The time is now 9:30 A.M. in Sydney. As we have a quorum of members present, I declare the annual general meeting open. Joining me today is our CEO, Aidan Williams, and our Non-Executive Directors, Tim Finlayson, Alison Ledger, Roger Price, and John Dyson. We also have our CFO and Company Secretary, Rob Goss. Helen Hamilton-James, representing the company's External Auditor, Deloitte Touche Tohmatsu, is also in attendance. Today, we're very pleased to welcome those of you participating online through our second virtual meeting platform provided by our share registrar, Link Market Services. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. Due to the current COVID-19 pandemic, we thought it's prudent to take steps to discourage a physical public gathering and encourage attendance online.
We hope that holding a virtual meeting will assist to further curb the spread of the COVID-19 virus and encourage greater participation and engagement amongst our shareholders. If we experience any technical issues today, a short recess or an adjournment may be required, depending on the number of shareholders being affected. If this occurs, I shall advise you accordingly. Before we proceed to the formal business of the meeting, I will give a short address, and I will then ask Aidan Williams, our CEO, to address you. Voting on the resolutions will be conducted by way of poll. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. You'll be able to vote directly any time between the start of the meeting at 9:30 A.M. Sydney time, and the closure of voting, as announced at the end of the meeting.
Once you've registered, your voting card will appear with all of the resolutions to be voted on by shareholders at the meeting, as set out in the notice of meeting. To cast your vote, simply select one of the options. I now declare voting open on all items of business. Please submit your votes at any time. I will give you a warning before I move to close voting at the conclusion of all items of business. After Aidan's presentation, we will formally step through each of the voting resolutions. Following the voting, general business questions will be taken. If you have a question that you would like to ask today, there are two ways to do so. Shareholders participating online through the virtual meeting website can submit their questions online. Please click on the Ask Question button, type your questions, and click Submit.
I encourage shareholders attending online and who have questions to send their questions through as soon as possible. Questions can be submitted online at any time. Questions can also be asked through the moderator for those using the telephone option. To do so, you must enter your unique pin, which could have been attained from Link Market Services on request prior to the meeting. After you've dialed in, you'll be asked to mute your computer and listen to the meeting by phone. If you wish to ask a question, press star one. The moderator will ask you your name and introduce you to the meeting at the relevant time. Please then unmute your phone and ask your question. Please note that while you can submit questions from now on, we will not address them until the relevant time in the meeting.
Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamated together. Due to time constraints, we may run out of time to answer all your questions. We will first take questions from shareholders using the online platform, then take questions received over the phone. Shareholder questions received prior to the meeting will be addressed during the general business questions. Before our CEO, Aidan Williams, addresses us, I would like to welcome our directors that have joined us here virtually today and would like to make a few comments. Reflecting on FY 2021, we were pleased with the resilience of our business, which recovered steadily as a result of diverse revenue streams, a broad customer base, and exposure to multiple geographies in a range of vertical markets.
As we expected, the shift towards software revenue was evident. This shift is likely to continue given the improved unit economics for customers adopting new software products, such as the Dante Embedded Platform and Dante IP Core. Despite the challenging operating environment, the business continued to produce strong operating metrics, including growth in design wins, customers, Dante-enabled products, market share, and training numbers. Having successfully navigated the worst of the COVID-19 and supply chain disruption to date, it was disappointing to recently experience an unanticipated shortage of a key component, which is likely to curtail revenue growth in the second half of FY 2022. Unfortunately, this occurred at a time where demand for Dante products is at record highs. Aidan will explain this in greater detail later in the meeting. I would also refer you to the trading update lodged with the ASX on Monday.
While Aidan is now comfortably established as CEO, it's worth recognizing that COVID-19 emerged relatively early in his tenure. The board has been very impressed with his calm demeanor and rational decision-making through what has, of course, been an extremely tumultuous period. In particular, Aidan's ability to act both tactically and strategically has been evident as we strive to pioneer the future of AV. A part of this success is undoubtedly due to the contribution of the experienced and talented executive leadership team he has fostered. COVID-19 has impacted our staff in many ways over the last year. Some have contracted the virus themselves or loved ones have. There have been economic impacts to families through loss of employment or income. Extended lockdowns, remote working, and homeschooling have presented other challenges. These things all affect staff wellbeing and mental health.
