Avid Technology Announces Q4 and FY 2022 Results
Avid reported Q4 2022 revenue of $116.1 million, reflecting a (2.5%) decrease year-over-year, impacted by a $3.3 million non-cash adjustment. Adjusted EBITDA stood at $24.8 million, down (0.6%) year-over-year, while net income surged 66.0% to $25.3 million. Subscription ARR reached $141.3 million, marking a 37.1% increase, with total ARR at $244.9 million—up 10.2%. Avid exceeded 500,000 paid Cloud-Enabled Software Subscriptions. For 2023, guidance includes ARR of $270-$280 million and revenue between $447-$472 million.
- Net income increased by 66.0% to $25.3 million due partly to a one-time tax benefit.
- Subscription ARR grew by 37.1% year-over-year, indicating strong demand.
- Total ARR also rose by 10.2% year-over-year, showcasing overall growth in recurring revenue.
- Q4 revenue decreased by (2.5%) year-over-year, indicating potential revenue challenges.
- Adjusted EBITDA fell by (0.6%) year-over-year, suggesting pressure on profitability.
- Free Cash Flow decreased by (41.1%) year-over-year, indicating cash flow challenges due to increased operational costs.
Q4 revenue of
Subscription ARR of
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 01, 2023 (GLOBE NEWSWIRE) -- 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
During the fourth quarter, we recorded a one-time, non-cash adjustment to revenue of (
Excluding the adjustment, fourth quarter revenue would have been
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
Net cash provided by operating activities was
Fourth Quarter 2022 Financial and Business Highlights
- Paid Cloud-enabled software subscriptions increased by approximately 23,100 during the quarter to approximately 506,000 as of December 31, 2022, an increase of
23.2% year-over-year. - Subscription ARR was
$141.3 million , an increase of37.1% year-over-year. At constant currency, Subscription ARR increased38.8% year-over-year. - Total ARR was
$244.9 million , an increase of10.2% year-over-year. At constant currency, ARR increased13.4% year-over-year. - Subscription revenue was
$42.5 million , an increase of24.6% year-over-year. At constant currency, subscription revenue increased29.6% year-over-year. Excluding the one-time adjustment in the quarter, subscription revenue would have increased34.3% year-over-year and39.2% year-over-year at constant currency. - Subscription and maintenance revenue was
$68.9 million , an increase of5.3% year-over-year. At constant currency, Subscription and maintenance revenue increased9.3% year-over-year. Excluding the one-time adjustment in the quarter, subscription and maintenance revenue would have increased10.3% year-over-year and14.3% year-over-year at constant currency. - Total revenue was
$116.1 million , a decrease of (2.5% ) year-over-year. At constant-currency, total revenue increased1.7% year-over-year. Excluding the one-time adjustment in the quarter, total revenue would have increased0.3% year-over-year and4.4% year-over-year at constant currency. - Gross margin was
64.2% , a decrease of (160 basis points) year-over-year and Non-GAAP Gross Margin was64.6% , a decrease of (160 basis points) year-over-year. - Operating expenses were
$58.0 million , a decrease of (5.2% ) year-over-year. Non-GAAP Operating Expenses were$52.5 million , a decrease of (5.9% ) year-over-year. - Net income was
$25.3 million , an increase of66.0% year-over-year, due in part to a one-time non-cash tax benefit of$11.3 million in Q4 2022. Net income was21.8% of revenue. Non-GAAP Net Income was$19.9 million , a decrease of (4.5% ) year-over-year. Non-GAAP Net Income was17.2% of revenue. Excluding the one-time adjustment in the quarter, net income would have increased82.0% year-over-year and97.3% year-over-year at constant currency, and Non-GAAP Net Income would have increased7.1% year-over-year and17.9% year-over-year at constant currency. - Adjusted EBITDA was
$24.8 million , a decrease of (0.6% ) year-over-year. At constant-currency, Adjusted EBITDA increased8.0% year-over-year. Adjusted EBITDA Margin was21.4% , an increase of 40 basis points year-over-year. Excluding the one-time adjustment in the quarter, Adjusted EBITDA increased9.2% year-over-year and17.9% year-over-year at constant currency. - Net income per common share was
$0.57 , an increase of$0.24 year-over-year, due in part to the one-time non-cash tax benefit in Q4 2022 mentioned above. Non-GAAP Earnings per Share was$0.45 , a decrease of ($0.01) year-over-year. Excluding the one-time adjustment in the quarter, Net income per common share would have increased$0.30 year-over-year and$0.34 year-over-year at constant currency, and Non-GAAP Earnings per Share would have increased$0.05 year-over-year and$0.10 year-over-year at constant currency. - Net cash provided by operating activities was
$22.5 million in the quarter, a decrease of ($4.6) million compared to the prior year period. - Free Cash Flow was
$18.3 million in the quarter, a decrease of ($6.7) million compared to the fourth quarter of 2022, due to the items mentioned above. - The Company repurchased 364,760 shares for
$9.3 million during the fourth quarter, under the$115 million share repurchase authorization announced on September 9, 2021.
