Sparks - Focusrite

There are no surprises in Focusrite’s FY24 results, given the headline figures were well flagged in a trading statement at the end of August. Revenue fell by 11% y-o-y and adjusted EBITDA dropped by c 35%. The results highlight that the company’s two divisions have been pulled in different directions: its largest business, Content Creation (-17% constant currency) has been impacted by macroeconomic weakness and channel destocking, while Audio Reproduction (+14% constant currency) has continued to thrive as live events have normalised post the pandemic.

There appears to be more encouraging signs for FY25, or at least signs of stabilisation, for Content Creation, and management appears confident of outperforming a slowing Audio Reproduction market. Despite the weak FY24 results, management has continued to take the long view by investing in new product development and undertaking M&A to increase its market coverage.