Investor Presentation: Market Eye 6 November 2019 Rob Goss – Chief Financial Officer
Audinate: pioneering the future of the AV industry Dante technology distributes audio & video signals across computer networks The Dante Audinate is the leading supplier of digital audio & video networking for the platform is used Professional AV industry in thousands of installations globally Melbourne Convention Centre Melbourne, Australia 2019 Investor Presentation 2
Audinate 101 Audinate products Customers (OEM Brands) OEM Products Chips Modules Cards Software 2019 Investor Presentation 3
Audinate is driving the transformation of the AV industry A$400m • Networked digital connectivity is replacing Audinate Total Addressable Market (‘TAM’) * traditional, point-to-point analogue cabling The TAM for digital audio networking is Audinate share of Audio in the AV industry A$400m annually for Market estimated at 7% chips, cards, modules & software Digital Audio Networking • Software-based AV systems are replacing A$400m hardware AV systems, in the next wave of Video Software Services industry transformation Networking for Pro-AV • Transformation analogous to the impact of Software Service Software for Pro-AV * Management estimate total VOIP on the telecom industry A$400m addressable market exceeds A$1bn 2019 Investor Presentation 4 4
FY19 Highlights Fina nanc ncial 34% A$2.8m A$3.6m A$24.0m Growth in revenue to US$20.3m EBITDA increased Operating cashflow increased Capital raised (A$28.3m / 44% Growth) from A$0.6m from A$1.0m via placement & SPP Operati tional al 2,134 22% 29% Video & Software products launched Growth in Dante units * Dante-enabled products Increase in OEMs on the market shipping Dante product shipped annually 3 products * Chips, cards, modules & software 2019 Investor Presentation 5
Driving growth & the network effect Increase market Increase number of Dante Increase the number of awareness of Dante products per OEM OEMs adopting Dante Ov Over 60, 60,000 000 Ov Over 2, 2,100 100 270 270 Dante trained and certified Dante-enabled products OEM customers shipping professionals globally available on the market Dante-enabled products Average of nearly 8 per OEM Educate end users, system designers Encourage existing OEM customers to Continue to sign new OEM and integrators so that they use Dante-enable more of their product customers and help them to get more Dante products in their range – some manufacturers make Dante enabled products to market AV installations – driving growth in many hundreds of products chips/modules sales 2019 Investor Presentation 6
Competitive landscape – Networked Audio Products Total audio products per protocol (1) 2500 2,134 2000 2,13 2, 134 Da Dante Number of Products Dante h has 6x 6x Enabled ed the adoption versus closest 1500 Products competitor 1000 Note: Competitive product numbers 500 have not been Audinate is the clear global market updated since June 2018 Report leader compared to competing 0 audio networking solution providers 2013 2014 2015 2016 2017 2018 2019 Dante Cobranet Ravenna Others AVB 1) RH Consulting, Networked Audio Products 2018 and Audinate company data. 2019 Investor Presentation 7
Strong year on year growth in revenue and units shipped CCM revenue driven by Brooklyn (32 & 64: 28% growth) and Revenue CAGR of 27.6% (5 yrs) at 74-75% GP margin AVIO adapter sales Chips, cards & modules (‘CCM’) includes AVIO adapters Continued growth in established customers: Software includes royalties, retail software, on average, OEMs >5 years have >15 Dante products Dante Domain Manager & IP core Software increase driven by DDM and IP Core Audinate invoices customers & pays COGs in USD Customers pulled forward estimated US$0.5m from H2 to H1 20.3 515 Revenue (US$M) Dante units shipped (‘000s) 3.2 163 398 15.2 CCM Software 2.3 Maintenance & other 11.3 150 398 1.5 8.7 95 16.6 175 6.7 0.9 352 12.5 65 65 248 9.7 7.4 180 5.5 110 73 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Note: Software units not tracked prior to FY16 2019 Investor Presentation 8 8 FY19 Results Presentation