FY 2022 Financial and Business Highlights
- Paid Cloud-enabled software subscriptions increased during the year by approximately 95,400 to approximately 506,000 as of December 31, 2022, an increase of
23.2% year-over-year. - Subscription revenue was
$151.3 million , an increase of39.5% year-over-year. At constant currency, subscription revenue increased44.7% year-over-year. Excluding the one-time adjustment in the fourth quarter, subscription revenue would have increased42.6% year-over-year and47.7% year-over-year at constant currency. - Subscription and maintenance revenue was
$261.2 million , up13.1% year-over-year. At constant currency, Subscription and maintenance revenue increased16.4% year-over-year. Excluding the one-time adjustment in the fourth quarter, subscription and maintenance revenue would have increased14.6% year-over-year and17.8% year-over-year at constant currency. - Total revenue was
$417.4 million , an increase of1.8% year-over-year. At constant-currency, total revenue increased5.3% year-over-year. Excluding the one-time adjustment in the fourth quarter, total revenue would have increased2.6% year-over-year and6.1% year-over-year at constant currency. - Gross margin was
65.7% , an increase of 90 basis points year-over-year. Non-GAAP Gross Margin was66.2% , an increase of 90 basis points year-over-year. - Operating expenses were
$220.6 million , an increase of0.5% year-over-year. Non-GAAP Operating Expenses were$203.3 million , an increase of1.4% year-over-year. - Net income was
$55.2 million , an increase of33.5% year-over-year, due in part to the one-time non-cash tax benefit in Q4 2022 mentioned above. Net income was13.2% of revenue. Non-GAAP Net Income was$63.3 million , an increase of9.3% year-over-year. Non-GAAP Net Income was15.2% of revenue. Excluding the one-time adjustment in the quarter, net income would have increased39.4% year-over year and59.2% year-over-year at constant currency, and Non-GAAP Net Income would have increased13.5% year-over-year and26.4% year-over-year at constant currency. - Adjusted EBITDA was
$81.6 million , an increase of8.1% year-over-year. At constant-currency, Adjusted EBITDA increased17.9% year-over-year. Adjusted EBITDA Margin was19.5% , an increase of 110 basis points year-over-year. Excluding the one-time adjustment in the fourth quarter, Adjusted EBITDA would have increased11.3% year-over-year and21.3% year-over-year at constant currency. - Net income per common share was
$1.23 , an increase of$0.34 year-over-year, due in part to the one-time non-cash tax benefit in Q4 2022 mentioned above. Non-GAAP Earnings per Share was$1.41 , an increase of$0.16 year-over-year. Excluding the one-time adjustment in the quarter, Net income per common share would have increased$0.40 year-over-year and$0.55 year-over-year at constant currency, and Non-GAAP Earnings per Share would have increased$0.22 year-over-year and$0.37 year-over-year at constant currency. - Net cash provided by operating activities was
$48.0 million in 2022, a decrease of (23.2% ) year-over-year. - Free Cash Flow was
$32.8 million in 2022, a decrease of (41.1% ) year-over-year, due to the items mentioned above. - LTM Recurring Revenue % was
84.5% of the Company’s revenue for the year-ended 2022, up from78.0% for the prior year period. - The Company repurchased 2,036,524 shares for
$52.8 million during 2022, under the$115 million share repurchase authorization announced on September 9, 2021.
