Avid® (NASDAQ: AVID), a leading technology provider that powers the
media and entertainment industry, today announced its financial
results for the second quarter of 2023, which ended on June 30,
2023.
Total revenue increased 11.1% year-over-year in the
second quarter, or 13.0% at constant currency, driven by strong
growth in enterprise subscription revenue. Active Paid Software
Subscriptions reached approximately 544,400 as of June 30, 2023, an
increase of 20.9% year-over-year. At June 30, 2023, Subscription
ARR was $154 million, an increase of 27.0% year-over-year, and
total ARR was $248 million, an increase of 7.1% year-over-year. At
constant currency, Subscription ARR increased 25.6% year-over-year
and total ARR increased 4.6% year-over-year.
In the second quarter, subscription revenue was
$44.4 million, up 30.2% year-over-year, or 30.5% at constant
currency, and subscription & maintenance revenue was $67.9
million, up 9.7% year-over-year, or 11.8% at constant currency.
Maintenance revenue was $23.5 million in the second quarter, down
15.5% year-over-year, primarily driven by enterprise customers
continuing to transition to subscription. Maintenance revenue
increased 3.6% sequentially from the first quarter. Maintenance
revenue is currently expected to be stable through the second half
of 2023, due primarily to increases in maintenance contract pricing
that were implemented in the second quarter, and the sequential
increase in integrated solutions shipments which generally include
attached maintenance contracts. Integrated solutions revenue was
$33.7 million in the second quarter, up 20.4% year-over-year, as
demand continued to be healthy and the Company was able to reduce
the unshipped contractually committed backlog in the quarter. At
the end of the second quarter, the Company had approximately $11
million of unshipped contractually committed backlog for integrated
solutions, as improved production volumes reduced the backlog by
approximately $9 million from the prior quarter.
During the second quarter, Gross Margin was 61.1%
and Non-GAAP Gross Margin was 62.0%. Subscription and maintenance
gross margin remained strong at 84.4% during the second quarter, up
300 bps year-over-year. Integrated solutions gross margin was 25.8%
in the second quarter, below the target gross margin due primarily
to what are expected to be temporary higher production costs. These
challenges in integrated solutions gross margin, which are expected
to be temporary, had a flow through impact on net income (loss),
Adjusted EBITDA Margin, net cash used in operating activities and
Free Cash Flow in the quarter.
Second Quarter 2023 Financial and Business
Highlights
- Paid Cloud-enabled software
subscriptions increased by approximately 17,700 during the quarter
to approximately 544,400 as of June 30, 2023, an increase of 20.9%
year-over-year.
- Subscription ARR was $154 million at
June 30, an increase of 27.0% year-over-year. At constant currency,
Subscription ARR increased 25.6% year-over-year.
- Total ARR was $248 million at June 30,
an increase of 7.1% year-over-year. At constant currency, total ARR
increased 4.6% year-over-year.
- Subscription revenue for the quarter
was $44.4 million, an increase of 30.2% year-over-year. At constant
currency, subscription revenue increased 30.5% year-over-year.
- Subscription and maintenance revenue
was $67.9 million, an increase of 9.7% year-over-year. At constant
currency, subscription and maintenance revenue increased 11.8%
year-over-year.
- Total revenue was $108.5 million, an
increase of 11.1% year-over-year. At constant-currency, total
revenue increased 13.0% year-over-year.
- Gross margin was 61.1%, a decrease of
(380 basis points) year-over-year and Non-GAAP Gross Margin was
62.0%, a decrease of (350 basis points) year-over-year.
- Subscription and maintenance gross
margin was 84.4%, an increase of 300 basis points year-over-year.
Non-GAAP Subscription and Maintenance Gross Margin was 85.5%, an
increase of 340 basis points year-over-year.
- Integrated solutions gross margin was
25.8%, a decrease of (1310 basis points) year-over-year. Non-GAAP
Integrated Solutions Gross Margin was 26.4%, a decrease of (1300
basis points) year-over-year.
- Operating expenses were $66.9 million,
an increase of 25.2% year-over-year. Operating expenses included
$6.9 million in restructuring charges, primarily related to a
reduction in employee headcount during the second quarter, and
early retirement costs. Non-GAAP Operating Expenses were $53.0
million, an increase of 7.0% year-over-year.
