The Audinate Group Ltd (ASX: AD8) share price is up around 3% after giving an update for the first half of FY21.
Audinate is the business behind Dante, a media networking solution for the professional AV industry.
FY21 half year update
Audinate said that it had generated US$11.1 million of revenue for the FY21 half year, up 19.3% compared to the second half of FY20 and flat compared to the first half of FY20. The strengthening Australian dollar impacted revenue in Australian dollar terms, which was AU$15.4 million.
Audinate CEO Aidan Williams said: “Our first half revenue result is pleasing, yet we remain cautious of the near-term economic uncertainty associated with the ongoing impacts of COVID-19 around the world. However, our strong balance sheet has enabled us to remain focused on our medium-term strategic priorities.”
Cambridge video development team
Audinate said that as a result of an unrelated corporate acquisition in Cambridge, Audinate has been able to attract and establish an experienced video development team of 11 employees. Onboarding of four team members has been completed with the remainder commencing over the coming two months. It is expected that this team will be strengthened further by the end of this financial year.
It has also recruited a vice president of strategic partnerships to focus on corporate development on acquisition opportunities.
The ASX tech share reminded investors that some of its medium term strategic priorities are/were to double its engineering and R&D functions over the next two years, to develop the next generation Dante audio with video software implementations and to make Dante video the technology of choice for OEMs (original equipment manufacturers).
Audinate believes it can expand its total addressable market with the addition of video and software products.
The above initiatives are expected to result in extra expenditure in FY21 of approximately $1.3 million to $1.5 million, a portion of which will be capitalised. Audinate said that the people it has engaged will be able to hopefully execute its video strategy more swiftly.
Summary thoughts
Audinate seems like a very promising business. I’m not a sound expert, but its technology sounds very useful for clients.
A big question is about how long it will take for large events to start taking place again. North America and Europe are being ravaged by COVID-19. If it takes longer to get better than expected, then Audinate shares may not be an obvious buy. But if the vaccine really helps this in 2021, then Audinate could be one to watch.
However, there are other ASX growth shares in the recovery theme that could be even better such as EML Payments Ltd (ASX: EML).
