Avid® (NASDAQ: AVID), a leading technology provider that powers the
media and entertainment industry, today announced its financial
results for the third quarter of 2022, which ended on September 30,
2022.
The recurring components of the Company’s revenue
remained strong during the third quarter, with subscription revenue
increasing 49.2% year-over-year in the third quarter to $41.8
million and subscription & maintenance revenue growing 17.6%
year-over-year to $69.1 million. Total revenue
increased 1.3% year-over-year to $103.0 million in the third
quarter, led by the strong subscription growth but offset by
continuing supply chain challenges that have impacted the Company’s
ability to ship a significant amount of the orders received for
integrated solutions during the first nine months of
2022. At constant currency, total revenue
increased 6.0% year-over-year and subscription & maintenance
revenue increased 22.3% year-over-year in the third quarter.
The revenue growth, combined with improved gross
margin, resulted in Adjusted EBITDA of $21.0 million, representing
20.4% of revenue, and Non-GAAP Earnings per Share of $0.38, an
increase of 40.7% year-over-year.
Third Quarter 2022 Financial and Business
Highlights
- Subscription revenue was $41.8
million, an increase of 49.2% year-over-year. At constant currency,
subscription revenue increased 56.2% year-over-year.
- Paid Cloud-enabled software
subscriptions increased by an all-time record of 32,600 during the
quarter to approximately 482,900 as of September 30, 2022, an
increase of 24.1% year-over-year.
- Subscription and maintenance revenue
was $69.1 million, up 17.6% year-over-year. At constant currency,
Subscription and maintenance revenue increased 22.3%
year-over-year.
- Annual Recurring Revenue was $237.2
million, an increase of 10.0% year-over-year. At constant currency,
Annual Recurring Revenue increased 13.2% year-over-year.
- Subscription ARR was $131.3 million,
an increase of 33.2% year-over-year. At constant currency,
Subscription ARR increased 36.9% year-over-year.
- Total revenue was $103.0 million, an
increase of 1.3% year-over-year. At constant-currency, total
revenue increased 6.0% year-over-year.
- Gross margin was 67.8%, an increase of
300 basis points year-over-year. Non-GAAP Gross Margin was 68.3%,
an increase of 300 basis points year-over-year.
- Operating expenses were $55.7 million,
a decrease of (1.2%) year-over-year. Non-GAAP Operating Expenses
were $51.5 million, an increase 0.3% year-over-year.
- Net income was $12.0 million, a
decrease of (18.6%) year-over-year, largely due to a one-time gain
related to loan forgiveness in the prior year period. Net income
was 11.7% of revenue. Non-GAAP Net Income was $16.8 million, an
increase of 35.2% year-over-year. Non-GAAP Net Income was 16.3% of
revenue.
- Adjusted EBITDA was $21.0 million, an
increase of 23.5% year-over-year. Adjusted EBITDA Margin was 20.4%,
an increase of 360 basis points year-over-year.
- Net income per common share was $0.27,
a decrease of (15.6%) year-over-year, largely due to a one-time
gain related to loan forgiveness in the prior year period. Non-GAAP
Earnings per Share was $0.38, an increase of 40.7%
year-over-year.
- Net cash provided by operating
activities was $10.3 million in the quarter, a decrease of ($6.2)
million compared to the third quarter of 2021.
- Free Cash Flow was $6.6 million in the
quarter, an increase of $3.4 million compared to the second quarter
of 2022. Free Cash Flow decreased ($7.4) million compared to the
third quarter of 2021, due to impact of working capital changes and
timing of product shipments in the quarter.
- LTM Recurring Revenue % was 83.3% of
the Company’s revenue for the 12 months ended September 30, 2022,
up from 77.1% for the 12 months ended September 30, 2021.
- The Company repurchased 757,720 shares
for $18.6 million during the third quarter, under the $115 million
share repurchase authorization announced on September 9, 2021.