Dante AV – Audio and Video Wall plate – laptop input Dante AV Module * Key FY20 goals: Dante AV Module • Drive design wins to generate FY21 • “AV-over-IP” networking module , & beyond revenue pipeline OEM business model • • Broaden product offerings V+A+Network (1 video + 8 audio) Camera – Capture Presenter • (e.g. software, alternate chips, …) Commercial launch June 2019, Dante AV Module * expected shipping end CY19 • First design win July 2019 • OEM products expected on the market mid-late CY20 Video Output – Projector Dante AV Module * Dante AV Product Design Suite • Full HDMI-over-IP product design * Illustrative examples not currently using Dante AV • Accelerate OEM time to market & enable ODM business model • Launched June 2019, availability end CY19 Microphones, speakers Dante AV Use Cases • AV Module + Various Dante Class Rooms Live presentations Compression + Implementations Houses of Worship Conference Rooms HDMI + Courtrooms Transportation Hubs HDCP + Video Display Walls Sports Bars & Casinos USB + … 2019 Investor Presentation 9 9
New Software Products Dante Application Library (DAL) Ceiling Microphone • Dante for PC/Mac applications Dante IP Core (today) / Software products enable: • Simple way for software developers Dante Embedded Platform • to add Dante to their products Wider proliferation , thru lowered • Launched June 2019, marginal cost of adding Dante commercially available • Retro-fit and upgrade of Room Processor • Initial customer with Zoom, products already in the field Dante Embedded Platform conferencing application • Continue to drive adoption, revenue expected H2/FY20 Dante Embedded Platform (DEP) Conferencing Software • Dante for Linux OS, Dante Application Library targeting manufacturers (OEMs) • Supports Intel/x86 & ARM processors • Launched June 2019, commercially available Networked Speakers • Initial customer with QSC (x86) Ultimo (today) / • Initial partner with Analog Devices, Dante Embedded Platform ARM-based DSP chips • Drive adoption & partnerships, revenue expected H2/FY20 2019 Investor Presentation 10 10
Well positioned to deliver attractive long-term growth Audinate has the foundations in place to accelerate our product development and support the software transition of the AV industry A$400m over the medium term Investing to double Audinate’s engineering and R&D functions over the next two years Putting in place the business infrastructure platform to support long term growth A$400m Developing next generation Dante audio and video software implementations Make Dante AV the technology of choice for OEMs Software Service Software for Pro-AV Expand its Total Addressable Market with the addition of video & software products A$400m 2019 Investor Presentation 11 11
Summary Global market Attractive financial Significant market Strong customer Innovative Experienced leader profile products opportunity base management team • • • • • • Dominant High gross Strong portfolio AV market Existing customer Strong executive position as global margins of intellectual currently in the base includes team with leader in audio supported by property early stages of leading global AV extensive industry networking strong IP developed in transformation to equipment experience • • • Six times the Revenue growth Australia digital networking companies Built Audinate • • • market adoption supported by Extensive Audinate is well Customer base is into a sustainable of its closest repeat product investment in positioned to broad and market leadership competitor orders R&D capitalise on expanding position • History of market growth consistent and increased revenue growth penetration 2019 Investor Presentation 12 12
Appendices FY19 Investor Presentation 13
Growth trajectory to continue • Audinate has historically delivered financial year US Dollar revenue growth in the range Audinate: between 26% to 31%, and it is anticipated that this trajectory will continue Pioneering the • Economic conditions and US tariffs may impact the near-term results, but this will not impact future of AV on the Company’s focus to grow long-term shareholder value • Revenue split expected to revert to historic H2 bias in FY20 • Focus on design wins for newly launched products, driving future incremental revenue growth – Initial video and new software product revenue in H2 Boston Convention and Exhibition Center Boston, Massachusetts 2019 Investor Presentation 14 FY19 Results Presentation
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