Audinate's New Revenue Stream Emerges From A Tough Inventory Cycle

Fund managers track IRIS Studio's launch as OEM destocking pressures ease and the core Dante ecosystem keeps expanding

31 Mar 2026 · 5 min read

A new product launch gave Audinate one of its better months relative to beaten-up technology peers in January 2026. Lakehouse Capital said the stock was the fund's top contributor, fairing better than most broader technology names despite limited newsflow, as the company continued executing on its longer-term audio, video and platform software strategy, marked by the much-anticipated launch of IRIS Studio following its acquisition in June 2025. IRIS Studio is a differentiated browser-based control and monitoring layer for AV devices that operates independently of manufacturers, and unlike Dante's OEM-led monetisation model, it charges end customers directly, introducing a new and incremental recurring software revenue stream. Early adoption had already drawn support from 14 leading camera brands spanning more than 300 camera models.

A year of inventory destocking that tested patience

That launch followed a genuinely difficult year for the underlying numbers. Lakehouse Capital's August 2025 report described a softer year as OEM partners worked through excess inventory built up in prior periods, with revenue contracting 32 per cent to $62 million, though a greater mix of higher-margin software installations cushioned the impact, leaving gross profit down a slower 25 per cent to $51 million. Management kept cost growth to a modest 6 per cent, leaving underlying EBITDA still modestly positive at US$0.7 million. With reorders secured from 12 of the top 20 customers and ordering behaviour settling, the manager said management was guiding to 13 to 15 per cent gross profit growth in FY26, two to three times faster than the industry.

It is a case of short-term pain for long-term gain as Audinate pursues its landgrab to broaden the Dante ecosystem. Dante remains the industry standard in digital audio networking, extending its dominance over the nearest competitor with now 14 times the number of products, up from 12 times a year earlier.

— Lakehouse Capital, Monthly Report, August 2025

The market's early scepticism about the Iris investment

The market had reacted cautiously to the Iris acquisition from the outset. Clime Investment Management said in July 2025 that Audinate detracted as investors focused on near-term inventory build-ups and slower customer ordering cycles rather than the company's growing platform potential, even though the deal aligned with long-term strategic goals. Longwave Capital quantified the scale of the surprise the following month, noting the Iris acquisition would require another $25 million to bring to market in FY26, well above consensus expectations of around $13 million, a gap that triggered earnings downgrades and weighed heavily on the share price.

The recent Iris acquisition will require another $25m to take to market in FY26, surprising consensus expectations of around $13m. The disappointment and subsequent earnings downgrades weighed heavily on the stock price.

— Longwave Capital, Monthly Report, August 2025

A broader tech sector headwind

Elston Asset Management's March 2026 quarterly report showed Audinate had not escaped a wider de-rating across the technology sector, listing it alongside Megaport, Siteminder, Objective Corporation and Catapult as detractors pressured by higher interest rate expectations and concerns around AI, within a portfolio then carrying around 18 per cent exposure to technology names.

What managers are watching next

With Dante-enabled products in market now at 4,603 following 427 new product launches and 129 design wins in the past year, and Dante Video licensing partners up 19 per cent to 64, the key questions for managers are whether IRIS Studio's direct-to-customer monetisation model scales meaningfully as adoption grows, and whether the 13 to 15 per cent FY26 gross profit growth guidance holds as inventory normalises across the OEM customer base.