Given this environment, we are all the more grateful for all our employees' contribution, drive, and teamwork, and recognize this as vital to our ongoing success as Audinate. The strong financial performance in the current year made it possible to return to paying staff bonuses for FY 2021 and to award pay rises for the year ahead. We are grateful for the willingness staff demonstrated to accept the importance of financial restraint heading into FY 2021, and we were impressed by ongoing strong employee engagement results given the challenging circumstances. Given the strong returns for shareholders over the last 12 months, it's great to be able to share this upside with employees through our staff equity plan. We continue to see staff equity as promoting a shared sense of ownership and alignment between staff and shareholders.
In recognition of the increasing investor focus on environmental, social, and governance, ESG, matters, we've provided additional disclosure in the director's report about how we manage supply chain risk, including modern slavery and conflict minerals considerations. There is also increased detail on our approach to diversity and inclusion at Audinate. We value the broad diversity we have within the existing team, which we seek to retain as we tackle some ambitious targets to improve our gender diversity. We will continue to keep shareholders informed of our progress in these areas, given the importance to Audinate. Ahead of the meeting, we received a shareholder question about whether the JobKeeper benefits the company received were distributed to relevant staff and about any board consideration to repaying the money.
The details of the amounts received are set out in Note 7 of the financial statements, which may be found on page 47 of the annual report. Audinate received JobKeeper grants amounting to AUD 434,000 in FY 2020 and AUD 759,000 in FY 2021. I can confirm that 100% of JobKeeper benefits went to supporting the incomes of staff. The Board did formally consider repaying the money but unanimously reached the view that it was in the best interest of shareholders to keep the grants received. In reaching this view, we did take into account a number of factors, including, A, the fact that the company was loss-making in both financial years, B, the revenue decline we experienced exceeded the amount of benefit received, and C, that a part of the proceeds were used to extend the employment of staff whose roles were made redundant as a result of COVID.
As we commence the new financial year, we're conscious of the growth journey ahead and recognize the importance of having the people, processes, and systems in place to support the business. We expect that Audinate will double revenue in the medium term, and consequently, it's essential that the company has a scalable cost base to grow profitably. In FY 2022, this means targeting headcount of more than 170 staff, up from 135 in FY 2021, to support new product initiatives and build out a layer of management and expertise below the executive leadership team. In terms of systems and processes, it means investing in supply chain management, a new release management process, strengthening cybersecurity, and implementing a range of new support processes in operations and finance. We're encouraged by the record demand for Dante products and the accelerated move to digital networking, particularly in corporate conferencing and higher education.
This enables us to retain a strong conviction in our strategy to enable a transformation of the AV industry. Again, I'd like to express my gratitude to the Audinate team and all our shareholders for their continued commitment and support throughout another challenging year. I would now like to welcome Aidan Williams, our Chief Executive Officer, to address you.
Thank you. Good morning, everyone, and thank you for joining our call today. I'd like to begin with, I guess, our usual brief overview. Many of you will be familiar with this. I'm sure many of you are aware Audinate is a technology company. We supply technology to manufacturers of professional audio-visual equipment around the world. Our technology is called Dante, and it distributes audio and video signals across standard IT infrastructure. Whilst our technology is primarily in a software form, because our customers are manufacturers of electronics and equipment, we actually package that software into a number of different chips, cards, and modules. You can see on the screen in front of you, there are some chips, modules, cards, some pictures of chips, cards, and modules.
In particular, I would draw your attention to the chip and the module that is on the screen there, because as we talk about the impacts of the unexpected shortage of chips, it affects those particular products. These are physical products that we sell to manufacturers of AV equipment like Yamaha, Bose, Bosch, people like that, and that ultimately go into things like amplifiers and cameras and things like that. When we talk about modules later on in the presentation, you can see on the screen there is a picture of the Brooklyn module that we will be talking about. I don't want to labor too much of the next few slides, and this is because they are the same as the full year results. We have actually spoken to these previously. I just do want to reiterate the progress that we had in FY 2021.