Jeff Rosica, Avid’s Chief Executive Officer and President, stated, “We remain pleased with the overall business performance in the fourth quarter as we continue to see strong growth in our software subscription business for both creative and enterprise customers. Our customers continue to adopt our enterprise subscription offerings, which, combined with creative subscription growth, resulted in solid growth in ARR. In addition, we continued making progress in resolving supply chain challenges in our integrated solutions that we experienced throughout 2022.” Mr. Rosica added, “While the one-time, non-cash adjustment to revenue we took in the fourth quarter impacted our results for the quarter, absent this adjustment, we would have been at the high-end of our implied Q4 guidance range for revenue and Non-GAAP Earnings per Share, and so, as we start 2023, we are confident in the underlying performance of the business as our product innovations continue to drive strong customer demand for our solutions.”
Ken Gayron, Executive Vice President and Chief Financial Officer of Avid, said, “We continued to make substantial progress in driving our higher gross margin subscription and maintenance revenue during the fourth quarter, which together accounted for
First Quarter and Full Year 2023 Guidance
For the first quarter of 2023, Avid is providing guidance for ARR, Revenue, Subscription & Maintenance Revenue, Non-GAAP Earnings per Share, and Adjusted EBITDA. For the full year 2023, Avid is providing guidance for ARR, Revenue, Subscription & Maintenance Revenue, Non-GAAP Earnings per Share, Adjusted EBITDA, and Free Cash Flow, as adjusted.
| ($ in millions, except per share amounts) | Q1 2023 Guidance |
| ARR, at end of period | |
| Revenue | |
| Subscription & Maintenance Revenue | |
| Non-GAAP Earnings per Share | |
| Adjusted EBITDA | |
| Q1 Non-GAAP Earnings per Share assumes 44.2 million shares outstanding. | |
| Full Year 2023 Guidance | |
| ARR, at end of period | |
| Revenue | |
| Subscription & Maintenance Revenue | |
| Non-GAAP Earnings per Share | |
| Adjusted EBITDA | |
| Free Cash Flow, as adjusted | |
| 2023 Non-GAAP Earnings per Share assumes 43.5 million shares outstanding. Free Cash Flow, as adjusted, excludes | |
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 Q4 and FY 2022 Earnings presentation posted on Avid’s Investor Relations website at ir.Avid.com.
Conference Call to Discuss Fourth Quarter and FY 2022 Results on March 1, 2023
Avid will host a conference call to discuss its financial results for the fourth quarter and FY 2022 on Wednesday, March 1, 2023, 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.
Corrective Change in Methodology for Calculating Standalone Selling Price
More information on the one-time, non-cash adjustment taken during the fourth quarter to correct an immaterial error in methodology for calculating standalone selling price for subscription term-based licenses in prior periods is detailed in Management's Discussion and Analysis and the Notes to Consolidated Financial Statements in our 10-K filed today.
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. Constant currency growth rates are calculated using the same historical budget exchange rates 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.
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; 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; 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.
