This was a more upbeat AGM than the last one.

If FY25 was a transition year with revenue and profit getting smashed as inventory washed through customers working capital, FY26 will be another transition year but of a different sort.

CEO Aidan was a lot more positive than on recent earnings calls. He’s lost that haunted look, seemed a lot more relaxed and was laughing and joking with members of the audience at times.

The new chair Alison Ledger seems like a safe pair of hands - was matter of fact, upbeat and on message.

Iris + Q-SYS = ?

Audinate have a lot of execution ahead of them to launch and then integrate the early stage Iris business, onboard the Q-SYS team and get back to growth.

It’s not clear how Iris will integrate but it looks like an impressive piece of the puzzle.

OEM’s seem to love it (free for them – 1m units in the market already), as do end users (anecdotally).

Not sure how much end users are prepared to pay for it yet though, as the official launch is due this quarter (was last month but running late or was delayed).

The Q-SYS team are apparently veterans in this space who have done this sort of thing before so a big vote of confidence that they are joining Audinate to launch their AV platform.

Investing in an unknowable future

Last year Audinate were looking at a cyclical trough that required multiple downgrades and a cost cutting exercise.

This year they are still rebuilding their revenues but have invested in new tech (M&A) and a new team (Ex-Q-SYS) to build out their platform.

This won’t be quick, easy or cheap and the results are uncertain but they can’t not do it really.

The platform piece – sitting on top of the 3 legged stool of Audio, Video & Control (CEO’s metaphor, not mine) is where they convert to a subscription based SaaS business.

This does not feel imminent but is the north star they are heading for.

All this investment will keep them loss making and burning cash in FY26.

That will probably displease the market, who seem to be in “show me” mode with this business.

I much prefer this level of confident, considered investment to when they were cutting costs in FY25 to stem the flow of losses.

Video killed the Audio star?

Video market remains highly fragmented, is different to audio (stemming from the need for compression) and is no doubt harder than they through it would be.

I recall, years ago when heading into video Aidan saying he was going to break down the walled gardens in Video they same way he’d done it in audio.

These days the walled gardens seem to still be springing up and harder to tear down.

This makes some sense as vertically integrated OEMs are trying to differentiate and cross sell their products, so having their own brand-specific platform helps differentiate / value add.

There’s also the recently launched Open AV - https://www.openav.cloud/ which at a glance looks like an attempt at a Bluetooth Style Industry / Syndicate Owned Control Layer – “interoperable, and a customer-first AV ecosystem”.

One of the risks with Audinate is that they plow Audio Profits into the Video land grab but are unsuccessful in unifying AV over IP. If so, they'll burn a lot of capital along the way.

Same old problems?

Afterwards, I had a chat to one of the other co-founders who exited (was exited from) the business 7 years ago.

He marvelled at how they were still wrestling with the same problems that they had when he was there (maybe if he’d stayed they’d be solved by now? Hopefully just a bag of grapefruit / case of sour grapes?)

Lingering optimism

To be optimistic on this you need to think their recent investments in tech and people are the right ones.

That’s how it all looks to me at this stage but there’s still a way to go and things can definitely go wrong along the way (again).

The Iris launch will be one to track.

If this gains strong traction with end users, it could really speed up Dante Video adoption and they’ll be off to the races.

Disc: Held

This result was pretty well flagged and margins weren’t quite as bad as I was expecting.

I had however hoped and half expected the outlook would be better … there were some positives but also some understandable reasons for the market reaction (down 20%+).

It’s essentially another Jam tomorrow story - ST bad, LT good. Getting ugly now to emerge as a beautiful swan after some furious paddling below the water line.

Look! Over there!

Management tried to refocus investors on the long term outlook before hitting us with the less than rosy view of FY 25 & 26.

They also talked up the Iris acquisition which makes sense as it only completed last month but that’s not what we were gathered here today to hear about.

Body language was not good.