We're very pleased to see that the number of Dante products available on the market continues to grow. The network effect associated with the Dante technology continues to increase, which is fantastic for our competitive advantage. Operationally, we had a great year. We now have 371 manufacturers or brands shipping Dante-enabled products, and that is an additional 43 manufacturers that started shipping Dante products in the last financial year. Likewise, that 3,255 Dante-enabled products on the market represents an increase of 451 new Dante-enabled products which came onto the market during FY 2021, in spite of all of the supply chain disruptions that were happening at the time. We think that that was actually a really good result for Audinate. In terms of financial highlights, FY 2021 was extremely pleasing. I think during FY 2020, we weathered the COVID downturn, and our revenue was flat.
In FY 2021, we saw a pleasing return to revenue growth. We saw a 22.5% growth in our revenue during FY 2021, and this really occurred off the back of a general recovery, a global recovery in the AV industry. People starting to go back and do more installations and basically manufacturers once again building audio-visual products that had the Dante technology inside of them. That recovery in demand, strong demand, has driven a strong backlog for us going forward. Again, I would point out that we had a number of supply chain issues through FY 2021, and we managed to navigate many of those, and that it was not an easy environment in order to get revenue growth. We were very pleased with this return to growth.
One thing I do want to touch on very briefly is just talk again about some operational metrics and some of the key metrics which drive future revenue growth for Audinate. In FY 2021, we in particular had a record number of design wins, and the chart on the screen there is really intended to communicate why this is important for future revenue. The chart really shows the sales cycle for Dante technology, and the design win is right down the beginning of that sales pipeline. That is where a manufacturer commits to using Dante in a new product. The manufacturer pays some money to Audinate, and they become a licensee for one of those chips or modules or a software product, and they then design that Dante technology into their product.
On the other end of that sort of flow, the brown arrow that you can see, they complete their engineering design, they release a new product onto the market. That's a key milestone because once they release that product on the market, every time they manufacture a new amplifier or a new camera or something like that, then they buy a Dante product from us, that's what generates the repeat revenue for Audinate. When we think about our operational results, we had an excellent year in FY 2021 in terms of the beginning of the pipeline. This is a record number of design wins. We also had another excellent year with respect to getting new products onto the market. That's the end of that pipeline.
We also saw revenue growth in the repeat revenue cycle of this graph due to general recovery in the AV industry. FY 2021 also saw some substantial milestones for Audinate with our new video technology. We saw the first six Dante video products released onto the market. These were two camera products, which are called pan-tilt-zoom cameras. These are the kinds of cameras used in conferencing and higher education, as well as four devices which enable video signals to be transmitted across the network and then taken off the network and plugged into things like projectors and screens. One of the key things here is that this enables all Dante AV systems to be deployed. Most AV systems have an audio component but also a video component.
Now with these products, Dante can be used to manage audio and video signal distribution within those systems using a single networking technology. On the video side of things, we have had a good number of design wins. Getting the products released and on the market has certainly unlocked a lot of further interest and our expectation is that with these products now being in the market then, and we're seeing it already, is that there's increasing interest in using the Dante video technology. We also did a really great demonstration of the Dante video technology and the audio technology working together. This was a live performance where the musicians were in three completely different locations. New York, Washington, D.C., and Nashville.
You can see pictures of that on the screen, and also there's a link there that you can follow if you want to find out more about that. In terms of our quarterly update that we put out recently. There were a combination of things here, and I will spend most of my time talking to supply chain matters. I do want to note that we had very strong demand in our first quarter, and that translated to a record revenue of AUD 7.5 million in Q1. That was up 46% on the prior comparable period. We also have a record backlog of chips, cards, and modules of AUD 14.8 million. This is partly due to our customers ordering further into the future as they manage their own supply chain risks.
I think mostly it is to do with the general recovery that we're seeing around the world. This backlog is really representative of a return to underlying demand for our technology. It's at around about 6x pre-COVID levels. Unfortunately, though, we did see in the last week, we have been informed that we will be impacted by a component shortage. Many of you are probably aware that there is a global shortage in semiconductors at this point in time, and there are a lot of reasons for that, which I'm sure you can research on your own. What occurred to us is that we have a substantial chip supplier. This is a top 30 semiconductor manufacturer who supplies us with chips that go into the modules that I was talking about on the first slide.
