Okay. I think we're good to go. Well, good morning, everyone. Thank you for joining our call today. My name is Aidan Williams. I'm Co-founder and CEO at Audinate, and with me is Rob Goss, our CFO. In the first part of the call today, we will run through the investor presentation that was just lodged with the ASX. You may ask questions at any time by typing them into the Q&A box. I can see there's already a question in there. It's probably one of our favorite analysts who's jumped in and dropped a question in already. At the end of the presentation, we'll collate your questions and answer as many as possible in the time we have available.
The second half performance of the company and the full year financial results are particularly pleasing given the challenging operating environment throughout the year, with chip shortages and supply chain disruption coming to the fore. Internally, our team worked ceaselessly with chip suppliers to manage allocations of scarce parts and deliver products to our manufacturing customers. Substantial effort also went into providing our customers with design alternatives for unavailable electronic components. We again delivered strongly on operational metrics with a record number of 126 design wins with our manufacturing customers. Particularly pleasing was the growth in video design wins to a total of 26 OEM customers in various stages of video product development. Design wins are key to unlocking future repeat revenue for the Dante technology. Pleasingly, product innovation and development continued through the past year with several new product launches.
Dante Ready, a feature enabling customers to upgrade Dante on devices already in the field. Dante Cloud, our first cloud SaaS products for managing Dante installations, and Dante Studio, our first PC, Mac video software products. We'll be talking through the investor presentation that accompanied our financial statements, both of which were lodged with the ASX earlier this morning. On slide two, you will see a summary of Audinate's core business. Many of you will be familiar with this, but I'll just take a couple of moments to recap. Audinate provides networking technology to manufacturers of professional audio and video equipment. We are primarily a networking IP and software company, although we have traditionally packaged our software for sale into chips, cards and modules so that manufacturers of electronic equipment can easily incorporate our technology into their hardware designs.
Our customers are manufacturers like those, the brands that you can see on the slide, Yamaha, Bose, Bosch, and a host of other major brands in the professional audio visual industry. The first step in our typical sales cycle with a manufacturer is the design win. This is where we sign up a manufacturer to use one of our chips, modules, or software products. After that, it typically takes 12-18 months for a manufacturer to complete a new product design incorporating our technology. Once a new product is available for sale, the manufacturer buys chips or modules or pays per unit software royalties for each manufactured unit, creating a repeat revenue stream for Audinate. As you can see on the map, we are a global company with headquarters in Sydney, Australia. We have several locations around the world, primarily providing sales and support functions.
With the recent acquisition of the Silex video team, we now have an office in Belgium, complementing our video engineering team in Cambridge in the U.K. Slide three shows financial highlights for FY 2022. We are very pleased that Audinate has delivered U.S. dollar compound annual revenue growth of 28% over the last two years. During this period, the business has weathered COVID impacts initially to demand and then chip shortages and supply chain disruption. We have demonstrated resilience, maintained margins, and grown revenue strongly despite supply chain headwinds. The strong revenue result was driven by several factors, including unit growth in higher price Dante products, margin preservation, really around passing through increased input costs and ensuring we were maintaining our margin, and modest additional revenue from products associated with the recent Silex acquisition.
Through the year, revenue was largely gated by the availability of chips, electronic chips. The high level of sales order backlog carried into FY 2023 indicates strong demand for Dante products. However, we expect chip shortages and supply chain disruption to linger throughout calendar year 2022 and possibly beyond. The chart on the slide shows historical growth, gross profit dollars and gross profit growth to highlight the ongoing shift in product mix towards software style solutions. Gross margin percentage was lower during this financial year due to the need to alleviate component shortages through spot buying and because of the lower gross margin percentage of some Silex products. Rob will speak in more detail to the financials later in the presentation. Slide four shows key operational highlights for FY 2022. As I said earlier, design wins are a key operational metric for Audinate.
A design win is the moment that a manufacturer signs up to use a Dante chip or software implementation in future products. Each design win unlocks future repeat orders for Audinate when new Dante Ultimo-enabled products ultimately reach the market. Pleasingly, we had a record number of 126 design wins across all our manufacturing customers, with 76 design wins relating to next generation software products. At the end of the year, we had a total of 26 manufacturers with Dante video products in various stages of development. During the period, 39 manufacturers launched their first Dante product, bringing the total number of manufacturers shipping Dante products to 410. Another 103 OEM brands have their first Dante-enabled product in development. When a product is launched and is available for sale, Audinate generates repeat revenue, as I said before.