- Net loss was ($4.6 million) which
included $6.9 million in restructuring charges and early retirement
costs. Net loss was (4.2%) of revenue. Non-GAAP Net Income was $9.8
million and was 9.0% of revenue.
- Adjusted EBITDA was $16.9 million, an
increase of 2.4% year-over-year. At constant-currency, Adjusted
EBITDA increased 14.2% year-over-year. Adjusted EBITDA Margin was
15.5%, a decrease of (140 basis points) year-over-year.
- Net loss per common share was ($0.10),
which included $0.16 in restructuring charges and early retirement
costs. Non-GAAP Earnings per Share was $0.22.
- Net cash (used in) operating
activities was ($13.6) million, a decrease of ($20.9) million
compared to the second quarter of 2022 due primarily to a greater
use of cash in working capital in the second quarter of 2023 of
$17.6 million compared to the prior year period.
- Free Cash Flow was ($19.7) million, a
decrease of ($22.9) million compared to the second quarter of 2022
due primarily to higher use of cash in working capital in the
second quarter of 2023 compared to the prior year period.
- LTM Recurring Revenue % was 83.3% of
the Company’s revenue for the 12 months ended June 30, 2023, up
from 79.7% for the 12 months ended June 30, 2022.
- The Company did not repurchase any
shares during the second quarter. Through June 30, 2023, the
Company has repurchased 2.9 million shares for $78.4 million under
the $115 million share repurchase authorization announced on
September 9, 2021.
Avid Enters into Definitive Agreement to Be
Acquired by an Affiliate of STG for $1.4 Billion
Avid today also announced a definitive agreement to
be acquired by an affiliate of STG for $27.05 per share in an
all-cash transaction valuing Avid at approximately $1.4 billion,
inclusive of Avid’s net debt. The cash purchase price represents a
premium of 32.1% over the Company’s unaffected closing stock price
on May 23, 2023, the last full trading day prior to media
speculation regarding a potential sale of the Company.
The transaction is expected to close during the
fourth quarter of 2023, subject to Avid stockholder approval,
regulatory approvals and other customary closing conditions. A copy
of the press release can be found by visiting the Investor
Relations section of the Avid website: https://ir.Avid.com/.
In light of the announced transaction with STG,
Avid is withdrawing the guidance for full year 2023 that it
provided on May 4, 2023, and the Company is cancelling its
previously scheduled conference call to discuss its second quarter
earnings.
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 Subscription and
Maintenance Gross Margin, Non-GAAP Integrated Solutions Gross
Margin, Non-GAAP Operating Expenses, Non-GAAP Net Income, and
Non-GAAP Earnings per Share. The Company also includes the
operational metrics of Active Paid Software Subscriptions, Annual
Recurring Revenue (or ARR), Subscription ARR, Recurring Revenue,
and LTM Recurring Revenue % 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. Constant currency growth rates are calculated using
the current period budget exchange rates as of January 2023 for
both the historical and current 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.
Forward-Looking StatementsCertain
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, the anticipated timing of the
closing of the acquisition of the Company by an affiliate of STG,
expected duration of challenges to audio gross margin, anticipated
effects of cost management and pricing initiatives 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 risk that the proposed transaction may not
be completed in a timely manner, or at all; the effect of the
continuing worldwide macroeconomic uncertainty and its impacts,
including inflation, market volatility, including the impact of the
ongoing Writers Guild or Screen Actors Guild - American Federation
of Television and Radio Artists strikes, 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 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 cost increases, interruptions, delays, complications and
other impacts related to armed conflict and/or cyber conflict and
related international sanctions and reprisals; 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; the
impact of changes in accounting treatment interpretations over
time; our higher indebtedness and ability to service it and meet
the obligations thereunder; our ability to mitigate and remediate
material weaknesses in our internal controls; 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; the costs, disruption and diversion of
management's attention due to 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.