Leading Indicators

CEO Aidan spoke of strength in core business metrics but I’m not seeing it as clearly as he seems to be.

OEM's (1) Shipping & (2) Licencing and (3) Products in market (total Audio & Video I think) added 3%, 4% and 5% respectively, slower than the last few halves.

Slower than historical Video Products and OEM's added (5% and 7% respectively HoH, 11% and 14% respectively YoY). OEM's added increased a little less than prior period but products added at < 25% of prior period growth rate.

Lagging explanations

Earlier growth rate put down to covid impact requiring Uni's etc to get online and invest in AV installations - this was a one off tailwind. As was corporate conferencing which is a large part of Dante’s market. Live side of the market however has recovered strongly.

Would have been good to know this earlier instead of after the fact. That may be a bit harsh if the extent of this was only known later and I suspect they may have greater clarity on this now they have back-solved what went wrong in FY25.

Iris Acquisition

Sounds like they saw some urgency here and decided it was easier to buy rather than build despite already having some products in market.

I asked myself is this acquisition more as a result of threat or opportunity? I think it’s a bit of both.

There's some significant execution risk associated with the Iris M&A I reckon - different tech, business model, culture.

Happily, they don’t seem in a hurry to integrate Iris Products into the Dante fold. However, they don’t seem 100% sure how they will do this either, sounds like they’ll see how they go after the official Iris Launch in 1H 26 before merging the products into a single offering – with ongoing development.

Shifting sands

Management have stopped reporting some numbers (video endpoints, claiming commercially sensitive) and started reporting others (not cherry picking I hope?). One positive among this is they now split out software that’s replacing hardware installs (Embedded Software) and software that’s related to platform / control (p9 of the Preso) which will make the progress of each easier to track.

There are some changing industry dynamics and some were mentioned here – shift to software only installs and tariff uncertainty impacting end user demand leading to slowing estimates of market growth.

But the big one in my mind wasn’t discussed explicitly – the shifting focus from protocols to platform. Essentially from competing for OEM customers to control of devices, regardless of protocol (but obviously requiring interoperability). I only have this anecdotally for now but it was a key takeaway from some AI research I did on the 2025 ISE conference.

Below is a perplexity summary – sources used look legit at a glance – Bolin (OEM), Dante, NDI, YT of ISE conference presentations, etc.

“Across ISE 2025 and other recent AV industry shows, the head-to-head between NDI and Dante is being redefined. Both are moving the competitive focus to platform-level innovation—control, management, ecosystem, and cloud services—rather than just the technical details of video/audio transport. If judging by conference content and exhibitor strategy, the “protocol battle” is giving way to a maturity phase where enterprise and workflow control, reliability, and integration are decisive.”

This is where I am most optimistic about Iris and the apparent shift in AD8 mgmt focus from Video to Platform dev. Both are still priorities but if Iris can leapfrog the need for Dante video to beat out NDI, that could be a masterstroke and reading between the lines seems to be what management are now focusing on.

Outlook - hazy

Gross Margin (Mgmt’s top line focus) is projected to grow  at 13-15% (lower than historical) due to Tariff uncertainty hitting end users.

Opex to increase 25% in FY26 - due to investment in Iris Dev (M&A now becoming organic growth).

So, Op Leverage continues to work in reverse and will hurt again in FY26, then to turn positive in FY27.

I am actually happier with this than I was when they flagged the initial downgrade and cut FY25 Opex at the same time. I would like to think if they’d hit industry headwinds they would use their cash and strong competitive position to invest. Seems they were a little spooked and had lost clear sight of their pipeline so maybe they were being prudent? Too prudent for mine given the competitive position they have and the prize they are going after.

So I see it as a more confident move to let Op Leverage work against them for another year and invest in what seems to be a promising platform play. At least they will only have one acquisition to integrate and this seems to fit with the refocus on platform away from protocol (assuming interoperability still holds).