Across FY 2022, an additional 487 Dante-enabled products hit the market, bringing a total number of Dante-enabled products to 3,610. Given that product and engineering teams across the industry are dealing with supply chain distractions, we feel this is a strong operational result in the context of the headwinds faced by our OEM customers. Slide five summarizes our progress against FY 2022 objectives, and clearly, I just talked about design wins a fair bit. Even though we have tactically prioritized dealing with supply chain disruption, we have made meaningful progress in many areas important for the long-term health of the business. I won't cover everything on this slide, but I would like to hit a few highlights. Reducing adoption friction for manufacturers and end users has been a particular focus for us this year.
Our website and training materials are now available in eight languages, enabling a wider range of non-English speaking customers to learn about Dante. We internationalized our Dante Controller software, which is used by audio visual technicians around the world to set up and troubleshoot Dante networks. Over 10,000 Dante Controller users have selected a non-English language. During the year, we made good progress on several initiatives to manage cyber risk, notably implementing an information security management system and forming key internal bodies to provide ongoing oversight. Group-wide training in cybersecurity was completed in the second half. Several initiatives aimed at scaling the business were also completed. An increase in headcount to 178 has laid the foundation for doubling revenue in the medium term. Key hires strengthened supply chain and product delivery functions in the organization.
The business has successfully delivered on our FY 2022 priorities with a backdrop of ongoing supply chain management and the integration of the Silex video acquisition as well. Slide six highlights new products that were launched during FY 2022. Firstly, I wanna highlight the work that we have done on in-field activation of Dante software products and features. During the year, we released a substantial update to Dante Controller, enabling Dante software to be paid for and or enabled by end users rather than at manufacturing time. This feature was launched in an amplifier manufactured by K-array and provides or offers improved economics for Audinate as well as enabling broader proliferation of Dante technology into lower cost products. Software video solutions and cloud products or services are important areas of product development and investment for Audinate. In the second half, we released a beta trial of Dante Cloud.
This is a SaaS product based on Dante Domain Manager for remote management of Dante installations. As illustrated on the slide, Dante Cloud enables an audio visual or IT administrator to receive timely and early warning of problems in Dante installations, and that enables proactive fault correction. Further, Dante Cloud enables an administrator to remotely manage a Dante installation across the internet rather than needing to connect physically to the local network. This year also saw the release of our first video software product called Dante Studio. Dante Studio provides essential video transmit and receive functionality for PC and Mac platforms and is analogous to the Dante Via and Dante Virtual Soundcard software for audio. Dante Studio was released in beta form as a free trial during the year, with a subscription model and commercial availability to come in FY 2023.
If we turn to slide seven, this is an update on the Dante video products and progress. FY 2022 has been a big year for Dante Video. We completed the integration of the Silex business into Audinate, taking over manufacturing and supply chain management for Silex white label video products and delivering those products to customers. Further refinement of our video roadmap has resulted in new products, most notably Dante AV-H, which has been well received by OEMs, many of whom were new Dante customers. Dante AV-H is a software stack that can be run on a variety of chips supporting the H.264 video codec. You may remember in the past that I've talked about differences in video codecs and fragmentation within the industry around different kinds of video codecs.
There are many products already in the field based on these chips that can potentially interoperate by using Dante to control video signal routing across the network. Dante AV-H lets manufacturers have their products appear in Dante Controller and be managed by Dante products and services like Dante Domain Manager or Dante Cloud. Dante AV-H lets integrators, the people installing and managing AV systems, manage audio and video signal distribution using familiar and proven Dante tools. Since it is a software stack, it can also be combined with a Dante audio software implementation to create a fully featured Dante audio video product. The Silex acquisition, the release of Dante Studio, and new products like Dante AV-H are rounding out the portfolio of Dante video products.
As I mentioned before, Audinate now has 26 video OEM customers, including those acquired with Silex, and we are expecting revenue exceeding $3 million from video products during FY 2023. And I'll now hand over to Rob for the finance section.