© 2023 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 |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenues: |
|
|
|
|
|
|
|
Subscription |
$ |
44,439 |
|
|
$ |
34,142 |
|
|
$ |
83,824 |
|
|
$ |
67,096 |
|
Maintenance |
|
23,468 |
|
|
|
27,775 |
|
|
|
46,118 |
|
|
|
56,102 |
|
Integrated solutions & other |
|
40,635 |
|
|
|
35,763 |
|
|
|
76,411 |
|
|
|
75,131 |
|
Total net revenues |
|
108,542 |
|
|
|
97,680 |
|
|
|
206,353 |
|
|
|
198,329 |
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
Subscription |
|
5,522 |
|
|
|
6,292 |
|
|
|
9,786 |
|
|
|
11,894 |
|
Maintenance |
|
5,064 |
|
|
|
5,253 |
|
|
|
9,811 |
|
|
|
10,530 |
|
Integrated solutions & other |
|
31,611 |
|
|
|
22,769 |
|
|
|
58,218 |
|
|
|
45,775 |
|
Total cost of revenues |
|
42,197 |
|
|
|
34,314 |
|
|
|
77,815 |
|
|
|
68,199 |
|
Gross profit |
|
66,345 |
|
|
|
63,366 |
|
|
|
128,538 |
|
|
|
130,130 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
20,000 |
|
|
|
16,023 |
|
|
|
39,426 |
|
|
|
32,759 |
|
Marketing and selling |
|
25,391 |
|
|
|
23,673 |
|
|
|
48,048 |
|
|
|
45,600 |
|
General and administrative |
|
16,020 |
|
|
|
13,364 |
|
|
|
32,634 |
|
|
|
28,175 |
|
Restructuring costs, net |
|
5,462 |
|
|
|
342 |
|
|
|
5,462 |
|
|
|
357 |
|
Total operating expenses |
|
66,873 |
|
|
|
53,402 |
|
|
|
125,570 |
|
|
|
106,891 |
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
(528 |
) |
|
|
9,964 |
|
|
|
2,968 |
|
|
|
23,239 |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(4,214 |
) |
|
|
(1,944 |
) |
|
|
(7,929 |
) |
|
|
(3,420 |
) |
Other income (expense), net |
|
20 |
|
|
|
79 |
|
|
|
167 |
|
|
|
(8 |
) |
(Loss) income before income taxes |
|
(4,722 |
) |
|
|
8,099 |
|
|
|
(4,794 |
) |
|
|
19,811 |
|
(Benefit from) Provision for income taxes |
|
(126 |
) |
|
|
726 |
|
|
|
183 |
|
|
|
1,852 |
|
Net (loss) income |
$ |
(4,596 |
) |
|
$ |
7,373 |
|
|
$ |
(4,977 |
) |
|
$ |
17,959 |
|
|
|
|
|
|
|
|
|
Net (loss) income per common share – basic |
$ |
(0.10 |
) |
|
$ |
0.16 |
|
|
$ |
(0.11 |
) |
|
$ |
0.40 |
|
Net (loss) income per common share – diluted |
$ |
(0.10 |
) |
|
$ |
0.16 |
|
|
$ |
(0.11 |
) |
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding – basic |
|
44,099 |
|
|
|
44,740 |
|
|
|
43,957 |
|
|
|
44,778 |
|
Weighted-average common shares outstanding – diluted |
|
44,099 |
|
|
|
45,110 |
|
|
|
43,957 |
|
|
|
45,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Reconciliations of GAAP financial measures to
Non-GAAP financial measures(unaudited - in thousands
except per share data)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP revenue |
|
|
|
|
|
|
|
GAAP revenue |
$ |
108,542 |
|
|
$ |
97,680 |
|
|
$ |
206,353 |
|
|
$ |
198,329 |
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
GAAP gross profit |
$ |
66,345 |
|
|
$ |
63,366 |
|
|
$ |
128,538 |
|
|
$ |
130,130 |
|
Stock-based compensation |
|
984 |
|
|
|
589 |
|
|
|
1,413 |
|
|
|
1,015 |
|
Non-GAAP Gross Profit |
$ |
67,329 |
|
|
$ |
63,955 |
|
|