Reasons to be cheerful

At the 1H 25 preso Aidan said they were actively looking at a wide range of options for M&A (now done) but also outsourcing some dev (less likely now I think) and potential partnerships, etc.

The biggest puzzle piece of blue sky for me would be if they can get Iris firing and do some sort of deal with NDI to allow both to work under one platform (Iris) which AD8 can then look to dev it into the default industry OS which they can then monetise when ubiquitous.

That won’t be quick or easy, but will get them away from a trench warfare scenario with NDI that threatens the margins of both.

This could be way too optimistic but this is the upside scenario I will be hoping to see play out in the coming years.

Time for a rethink?

I wrote here last week that the downgrade from Jefferies with a price target (PT) falling from $9.50 to $7.50 seemed pessimistic but the market is today telling me that was actually too optimistic.

Again, I’m reminded that a PT is a 12 month target, not an estimate of intrinsic value.

If you were to estimate an intrinsic value for AD8 the old fashioned way, next years FCF (about zero is my best guess) would only account for a small portion of total value (5% or less for a growth company / growing series of FCF).

The trouble is, it’s very hard to see what FY26 might look like – except that it’s a year of investment while they burn cash on getting their new software platform to market.

FY27 should be a better year but I had thought that about FY26 until today…

There’s still a lot of potential to play for but also some growing risks, especially in the near term with Iris integration.

I thought it looked cheap at $500m Mkt Cap, so is it more attractive at closer to $400m?

Hmmm…

Disc: Held.

The annual RH Consulting annual survey is out today showing progress in the Pro-Audio over IP and Video too.

https://rhconsulting.uk/blog/networked-audio-products-2025/

Dante’s dominance in the Audio market is still growing.

They have now grown to > 14x the adoption of nearest competitor (RAVENNA) by products in market.

Dante enabled Products grew just 6% YoY, the lowest rate in 5 years.

But OEM’s grew at 14%, the second highest in 5 years.

A few reasons for this given in the report, which make sense and no cause for concern.

Endpoints out there in the ecosystem are arguably a more important metric but they’re not shown here.

Video is another story

NDI continue to dominate by products and OEM's signed up but AD8 still growing faster of a much smaller base.

Video market is probably 15 years behind audio and there remains a lot of fragmentation in standards due to bandwidth and legacy issues.

Feels like this will be a slower grind than audio but that’s still not the full picture.

As @mushroompanda has said in the past, NDI is the baby gorilla in the video jungle (paraphrasing) but it’s on the other side of the river where NDI dominates broadcast – albeit still only a small % is penetrated.

Dante is going after the larger installed AV part of the market – which aligns to its background and dominance in audio.

Plenty of runway for growth in Video for Dante but plenty of technical and non-technical challenges to overcome too…

Disc: Held

Panic averted?

Results were very bad as feared, but not quite as bad as feared.

Slight beat on guidance (after 2nd downgrade).

Confirmation that FY25 looks like a one off and FY26 should normalise. I expect this is what the market was sweating on.

Q2 was stronger than Q1 (Expected to be the same), momentum picking up in H2.

Under the hood, things are humming along nicely with design wins, growing products in market and OEM adoption in both audio and video, more AV pros trained up, etc, etc. This is what I am most interested in.

I can't see any clangers or big surprises.

Market should like this as the worst has been avoided.

So anyone hoping to buy on weakness from this result may need to be quick.

Jumping on the call now.

Audinate have announced that they’ve hired a Chief Strategy Officer to oversee M&A among other strategic growth initiatives.

This seems like a good position to fill given their M&A ambitions and the size of their war chest. It should also take some pressure off the incoming CFO whenever they get started. Also good to see a build out of Execs below the CEO as the business starts to mature, hopefully reducing some of the key person risk in the CEO, especially as their impressive, long standing CFO is departing soon.

Nick Pearce looks like a good fit based on his Linked In profile - https://www.linkedin.com/in/nick-peace-5a4ba64/details/experience/.