Jeff Rosica, Avid’s Chief Executive Officer and
President, stated, “We are pleased by the strong growth from our
subscription software business, particularly enterprise
subscription and reacceleration of our creative tools, most notably
Pro Tools.” Mr. Rosica continued, “Demand for our integrated
solutions products remains strong, and while we continue to see
some lingering constraints in the supply chain, we were able to
resume production of certain audio hardware products late in the
third quarter and we believe the remaining constraints are
temporary. For the fourth quarter and full year, we believe we are
well positioned to deliver earnings growth despite revenue
headwinds from the impacts of foreign exchange and slower-than
expected recovery from the current global supply chain
situation.”
Ken Gayron, Chief Financial Officer and Executive
Vice President of Avid, added, “We are pleased with our strong
Non-GAAP Earnings per Share growth of over forty percent that was
driven by an acceleration of our subscription business including an
all-time record in paid subscription net adds during the quarter.”
Mr. Gayron continued, “However, due to foreign exchange headwinds
and the continuing challenges with the supply chain for integrated
solutions, we are modifying our 2022 guidance for revenue and Free
Cash Flow but maintaining and tightening our 2022 guidance for
Non-GAAP Earnings per Share and Adjusted EBITDA due to prudent
management of the business. Solely as a result of the foreign
exchange headwinds, we are modifying our 2022 guidance for
subscription & maintenance revenue.”
Full-Year 2022 Guidance
For the full-year 2022, Avid is reaffirming and
tightening its guidance for Non-GAAP Earnings per Share and
Adjusted EBITDA. Solely as result of foreign exchange headwinds,
Avid is modifying is full-year 2022 guidance for subscription &
maintenance revenue. Finally, due to the challenges in the supply
chain and foreign exchange headwinds, Avid is modifying its
full-year 2022 guidance for revenue and Free Cash Flow.
|
|
Prior Guidance |
Revised Guidance |
($ millions, except per share amounts) |
Full-Year 2022 |
Full-Year 2022 |
Revenue |
$425 – $455 |
$412 – $424 |
Subscription & Maintenance Revenue |
$266 – $274 |
$260 – $268 |
Non-GAAP Earnings per Share |
$1.37 – $1.53 |
$1.40 – $1.50 |
Adjusted EBITDA |
$83 – $95 |
$83 – $87 |
Free Cash Flow |
$45 – $59 |
$38 – $43 |
2022 Non-GAAP Earnings per Share prior guidance assumed 45.2
million shares outstanding and revised guidance assumes 44.8
million shares outstanding. |
|
All guidance presented by the Company is inherently
uncertain and subject to numerous risks and uncertainties. Avid’s
actual future results of operations could differ materially from
those shown in the table above. For a discussion of some of the key
assumptions underlying the guidance, as well as the key risks and
uncertainties associated with these forward-looking statements,
please see “Forward-Looking Statements” below as well as the Avid
Technology Q3 2022 Earnings presentation posted on Avid’s Investor
Relations website at ir.Avid.com.
Conference Call to Discuss Third Quarter
2022 Results on November 8, 2022
Avid will host a conference call to discuss its
financial results for the third quarter 2022 on Tuesday, November
8, 2022, at 5:30 p.m. ET. Participants may join the
webcast in listen-only mode and access the presentation slides
using the link on the Avid Investor Relations website, which can be
found on the Events & Presentations tab at
ir.Avid.com. Please connect at least 5 minutes in
advance to ensure a timely connection to the call. A
replay of the call will also be available for a limited time and
can be accessed on the Events & Presentations tab of the Avid
Investor Relations website shortly after the completion of the
call.
Non-GAAP Financial Measures and Operational
Metrics
Avid includes non-GAAP financial measures in this
press release, including Adjusted EBITDA, Adjusted EBITDA Margin,
Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Operating Expenses,
Non-GAAP Net Income, and Non-GAAP Earnings per Share. The Company
also includes the operational metrics of Cloud-enabled software
subscriptions, Annual Recurring Revenue, Recurring Revenue, LTM
Recurring Revenue % and Annual Contract Value in this release. Avid
believes the non-GAAP financial measures and operational metrics
provided in this release provide helpful information to investors
with respect to evaluating the Company’s performance. Unless noted,
all financial and operating information is reported based on actual
exchange rates. Avid presents constant currency information to
provide a framework for assessing how our underlying businesses
performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results in currencies other than United States dollars
are converted into United States dollars using the same historical
budget exchange rate rather than the actual exchange rates in
effect during the respective periods. Definitions of the non-GAAP
financial measures and the operational metrics are included in our
Form 8-K filed today. Reconciliations of the non-GAAP financial
measures presented in this press release to the Company's
comparable GAAP financial measures for the periods presented are
set forth below and are included in the supplemental financial and
operational data sheet available on our Investor Relations website
at ir.Avid.com, which also includes definitions of all operational
metrics.