$ |
129,951 |
|
|
$ |
131,145 |
|
GAAP Gross Margin |
|
61.1 |
% |
|
|
64.9 |
% |
|
|
62.3 |
% |
|
|
65.6 |
% |
Non-GAAP Gross Margin |
|
62.0 |
% |
|
|
65.5 |
% |
|
|
63.0 |
% |
|
|
66.1 |
% |
|
|
|
|
|
|
|
|
Non-GAAP Operating Expenses |
|
|
|
|
|
|
|
GAAP operating expenses |
$ |
66,873 |
|
|
$ |
53,402 |
|
|
$ |
125,570 |
|
|
$ |
106,891 |
|
Less Amortization of intangible assets |
|
— |
|
|
|
(57 |
) |
|
|
(37 |
) |
|
|
(115 |
) |
Less Stock-based compensation |
|
(4,958 |
) |
|
|
(3,056 |
) |
|
|
(9,622 |
) |
|
|
(6,052 |
) |
Less Restructuring costs, net |
|
(5,462 |
) |
|
|
(342 |
) |
|
|
(5,462 |
) |
|
|
(357 |
) |
Less Early Retirement Program |
|
(1,473 |
) |
|
|
— |
|
|
|
(2,675 |
) |
|
|
(409 |
) |
Less Acquisition, integration and other costs |
|
(1,597 |
) |
|
|
50 |
|
|
|
(1,912 |
) |
|
|
— |
|
Less Digital Transformation costs |
|
(363 |
) |
|
|
(445 |
) |
|
|
(660 |
) |
|
|
(688 |
) |
Non-GAAP Operating Expenses |
$ |
53,020 |
|
|
$ |
49,552 |
|
|
$ |
105,202 |
|
|
$ |
99,270 |
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income and Adjusted EBITDA |
|
|
|
|
|
|
|
GAAP net (loss) income |
$ |
(4,596 |
) |
|
$ |
7,373 |
|
|
$ |
(4,977 |
) |
|
$ |
17,959 |
|
Interest and other expense |
|
4,194 |
|
|
|
1,865 |
|
|
|
7,762 |
|
|
|
3,428 |
|
Provision for income taxes |
|
(126 |
) |
|
|
726 |
|
|
|
183 |
|
|
|
1,852 |
|
GAAP operating (loss) income |
$ |
(528 |
) |
|
$ |
9,964 |
|
|
$ |
2,968 |
|
|
$ |
23,239 |
|
Amortization of intangible assets |
|
— |
|
|
|
57 |
|
|
|
37 |
|
|
|
115 |
|
Stock-based compensation |
|
5,942 |
|
|
|
3,645 |
|
|
|
11,035 |
|
|
|
7,067 |
|
Restructuring costs, net |
|
5,462 |
|
|
|
342 |
|
|
|
5,462 |
|
|
|
357 |
|
Early Retirement Program |
|
1,473 |
|
|
|
— |
|
|
|
2,675 |
|
|
|
409 |
|
Acquisition, integration and other costs |
|
1,597 |
|
|
|
(50 |
) |
|
|
1,912 |
|
|
|
— |
|
Digital Transformation costs |
|
363 |
|
|
|
445 |
|
|
|
660 |
|
|
|
688 |
|
Non-GAAP Operating Income |
$ |
14,309 |
|
|
$ |
14,403 |
|
|
$ |
24,749 |
|
|
$ |
31,875 |
|
Depreciation |
|
2,555 |
|
|
|
2,066 |
|
|
|
4,852 |
|
|
|
3,869 |
|
Adjusted EBITDA |
$ |
16,864 |
|
|
$ |
16,469 |
|
|
$ |
29,601 |
|
|
$ |
35,744 |
|
GAAP net (loss) income margin |
(4.2)% |
|
|
7.5 |
% |
|
(2.4)% |
|
|
9.1 |
% |
Adjusted EBITDA Margin |
|
15.5 |
% |
|
|
16.9 |
% |
|
|
14.3 |
% |
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
GAAP net (loss) income |
$ |
(4,596 |
) |
|
$ |
7,373 |
|
|
$ |
(4,977 |
) |
|
$ |
17,959 |
|
Amortization of intangible assets |
|
— |
|
|
|
57 |
|
|
|
37 |
|
|
|
115 |
|
Stock-based compensation |
|
5,942 |
|
|
|
3,645 |
|
|
|
11,035 |
|
|
|
7,067 |
|
Restructuring costs, net |
|
5,462 |
|
|
|
342 |
|
|
|
5,462 |
|
|
|
357 |
|
Early Retirement Program |
|
1,473 |
|
|
|
— |
|
|
|
2,675 |
|
|
|
409 |
|
Acquisition, integration and other costs |
|
1,597 |
|
|
|
(50 |
) |
|
|
1,912 |
|
|
|
— |
|
Digital Transformation costs |
|
363 |
|
|
|
445 |
|
|
|
660 |
|
|
|
688 |
|