Having previously been an Audinate Board member and early investor for 4 years until about a decade ago, he’s clearly a believer in the business and a known quantity.

His prior role at Promedicus as Chief Strategy Officer for 2 years will be useful experience and with names like Starfish and Oracle on his CV it’s great to see Audinate can attract someone of this calibre.

To release a downgrade on the worst trading day / highest volatility since Covid shows the same mgmt. naivety as selling down into a Cap Raise.

This is potentially a downside of having a technical founder CEO rather than a professional / slick management. I would still take the owner operator (missionary) over ‘professional’ (mercenary) approach any day.

Other factors like the large cap raise at $13, still unutilised, CFO resignation, Directors selling above $20, relatively low insider ownership, would have put Audinate on a negative watch.

Broker reports saying that they are effectively a hardware maker (not true) and the vast bulk of their sales are non-recurring (not true) and 1 year price targets are closer to $13 would have helped prime the doors for a stampede.

This downgrade to guidance for FY25 was significant but also given the brevity of the release likely raises concerns about some of these prior actions – especially CFO resignation, director selling, raising at $13, etc.

The jaded trader set and the ‘I told you so’ brigade are negative on this stock and currently sounding smart and wisely cautious. They are playing a much shorter timeframe game to me but will likely be the marginal buyers / sellers / shorters so could push the price around quite a lot in the short term. 2.5% shorted last time I checked.

So I would be surprised if the share price rebounded any time soon in any meaningful way but that’s just my best guess.

Buffett talks about wanting to buy a great business with short term problems – his ideal situation is when they are on the operating table. That’s what this feels like to me but only time will tell.

Sharing my AD8 notes to myself following the recent downgrade, so apologies if some of this is repetitive has been covered elsewhere...

Growth

I think about Audinate’s growth as having 3 sources. All are from selling their Dante protocol in different forms. Note, this is different to the 3 segments they call out in their presentations – more on them below.

The primary revenue source is from sales to existing Original Equipment Manufacturers (OEM’s) who buy Dante enabled Chips, Cards & Modules (CCM’s) from Audinate.

The growth drivers I see are:

1)   Existing Dante enabled pro AV units being shipped in greater quantities over time. Note, this piece can also go in reverse, as is now forecast for FY25, but unlikely to drop for long as new products gain in popularity or are replaced by Dante enabled products that do and the market continues to grow.

2)   Design Wins in one year becoming sales in the next and subsequent years. This is likely the biggest driver of revenue growth and market penetration early on (especially for Video but more on that later).

3)   Software sales (SaaS) to end users, usually sound engineers, their employers or owners of networked installations (eg, Sydney Trains). The greater the ‘installed base’ from 1 & 2 above the higher the value proposition from Dante software to manage them. In time they’ll likely also / instead sell the protocol to OEM’s as software (licence per unit) rather than embedded in chips / hardware.

When an OEM designs a Dante chip into their hardware in Year 0 (aka a Design Win), sales of Dante CCM’s are triggered whenever new hardware is built. For Example, if a Pro audio equipment maker in South Korea makes 1,000 units of a Dante enabled product in Year 1 and ships 950 of these to distributors in US, Europe & Asia, 1,000 Dante enabled chips will be sent from Malaysia to South Korea, along with nuts and bolts from China, circuitry from wherever… to be assembled in South Korea. If these sell well, they might make 1,500 units in Year 2, so 1,500 Dante chips are sold for this product in this next year.

It seems existing sales in FY24 were brought forward to such a large extent by covid supply shocks that OEM’s have over stocked and won’t need to buy as many chips in FY25. Further this decline is unlikely to be made up for in new design wins (from FY24) or expected software sales in FY25.

The over earning in FY24 was a one off, FY25 should see lower Revenue AND Gross Profit, despite rising gross margin, so normalised revenue growth rates are probably something like the 22% average you get when you average the 6 years to FY25, including an estimate of -5% for next year.

3 Segments

Audinate split their market into Audio, Video & Software.