This press release also includes expectations for
future Adjusted EBITDA, Non-GAAP Earnings per Share and Free Cash
Flow, which are forward-looking non-GAAP financial measures.
Reconciliations of these forward-looking non-GAAP measures are not
included in this press release or elsewhere, due to the high
variability and difficulty in making accurate forecasts and
projections of some of the information excluded from the estimation
of the non-GAAP results, together with some of the excluded
information not being ascertainable or accessible at this time. As
a result, we are unable to quantify certain amounts that would be
required to be included in the most directly comparable GAAP
financial measure without unreasonable efforts.
Forward-Looking Statements
Certain information provided in this press release
includes forward-looking statements within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934,
which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Examples of
forward-looking statements include statements regarding our future
financial performance or position, results of operations, business
strategy, plans and objectives of management for future operations,
and other statements that are not historical fact. You can identify
forward-looking statements by their use of forward-looking words
such as “may”, “will”, “anticipate”, “expect”, “believe”,
“estimate”, “intend”, “plan”, “should”, “seek”, or other comparable
terms.
Readers of this press release should understand
that these forward-looking statements are not guarantees of
performance or results. Forward-looking statements provide our
current expectations and beliefs concerning future events and are
subject to risks, uncertainties, and factors relating to our
business and operations, all of which are difficult to predict and
could cause our actual results to differ materially from the
expectations expressed in or implied by such forward-looking
statements.
These risks, uncertainties, and factors include,
but are not limited to: the effect of the continuing worldwide
macroeconomic uncertainty and its impacts, including inflation,
market volatility and fluctuations in foreign currency exchange and
interest rates on our business and results of operations, including
impacts related to acts of war, armed conflict, and cyber conflict,
such as for example, the Russian invasion of Ukraine, and related
international sanctions and reprisals; risks related to the impact
of the ongoing coronavirus (COVID-19) pandemic and subsequent
variants on our business, suppliers, consumers, customers and
employees; economic, social, and political instability, security
concerns, and the risk of war, armed conflict and/or cyber
conflict, particularly originating in, and complicated by, areas of
heightened geopolitical tension and open conflict such as Ukraine,
where we have outsourced research and development activities,
Russia, and bordering territories; our liquidity; our ability to
execute our strategic plan including our cost saving strategies,
and to meet customer needs; our ability to retain and hire key
personnel; our ability to produce innovative products in response
to changing market demand, particularly in the media industry; our
ability to successfully accomplish our product development plans;
competitive factors; history of losses; fluctuations in our revenue
based on, among other things, our performance and risks in
particular geographies or markets; our higher indebtedness and
ability to service it and meet the obligations thereunder;
restrictions in our credit facilities; our move to a subscription
model and related effect on our revenues and ability to predict
future revenues; fluctuations in subscription and maintenance
renewal rates; elongated sales cycles; seasonal factors; other
adverse changes in external economic conditions; variances in our
revenue backlog and the realization thereof; risks related to the
availability and prices of raw materials, including any negative
effects caused by inflation, armed conflict and related sanctions,
weather conditions, or health pandemics; disruptions,
inefficiencies, and/or complications in our operations and/or
dynamic and unpredictable global supply chain, including
interruptions, delays, complications, and other impacts related to
armed conflict and/or cyber conflict and related international
sanctions and reprisals and the ongoing COVID-19 pandemic and
subsequent variants; the costs, disruption, and diversion of
management's attention due to the ongoing COVID-19 pandemic and
subsequent variants, armed conflict and/or cyber conflict and
related international sanctions and reprisals; the possibility of
legal proceedings adverse to our Company; and other risks described
in our reports filed from time to time with the U.S. Securities and
Exchange Commission. Moreover, the business may be
adversely affected by future legislative, regulatory or other
changes, including tax law changes, as well as other economic,
business and/or competitive factors. The risks included
above are not exhaustive. We caution readers not to
place undue reliance on any forward-looking statements included in
this press release which speak only as to the date of this press
release. We undertake no responsibility to update or
revise any forward-looking statements, except as required by
law.