Tax impact of non-GAAP adjustments |
|
(455 |
) |
|
|
— |
|
|
|
(455 |
) |
|
|
(3 |
) |
Non-GAAP Net Income |
$ |
9,786 |
|
|
$ |
11,812 |
|
|
$ |
16,349 |
|
|
$ |
26,592 |
|
Weighted-average common shares outstanding -
basic |
|
44,099 |
|
|
|
44,740 |
|
|
|
43,957 |
|
|
|
44,778 |
|
Weighted-average common shares outstanding -
diluted |
|
44,099 |
|
|
|
45,110 |
|
|
|
43,957 |
|
|
|
45,280 |
|
GAAP net (loss) income per share - basic |
$ |
(0.10 |
) |
|
$ |
0.16 |
|
|
$ |
(0.11 |
) |
|
$ |
0.40 |
|
GAAP net (loss) income per share - diluted |
$ |
(0.10 |
) |
|
$ |
0.16 |
|
|
$ |
(0.11 |
) |
|
$ |
0.40 |
|
Non-GAAP Earnings Per Share - basic |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.37 |
|
|
$ |
0.59 |
|
Non-GAAP Earnings Per Share - diluted |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.37 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
|
|
|
|
|
|
GAAP net cash (used in) provided by operating
activities |
$ |
(13,621 |
) |
|
$ |
7,305 |
|
|
$ |
(16,177 |
) |
|
$ |
15,221 |
|
Capital expenditures |
|
(6,077 |
) |
|
|
(4,115 |
) |
|
|
(10,008 |
) |
|
|
(7,359 |
) |
Free Cash Flow |
$ |
(19,698 |
) |
|
$ |
3,190 |
|
|
$ |
(26,185 |
) |
|
$ |
7,862 |
|
Free Cash Flow conversion of Adjusted EBITDA |
(116.8)% |
|
|
19.4 |
% |
|
(88.5)% |
|
|
22.0 |
% |
|
|
|
|
|
|
|
|
Non-GAAP Gross Profit by Revenue Type |
|
|
|
|
|
|
|
Subscription Revenue |
|
44,439 |
|
|
|
34,142 |
|
|
|
83,824 |
|
|
|
67,096 |
|
Maintenance Revenue |
|
23,468 |
|
|
|
27,775 |
|
|
|
46,118 |
|
|
|
56,102 |
|
Subscription & Maintenance Revenue |
|
67,907 |
|
|
|
61,917 |
|
|
|
129,942 |
|
|
|
123,198 |
|
|
|
|
|
|
|
|
|
Subscription Cost of Revenues |
|
5,522 |
|
|
|
6,292 |
|
|
|
9,786 |
|
|
|
11,894 |
|
Maintenance Cost of Revenues |
|
5,064 |
|
|
|
5,253 |
|
|
|
9,811 |
|
|
|
10,530 |
|
Subscription & Maintenance Cost of Revenues |
|
10,586 |
|
|
|
11,545 |
|
|
|
19,597 |
|
|
|
22,424 |
|
Subscription & Maintenance Stock-based compensation |
|
773 |
|
|
|
443 |
|
|
|
1,067 |
|
|
|
744 |
|
Non-GAAP Subscription & Maintenance Cost of Revenues |
|
9,813 |
|
|
|
11,102 |
|
|
|
18,530 |
|
|
|
21,680 |
|
Subscription & Maintenance Gross Margin |
|
84.4 |
% |
|
|
81.4 |
% |
|
|
84.9 |
% |
|
|
81.8 |
% |
Non-GAAP Subscription & Maintenance Gross Margin |
|
85.5 |
% |
|
|
82.1 |
% |
|
|
85.7 |
% |
|
|
82.4 |
% |
|
|
|
|
|
|
|
|
Integrated Solutions Revenue |
|
33,735 |
|
|
|
28,013 |
|
|
|
62,445 |
|
|
|
56,223 |
|
Integrated Solutions Cost of Revenues |
|
25,046 |
|
|
|
17,116 |
|
|
|
45,504 |
|
|
|
33,744 |
|
Integrated Solutions Stock-based compensation |
|
211 |
|
|
|
146 |
|
|
|
346 |
|
|
|
271 |
|
Non-GAAP Integrated Solutions Cost of Revenues |
|
24,835 |
|
|
|
16,970 |
|
|
|
45,158 |
|
|
|
33,473 |
|
Integrated Solutions Gross Margin |
|
25.8 |
% |
|
|
38.9 |
% |
|
|
27.1 |
% |
|
|
40.0 |
% |
Non-GAAP Integrated Solutions Gross Margin |
|
26.4 |
% |
|
|
39.4 |
% |
|
|
27.7 |
% |
|
|
40.5 |
% |
|
|
|
|
|
|
|
|
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)
