Shares double for hearing tech scale-up Audeara on Zildjian contract

Brisbane-based hearing tech scale-up Audeara (ASX: AUA) has found a new groove thanks to its decision to expand into white-labelled product design and manufacturing outside of the health sector, securing the first mass production order for a spin-off that has been trialing a product with a previously unnamed US-based musical instrument company.

Today Audeara revealed that customer is percussion-focused manufacturer Avedis Zildjian, which in the previous quarter put down a $320,000 deposit but has now made a $2.1 million purchase order with the Australian company.

AUA shares more than doubled to a 52-week high of 7.6 cents per share (cps) this morning, before levelling out to 6.8cps (up 106 per cent) at the time of publication.

Audeara believes the purchase order - the first of its kind for the AUA Technology business aimed at finding new revenue streams - will have a significant positive impact on cashflow and its push toward breakeven and profitability.

"Through this exciting partnership with a global category leader, we are thrilled to see the technology we’ve been developing for years gain access to additional high scale markets," says Audeara co-founder and chief technology officer (CTO) Alex Afflick, an engineer who founded the company in 2015 alongside doctors James Fielding and Chris Jeffery.

"As part of that process, the team’s progress throughout the transition from hardware product development to professional services and licensing has been highly commendable.

"Building best-in-class audio solutions is our passion, and Audeara envisions that this partnership is just the beginning of future product sales and licensing agreements aimed at expanding the reach of our technology in collaboration with established industry leaders."

Today's share price lift takes Audeara's market capitalisation to around the $10 million mark, which is still half its indicative initial public offering (IPO) valuation in 2021. 

In the financial year of its listing, Audeara's revenue was just $1.1 million and it ran at a loss of $1.25 million. 

Two years later in FY23, its annual revenue reached $2.9 million with its proprietary hearing technology-driven product suite distributed through 1,400 clinics in Australia and stocked in six countries - a number that rose to 10 nations by January with another seven in the pipeline this year.

The company currently has partnerships with three of the global top-tier audiology brands – Amplifon, Demant and WS Audiology - and in FY23 also launched in Taiwan's largest audiology clinic Clinico, which has entered into an R&D agreement with Audeara to develop an in-ear earbud device.

In the most recent quarterly results for December, Audeara reported a significant reduction of 58 per cent in its net cash outflows quarter-on-quarter, and noted the first purchase orders received from Amplifon in France and Belgium. Since then it has also secured its maiden order from Spain.

Audeara is an alumnus of the University of Queensland (UQ) Ventures program, and its founders have been finalists in the Brisbane Young Entrepreneur Awards on several occasions. Jeffrey's medical technology startup Convergence Medical hopes to commercialise its world-first arthroscopic surgical robot in 2025.

The news is one of two big announcements today from UQ Ventures alumni, with the other being automation deployment group Octopus Deploy acquiring its US competitor Codefresh for a reported US$28 million.