Thanks, Aidan, and good morning, everyone. Over the next few minutes, I will be explaining the FY 2022 financial results that were lodged with the ASX earlier today, and the financial information I will be covering is set out on slides nine to 14. I'll start with slide nine, which explains some of the key revenue information for the business. In U.S. dollars, revenue was $33.4 million growing 33.4% from $25 million in the prior year. In Australian dollars, revenue was up 38.7% on the prior year, with the differential growth rate due to currency tailwinds as the Aussie dollar weakened against the U.S. dollar.
During FY 2022, gross profit dollars grew 29.7% to $24.9 million at a gross margin percentage of 74.7%, reflecting some impact of spot inventory purchases as previously flagged and from some lower margin Silex revenue. From this point onwards, all amounts quoted will be in Australian dollars. Growth in Dante units amounted to 8% for FY 2022. We use the term Dante units as a catch-all expression for the number of unique AV products and computers with Dante inside, whether that be in the form of a chip, card, module or software. Revenue for chips, cards, and modules, collectively referred to as CCM, and revenue from software was impacted by similar factors. Unit growth in higher value Dante products like Brooklyn 2, Dante Broadway, Dante IP Core, and Dante Embedded Platform. Price increases to maintain margins.
25% price increases in the case of Brooklyn 2 and Broadway, and greater than 30% for Dante Via and Dante Virtual Soundcard. Declines in high volume, low value Dante products such as Ultimo and high channel count reference designs, and there was some additional CCM revenue from the Silex acquisition. As we flagged at the half year, Ultimo volumes were modest in the second half due to limited chip supplies. Overall, there was a decline in 90,000 units from the first half to the second half. Naturally, this significantly impacts on the average revenue per unit of chips, cards, and modules, and on comparison to unit trends to the previous financial years. We expect some recovery of Ultimo volumes in first half 2023.
Overall, the strong revenue growth for the year reflects Audinate's ability to implement material price rises in response to the inflationary impacts on the cost of raw materials. Notwithstanding the strong performance, revenue was gated by Audinate's and our customers' access to chips. For this reason, we suggest not reading too much into the performance of individual product lines. Our sales backlog remains at near record levels and places us well heading into FY 2023. In terms of the income statement set out on page 10, you can see that we delivered 41% growth in EBITDA, which amounted to AUD 4.3 million for FY 2022. At the beginning of FY 2022, we flagged the belief that the business can double revenue in the medium term and the resultant need to build up the team to support the business achieve this outcome.
It is pleasing that we've managed to grow headcount from 135 to 178 over the year, inclusive of the Silex team. This resulted in the AUD 6 million increase in employee costs for the financial year. It should also be noted the improved performance in the second half skewed the FY 2022 bonus expense, with the charge for the second half being AUD 2 million more than the first half expense. Sales and marketing expenses increased by around 900K as COVID restrictions eased and travel and trade shows recommenced in the second half. We expect further uplift in travel costs in FY 2023, with a return to a relatively full travel schedule.
Other operating costs increased from AUD 3 million to AUD 3.8 million in FY 2022, primarily due to half a million AUD of costs associated with the Silex acquisition. Consistent with the prior year, we are not in the position of recognizing tax losses. Overall, the net result of the impacts just described is that the group recorded a net loss after tax of AUD 4.5 million compared to a loss of AUD 3.4 million in the prior year. On slide 11, there is an EBITDA bridge outlining the key movements driving the 41% increase in the EBITDA in FY 2022. Please note we've shown the growth in gross profit dollars at the same rate as the prior year and then quantified the impact of FX tailwinds separately. The other factors in the graph have already been explained in my earlier commentary.
On slide 13, you'll find the cash flow statement which shows operating cash flows of AUD 1 million compared to operating cash flows of AUD 6.7 million in the prior year. There are a number of factors to be taken into account in comparing operating cash flows between the two periods. Firstly, an increase in inventory of AUD 3.7 million in FY 2022 to de-risk the business. Secondly, a bumper June drove a AUD 3.2 million dollar increase in trade debtors. Thirdly, due to COVID, there were no staff bonuses paid in respect of the FY 2021 financial year, whereas the FY 2021 bonuses are reflected in the operating cash flows for the current year. Lastly, there was approximately AUD 1 million of COVID grants received in FY 2021.