|
June 30, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
33,502 |
|
|
$ |
35,247 |
|
Restricted cash |
|
926 |
|
|
|
2,413 |
|
Accounts receivable, net of allowances of $539 and $601 at June 30,
2023 and December 31, 2022, respectively |
|
58,679 |
|
|
|
76,849 |
|
Inventories |
|
28,028 |
|
|
|
20,981 |
|
Prepaid expenses |
|
10,696 |
|
|
|
8,360 |
|
Contract assets |
|
38,487 |
|
|
|
32,295 |
|
Other current assets |
|
3,360 |
|
|
|
2,826 |
|
Total current assets |
|
173,678 |
|
|
|
178,971 |
|
Property and equipment, net |
|
29,613 |
|
|
|
23,684 |
|
Goodwill |
|
32,643 |
|
|
|
32,643 |
|
Right of use assets |
|
20,756 |
|
|
|
21,395 |
|
Deferred tax assets, net |
|
16,352 |
|
|
|
15,859 |
|
Other long-term assets |
|
20,775 |
|
|
|
14,901 |
|
Total assets |
$ |
293,817 |
|
|
$ |
287,453 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
51,790 |
|
|
$ |
45,904 |
|
Accrued compensation and benefits |
|
20,140 |
|
|
|
22,602 |
|
Accrued expenses and other current liabilities |
|
39,165 |
|
|
|
36,031 |
|
Income taxes payable |
|
142 |
|
|
|
62 |
|
Short-term debt |
|
10,912 |
|
|
|
9,710 |
|
Deferred revenue |
|
42,114 |
|
|
|
76,308 |
|
Total current liabilities |
|
164,263 |
|
|
|
190,617 |
|
Long-term debt |
|
202,213 |
|
|
|
172,958 |
|
Long-term deferred revenue |
|
22,367 |
|
|
|
17,842 |
|
Long-term lease liabilities |
|
19,884 |
|
|
|
20,470 |
|
Other long-term liabilities |
|
4,044 |
|
|
|
4,348 |
|
Total liabilities |
|
412,771 |
|
|
|
406,235 |
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
Common stock |
|
465 |
|
|
|
462 |
|
Treasury stock |
|
(78,353 |
) |
|
|
(77,933 |
) |
Additional paid-in capital |
|
1,041,280 |
|
|
|
1,036,287 |
|
Accumulated deficit |
|
(1,076,695 |
) |
|
|
(1,071,718 |
) |
Accumulated other comprehensive loss |
|
(5,651 |
) |
|
|
(5,880 |
) |
Total stockholders’ deficit |
|
(118,954 |
) |
|
|
(118,782 |
) |
Total liabilities and stockholders’ deficit |
$ |
293,817 |
|
|
$ |
287,453 |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Consolidated Statements of Cash
Flows(unaudited - in thousands)
|
Six Months Ended |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
Net (loss) income |
$ |
(4,977 |
) |
|
$ |
17,959 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
4,852 |
|
|
|
3,869 |
|
(Recovery from) allowance for doubtful accounts |
|
(30 |
) |
|
|
222 |
|
Stock-based compensation expense |
|
11,035 |
|
|
|
7,067 |
|
Non-cash provision for restructuring |
|
5,462 |
|
|
|
338 |
|
Non-cash interest expense |
|
298 |
|
|
|
247 |
|
Loss on disposal of fixed assets |
|
— |
|
|
|
548 |
|
Unrealized foreign currency transaction gains (losses) |
|
874 |
|
|
|
(1,729 |
) |
(Provision for) Benefit from deferred taxes |
|
(498 |
) |
|
|
1,610 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
18,200 |
|
|
|
22,945 |
|
Inventories |
|
(7,047 |
) |
|
|
672 |
|
Prepaid expenses and other assets |
|
(6,525 |
) |
|
|
(5,664 |
) |
Accounts payable |
|