© 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 | Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net revenues: | |||||||||||||||
| Subscriptions | $ | 42,452 | $ | 34,059 | $ | 151,330 | $ | 108,443 | |||||||
| Maintenance | 26,463 | 31,414 | 109,845 | 122,411 | |||||||||||
| Integrated solutions & other | 47,184 | 53,591 | 156,238 | 179,090 | |||||||||||
| Total net revenues | 116,099 | 119,064 | 417,413 | 409,944 | |||||||||||
| Cost of revenues: | |||||||||||||||
| Subscriptions | 5,447 | 4,753 | 23,504 | 14,963 | |||||||||||
| Maintenance | 4,534 | 5,846 | 19,913 | 22,981 | |||||||||||
| Integrated solutions & other | 31,589 | 30,118 | 99,558 | 106,196 | |||||||||||
| Total cost of revenues | 41,570 | 40,717 | 142,975 | 144,140 | |||||||||||
| Gross profit | 74,529 | 78,347 | 274,438 | 265,804 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 17,035 | 16,920 | 66,904 | 65,559 | |||||||||||
| Marketing and selling | 26,015 | 28,983 | 95,977 | 95,494 | |||||||||||
| General and administrative | 14,948 | 15,158 | 57,189 | 57,372 | |||||||||||
| Restructuring costs, net | (2 | ) | 115 | 513 | 1,116 | ||||||||||
| Total operating expenses | 57,996 | 61,176 | 220,583 | 219,541 | |||||||||||
| Operating income | 16,533 | 17,171 | 53,855 | 46,263 | |||||||||||
| Interest expense, net | (3,189 | ) | (1,609 | ) | (9,350 | ) | (7,149 | ) | |||||||
| Other income, net | 825 | 389 | 832 | 4,841 | |||||||||||
| Income before income taxes | 14,169 | 15,951 | 45,337 | 43,955 | |||||||||||
| (Benefit from) Provision for income taxes | (11,091 | ) | 735 | (9,904 | ) | 2,567 | |||||||||
| Net income | $ | 25,260 | $ | 15,216 | $ | 55,241 | $ | 41,388 | |||||||
| Net income per common share – basic | $ | 0.58 | $ | 0.34 | $ | 1.24 | $ | 0.92 | |||||||
| Net income per common share – diluted | $ | 0.57 | $ | 0.33 | $ | 1.23 | $ | 0.89 | |||||||
| Weighted-average common shares outstanding – basic | 43,836 | 45,061 | 44,531 | 45,101 | |||||||||||
| Weighted-average common shares outstanding – diluted | 43,991 | 45,773 | 44,856 | 46,303 | |||||||||||
AVID TECHNOLOGY, INC.
Reconciliations of GAAP financial measures to Non-GAAP financial measures
(unaudited - in thousands except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| GAAP revenue | |||||||||||||||
| GAAP revenue | $ | 116,099 | $ | 119,064 | $ | 417,413 | $ | 409,944 | |||||||
| Non-GAAP Gross Profit | |||||||||||||||
| GAAP gross profit | $ | 74,529 | $ | 78,347 | $ | 274,438 | $ | 265,804 | |||||||
| Stock-based compensation | 461 | 439 | 2,064 | 1,801 | |||||||||||
| Non-GAAP Gross Profit | $ | 74,990 | $ | 78,786 | $ | 276,502 | $ | 267,605 | |||||||
| GAAP Gross Margin | 64.2 | % | 65.8 | % | 65.7 | % | 64.8 | % | |||||||
| Non-GAAP Gross Margin | 64.6 | % | 66.2 | % | 66.2 | % | 65.3 | % | |||||||
| Non-GAAP Operating Expenses | |||||||||||||||
| GAAP operating expenses | $ | 57,996 | $ | 61,176 | $ | 220,583 | $ | 219,541 | |||||||
| Less Amortization of intangible assets | (37 | ) | (73 | ) | (189 | ) | (388 | ) | |||||||
| Less Stock-based compensation | (5,029 | ) | (3,208 | ) | (14,440 | ) | (12,681 | ) | |||||||
| Less Restructuring costs, net | 2 | (115 | ) | (513 | ) | (1,116 | ) | ||||||||
| Less Acquisition, integration and other costs | (75 | ) | (985 | ) | (506 | ) | (3,068 | ) | |||||||
| Less Efficiency program costs | — | — | — | (48 | ) | ||||||||||
