• Q2 FY25 sales of $9.3m, up 7% on pcp
• Gross profit margin declined from 43.1% in Q1 to 38.5% in Q2 due to discounting and promotions
• Cost restructure largely finalised, with run rate fixed cost base of $16m expected in H2 FY25

Atomos Limited (ASX:AMS) released its Q2 FY25 Quarterly Activities Report, highlighting a 7% increase in sales to $9.3m, primarily driven by the new Shinobi II product which contributed $2.6m in revenue. However, the company experienced a reduction in gross profit margin from 43.1% in Q1 FY25 to 38.5% in Q2 FY25, driven by discounting and promotions required to meet the market, as well as global headwinds and a reduction in discretionary spend leading to softening demand and an increasingly price-conscious customer base. To address this, Atomos is developing a new Monitor product expected to be released in Q3 FY25 to engage with more price-conscious consumers, and a new product suite for H1 FY26 which should drive sales volumes and provide margin retention. The company's cost restructure is largely finalised, albeit the run rate fixed cost base of approximately $16m is not expected to be visible until H2 FY25 when redundancies, legacy service contracts, and other non-recurring expenses are completed. Atomos is reviewing its funding requirements, with an update to be provided in Q3 FY25.

The restructure has now largely been finalised, albeit the run rate fixed cost base of approximately $16m is not expected to be visible until H2 FY25 when redundancies (including notice periods) are completed; legacy service contracts expire; and other non-recurring expenses (such as legal and settlement costs) are finalised. Atomos is highly focused on new customer acquisition and the development of existing channels coupled with a stronger online presence.