Audio is where they dominate with 12x the units in market of their nearest competitor. So even though they have less than 10% of the addressable market, they have 90% of the penetrated market and an even higher proportion of new units coming to market.

So there is 90% of the market still to be taken from the incumbent which is physical cabling of networked pro-Audio products.

Audinate’s dominance of this market suggests that Dante becoming the default Audio over Internet Protocol format is just a matter of time and management have said as much.

The key questions are how much of this 90% can they take, by when and what margins can they earn?

Video is the newest part of the strategy, the biggest focus for the business, the biggest opportunity, and the biggest risk.

This is off to a good start exceeding management expectations for units shipped and growing fast off a small base.

It probably needs some M&A to step up and compete against some of the larger competitors in this space. The $70m Cap Raise @ $13 in Oct-23 was to be used for this purpose but is still sitting on the balance sheet. More on that later.

Software is already a significant and growing piece of the Revenue mix (20% I think) and should grow well from here – just how far it can go will depend on the success of the Video strategy – at which point they can unify both formats under Dante as the Operating System for the Pro-AV Industry which is their stated longer term strategic aim.

I think of this as Audio being the foundation, funding source and playbook for Video penetration – this will be the battleground for dominance.

Video is the big opportunity as it potentially unites the industry under one format for Networking over IP and opens up the opportunity for high margin sticky software to manage a large installed base.

Valuation - Statistically Expensive (@ 14x Price to Sales), hard to value and only marginally profitable due to high reinvestment / Spending all their FCF on growth.

Strategy - Video a more fragmented (by protocol and participant) than Audio was.

Niche - Limited market with unlikely / uncertain growth opportunities beyond it.

Cash burning tech - Haven’t monetised it yet, so not sure how it will look when mature - need to guestimate future margins.

Gross Margin falling - This is primarily due to product mix as Viper board (video hardware from Silex acquisition) sales grow. Should be temporary?

License Fee based - more 'reoccurring' than recurring revenue. Will likely stay that way until Software & Services picks up, in the distant future.

Mgmt not buying at recent prices. CEO actually sold into (ahead of) the recent capital raise.

50% Revenue Growth - Great but ... hard to maintain.

M&A brings execution risk – implementations are not easy – especially when tech is at the centre of it.

Key person risk in Aidan CEO.

Something from left field - an Apple or a Google makes a competing protocol via an app to displace Dante?

What have I missed??

Disc: Held (largest position)

Key take always from the AD8 AGM for me (apart from TAM expansion per separate straw) were:

There are 2 main strategies

1) “Winning in video”, this will include M&A ($1.2bn Rev Video Mkt), this is their #1 priority.

2) “Building out the operating system of AV” ($1.4bn Rev Software & Services Mkt), this is the big Long Term prize.

So they have a long runway of reinvestment opportunities at (a high expected ROI).

Technically there's a 3rd strategy which is to dominate Audio, but I'd say this is just a matter of time and the focus of CEO Aidan's discussion is all around video. Software & Service (operating system for AV flows from that).

Execution on the Video strategy is everything, and I would say if they don't manage this, the thesis that supports the current share price is badly damaged.

If they can do in Video what they have done in Audio to dominate the Video market, S&S should be easier as they will be the de facto AV operating system and be able to build a product suite earning high margin SaaS Revenue on top of this.

The recent $70m Cap raise was to expedite their Video investment via M&A and in-house Dev (Capex), so aligned to this Video focus.

Expecting minimal growth in Opex so should start to see Operating Leverage in evidence in the next few years.

This Video strategy is de-risked in a few ways.

1) They are following the same playbook as they did in audio where they have now effectively won. Their Dante protocol has 9% of the available market (but 12x the penetration of their nearest competitor). Trajectory is also positive, as this was 6x a few years ago and will soon be > 12x as more design wins translate into OEM (product) deployments.