| Less Digital Transformation costs | (371 | ) | (1,028 | ) | (1,685 | ) | (1,836 | ) | |||||||
| Less COVID-19 related expenses | — | — | — | (22 | ) | ||||||||||
| Non-GAAP Operating Expenses | $ | 52,486 | $ | 55,767 | $ | 203,250 | $ | 200,382 | |||||||
| Non-GAAP Operating Income and Adjusted EBITDA | |||||||||||||||
| GAAP net income | $ | 25,260 | $ | 15,216 | $ | 55,241 | $ | 41,388 | |||||||
| Interest and other expense | 2,364 | 1,220 | 8,518 | 2,308 | |||||||||||
| Provision for income taxes | (11,091 | ) | 735 | (9,904 | ) | 2,567 | |||||||||
| GAAP operating income | $ | 16,533 | $ | 17,171 | $ | 53,855 | $ | 46,263 | |||||||
| Amortization of intangible assets | 37 | 73 | 189 | 388 | |||||||||||
| Stock-based compensation | 5,490 | 3,647 | 16,504 | 14,482 | |||||||||||
| Restructuring costs, net | (2 | ) | 115 | 513 | 1,116 | ||||||||||
| Acquisition, integration and other costs | 75 | 985 | 506 | 3,068 | |||||||||||
| Efficiency program costs | — | — | — | 48 | |||||||||||
| Digital Transformation costs | 371 | 1,028 | 1,685 | 1,836 | |||||||||||
| COVID-19 related expenses | — | — | — | 22 | |||||||||||
| Non-GAAP Operating Income | $ | 22,504 | $ | 23,019 | $ | 73,252 | $ | 67,223 | |||||||
| Depreciation | 2,301 | 1,932 | 8,324 | 8,255 | |||||||||||
| Adjusted EBITDA | $ | 24,805 | $ | 24,951 | 81,576 | 75,478 | |||||||||
| GAAP net income margin | 21.8 | % | 12.8 | % | 13.2 | % | 10.1 | % | |||||||
| Adjusted EBITDA Margin | 21.4 | % | 21.0 | % | 19.5 | % | 18.4 | % | |||||||
| Non-GAAP Net Income | |||||||||||||||
| GAAP net income | $ | 25,260 | $ | 15,216 | $ | 55,241 | $ | 41,388 | |||||||
| Amortization of intangible assets | 37 | 73 | 189 | 388 | |||||||||||
| Stock-based compensation | 5,490 | 3,647 | 16,504 | 14,482 | |||||||||||
| Restructuring costs, net | (2 | ) | 115 | 513 | 1,116 | ||||||||||
| Acquisition, integration and other costs | 75 | 985 | 506 | 3,068 | |||||||||||
| Efficiency program costs | — | — | — | 48 | |||||||||||
| Digital Transformation costs | 371 | 1,028 | 1,685 | 1,836 | |||||||||||
| Gain on forgiveness of PPP Loan | — | — | — | (7,800 | ) | ||||||||||
| COVID-19 related expenses | — | — | — | 22 | |||||||||||
| Loss on extinguishment of debt | — | — | — | 3,748 | |||||||||||
| Non-GAAP tax adjustments | (11,313 | ) | (198 | ) | (11,316 | ) | (382 | ) | |||||||
| Non-GAAP Net Income | $ | 19,918 | $ | 20,866 | $ | 63,322 | $ | 57,914 | |||||||
| Weighted-average common shares outstanding - basic | 43,836 | 45,061 | 44,531 | 45,101 | |||||||||||
| Weighted-average common shares outstanding - diluted | 43,991 | 45,773 | 44,856 | 46,303 | |||||||||||
| Net Income per Share (Basic) | $ | 0.58 | $ | 0.34 | $ | 1.24 | $ | 0.92 | |||||||
| Net Income per Share (Diluted) | $ | 0.57 | $ | 0.33 | $ | 1.23 | $ | 0.89 | |||||||
| Non-GAAP Earnings Per Share - basic | $ | 0.45 | $ | 0.46 | $ | 1.42 | $ | 1.28 | |||||||
| Non-GAAP Earnings Per Share - diluted | $ | 0.45 | $ | 0.46 | $ | 1.41 | $ | 1.25 | |||||||
| Free Cash Flow | |||||||||||||||
| GAAP net cash provided by operating activities | $ | 22,456 | $ | 27,071 | $ | 48,019 | $ | 62,489 | |||||||
| Capital expenditures | (4,184 | ) | $ | (2,069 | ) | (15,251 | ) | $ | (6,819 | ) | |||||
| Free Cash Flow | $ | 18,272 | $ | 25,002 | $ | 32,768 | $ | 55,670 | |||||||
| Free Cash Flow conversion of Adjusted EBITDA | 73.7 | % | 100.2 | % | 40.2 | % | 73.8 | % | |||||||