Avid Powers Greater Creators
People who create media for a living become greater
creators with Avid’s award-winning technology solutions to make,
manage and monetize today’s most celebrated video and audio
content—from iconic movies and bingeworthy TV series, to network
news and sports, to recorded music and the live stage. What began
more than 35 years ago with our invention of nonlinear digital
video editing has led to individual artists, creative teams and
organizations everywhere subscribing to our powerful tools and
collaborating securely in the cloud. We continue to re-imagine the
many ways editors, musicians, producers, journalists and other
content creators will bring their stories to life. Discover the
possibilities at avid.com and join the conversation on social media
with the multitude of brilliant creative people who choose Avid for
a lifetime of success.
© 2022 Avid Technology, Inc., Avid and its logo are
property of Avid. All rights reserved. Other trademarks are
property of their respective owners.
Contacts
Investor contact: |
PR contact: |
Whit Rappole |
Jim Sheehan |
Avid |
Avid |
ir@Avid.com |
jim.sheehan@Avid.com |
|
|
AVID TECHNOLOGY,
INC.Consolidated Statements of
Operations(unaudited - in thousands except per share
data)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net revenues: |
|
|
|
|
|
|
|
Subscription |
$ |
41,782 |
|
|
$ |
28,008 |
|
|
$ |
108,878 |
|
|
$ |
74,384 |
|
Maintenance |
|
27,280 |
|
|
|
30,702 |
|
|
|
83,382 |
|
|
|
90,997 |
|
Integrated solutions & other |
|
33,923 |
|
|
|
42,930 |
|
|
|
109,054 |
|
|
|
125,499 |
|
Total net revenues |
|
102,985 |
|
|
|
101,640 |
|
|
|
301,314 |
|
|
|
290,880 |
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
Subscription |
|
6,163 |
|
|
|
4,020 |
|
|
|
18,057 |
|
|
|
10,210 |
|
Maintenance |
|
4,849 |
|
|
|
5,739 |
|
|
|
15,379 |
|
|
|
17,135 |
|
Integrated solutions & other |
|
22,194 |
|
|
|
25,978 |
|
|
|
67,969 |
|
|
|
76,078 |
|
Total cost of revenues |
|
33,206 |
|
|
|
35,737 |
|
|
|
101,405 |
|
|
|
103,423 |
|
Gross profit |
|
69,779 |
|
|
|
65,903 |
|
|
|
199,909 |
|
|
|
187,457 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
17,110 |
|
|
|
17,129 |
|
|
|
49,869 |
|
|
|
48,639 |
|
Marketing and selling |
|
24,362 |
|
|
|
24,413 |
|
|
|
69,962 |
|
|
|
66,511 |
|
General and administrative |
|
14,066 |
|
|
|
14,901 |
|
|
|
42,241 |
|
|
|
42,214 |
|
Restructuring costs, net |
|
158 |
|
|
|
(88 |
) |
|
|
515 |
|
|
|
1,001 |
|
Total operating expenses |
|
55,696 |
|
|
|
56,355 |
|
|
|
162,587 |
|
|
|
158,365 |
|
|
|
|
|
|
|
|
|
Operating income |
|
14,083 |
|
|
|
9,548 |
|
|
|
37,322 |
|
|
|
29,092 |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(2,741 |
) |
|
|
(1,646 |
) |
|
|
(6,161 |
) |
|
|
(5,547 |
) |
Other income, net |
|
15 |
|
|
|
7,864 |
|
|
|
7 |
|
|
|
4,459 |
|
Income before income taxes |
|
11,357 |
|
|
|
15,766 |
|
|
|
31,168 |
|
|
|
28,004 |
|
(Benefit from) provision for income taxes |
|
(665 |
) |
|
|
991 |
|
|
|
1,187 |
|
|
|
1,832 |
|
Net income |
