Avid Technology, Inc. (AVID) 10-Q Quarterly Report May 2023

Q4 revenue of $116.1M, which includes a ($3.3M) one-time non-cash adjustment, was in the middle of the implied Q4 guidance range; excluding the adjustment, Q4 revenue of $119.4M would have been at the high end of the implied Q4 guidance range

Subscription ARR of $141.3M, an increase of 37.1% year-over-year and 38.8% at constant currency, and total ARR of $244.9M, an increase of 10.2% year-over-year and 13.4% at constant currency

Exceeded 500,000 paid Cloud-Enabled Software Subscriptions as of December 31, 2022

Introduction of Annual Recurring Revenue (ARR) guidance for Q1 and FY 2023

BURLINGTON, Mass., March 1, 2023 -- Avid® (NASDAQ: AVID), a leading technology provider that powers the media and entertainment industry, today announced its financial results for the fourth quarter and full year ended December 31, 2022.

As reported, fourth quarter revenue was $116.1 million, a decrease of (2.5%) year-over-year, net income was $25.3 million, an increase of 66.0% year-over-year, Adjusted EBITDA was $24.8 million, a decrease of (0.6%) year-over-year, net income per common share was $0.57, an increase of $0.24 year-over-year, and Non-GAAP Earnings per Share was $0.45, a decrease of ($0.01) year-over year. Revenue was in the middle of our implied Q4 guidance range, Adjusted EBITDA was below our implied Q4 guidance range and Non-GAAP Earnings per Share was within our implied Q4 guidance range.

During the fourth quarter, we recorded a one-time, non-cash adjustment to revenue of ($3.3 million) related to a corrective change in methodology for calculating standalone selling price for subscription term-based licenses in the amount of $0.1 million for FY 2020, ($2.1 million) for FY 2021 and ($1.3 million) for the nine months ending September 30, 2022, as outlined in our 10-K filed today. The adjustment related to the period from FY 2020 to FY 2022 and represented 0.3% of the total revenue over the three years. The adjustment also negatively impacted net income and Adjusted EBITDA in the fourth quarter, but had no impact on net cash provided by operating activities, Free Cash Flow or ARR.

Excluding the adjustment, fourth quarter revenue would have been $119.4 million, an increase of 0.3% year-over-year (or 4.4% at constant currency), net income would have been $27.7 million, an increase of 82.0% year-over year (or 97.3% at constant currency), Adjusted EBITDA would have been $27.2 million, an increase of 9.2% year-over year (or 17.9% at constant currency), net income per common share would have been $0.63, an increase of $0.30 year-over year (or an increase of $0.34 at constant currency) and Non-GAAP Earnings per Share would have been $0.51, an increase of $0.05 year-over-year (or an increase of $0.10 at constant currency). Excluding the adjustment, revenue and Non-GAAP Earnings per Share would have been in the high end of our implied Q4 guidance range and Adjusted EBITDA would have been within our implied Q4 guidance range.

The recurring components of the Company’s revenue remained strong during the fourth quarter as paid subscriptions reached 506,000 as of the end of 2022, an increase of 23.2% year-over-year. Subscription ARR was $141.3 million (as of December 31, 2022), an increase of 37.1% year-over-year, and total ARR was $244.9 million (as of December 31, 2022), an increase of 10.2% year-over-year. At constant currency, subscription ARR increased 38.8% year-over-year and total ARR increased 13.4% year-over-year. In the fourth quarter, integrated solutions revenue was $40.8 million, an increase of 55% sequentially, as we continued to work to resolve supply chain challenges. As a result of continued strong integrated solutions orders during the fourth quarter, the backlog of unshipped orders was reduced during the quarter but remained above what we believe to be normal levels as of the end of 2022, at over $20 million.

Net cash provided by operating activities was $22.5 million in the fourth quarter and $48.0 million for FY 2022. Free Cash Flow was $18.3 million in the fourth quarter and $32.8 million for FY 2022. Free Cash Flow was lower

The following information was filed by Avid Technology, Inc. (AVID) on Wednesday, March 1, 2023 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:

Revenue - Product Highlight
There was also a change in the mix of integrated solutions and other revenues towards our lower margin hardware, which also negatively impacted margins.

Financial - Earnings Highlight
This was partially offset by the increase in our subscription margins due to increased volume.
Revenue - Product Highlight
In the event revenues in future quarters are lower than we currently anticipate or operating expenses are higher than we expect, 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 25 securities or the incurrence of additional borrowings, or (iv) disposing of certain assets or businesses.
Other - Other Highlight
24 LIQUIDITY AND CAPITAL RESOURCES Liquidity and Sources of Cash Our principal sources of liquidity include cash and cash equivalents totaling $20.9 million as well as the availability of borrowings of up to $120.0 million under our revolving Credit Facility as of March 31, 2023.
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.
Revenue - Product
In recent quarters, we have...Read more
Financial - Expense
The increases in operating expenses...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
Other - Other
These expenditures will be a...Read more
Other - Other
The borrowings under the Term...Read more
Financial - Expense
Marketing and Selling Expenses Marketing...Read more
Financial - Expense
These shortages have resulted in...Read more
Financial - Expense
R&D expenses increased $2.7 million,...Read more
Financial - Expense
G&A expenses increased $1.8 million,...Read more
Financial - Expense
The increase in facilities and...Read more
Financial - Earnings
Our gross margin percentage for...Read more
Financial - Expense
The increase in personnel-related expenses...Read more
Revenue - Product
Although our revenue and earnings...Read more
Financial - Expense
The increase in personnel-related expenses...Read more
Revenue - Product
Subscription revenues increased $6.4 million,...Read more
Financial - Earnings
The use of cash in...Read more
Financial - Expense
22 Change in Marketing and...Read more
Financial - Earnings
Operations Overview Our strategy for...Read more
Revenue - Product
We expect to increase subscription...Read more
Revenue - Product
As a result of these...Read more
Revenue - Geography
The change in foreign exchange...Read more

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: 0000896841-23-000065
Submitted to the SEC: Thu May 04 2023 4:47:26 PM EST
Accepted by the SEC: Thu May 04 2023
Period: Friday, March 31, 2023
Industry: Prepackaged Software

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Avid Technology, Inc. (AVID) SEC Filing 10-Q Quarterly Report for the period ending Friday, March 31, 2023

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