That picture of the circuit board with the chips on it. Also supplies our customers directly, and we also sell one of their chips as a product of ours. The Broadway product is in fact manufactured by this semiconductor company. We were informed Wednesday last week that they would be unable to supply any further chips to us up until March 2022. We do have some inventory on hand, but we do not have enough inventory to cover the overall demand. This is a fairly substantial change to our supply chain. As a supplier, they are a top-tier semiconductor manufacturer. What occurred here was unexpected in that they had a sudden loss of capacity in their semiconductor foundry. The chip company is a fabless semiconductor. The foundry is in Korea. It is a 45-nanometer semiconductor foundry.
It's a relatively old technology with a long lifetime. Basically, there's been a sudden decrease in the amount of chips that are available. With immediate effect, unfortunately, we need to be rationing or placing on allocation the components that we have and then making some changes to switch to some alternative chips that will enable our technology to be sold into manufacturers' products. The situation is that we have no supply of these chips until March 2022. Ongoing from March 2022, it's our expectation or we've been informed that capacity will still be very constrained, and so we need to take action to design a different solution into our products going forward. Okay. The list of affected products is called out in the ASX release. You will see there's a longer list than is mentioned on this screen here.
I really wanted to focus on the main products that are affected with respect to revenue for Audinate and also the impacts for customers. Really, they fall into two categories. The first category is the module category, which I pointed you towards in the first slide. This Brooklyn II module uses a particular family of chips called the Spartan-6 FPGA. One of the chips on that module we can no longer get, and we have some inventory for it. The good news with the module is that we can redesign that module. We can change the electronics of that module and swap the chip for another chip, and that will enable us to offer our customers a drop-in replacement. A substitute that they can drop in that uses a different part that doesn't depend on that semiconductor manufacturer that is currently constrained.
On the other hand, some of our customers have incorporated one of these Spartan-6 chips directly into their product. They either buy that chip themselves, or they use our Broadway part. Either way, there is a Spartan-6 chip that is designed into their product. What we need to do in that case, is we need to work with our manufacturing customers to do the electronics design to put a different Dante solution into that product using different chips or potentially in a different form. We have a number of Dante solutions on the shelf that we can provide to manufacturers. These are software solutions like Dante Embedded Platform or Dante IP Core that can run on different parts that don't come from the affected semiconductor manufacturer. However, many of our customers will have to go through the process of doing that electronics design.
A lot of our customers are already facing chip shortages on other non-Dante components as well. Most of our customers are already doing redesigns of various sorts. This is yet another design change that potentially is needed. Through the transition, we need to be able to manage our inventory for the best interests of our customers as we try and get them through this particular shortage of the chips that they have on their boards to another design that is not as supply constrained. In response, we have a very high priority activity internally, which is to design that drop-in Brooklyn replacement. At this stage, we believe that that will be available for sale by Q4 FY 2022, and this will use a more available chip manufactured at a different foundry. We also need to prioritize and allocate the inventory we have on hand.
The typical process of allocation we go through here is we work out which customers are high priority, and we work out how to try and manage the inventory we have in order to help those customers get through this particular period. The reality, of course, is that we do not have enough inventory to meet the desired demand on hand. This will unfortunately involve customers not getting as many chips as they would otherwise want. On the financial side of things, there will be a revenue impact to Audinate. Clearly, not being able to get these Spartan-6 chips affects our ability to sell Brooklyn modules but also affects our manufacturing customers' ability to make products based on this Spartan-6 chip.
If they have purchased a Spartan-6 chip, we give them the software to run on it, but the net effect is essentially that they are unable to manufacture the product because they can't get Spartan-6 chip, that means we would not receive a royalty at that point in time. Historically, the affected products last year, those affected products delivered across the full year, they delivered 43% of Audinate's revenue. We have enough inventory on hand for Q2, for the remainder of this quarter. We expect the drop-in replacement Brooklyn module to be ready by Q4. The main impacted quarter will be Q3. Unfortunately, I think everything we've heard from our chip suppliers makes us believe that the global shortage of chips, we expect it to linger through the calendar year 2022.