$ |
12,022 |
|
|
$ |
14,775 |
|
|
$ |
29,981 |
|
|
$ |
26,172 |
|
|
|
|
|
|
|
|
|
Net income per common share – basic |
$ |
0.27 |
|
|
$ |
0.32 |
|
|
$ |
0.67 |
|
|
$ |
0.58 |
|
Net income per common share – diluted |
$ |
0.27 |
|
|
$ |
0.32 |
|
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – basic |
|
44,476 |
|
|
|
45,564 |
|
|
|
44,676 |
|
|
|
45,115 |
|
Weighted-average common shares outstanding – diluted |
|
44,703 |
|
|
|
46,428 |
|
|
|
45,107 |
|
|
|
46,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Reconciliations of GAAP financial measures to
Non-GAAP financial measures(unaudited - in thousands
except per share data)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
GAAP revenue |
|
|
|
|
|
|
|
GAAP revenue |
$ |
102,985 |
|
|
$ |
101,640 |
|
|
$ |
301,314 |
|
|
$ |
290,880 |
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
GAAP gross profit |
$ |
69,779 |
|
|
$ |
65,903 |
|
|
$ |
199,909 |
|
|
$ |
187,457 |
|
Stock-based compensation |
|
588 |
|
|
|
444 |
|
|
|
1,603 |
|
|
|
1,362 |
|
Non-GAAP Gross Profit |
$ |
70,367 |
|
|
$ |
66,347 |
|
|
$ |
201,512 |
|
|
$ |
188,819 |
|
GAAP Gross Margin |
|
67.8 |
% |
|
|
64.8 |
% |
|
|
66.3 |
% |
|
|
64.4 |
% |
Non-GAAP Gross Margin |
|
68.3 |
% |
|
|
65.3 |
% |
|
|
66.9 |
% |
|
|
64.9 |
% |
|
|
|
|
|
|
|
|
Non-GAAP Operating Expenses |
|
|
|
|
|
|
|
GAAP operating expenses |
$ |
55,696 |
|
|
$ |
56,355 |
|
|
$ |
162,587 |
|
|
$ |
158,365 |
|
Less Amortization of intangible assets |
|
(37 |
) |
|
|
(105 |
) |
|
|
(152 |
) |
|
|
(315 |
) |
Less Stock-based compensation |
|
(3,359 |
) |
|
|
(3,337 |
) |
|
|
(9,411 |
) |
|
|
(9,473 |
) |
Less Restructuring costs, net |
|
(158 |
) |
|
|
88 |
|
|
|
(515 |
) |
|
|
(1,001 |
) |
Less Acquisition, integration and other costs |
|
(22 |
) |
|
|
(876 |
) |
|
|
(431 |
) |
|
|
(2,083 |
) |
Less Efficiency program costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(48 |
) |
Less Digital Transformation costs |
|
(626 |
) |
|
|
(808 |
) |
|
|
(1,314 |
) |
|
|
(808 |
) |
Less COVID-19 related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22 |
) |
Non-GAAP Operating Expenses |
$ |
51,494 |
|
|
$ |
51,317 |
|
|
$ |
150,764 |
|
|
$ |
144,615 |
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income and Adjusted EBITDA |
|
|
|
|
|
|
|
GAAP net income |
$ |
12,022 |
|
|
$ |
14,775 |
|
|
$ |
29,981 |
|
|
$ |
26,172 |
|
Interest and other expense |
|
2,726 |
|
|
|
(6,218 |
) |
|
|
6,154 |
|
|
|
1,088 |
|
Provision for income taxes |
|
(665 |
) |
|
|
991 |
|
|
|
1,187 |
|
|
|
1,832 |
|
GAAP operating income |
$ |
14,083 |
|
|
$ |
9,548 |
|
|
$ |
37,322 |
|
|
$ |
29,092 |
|
Amortization of intangible assets |
|
37 |
|
|
|
105 |
|
|
|
152 |
|
|
|
315 |
|
Stock-based compensation |
|
3,947 |
|
|
|
3,781 |
|
|
|
11,014 |
|
|
|
10,835 |
|
Restructuring costs, net |
|
158 |
|
|
|
(88 |
) |
|
|
515 |
|
|
|
1,001 |
|
Acquisition, integration and other costs |
|
22 |
|
|
|
876 |
|
|
|
431 |
|
|
|
2,083 |
|
Efficiency program costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
