Audinate’s FY26 recovery and 82% gross margins create substantial operating leverage, with software catalysts potentially driving the A$2.38 share price toward an A$8.86 probability-weighted FY31 target.
Overview
Audinate is the leading infrastructure-layer platform in professional AV, monetizing its proprietary Dante standard through OEM licensing, embedded components, software and emerging SaaS subscriptions. Dante’s interoperability, Layer 3 network compatibility and installed base of more than 8 million devices make adoption commercially important for OEMs and create substantial switching costs. FY26 marked a recovery from FY25 inventory destocking: USD revenue increased 14.9% to US$46.0 million, while AUD revenue rose 9.2% to A$67.8 million. Gross margin remained exceptionally high at 82.0%, although underlying EBITDA declined to a loss of A$3.6 million as Audinate funded video, control and Iris expansion. **The key investment argument is latent operating leverage:** FY27 operating expenses are guided flat after a 10% headcount reduction, while management expects gross profit growth of approximately 15% and free-cash-flow breakeven in FY28. The current A$2.38 baseline share price compares with broker targets of A$5.10–A$5.20 and a probability-weighted FY31 target of A$8.86. Near-term catalysts include continued OEM inventory normalization, DEP licensing, Dante Director SaaS adoption, Iris scaling and conversion of design wins into shipments.