That's going to impact both our ability and our manufacturing customers' ability to source components generally, and I mean even non-Dante components. At the moment, that's certainly a significant disruption in terms of their ability to do regular production. In terms of the outlook for FY 2022. There will clearly be a revenue impact from this. However, we still are expecting revenue growth. We think that we have a plan in place, as good a plan as we can, in order to mitigate the impacts on revenue. We still expect revenue growth over the prior comparable period, but we don't expect that we will be in the range of our historic revenue growth. Non-Dante that's a change.
When we spoke last time during the results season, we were expecting to be able to achieve revenue growth in the range of our historic range of 26%-31% revenue growth. What's happened here is that we have a major chip supplier that has suddenly and unexpectedly been able to supply us, and that has flowed onto our ability to generate revenue. We've been through a lot of turbulence in the last 18 months, and I would say that this is p robably the biggest road bump that we've had, and it's certainly a substantial speed bump in terms of our ability to deliver products to our customers. We will be working hard internally to satisfy as much demand as we can. We'll be making tough choices in terms of allocating the product that we have available to the customers who are in need of it.
We will be doing everything that we can to deliver the inventory we have, but also to help our customers to make the necessary design changes in order to work through this particular problem. Okay. That is all I had. Thank you very much.
All right. Thank you for that update, Aidan. Ladies and gentlemen, we now come to the formal part of the business, matters requiring resolution, which are outlined in the notice of meeting. The notice of meeting dated 17 September 2021 was circulated to members. I will take the notice of meeting as being read. The resolutions for consideration today may only be voted on by shareholders, proxy holders, and shareholder company representatives. Shareholders online through the virtual meeting website have the opportunity to ask questions on each matter being put to shareholders. Moving to the resolutions, I'd like to advise that I, as Chairman, intend to vote all undirected proxies in favor of all resolutions.
Each resolution set out in the notice of meeting is to be considered as an ordinary resolution, and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. As each resolution is tabled, a slide will show the results of the proxy votes on the screen. Are there any questions relating to procedures of the meeting? Okay, we've gotten none received. Okay. We will now move to the business of the meeting. Mr. Rob Goss, the CFO and Company Secretary, will now lead us through the formal matters and resolutions being considered today.
Thank you, David. The meeting will receive and consider the financial report, the directors' report, and the independent auditor's report of the company for the financial year ended 30 June 2021. A copy of the annual report was made available on the company's website, the ASX platform, and was sent to those shareholders who requested it. I will take the reports as read. In advance of the meeting, we received one question from a shareholder, and this was responded to in the Chair's presentation. I will now take questions on this item of business received through the online platform, if there are any.
No questions have been received.
I will now take questions on this item of business received over the phone line, if there are any.
Thank you. There are no phone questions.
Thank you. We will now move to the resolutions for voting. The first resolution is the re-election of Ms. Alison Ledger as director. I now move to the first resolution, which is to consider, and if thought fit, pass the following as an ordinary resolution of the company to re-elect Alison Ledger as a director. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. The directors, with Ms. Ledger abstaining, unanimously recommend shareholders vote in favor of this resolution. The resolution is set out on the screen. I will now take questions on this item of business received through the online platform, if there are any.
No questions have been received.
I'll now take questions on this item of business received over the phone, if there are any.
There are no phone questions.
Thank you. I will now put to the meeting Resolution 1, and here are the proxies. Thank you. Please now select either for, against, or abstain for Resolution 1 on the voting card, and I will pause briefly for voting. The second resolution is to consider, and if thought fit, pass the following as an ordinary resolution of the company: to re-elect Tim Finlayson as a director. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. The directors, with Mr. Finlayson abstaining, unanimously recommend shareholders vote in favor of this resolution. The resolution is set out on the screen. I will now take questions on this item of business received through the online platform, if any.
No questions have been received.
Thank you. I will now take questions on this item of business received over the phone, if any.
There are no phone questions.