48 |
|
Digital Transformation costs |
|
626 |
|
|
|
808 |
|
|
|
1,314 |
|
|
|
808 |
|
COVID-19 related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22 |
|
Non-GAAP Operating Income |
$ |
18,873 |
|
|
$ |
15,030 |
|
|
$ |
50,748 |
|
|
$ |
44,204 |
|
Depreciation |
|
2,154 |
|
|
|
2,002 |
|
|
|
6,023 |
|
|
|
6,323 |
|
Adjusted EBITDA |
$ |
21,027 |
|
|
$ |
17,032 |
|
|
$ |
56,771 |
|
|
$ |
50,527 |
|
GAAP net income margin |
|
11.7 |
% |
|
|
14.5 |
% |
|
|
10.0 |
% |
|
|
9.0 |
% |
Adjusted EBITDA Margin |
|
20.4 |
% |
|
|
16.8 |
% |
|
|
18.8 |
% |
|
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
GAAP net income |
$ |
12,022 |
|
|
$ |
14,775 |
|
|
$ |
29,981 |
|
|
$ |
26,172 |
|
Amortization of intangible assets |
|
37 |
|
|
|
105 |
|
|
|
152 |
|
|
|
315 |
|
Stock-based compensation |
|
3,947 |
|
|
|
3,781 |
|
|
|
11,014 |
|
|
|
10,835 |
|
Restructuring costs, net |
|
158 |
|
|
|
(88 |
) |
|
|
515 |
|
|
|
1,001 |
|
Acquisition, integration and other costs |
|
22 |
|
|
|
876 |
|
|
|
431 |
|
|
|
2,083 |
|
Efficiency program costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
48 |
|
Digital Transformation costs |
|
626 |
|
|
|
808 |
|
|
|
1,314 |
|
|
|
808 |
|
Gain on forgiveness of PPP Loan |
|
— |
|
|
|
(7,800 |
) |
|
|
— |
|
|
|
(7,800 |
) |
COVID-19 related expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,748 |
|
Tax impact of non-GAAP adjustments |
|
— |
|
|
|
(25 |
) |
|
|
(3 |
) |
|
|
(184 |
) |
Non-GAAP Net Income |
$ |
16,812 |
|
|
$ |
12,432 |
|
|
$ |
43,404 |
|
|
$ |
37,048 |
|
Weighted-average common shares outstanding -
basic |
|
44,476 |
|
|
|
45,564 |
|
|
|
44,676 |
|
|
|
45,115 |
|
Weighted-average common shares outstanding -
diluted |
|
44,703 |
|
|
|
46,428 |
|
|
|
45,107 |
|
|
|
46,449 |
|
Non-GAAP Earnings Per Share - basic |
$ |
0.38 |
|
|
$ |
0.27 |
|
|
$ |
0.97 |
|
|
$ |
0.82 |
|
Non-GAAP Earnings Per Share - diluted |
$ |
0.38 |
|
|
$ |
0.27 |
|
|
$ |
0.96 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
GAAP net cash provided by operating
activities |
$ |
10,342 |
|
|
$ |
16,521 |
|
|
$ |
25,563 |
|
|
$ |
35,418 |
|
Capital expenditures |
|
(3,708 |
) |
|
|
(2,475 |
) |
|
|
(11,067 |
) |
|
|
(4,750 |
) |
Free Cash Flow |
$ |
6,634 |
|
|
$ |
14,046 |
|
|
$ |
14,496 |
|
|
$ |
30,668 |
|
Free Cash Flow conversion of Adjusted EBITDA |
|
31.5 |
% |
|
|
82.5 |
% |
|
|
25.5 |
% |
|
|
60.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These non-GAAP measures reflect how Avid manages
its businesses internally. Avid’s non-GAAP measures may vary
from how other companies present non-GAAP measures. Non-GAAP
financial measures are not based on a comprehensive set of
accounting rules or principles. This non-GAAP information
supplements, and is not intended to represent a measure of
performance in accordance with, disclosures required by generally
accepted accounting principles, or GAAP. Non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, financial measures determined in accordance
with GAAP.