5,886 |
|
|
|
6,044 |
|
Accrued expenses, compensation and benefits and other
liabilities |
|
(5,559 |
) |
|
|
(16,105 |
) |
Income taxes payable |
|
80 |
|
|
|
(776 |
) |
Deferred revenue and contract assets |
|
(38,228 |
) |
|
|
(22,026 |
) |
Net cash (used in) provided by operating
activities |
|
(16,177 |
) |
|
|
15,221 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
Purchases of property and equipment |
|
(10,008 |
) |
|
|
(7,359 |
) |
Net cash used in investing activities |
|
(10,008 |
) |
|
|
(7,359 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Proceeds from revolving credit facility |
|
35,000 |
|
|
|
19,000 |
|
Repayment of debt principal |
|
(4,841 |
) |
|
|
(2,288 |
) |
Payments for repurchase of common stock |
|
(572 |
) |
|
|
(25,262 |
) |
Proceeds from the issuance of common stock under employee stock
plans |
|
486 |
|
|
|
468 |
|
Common stock repurchases for tax withholdings for net settlement of
equity awards |
|
(6,525 |
) |
|
|
(10,885 |
) |
Prepayment penalty on extinguishment of debt |
|
— |
|
|
|
— |
|
Payments for credit facility issuance costs |
|
— |
|
|
|
(440 |
) |
Net cash (used in) provided by financing
activities |
|
23,548 |
|
|
|
(19,407 |
) |
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(645 |
) |
|
|
(941 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
(3,282 |
) |
|
|
(12,486 |
) |
Cash, cash equivalents and restricted cash at beginning of
period |
|
38,852 |
|
|
|
60,556 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
35,570 |
|
|
$ |
48,070 |
|
Supplemental information: |
|
|
|
Cash and cash equivalents |
$ |
33,502 |
|
|
$ |
44,332 |
|
Restricted cash |
$ |
926 |
|
|
$ |
2,413 |
|
Restricted cash included in other long-term assets |
$ |
1,142 |
|
|
$ |
1,325 |
|
Total cash, cash equivalents and restricted cash shown in the
statement of cash flows |
$ |
35,570 |
|
|
$ |
48,070 |
|
|
|
|
|
|
|
|
|
AVID TECHNOLOGY,
INC.Supplemental Revenue
Information(unaudited - in millions)
Backlog Disclosure for Quarter Ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
June 30, |
March 31, |
June 30, 2023 |
|
|
|
|
2023 |
|
2023 |
|
2022 |
|
|
Revenue Backlog* |
|
|
|
|
|
|
|
|
|
|
|
Deferred Revenue |
$ |
64.5 |
$ |
82.5 |
$ |
80.9 |
|
|
Other Backlog |
|
250.7 |
|
259.1 |
|
285.4 |
|
|
Total Revenue Backlog |
$ |
315.2 |
$ |
341.6 |
$ |
366.3 |
|
|
|
|
|
|
|
|
The expected timing of recognition of revenue backlog as of June
30, 2023 is as follows: |
|
|
|
|
|
|
|
|
|
2023 |
|
2024 |
|
2025 |
Thereafter |
Total |
|
|
|
|
|
|
Deferred Revenue |
$ |
25.9 |
$ |
23.3 |
$ |
9.2 |
$ |
6.1 |
$ |
64.5 |
Other Backlog |
|
128.0 |
|
42.0 |
|
39.7 |
|
41.0 |
|
250.7 |
Total Revenue Backlog |
$ |
153.9 |
$ |
65.3 |
$ |
48.9 |
$ |
47.1 |
$ |
315.2 |
|
|
|
|
|
|
*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. |
|
|
|
|
|
|
Avid Technology (NASDAQ:AVID)
Historical Stock Chart
From Jun 2024 to Jul 2024
Avid Technology (NASDAQ:AVID)
Historical Stock Chart
From Jul 2023 to Jul 2024