FWIW UBS's First Read of AD8's results out before this mornings conference call
UBS SnapShot: FY24 Results
ONE LINER: Majority pre-released, with a challenging year ahead. Incremental is good ongoing momentum in video
KEY NUMBERS (post AASB16): Rev. US$60m (+28% y/y) / A$92m (+31% y/y). U/lying EBITDA $20m (+85% y/y) vs UBSe & Cons $20m (in-line). U/lying PBT $12m (vs $0.9m pcp /UBSe $11m/ Cons. $10.6m). DPS 0cps (in line)
RESULT HIGHLIGHTS: 1) G/dance met: GP US$44.5m, +33% y/y vs guided ~26-31% growth (A$68m +35% y/y), but big deceleration in 2H24 (1H +49% / 2H +19%). 2H24 GM 76.8% vs 71.8% 1H24 driven by product mix & cost-down on Brooklyn. 2) CCM revenue +26% y/y driven by Brooklyn & Ultimo, Software +33% (IP Core, DEP, retail software) with 2H indicating deceleration. 3) Video: +18 video products in 2H24 (vs +18 in 1H), +4 OEMs in 2H (vs +16 in 1H). with g/dance met in 1H (>30k - no details on units shipped in FY24/2H24). 4) Continued strong audio ecosystem, 460 OEMs +161 developing shipping products vs 430 + 153 1H24 & 400 + 138 in 2H23, 4,176 products (+168 in 2H / +155 in 1H) 12x the closest comp vs 4k in 1H24. Trained professionals +48k / +22% to 271k in FY24, with acceleration in 2H24. 5) Op. cost control in line $48m vs UBSe $48m, with 2H24 EBITDA $10m vs UBSe $10m. 6) 3rd consecutive period of +FCF ($7m) & OpCF conversion 112%. 7) $48m cash, no debt
VALUATION: $10.90 PT, Blended 2yr fwd EV/Sales to sales CAGR / DCF valuation
GUIDANCE: Unwinding of FY24 revenue tailwinds to result in FY25 Rev decline y/y, marginally lower FY25 US$GP (flat to -9% y/y), with exp. cost growth of 7-9%. UBSe analysis suggests this implies an EBITDA range of $6.8m-$14.2m / -66% to -29% y/y. AD8 is actively exploring potential M&A opportunities
UBS COMMENT: Ongoing positive video momentum in 2H24 the real incremental in this release. Strong FY24E performance, however partially from a pull forward of FY25E sales, which combined with other headwinds creates a challenging year ahead. Based on FY25E g'dance, our analysis suggests LT GP CAGR reduces from prev. 24% to 20- 22% - which would give upside vs UBSe (incorporating +18%) and consensus. LT story looks attractive, ST lack of growth will understandably hold some investors back
DISC: Held in RL & SM