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)
| December 31, | December 31, | ||||||
| 2022 | 2021 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 35,247 | $ | 56,818 | |||
| Restricted cash | 2,413 | 2,416 | |||||
| Accounts receivable, net of allowances of | 76,849 | 77,046 | |||||
| Inventories | 20,981 | 19,922 | |||||
| Prepaid expenses | 8,360 | 5,464 | |||||
| Contract assets | 32,295 | 18,903 | |||||
| Other current assets | 2,826 | 1,953 | |||||
| Total current assets | 178,971 | 182,522 | |||||
| Property and equipment, net | 23,684 | 16,028 | |||||
| Goodwill | 32,643 | 32,643 | |||||
| Right of use assets | 21,395 | 24,143 | |||||
| Deferred tax assets, net | 15,859 | 5,210 | |||||
| Other long-term assets | 14,901 | 13,454 | |||||
| Total assets | $ | 287,453 | $ | 274,000 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 45,904 | $ | 26,854 | |||
| Accrued compensation and benefits | 22,602 | 35,458 | |||||
| Accrued expenses and other current liabilities | 36,031 | 37,552 | |||||
| Income taxes payable | 62 | 868 | |||||
| Short-term debt | 9,710 | 9,158 | |||||
| Deferred revenue | 76,308 | 87,475 | |||||
| Total current liabilities | 190,617 | 197,365 | |||||
| Long-term debt | 172,958 | 160,806 | |||||
| Long-term deferred revenue | 17,842 | 10,607 | |||||
| Long-term lease liabilities | 20,470 | 23,379 | |||||
| Other long-term liabilities | 4,348 | 5,917 | |||||
| Total liabilities | 406,235 | 398,074 | |||||
| Stockholders’ deficit: | |||||||
| Common stock | 462 | 455 | |||||
| Treasury stock | (77,933 | ) | (25,090 | ) | |||
| Additional paid-in capital | 1,036,287 | 1,031,633 | |||||
| Accumulated deficit | (1,071,718 | ) | (1,126,959 | ) | |||
| Accumulated other comprehensive loss | (5,880 | ) | (4,113 | ) | |||
| Total stockholders’ deficit | (118,782 | ) | (124,074 | ) | |||
| Total liabilities and stockholders’ deficit | $ | 287,453 | $ | 274,000 | |||
AVID TECHNOLOGY, INC.
Consolidated Statements of Cash Flows
(unaudited - in thousands)
| Twelve Months Ended | |||||||
| December 31, | |||||||
| 2022 | 2021 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 55,241 | $ | 41,388 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 8,324 | 8,254 | |||||
| Provision for doubtful accounts | 1,056 | 694 | |||||
| Loss on extinguishment of debt | — | 2,579 | |||||
| Stock-based compensation expense | 16,555 | 13,737 | |||||
| Non-cash provision for restructuring | 495 | 956 | |||||
| Non-cash interest expense | 516 | 515 | |||||
| Gain on forgiveness of PPP loan | — | (7,800 | ) | ||||
| Loss on disposal of fixed assets | 548 | — | |||||
| Unrealized foreign currency transaction (gains) | (788 | ) | (2,101 | ) | |||
| (Benefit from) provision for deferred taxes | (10,649 | ) | 1,591 | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (859 | ) | 875 | ||||
| Inventories | (1,059 | ) | 6,646 | ||||
| Prepaid expenses and other assets | (7,238 | ) | (1,156 | ) | |||
| Accounts payable | 19,049 | 5,032 | |||||
| Accrued expenses, compensation and benefits and other liabilities | (16,066 | ) | 69 | ||||
| Income taxes payable | (805 | ) | (796 | ) | |||
| Deferred revenue and contract assets | (16,301 | ) | (7,994 | ) | |||
| Net cash provided by operating activities | 48,019 | 62,489 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (15,251 | ) | (6,819 | ) | |||