The other key item in the cash flow statement is the initial payment for the Silex acquisition of AUD 9.1 million reflected in investing activities. The statement of financial position is set out on slide 14. From our perspective, it is a clean balance sheet with no debt, and at 30 June, we have AUD 44.5 million of cash and term deposits. I will now hand back to Aidan to cover the outlook for FY 2023.
Thanks, Rob. If we move to slide 16, this slide summarizes supply chain risks and outlook. You know, as we've talked about a lot, throughout FY 2022, Audinate faced supply chain constraints and shortages of electronic components. The adaptability of our internal team, deepening relationships with key chip suppliers and ensuring redundancy in contract manufacturing were critical in responding to an acute shortage of chips. During the second half, Audinate built inventory of key components, notably for the new Brooklyn 3 designs, and that inventory addresses critical part shortages with the current Brooklyn 2 design. We expect supply chain challenges to linger through FY 2023, with long component lead times and elevated spot market prices. Chip shortages will continue to affect both Audinate and our manufacturing customers.
We expect temporary margin pressure as we prioritize product delivery using components that are available on the market at the time. Revenue will likely be gated again by chip availability, but demand remains strong. If we can successfully transition manufacturing customers onto solutions using more available chips, for example, transitioning customers to our Brooklyn 3-based design, we expect to convert our backlog into revenue. On slide 17, this summarizes our priorities for FY 2023. We need to maintain a focus on supply chain issues and on transitioning our customers to newer platforms that have more available electronic components. Strategically, we also want to convert the video design wins we have to date into shipping products as quickly as possible and begin to generate meaningful revenue from our video business.
As always, a key objective is to get new design wins over the line for Dante-enabled products, with a particular emphasis on driving traction with newly released products like Dante AV-H. Finally, having built the foundation of people across the business to enable growth, we will continue to focus on operating leverage and efficiency as we scale. Finally, on slide 18, chip shortages and supply chain risks are going to linger and there are related risks associated with the transition of customers to more available next generation products like Brooklyn 3. Given these risks and general global economic uncertainty, the company continues to operate on a cautious and prudent footing. However, Audinate enters FY 2023 with a backlog and software revenue run rate to support USD revenue growth in the historical range, subject to the risks I just mentioned.
In particular, we aim to see meaningful traction in our video offerings, including revenue of at least $3 million in FY 2023. It is particularly satisfying to have delivered strong revenue growth and improved EBITDA despite the many challenges faced by the business during the last year. With one eye on the global outlook, I'm excited about the potential for revenue growth, the new products we have in the pipeline and for Dante, video adoption during FY 2023. With that, I think we can look at questions.
Very good. Thank you, Aidan. There's a few here which are, what I might call, housekeeping questions. I might deal with a few of those off the bat, while you perhaps look at those questions from Danny. Questions about what we mean by medium term. A year ago, what we said was that we believe that revenue could double in the medium term, if we grow at our historical growth rates, which we've indicated that we believe we can do again this year. That would see us doubling revenue over the course of a three-year period. So that was in respect to that question which has been asked a few different times. There's been some questions around video revenue and OEM customers acquired with Silex and video revenue for FY 2022.
Most of that's sort of commercially sensitive. There was a relatively modest amount of revenue generated from video in the current year, so AUD 3 million next year would be a very material increase in revenue from video.
Do you want me to get my results?
Yep. Do you want to deal with this one then, Aidan?
Yeah, sure.
The question is.
I mentioned the scalability of the business and doubling Audinate's revenue. Historically, or when we talk about the historical growth rates for Audinate, it's been in that historic sort of 26 or-
26-31
31% growth rate. If you project that forward, I guess that's over the next few years is certainly revenue we expect to double in that kind of timeframe. That is more a bit, the risks ahead. I think, you know, nine months ago it would have been hard to say that we were expecting the kind of performance we have. I'm cautiously optimistic, and we have invested in headcount in the business in order to enable growth at our historical growth rate around that 26%-31% range over time. The other aspect of that question was associated with the capability that we're building in the Philippines.