AVID TECHNOLOGY,
INC.Consolidated Balance Sheets(unaudited
- in thousands, except per share data)
|
September 30, |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
31,344 |
|
|
$ |
56,818 |
|
Restricted cash |
|
2,413 |
|
|
|
2,416 |
|
Accounts receivable, net of allowances of $2,317 and $1,456 at
September 30, 2022 and December 31, 2021, respectively |
|
55,257 |
|
|
|
77,046 |
|
Inventories |
|
21,993 |
|
|
|
19,922 |
|
Prepaid expenses |
|
8,766 |
|
|
|
5,464 |
|
Contract assets |
|
17,728 |
|
|
|
18,903 |
|
Other current assets |
|
2,380 |
|
|
|
1,953 |
|
Total current assets |
|
139,881 |
|
|
|
182,522 |
|
Property and equipment, net |
|
21,215 |
|
|
|
16,028 |
|
Goodwill |
|
32,643 |
|
|
|
32,643 |
|
Right of use assets |
|
20,553 |
|
|
|
24,143 |
|
Deferred tax assets, net |
|
3,972 |
|
|
|
5,210 |
|
Other long-term assets |
|
19,271 |
|
|
|
13,454 |
|
Total assets |
$ |
237,535 |
|
|
$ |
274,000 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
34,906 |
|
|
$ |
26,854 |
|
Accrued compensation and benefits |
|
22,453 |
|
|
|
35,458 |
|
Accrued expenses and other current liabilities |
|
35,560 |
|
|
|
37,552 |
|
Income taxes payable |
|
27 |
|
|
|
868 |
|
Short-term debt |
|
8,694 |
|
|
|
9,158 |
|
Deferred revenue |
|
60,630 |
|
|
|
87,475 |
|
Total current liabilities |
|
162,270 |
|
|
|
197,365 |
|
Long-term debt |
|
175,683 |
|
|
|
160,806 |
|
Long-term deferred revenue |
|
16,045 |
|
|
|
10,607 |
|
Long-term lease liabilities |
|
19,978 |
|
|
|
23,379 |
|
Other long-term liabilities |
|
4,960 |
|
|
|
5,917 |
|
Total liabilities |
|
378,936 |
|
|
|
398,074 |
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
Common stock |
|
461 |
|
|
|
455 |
|
Treasury stock |
|
(68,651 |
) |
|
|
(25,090 |
) |
Additional paid-in capital |
|
1,031,232 |
|
|
|
1,031,633 |
|
Accumulated deficit |
|
(1,096,978 |
) |
|
|
(1,126,959 |
) |
Accumulated other comprehensive loss |
|
(7,465 |
) |
|
|
(4,113 |
) |
Total stockholders’ deficit |
|
(141,401 |
) |
|
|
(124,074 |
) |
Total liabilities and stockholders’ deficit |
$ |
237,535 |
|
|
$ |
274,000 |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Consolidated Statements of Cash
Flows(unaudited - in thousands)
|
Nine Months Ended |
|
September 30, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
Net income |
$ |
29,981 |
|
|
$ |
26,172 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
6,023 |
|
|
|
6,323 |
|
Allowance for doubtful accounts |
|
893 |
|
|
|
401 |
|
Stock-based compensation expense |
|
11,014 |
|
|
|
10,216 |
|
Non-cash provision for restructuring |
|
495 |
|
|
|
841 |
|
Non-cash interest expense |
|
367 |
|
|
|
386 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
2,579 |
|
Gain on forgiveness of PPP loan |
|
— |
|
|
|
(7,800 |
) |
Loss on disposal of fixed assets |
|
548 |
|
|
|
— |
|
Unrealized foreign currency transaction gains |
|
(2,769 |
) |
|
|
(1,400 |
) |
Benefit from deferred taxes |
|
1,238 |
|
|
|
1,388 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
20,896 |
|
|
|
20,089 |
|
Inventories |
|
(2,071 |
) |
|
|
4,353 |
|
Prepaid expenses and other assets |
