AD8 +26.52%: A big relief rally from the audio/visual operative today after they reported lower costs, down 3% versus prior guidance which was a 7-9% increase. A big shift from an operational perspective and we’d generally expect that to have a negative influence on the top line, though this came largely in line with expectations.
While the numbers below are all significantly lower, they were cycling off a strong period this time last year and they’d already highlighted the challenges likely in FY25 when they reported FY24 results in August, pouring cold water on market expectations.
- 1H25 Revenue $28.7 million, -38% yoy
- 1H25 Net loss $2.21 million vs. profit A$4.75 million yoy
- 1H25 Ebitda $0.84 million, -91% yoy
- Gross margin 82% vs. 71.8% yoy
The final point is interesting and materially ahead of expectations with video ecosystem growth accelerating, suggesting growth from Audio into Video is on track while the improved gross margin reflects a favorable product mix shift toward higher-margin software based implementations.
Lower costs, higher margins, all that’s needed now is an acceleration in re-stocking, with the company now expecting a return to normal order patterns and growth by FY26.
Clearly a good result from AD8 today, the lower costs should drive big upgrades to FY profit expectations, though it’s a big move by the shares, probably a bit overdone.
MM is neutral AD8 ~$10
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