HIGHLIGHTS

  • Audinate returned to Revenue growth in 1H FY26, reporting US$21.1 million in revenue — up from US$18.9 million in 1H FY25 — with gross Margin maintained at 82.6%.
  • Shaw and Partners has a BUY rating with a price target of A$4.90, implying potential upside of approximately 126% from the current price of A$2.17.
  • The company successfully launched Iris, a new subscription-based camera control product, extending the Dante ecosystem into intelligent camera control and cloud-enabled video production workflows.

Audinate Group Limited (ASX:AD8) has endured one of the most severe re-ratings of any ASX-listed technology company over the past year. From a twelve-month high that reflected significant market enthusiasm for the company's Dante audio networking technology, the stock has plunged approximately 69.31% to its current price of A$2.17 as of 14 May 2026. For shareholders who bought at higher prices, this has been an extraordinarily painful experience. Yet amid the carnage, Shaw and Partners has maintained a BUY recommendation with a price target of A$4.90 — suggesting the broker believes the market has dramatically oversold this stock.

The key question for investors is whether this is a Business with a genuinely impaired long-term trajectory, or whether the market has indiscriminately punished a fundamentally sound company during a period of temporary Earnings pressure and sector-wide technology de-rating. To answer that question, it is necessary to examine what Audinate actually does, what the 1H FY26 results revealed, and whether the conditions for a recovery are beginning to take shape.

What Audinate Does and Why the Dante Ecosystem Matters

Audinate is not a consumer-facing technology company. It operates as a platform business at the infrastructure layer of the professional audio-visual industry. Its core product — Dante — is a networking protocol that enables audio signals to be transmitted over standard IP networks in professional AV environments including broadcast studios, live concert venues, corporate meeting rooms, and houses of worship. Dante has become the de facto industry standard for AV-over-IP networking, which is a position of considerable competitive strength.

The business model is built around OEM partnerships: Audinate licenses the Dante technology to manufacturers of professional audio equipment, who embed it in their products. This creates a large and growing installed base of Dante-enabled devices in the field, which in turn creates a network effect — the more devices that support Dante, the more valuable the ecosystem becomes to any individual participant. As of the first half of FY26, there were 516 original equipment manufacturers with Dante products in the market, with a further 207 OEMs developing new Dante-enabled products.

1H FY26 Results: Return to Growth, But EBITDA Still Negative

The half-year results for the period ended 31 December 2025, released in February 2026, showed a return to revenue growth after a difficult comparative period. Revenue grew from US$18.9 million to US$21.1 million — an increase of approximately 11.6%. Gross Profit rose from US$15.5 million to US$17.4 million, and gross margin improved slightly from 82.2% to 82.6%, reflecting a favourable product mix shift toward higher-margin software solutions. This gross margin level is exceptional by any industry standard and speaks to the embedded nature of Dante and the pricing power Audinate can exercise with its OEM partners.

However, the underlying EBITDA position deteriorated from a gain of A$0.8 million in 1H FY25 to a loss of A$2.3 million in 1H FY26. This reflects the significant Investment cycle the company has been in, spending heavily on new product development including Iris, Dante Director, and the broader Dante platform expansion. Management has been explicit that these investments represent deliberate choices to build the platform for the next phase of growth, rather than evidence of structural deterioration. Importantly, the company implemented organisational changes in 1H FY26 that are expected to deliver approximately A$5 million in annualised cost savings — a signal that the investment phase is maturing and management is beginning to focus on profitability.

Iris: A New Revenue Stream That Could Reshape the Growth Profile

One of the most significant strategic developments in the 1H FY26 period was the successful launch of Iris, Audinate's new camera control subscription offering. Iris extends the Dante ecosystem into intelligent camera control and cloud-enabled video production workflows — a natural adjacency to the audio networking business that opens up a substantial new addressable market.

At launch in December 2025, Iris onboarded 10 camera manufacturers as partners. The product uses a usage-based subscription model, which introduces a Recurring Revenue stream into a business that has historically been more transactional in its licensing structure. This shift toward subscription revenue has the potential to improve earnings visibility and command a higher valuation multiple as it scales. The fact that 10 camera OEMs participated at launch suggests genuine market appetite, though the revenue contribution in the early stages of the product lifecycle will naturally be modest.

Design Wins and OEM Momentum: The Leading Indicators

One of the most important forward-looking metrics for Audinate is design wins — the number of new products being designed by OEMs that will incorporate Dante technology. In 1H FY26, the company secured 66 design wins, up from 61 in 1H FY25. This increase, against a backdrop of broader electronics industry softness, suggests that the fundamental Demand for Dante technology remains intact and that Audinate's platform continues to attract new product development investments from its OEM ecosystem.

With 207 OEMs currently developing new Dante-enabled products, the pipeline of future revenue-generating devices in the market is substantial. Each new product that ships represents a future Royalty or license fee flowing back to Audinate when those devices are sold. The ecosystem flywheel — more OEMs developing products, more Dante devices in the market, greater value to any individual user — remains very much intact even if near-term revenue and earnings have been subdued.

Conclusion

Audinate is a company where the long-term thesis — dominant platform technology in a growing AV-over-IP market — remains compelling, but the near-term financial reality of heavy investment spending has tested the patience of even the most committed shareholders. The 69% decline in the share price over the past year reflects genuine disappointment with the pace of earnings delivery, the negative underlying EBITDA, and the broader de-rating of small-cap technology stocks. Yet the fundamentals of the Dante ecosystem are not broken. Design wins are rising, gross margins remain exceptional, the new Iris product is live and attracting OEM partners, and the cost structure is being tightened. Shaw and Partners' $4.90 BUY target suggests the broker sees a business trading at a significant discount to its Intrinsic Value, and the return to revenue growth in 1H FY26 may mark the early stages of the recovery that bull case investors have been waiting for.