|
(5,624 |
) |
|
|
(1,343 |
) |
Accounts payable |
|
8,050 |
|
|
|
590 |
|
Accrued expenses, compensation and benefits and other
liabilities |
|
(17,257 |
) |
|
|
(10,635 |
) |
Income taxes payable |
|
(841 |
) |
|
|
(217 |
) |
Deferred revenue and contract assets |
|
(25,380 |
) |
|
|
(16,525 |
) |
Net cash provided by operating activities |
|
25,563 |
|
|
|
35,418 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Purchases of property and equipment |
|
(11,067 |
) |
|
|
(4,750 |
) |
Net cash used in investing activities |
|
(11,067 |
) |
|
|
(4,750 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from revolving credit facility |
|
19,000 |
|
|
|
— |
|
Proceeds from long-term debt |
|
— |
|
|
|
180,000 |
|
Repayment of debt |
|
(4,515 |
) |
|
|
(208,142 |
) |
Payments for repurchase of common stock |
|
(40,929 |
) |
|
|
(10,526 |
) |
Proceeds from the issuance of common stock under employee stock
plans |
|
468 |
|
|
|
363 |
|
Common stock repurchases for tax withholdings for net settlement of
equity awards |
|
(11,878 |
) |
|
|
(17,108 |
) |
Prepayment penalty on extinguishment of debt |
|
— |
|
|
|
(1,169 |
) |
Payments for credit facility issuance costs |
|
(440 |
) |
|
|
(2,574 |
) |
Net cash used in financing activities |
|
(38,294 |
) |
|
|
(59,156 |
) |
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(1,809 |
) |
|
|
(927 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
(25,607 |
) |
|
|
(29,415 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
|
60,556 |
|
|
|
83,638 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
34,949 |
|
|
$ |
54,223 |
|
Supplemental information: |
|
|
|
Cash and cash equivalents |
$ |
31,344 |
|
|
$ |
50,485 |
|
Restricted cash |
$ |
2,413 |
|
|
$ |
1,422 |
|
Restricted cash included in other long-term assets |
$ |
1,192 |
|
|
$ |
2,316 |
|
Total cash, cash equivalents and restricted cash shown in the
statement of cash flows |
$ |
34,949 |
|
|
$ |
54,223 |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Supplemental Revenue
Information(unaudited - in millions)
Backlog Disclosure for Quarter Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
September 30, |
June 30, |
September 30, |
|
|
|
|
2022 |
|
2022 |
|
2021 |
|
|
Revenue Backlog* |
|
|
|
|
|
|
|
|
|
|
|
Deferred Revenue |
$ |
76.7 |
$ |
80.9 |
$ |
86.8 |
|
|
Other Backlog |
|
302.5 |
|
285.4 |
|
315.0 |
|
|
Total Revenue Backlog |
$ |
379.2 |
$ |
366.3 |
$ |
401.8 |
|
|
|
|
|
|
|
|
The expected timing of recognition of revenue backlog as of
September 30, 2022 is as follows: |
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
|
2024 |
Thereafter |
Total |
|
|
|
|
|
|
Deferred Revenue |
$ |
28.8 |
$ |
35.1 |
$ |
7.6 |
$ |
5.2 |
$ |
76.7 |
Other Backlog |
|
45.4 |
|
107.0 |
|
63.7 |
|
86.4 |
|
302.5 |
Total Revenue Backlog |
$ |
74.2 |
$ |
142.1 |
$ |
71.3 |
$ |
91.6 |
$ |
379.2 |
|
|
|
|
|
|
*A definition of Revenue Backlog is included in our Form 10-K and
the supplemental financial and operational data sheet available on
our investor relations webpage at ir.avid.com. |
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