Thank you. I now put to the meeting Resolution 2, and here are the proxies. Please now enter your vote for Resolution 2 on the voting card, and I will pause momentarily for voting. The next resolution of the meeting is regarding the Audinate Remuneration Report. Under the Corporations Act, listed companies are required to include the Remuneration Report within the 2021 Director's Report. The 2021 Remuneration Report is available on the company's website and was posted to shareholders on request. I will take the Remuneration Report as read. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. This vote is advisory only and is not binding on the company.
I would like to advise shareholders that Audinate Group Limited will disregard any votes as stated in the voting exclusion statement related to Resolution 3 as set out in the notice of meeting. In the interest of governance, the Board does not make a recommendation to shareholders in relation to this resolution. The resolution is set out on the screen. I will now take questions on this item of business received through the online platform, if any.
No questions have been received.
Thank you. I will now take questions on this item of business received over the phone line, if any.
There are no phone questions.
Thank you. I will now put to the meeting Resolution 3, and here are the proxies. Please now enter your vote for Resolution 3 on the voting card, and once again, I will pause momentarily for voting. The next item of business is the approval of the issue of performance rights to the CEO, Mr. Aidan Williams. Details of Mr. Williams' remuneration package as CEO and the basis upon which the remuneration was determined are set out in the remuneration report, which can be found in the company's annual report.
The directors consider that the proposed issue of performance rights is an integral part of effectively rewarding and incentivizing executive management in a manner that aligns the interest of management with shareholders and is a key component of an appropriately structured remuneration package for Mr Williams. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. The directors, with Mr. Williams abstaining, unanimously recommend shareholders vote in favor of this resolution. I would like to advise shareholders that Audinate Group Limited will disregard any votes as stated in the voting exclusion statement related to Resolution 4A as set out in the notice of meeting. The resolution is set out on the screen. I will now take questions on this item of business received through the online platform, if any.
No questions have been received.
Thank you. I will now take questions on this item of business received over the phone, if any.
There are no phone questions.
Thank you. I will now put to the meeting Resolution 4A, and here are the proxies. Please now enter your vote for Resolution 4A on the voting card while we momentarily pause for voting. The next resolution relates to the accelerated pro rata vesting of Mr. Williams' 2021 LTI award in limited circumstances, and in the event that Mr. Williams ceases to be employed by the company as specified in terms of the 2021 LTI award. These circumstances include retirement, redundancy, death or permanent incapacity. Resolution 4B is conditional upon shareholder approval of Resolution 4A being obtained. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting.
The directors, with Mr. Williams abstaining, unanimously recommend shareholders vote in favor of this resolution. I would like to advise shareholders that Audinate Group Limited will disregard any votes as stated in the voting exclusion statement related to Resolution 4B as set out in the notice of meeting. The directors, with Mr. Williams abstaining, unanimously recommend shareholders vote in favor of this resolution. I would like to advise shareholders that Audinate Group Limited will disregard any votes as stated in the voting exclusion statement related to Resolution 4B. The resolution is set out on the screen. I will now take questions on this item of business received through the online platform, if any.
No questions have been received.
Thank you. I'll now take questions on this item of business received over the phone, if any.
There are no phone questions.
Thank you. I will now put to the meeting Resolution 4B, and here are the proxies. Please now enter your vote for Resolution 4B on your voting card while we once again pause for voting. Ladies and gentlemen, that concludes our discussion on the items of business. In a couple minutes, the voting system will be closed. Please ensure that you have cast your vote on all resolutions. The voting card remains editable until voting is closed. Once voting has been closed, all voting cards submitted and unsubmitted will automatically be submitted and cannot be changed. I'll now pause to allow you time to finalize your votes.
The shareholders are reminded that they can submit their vote online until five minutes after the meeting closes. I will now hand back to the Chairman.
Thank you, Rob. As we outlined at the beginning, we will now respond to any further questions raised through the online platform that have not been addressed during the course of the meeting, if any.
No questions have been received.
I will now take any further questions received over the phone, if any.
There are no phone questions.
Thank you all for your interest in Audinate. We will now conclude question time at this point. On behalf of the Board of Audinate, I would like to thank you for your support, and I now declare the meeting closed. The results of the poll will be announced to the ASX later today. Thank you all for your attendance and participation in our meeting today.