We have a number of people in the Philippines at the moment providing finance, back office development, sales operations, HR capabilities. A number of systems and processes that are built around that office of people in the Philippines. As we grow and scale, that's something that works well for us because it's in a, you know, a friendly time zone with respect to the Australian head office, and it's been successful as we've been growing our business and also trying to maintain costs. It's worked well for us and we intend to keep using people in the Philippines and grow that office going forward.
Can I just pick up that question there, which deals with sort of incremental headcount and again, sort of the savings?
Yeah.
in the Philippines, which is sort of a related question.
Yeah. It's a question around incremental headcount investment. I think this last financial year was definitely a big step up in terms of our investment in people. The concept really was making sure we had the right people in place to enable the business to continue to grow at that historic rate. There was a fairly substantial step up in headcount and obviously costs associated with that. The 10% number of increase in headcount is really aimed at communicating that we don't intend to step up expenses again, anything like the same amount. If we're looking at administrative functions, we'll be likely doing those in the Philippines. That, as you point out, is a lower cost environment to do that.
However, we may still employ additional people in other offices around the world, but it'll be modest growth in other parts of the business in things like engineering, product management, sales and marketing, but quite modest growth.
Aidan, I'll answer a few questions here, but you might like to turn your mind to these two questions, which I'll come back to you in a moment on.
Yeah.
There are some questions around sort of design wins and the breakdown of that. We said 76 related to sort of new software products. The balance of 50 relates to video design wins, but it also relates to design wins in our sort of existing core audio products. For example, there was quite a few Brooklyn 3 design wins, for example, in FY 2022. I'll just check. There were some related questions which I think are very similar in nature, which we've covered. We've talked about. I'm just looking at another person who's asked five questions here. We've talked about medium term. I think we've talked about sort of the aspiration around video revenue for next year. There's a question about percentage of revenue spent on sort of development.
We do expect to see that percentage to continue to decrease over time. There's a slide in showing our development costs as a percentage of revenue. We are a technology-centric business, so there will always be a very material part of our P&L dedicated to technology research and development. We do expect to see continued improvement in operating leverage. I think we've talked to the additional headcount. I think the point that I'd make there is that the step-up in the cost base, as Aidan's already talked about, was providing us with the base to double revenue over that time frame. It's not the same as saying we don't require any additional headcount.
We're sort of looking at FY 2023 through a very different lens and hence the very modest headcount growth expected. Aidan, I might ask you to answer question four in a moment. Question five is about gross margins and what the expectations are for FY 2023. Aidan's talked about some pressure on gross margin, particularly around the Brooklyn 3 product, where we are sort of optimizing on being on availability and ability to deliver to customers. There will be some temporary downward pressure on margins, and revenue from the Silex products is also lower margin. We do expect to see some margin pressure, particularly in the first half of FY 2023.
Over time, we do expect that the shift from chips, cards and modules to software revenue will continue to drive that GP margin percentage higher over time. Aidan, there's sort of three questions which I've earmarked for you. Perhaps if you'd like to start with four and I'll jump.
Sure. The question here is around the step-up in design wins from 95 to 126, which is a big improvement from the previous year. What was the catalyst for that? When do we expect that to turn into revenue? I think the big catalyst for that was really around the software products that we brought to market recently. Things like the Dante Embedded Platform, Dante Application Library, those software products did very well.
They were driven partly by the sales team getting out there and selling them, but also because of things like supply chain issues where people were thinking about how to design a product to use more software and how they could potentially minimize the number of chips that were in use in the product. I think expectations around that, because it's software, it does have the potential to be adopted relatively quickly, particularly if we look at Dante Embedded Platform or Dante AV-H. These are software products that can be run on existing designs. To the extent that people already have designs, then the adoption of those technologies can proceed more quickly.
Having said that, I still think supply chain related stuff is going to be relevant over the next 12 months, and people are spending a lot of effort redesigning existing products rather than working on new products. In terms of monetization, it has the potential to for there to be faster adoption than a chip-style solution which involves redesigning the electronics. You know, it'll remain to be seen over the next 12 months how things pan out on the supply chain side of things. I am optimistic about it. I think it should convert into revenue relatively quickly.
