Avid Technology, Inc. (AVID) 10-Q Quarterly Report November 2022

Subscription Revenue of $41.8M, an Increase of 49.2% Year-Over-Year, Driven by All-Time Record 32,600 Net Increase in Paid Subscriptions in the Quarter

Net Income of $12.0M, Adjusted EBITDA of $21.0M, and Adjusted EBITDA Margin of 20.4%

Net Income per Common Share of $0.27; Non-GAAP Net Income per Common Share of $0.38 which Represents an Increase of 40.7% Year-Over-Year

BURLINGTON, Mass., Nov. 8, 2022 -- 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.

The following information was filed by Avid Technology, Inc. (AVID) on Tuesday, November 8, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Avid Technology, Inc.'s 10-Q Quarterly Report:

Financial - Earnings Highlight
Our increase in gross margin percentage for the three and nine months ended September 30, 2022 compared to the same periods in 2021, was primarily due to increased volume on our higher margin subscription revenue.

Financial - Expense Highlight
The extent to which our operations may be impacted will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including the severity or resurgence of a COVID-19 outbreak, actions by government authorities to contain an outbreak or treat its impact, actions by government authorities to address inflationary and cost pressures, and the severity, length and potential expansion of the conflict in Ukraine.
Other - Other Highlight
28 LIQUIDITY AND CAPITAL RESOURCES Liquidity and Sources of Cash Our principal sources of liquidity include cash and cash equivalents totaling $31.3 million as of September 30, 2022, as well as the availability of borrowings of up to $70.0 million under our revolving Credit Facility.
Revenue - Product Highlight
In the event revenues in future quarters are lower than we currently anticipate, we may be forced to take remedial actions which could include, among other things (and where allowed by the lenders), (i) further cost reductions, (ii) seeking replacement financing, (iii) raising funds through the issuance of additional equity or debt securities or the incurrence of additional borrowings, or (iv) disposing of certain assets or businesses.
Other - Other Highlight
We commonly sell large, complex solutions to our customers that, due to their strategic nature, have long lead times where the timing of order execution and fulfillment can be difficult to predict.
Other - Other
The proceeds from the Term...Read more
Financial - Cash Flow
Cash Flows from Financing Activities...Read more
Revenue - Product
In recent quarters, we have...Read more
Financial - Expense
The decrease in other expenses...Read more
Revenue - Product
Integrated solutions and other revenues...Read more
Financial - Debt
If we are not in...Read more
Financial - Earnings
The A&R Credit Agreement extended...Read more
Other - Other
For a discussion of these...Read more
Other - Other
For a discussion of these...Read more
Other - Other
Our cash requirements vary depending...Read more
Revenue - Product
Maintenance revenues decreased $3.4 million,...Read more
Revenue - Geography
The Russian invasion of Ukraine...Read more
Financial - Expense
24 Operating Expenses and Operating...Read more
Financial - Expense
Marketing and Selling Expenses Marketing...Read more
Financial - Expense
The increase in other expenses...Read more
Financial - Expense
The increase in facilities and...Read more
Financial - Expense
The increase in personnel-related expenses...Read more
Revenue - Product
A summary of our revenue...Read more
Financial - Expense
These shortages have resulted in...Read more
Revenue - Product
26 The decrease in consulting...Read more
Revenue - Product
Subscription revenues increased $13.8 million,...Read more
Financial - Earnings
Operations Overview Our strategy for...Read more
Financial - Expense
Costs of Revenues and Gross...Read more
Revenue - Product
We expect to increase subscription...Read more
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As a result of these...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Avid Technology, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: AVID
CIK: 896841
Form Type: 10-Q Quarterly Report
Accession Number: 0000896841-22-000162
Submitted to the SEC: Tue Nov 08 2022 4:48:30 PM EST
Accepted by the SEC: Tue Nov 08 2022
Period: Friday, September 30, 2022
Industry: Prepackaged Software

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Avid Technology, Inc. (AVID) SEC Filing 10-Q Quarterly Report for the period ending Friday, September 30, 2022

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