Cookie Consent by TermsFeed
      business-news-en
      mebucom-en
                
Jeff Rosica

AVID makes substantial progress

AVID announced its financial results for the third quarter ended September 30, 2020. Total revenue increased 14.1% sequentially in the third quarter, while declining slightly year-over-year, as many of Avid’s end markets showed initial signs of recovery from the COVID-19 pandemic.

During the third quarter, the Recurring Revenue components of the Company’s business remained strong. The Company reported record subscription revenue of $17.9 million, up 73.9% year-over-year, resulting in 6.5% year-over-year growth in Annual Contract Value. Also, in the third quarter, Avid significantly improved its profitability as a result of a 250 basis point year-over-year improvementin gross margin coupled with a ($4.3) million reduction in operating expenses that yielded a 56.1% year-over-year improvement in operating incomeand an Adjusted EBITDA Margin of 21.4%. The strong operating results for the third quarter resulted in Free Cash Flow of $15.5 million. The non-Recurring Revenue portions of the Company’s business related to product and professional services showed strong signs of sequentialrecovery during the third quarter, although they continued to be negatively impacted year-over-year by weaker demand as a result of the COVID-19pandemic. Product revenue from perpetual software licenses and integrated solutions increased 29.5% sequentially to $35.8 million in the thirdquarter.

During the third quarter, the Company repaid the $22.0 million balance on its revolving credit facility using available cash. As of September 30, 2020,the Company had $49.1 million in cash and cash equivalents. The Company’s leverage ratio under its financing agreement decreased to 3.4x as of September 30, 2020 as a result of the repayment of borrowings under the revolving credit facility using the Company’s strong Free Cash Flowgeneration in the quarter, and the year-over-year increase in Adjusted EBITDA in the quarter.

 

Third Quarter 2020 Financial and Business Highlights

  • Subscription revenue was $17.9 million, up 73.9% year-over-year.
  • Paid Cloud-enabled software subscriptions increased by approximately 27,000 during the quarter, to approximately 269,000at September 30, 2020, an increase of 58.1% year-over-year in total paid subscriptions.
  • Subscription and Maintenance revenue was $48.7 million, up 11.6% year-over-year.
  • Total revenue was $90.4 million, up 14.1% sequentially, and down (3.2%) year-over-year.
  • Gross margin was 64.4%, up 250 basis points year-over-year. Non-GAAP Gross Margin was 64.9%, up 280 basis pointsyear-over-year.
  • Operating expenses were $45.1 million, a decrease of (8.7%) year-over-year. Non-GAAP Operating Expenses were $41.4million, a decrease of (12.6%) year-over-year. Operating income was $13.1 million, an increase of 56.1% year-over-year. Non-GAAP Operating Income was $17.3 million, an increase of 61.3% year-over-year.
  • Adjusted EBITDA was $19.3 million, an increase of 51.2% year-over-year. Adjusted EBITDA Margin was 21.4%, up 770 basis points year-over-year.
  • Net income per common share was $0.18, up from $0.07 in the third quarter of 2019. Non-GAAP Net Income per Sharewas $0.27, up from $0.10 in the third quarter of 2019.
  • Net cash provided by operating activities was $18.0 million in the quarter, an increase of $20.5 million compared to Netcash (used in) operating activities of ($2.6) million in the third quarter of 2019.
  • Free Cash Flow was $15.5 million in the quarter, an increase of $20.2 million compared to Free Cash Flow of negative ($4.6) million in the third quarter of 2019.
  • LTM Recurring Revenue % was 71.2% of the Company’s revenue for the 12 months ended September 30, 2020, up from 59.4% for the 12 months ended September 30, 2019.
  • Annual Contract Value was $271.9 million as of September 30, 2020, up 6.5% from $255.3 million as of September 30, 2019.

Jeff Rosica, Avid’s CEO and President, stated, “We are pleased with the beginning of the demand turnaround we saw in our non-recurring business during the third quarter, and with the strength of the recurring revenue elements of our business driven by the continued growth of our creative software subscription business and the introduction of enterprise subscription. COVID-19 continued to have some temporary impact on customerdemand for parts of our non-recurring product business, but we expect demand to continue the gradual recovery that started in Q3.” Rosica added, “We have adjusted our strategy and investments to quickly respond to the changes in the market we’re seeing, focusing even more sharply on the parts of the business that we believe will drive more profitable growth. We also remain focused on ensuring we have the right cost structure movingforward so that Avid enters 2021 as a stronger and more profitable company.”

Ken Gayron, Executive Vice President and Chief Financial Officer of Avid, said, “We continued to make substantial progress in driving our higher margin revenue streams and improving our cost structure in the third quarter, yielding strong growth in profitability.” Gayron continued, “The improvement in profitability resulted in third quarter Free Cash Flow of $15.5 million, enabling us to fully repay the balance on our revolving creditfacility and reduce our accounts payable, further strengthening our balance sheet. As we head into our seasonally highest Free Cash Flow generating quarter and with the improvements we achieved in our profitability during the third quarter, we believe Avid will generate strong Free Cash Flow as we conclude fiscal year 2020, which should enable us to improve our cost of capital and reduce our interest costs.” (10/20)

picture: Jeff Rosica, Avid’s CEO and President @EMpress

 

Zurück


Relevant Companies
Similar News