Okay. Aidan, then we've got a question here. Design wins important to understand its traction with clients. What design wins would you like per annum over the coming years?
Yeah. Design wins are kind of an interesting number because they are an excellent leading indicator, but they don't really directly connect to the per unit revenue. For example, if we were to get a design win with a very large company like Yamaha for a chip like Ultimo, Yamaha could make 20 or 30 products using the Ultimo chip, and we would just count one design win. Sorry, I've forgotten what the question was. It's gone away.
Sorry.
Yeah.
Expectation for your design wins over the month.
In terms of what expectation would I have with that, I want to get larger companies. Design wins I expect to continue to grow solidly. As we broaden out our portfolio of video products, as we add things like Dante AV-H, and as we add new video product options to our product portfolio, then I expect more and more design wins that then generate more and more products over the coming years. I think design wins will increase relatively modestly, maybe linearly or something like that. I'd certainly like to see strong growth coming from video products, somewhat similar to the growth that we've had in the past for the audio business or perhaps faster.
Thanks, Aidan. Another question here: Are you able to comment on manufacturing capacity outside of China? Any plans to increase this?
Audinate has had a dual manufacturing strategy for a couple of years now, and we have a contract manufacturer in mainland China, but also one in Malaysia. This has served us well through COVID in that it's given us redundancy with respect to manufacturing. If there were lockdowns in one place, they typically weren't in the other place. It has also given us the capacity to avoid tariffs on imports from mainland China to countries like the U.S., for example. We certainly are looking at different manufacturing options around the world. With the Silex acquisition, we inherited a relationship with the contract manufacturer in Hungary.
We're exploring using that contract manufacturer more, and we're also looking at other options as well, potentially closer to our markets, where we sell rather than more focused around Southeast Asia. It is a very interesting topic, and there's certainly plenty of increasing geopolitical tension around Southeast Asia, and it's something we have on our agenda for sure.
I know I'll sort of just play a couple for you to come back to in a moment while I knock off a few of these. This question at the top we'll come back to with you, and then there's also a question around competitive threats that I'll get you to answer in a moment.
Yeah.
A couple of other technical questions, one on expand on why Audinate can't recognize tax assets for an Australian tax loss. Under the accounting standards, you need to be virtually certain over a period of three years that you're able to utilize those tax losses. At the moment, we're not, we're conservatively not in a position to do that. At the point at which we are able to have that level of certainty, you re-recognize all of the tax losses. It does go through the income tax line as a benefit in the P&L, and therefore sort of does favorably impact on NPAT.
We have been asked in the past about how that sort of impacts on any of the staff incentives, and any decision to re-recognize tax losses wouldn't have any impact on any, either short-term or long-term incentives. Also got a question here about the 10% headcount growth. Is this a reflection of scale of the business more consistent with a normalized investment rate going forward? I think that is a good way of thinking about it. I don't think I would be suggesting people sort of anchor on 10%, but we are more focused on having headcount falling into one of two particular buckets. I guess we've got an expectation of our core business being able to deliver revenue growth at a certain level.
You know, we're very focused on making sure that the headcount growth to sustain that revenue growth is a lot less so that we can deliver that operating leverage into the results. Then on top of that, there will always be additional headcount in sort of new product or new initiatives and so on. I do think it is yeah, I guess indicative of more modest expectations of headcount growth in the medium term. There was a question there as well.
Right. There's a question there. Is the board comfortable in terms of cash on hand or, you know, what's our balance sheet look like versus forward-looking growth and costs and expenses?
I think the broad position is that, yes, the board is comfortable with our current balance sheet. We don't have debts. We have AUD 40+ million in cash in the bank, and so that we see that as enabling what we need to do to get to cash flow breakeven over the next few years and potentially also gives us some optionality around some small acquisitions as well. At this point, we don't see any need to raise further capital, for example.
Thanks, Aidan. Sort of one last question. Other than chip shortages, is there any significant competitive threats from new technology or new competitors on the horizon that you are monitoring?