2) They have a very good name and relationships in the AV industry from their work in Audio. There are a lot of synergies for AV Engineers and OEM’s to have a single integrated protocol across Audio and Video combined – as they have won in Audio they can be the only integrated protocol across both.

3) The Video market is more fragmented than Audio with no clear competitor and the incumbent is inertia (See separate straw on NDI).

4) They have integrated 2 small acquisitions that have allowed them a rapid entry into the market increasing their products from 7 to 48 in FY23. It took more like 6 or 7 years to grow this part of the Audio build out.

Note: The above is not what they spelled out specifically in their presentation (not sure why - building a monopoly concerns, don't want to spook the competitors?), it's just me pulling a few things together from the AGM preso, FY23 results and ASX material and what Aidan's been saying for a while. So I could be off the mark here and reading into what I want to believe...

Disc: Held (largest position)

Agree with @jcmleng that the standout from the AD8 AGM was the expansion TAM.

I attended the AGM in person (no virtual option) and was surprised to see only a few more people than last year.

A few more analysts (brokers or buy side I presume) than usual but only retail shareholders asked any questions.

I'll add some details in separate straws.

TAM update

My reading of the preso and Aidan's speech is that the TAM has changed in a few ways.

1) More detailed work has been done (via consultants) to arrive at a more granular view of the various markets (although they only shared the 3 high level segments).

2) Fine tuned the definition of each market to only capture revenue pools they can actually capture – i.e. where they have products / solutions in market or planned. For example, this re-cut included removing revenue potential for OEM products that may never be networked.

3) Increased market for each segment but especially in Video ($1.2bn, 39% of total) and Software Services ($1.4bn, 45% of total).

Market Share small but growing nicely

AD8 now has approx. 9% of the Audio Market ($46m of $510m, 17% of total TAM) and approx. 0.5% of Video, leaving approx. 1.5% of Software & Services market by revenue.

The market as a whole is expected to grow at approx. 6% CAGR for next 5 years (grew 8% in FY23).

Given their dominance in Audio (12x their nearest competitor and growing) and their aspirations, with a strong start in Video, I see TAM as a much more relevant for valuing AD8 than for most businesses who discuss it.

Disc: Held (largest position)

Inspired by @mushroompanda's DD on NDI, I asked Aidan (CEO) about them as a competitor a the AD8 AGM last week.

He gave a pretty full answer that left me feeling like he had their number and is quite confident of out-competing NDI over the long term – you would hope he thinks this…

Here's some of his comments (paraphrased from my shorthand).

NDI is probably the tech most like AD8 from a technical POV.

NDI is stronger in stronger in broadcast / live production environments. So they are more market specific, but looking to branch out.

AD8 is stronger in commercial installed AV which is a much larger market.

AD8 have advantages over NDI on price, technology, market and people (NDI have lost a lot of staff).

Dr Andrew Cross (https://www.linkedin.com/in/adjc/) no longer works at NDI (he was their founder / CEO / spirit animal).

In summary, NDI is one to watch and will probably remain the biggest competitor for AD8 in Video.

This needs to be seen in a larger context though which I will discuss in a separate straw on Strategy.

Disc: Held (largest position)

Some great intel and insights to match here @mushroompanda, shows the challenges faced in a "fragmented" Video market as AD8 like to characterise it.

I had got the impression from Audinate Management that video was more complex but they have a play book and it's likely just a matter of time before they do in Video what they've done in Audio.

The big headstart and impressive offering NDI seem to have (and no doubt awareness of the challenge from Audinate in Video) make Video dominance a very different proposition and far from a foregone conclusion I expect.

This raises a couple of potential issues for my Audinate thesis.

Duopoly

Audinate could very well hit up the Video market and gain significant market share, however, if they are doing this via software, or with minimally intrusive hardware, there might be a case for OEM's to use both Dante and NDI - unless there are exclusion clauses in contracts as @mushroompanda suggests there might be.