| Net cash used in investing activities | (15,251 | ) | (6,819 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from revolving line of credit | 44,000 | — | |||||
| Repayment on revolving line of credit | (44,000 | ) | — | ||||
| Proceeds from long-term debt | 20,000 | 180,000 | |||||
| Repayment of debt | (6,871 | ) | (210,456 | ) | |||
| Payments for repurchase of common stock | (52,993 | ) | (24,787 | ) | |||
| Proceeds from the issuance of common stock under employee stock plans | 928 | 808 | |||||
| Common stock repurchases for tax withholdings for net settlement of equity awards | (12,822 | ) | (19,557 | ) | |||
| Prepayment penalty on extinguishment of debt | — | (1,169 | ) | ||||
| Payments for credit facility issuance costs | (942 | ) | (2,574 | ) | |||
| Net cash used in financing activities | (52,700 | ) | (77,735 | ) | |||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,772 | ) | (1,016 | ) | |||
| Net (decrease) in cash, cash equivalents and restricted cash | (21,704 | ) | (23,081 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period | 60,556 | 83,637 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 38,852 | $ | 60,556 | |||
| Supplemental information: | |||||||
| Cash and cash equivalents | $ | 35,247 | $ | 56,818 | |||
| Restricted cash | $ | 2,413 | 2,416 | ||||
| Restricted cash included in other long-term assets | $ | 1,192 | 1,322 | ||||
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | 38,852 | $ | 60,556 | |||
AVID TECHNOLOGY, INC.
Supplemental Revenue Information
(unaudited - in millions)
| Backlog Disclosure for Quarter Ended December 31, 2022 | ||||||||||
| December 31, | September 30, | December 31, | ||||||||
| 2022 | 2022 | 2021 | ||||||||
| Revenue Backlog* | ||||||||||
| Deferred Revenue | ||||||||||
| Other Backlog | 288.6 | 302.5 | 314.7 | |||||||
| Total Revenue Backlog | $382.8 | $379.2 | $412.8 | |||||||
| The expected timing of recognition of revenue backlog as of December 31, 2022 is as follows: | ||||||||||
| 2023 | 2024 | 2025 | Thereafter | Total | ||||||
| Deferred Revenue | ||||||||||
| Other Backlog | 147.3 | 66.8 | 48.2 | 26.3 | 288.6 | |||||
| Total Revenue Backlog | $223.9 | $77.0 | $53.3 | $28.6 | $382.8 | |||||
| *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, INC.
Impact of one-time, non-cash revenue adjustment in Q4 2022
(unaudited - in millions)
| Q4 2022 | Q4 Implied Guidance1 | Q4 As Reported | Adjustment2 | Excluding Adjustment | |||
| Revenue | |||||||
| Net income | 25.3 | 2.4 | 27.7 | ||||
| Non-GAAP Net Income | 19.9 | 2.4 | 22.4 | ||||
| Adj. EBITDA | 24.8 | 2.4 | 27.2 | ||||
| Net income per common share (diluted)3 | |||||||
| Non-GAAP Earnings per Share3 | |||||||
| FY 2022 | FY 2022 Guidance1 | FY 2022 As Reported | Adjustment2 | Excluding Adjustment | |||
| Revenue | |||||||
| Net income | 55.2 | 2.4 | 57.7 | ||||
| Non-GAAP Net Income | 63.3 | 2.4 | 65.8 | ||||
| Adj. EBITDA | 81.6 | 2.4 | 84.0 | ||||
| Net income per common share (diluted)4 | |||||||
| Non-GAAP Earnings per Share4 | |||||||
| (1) Guidance provided November 8, 2022 | |||||||
| (2) One-time, non-cash adjustment to revenue and the drop through impact on the bonus during Q4 2022 | |||||||
| (3) Weighted-average share count (diluted) 44.0M for Q4 2022 | |||||||
| (4) Weighted-average share count (diluted) 44.9M for FY 2022 | |||||||
FAQ
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