Yeah. With respect to competitive threats from new technology, I think there's a lot of maybe there's some shifts that happened throughout COVID in that there was a lot of normalization of the use of video technology and video streaming in particular. I think that really brings to the fore a variety of streaming style solutions for audiovisual applications. We're using one of them today, which is Zoom, where historically we would have met somewhere in a building and done a kind of physical in-person presentation, but now we're doing it online and through the cloud. I think those sorts of shifts and trends are definitely in play and there are significant competitive threats associated with new technology like streaming and the video technologies in the cloud.
On the other hand, they're also great opportunities for us because in the end you need a camera and in the end you need a microphone, and people still exist in physical spaces. One of the real opportunities and the other side of the coin with the competitive threat from things like cloud technologies is that there are some great opportunities for us to be able to connect physical spaces that contain networked Dante devices to the cloud and link into these sorts of technologies going forward. We're definitely paying close attention to the cloud side of things, video, and we are investing in products on that side of things.
Okay. Thanks, Aidan. Look, we will have to call time on questions. There are another two which we'll get to in a moment, but in the interest of time, we will have to cap the questions at this point. We have answered all of the questions that we've received. There is, you know, there was some interest in some information around extra detail around the video products and video revenue, which is commercially sensitive, and we're not in a position to share. Other than that, we have answered all of the questions that we've received. There are a further two which are open, which we'll get to now, after which we'll have to bring the webinar to a close.
Firstly, Aidan, will your video chip product support H.265 in the future?
Yeah. I didn't mean to specifically pigeonhole our Dante AV-H product as a H.264 product. The essential concept here is that there are chips that are available on the market which support various types of video codecs, including H.265. One of the purposes behind offering a Dante software product is to be able to leverage those chips and incorporate those into the Dante control ecosystem. To be able to manage audio and video distribution using a variety of chipsets and codecs across the network. In order to do so, the main goal is really to maximize the interoperability of the control layer, which nis what we're trying to do with that. We will partner with chip companies.
I think we've talked in the past about work we've been doing with the SDVoE Alliance. We've got our own FPGA-based solutions using JPEG 2000 at the moment. We have the Colibri codec that came from the acquisition of Silex Insight, and now we're also supporting a software stack that can run on quite commodity and low-cost H.264, H.265 chipsets. The plan is to continue to support commercially available and sort of meaningful codecs and chipsets going forward and grow our portfolio of video products.
Okay. Thanks, Aidan. One last question. This is from Claude Walker. Do you have any sense for when the priority at Audinate might transition from revenue growth to profit growth in the years ahead?
Yeah. I mean, I think about this from a strategic perspective in that, Audinate is, well, we're EBITDA positive, and that's really reflective and so free cash flow or profitability is really reflective of our investments that we're making in new products. We are a technology company, and we have a strategy to build out our video product portfolio. That's why we invested, a couple of years ago. We raised money, and we have built a team in Cambridge, and now with the Silex acquisition, we have a team in Belgium as well. That's broadening out our capability of developing and delivering video products.
Long term, by which I mean over the next few years, we will also be investing in the development of cloud-based products for the management and control of Dante installations of various sorts. We certainly don't want to be burning cash at a rate of nought, but the plan is to be able to execute on that strategy to establish a platform for the management of Dante devices which is built on the footprint of the Dante products in the field. At that point, I think we will have substantially achieved a number of strategic objectives at Audinate, and that is where we'll likely be generating cash.
Yeah. I don't think there's been any.
Not that we aren't generating cash right now. Yeah.
Yes. I don't think there's been any sort of change in the medium-term expectations that this is, you know, a 30%+ EBITDA-
Right
high-margin business. I think what you talked about is the trade-offs around, you know, achieving revenue growth and investing for that revenue growth. You know, ultimately, we see that sort of translating through into, you know, a very profitable business model at maturity.
Yeah. That's it for the questions. Notwithstanding the speed bumps on the way. Thank you all for joining us this morning. We appreciate your time. Again, I'm very satisfied with the financial result that we have achieved in FY 2022, given the headwinds that we faced. I'm particularly pleased around the Design Win results, the video progress that we've made, and the various new products that we've managed to introduce during the year with all of the distractions that we had. Thank you again, and that's it for our webinar today. Hopefully we'll see you again soon.
Thanks, everyone. Thanks for the interest in Audinate and your ongoing support.
Goodbye.