If this happens, they might end up in a situation like Catapult where they have a lot of customers signed up but they're not exclusive, and the presence of competitors in your customers products severely restricts your pricing power and thereby, margins.

Acquisition

It might make sense, as @mushroompanda suggests for both Dante and NDI to be co-owned and jointly developed for seamless integration and AV industry dominance.

For this to happen one would need to acquire the other or someone bigger acquire both.

The obvious play would be for NDI's owners to acquire Audinate as Audinate is smaller (in revenue terms), stand alone, listed and has a diverse share registry with only Yamaha having a 10% blocking stake.

There's likely a good premium to be attached to a transaction like this but it would prevent Audiante growing into the multi year ASX Compounder that I would otherwise expect it to be.

Disc: Held.

Valuation – statistically expensive as it’s loss making and trades on an EV/Sales multiple over 23x.

The estimate of AU$1Bn+ TAM may prove to be ambitious or take longer to grow into.

COVID may postpone more events for longer and digital transformation may take longer than management expect.

Video dominance is not a given. You can’t simply extrapolate Audio dominance into video – there are more formatting complexities in video than audio and more (although fragmented) competition – as identified by Aidan (CEO) at the 2019 AGM.

If the Video market proves harder or more expensive to crack than management expect, there is a risk of an over / misallocation of capital here.

Disc: Held

Audinate’s TAM (Total Addressable Market) is estimated to be in excess of AU$1Bn annual revenue and growing. It splits this into Audio, Video and Software Services comprising approximately AU$400m each.

Despite dominating the audio market with 17 times the adoption of its closest rival (3,008 vs 173 products), Dante has only 7% penetration of it today, with the legacy physical cabling and connections yet to be digitised, representing a long runway for growth.

Growth - This niche and its adjacent are big enough for Dante to grow at 20%+ for a decade or more but still likely too small for a large, well-resourced competitor to attack profitably.

Audinate’s Economic moat is further expanded as it offers free Dante Certification, with 94,000 AV professionals having gone through the program in the last 2.5 years, driving further adoption.

Founder Management and the experienced Board collectively own 6.4% of the company with CEO and ED Aidan Williams and CTO Geetha Witana (both Co-foundered Audinate in 2006) owning 2.58% / $14.7m & 1.23% / $7m respectively. Aidan invented the initial Dante protocol to solve a problem he had as an amateur musician. Aidan is strongly aligned to shareholders as his holding represents more than 26 times his annual salary and the company is clearly a very large part of his identity.

Balance Sheet - $66m in cash at 2021 H1 should be sufficient firepower to support the growth agenda (along with growing audio revenue) as well as providing a shock absorber if required.

ESG – all ticks, no issues that I can see. Removes cabling (Environment), certification program (Community engagement), experienced board and aligned CEO (Governance).

Edge - The opportunity here is to see the longer-term quality of, and growth in, future earnings when the market is too focussed on high level recent numbers like modest revenue growth and lack of current earnings.

Disc: Held

Rivalry among Competitors (Extremely Low) - Non-existent from existing players (some OEM’s have internal solutions). Dante (Audinate’s product) has 17 times the adoption of its closest rival (3,008 vs 173 products)

Supplier Power (Med-Low) – 1) Software / Developers: Inhouse expertise built from scratch, close to 3 of the big Sydney Universities, Glassdoor reviews positive. 2) Hardware sourced from China and now Malaysian providing some diversification.

Customer Power (Low) – More Original Equipment Manufacturers (OEM’s) use Dante than any other protocol and this trend is increasing. (Note Yamaha were an early adopter and owns 8.25% of shares, but this doesn’t seem to have hurt)

Threat of Substitutes (Low) – legacy analogue (cabling) which is currently the default but is being slowly digitised / phased out. Some OEM’s have their own proprietary system but this is becoming less tenable as it does not allow for the interoperability between other Pro AV brands which tend to be specialised.

Barriers to entry (High) – Too small a market for big players to attack given how entrenched Dante already is.

Disc: Held