Avid Technology (AVID) Misses Q4 EPS by 2c, Revenues Beat; Offers Q1 & FY19 Revenues Guidance

Avid Technology (NASDAQ: AVID) reported Q4 EPS of $0.14, $0.02 worse than the analyst estimate of $0.16. Revenue for the quarter came in at $112.7 million versus the consensus estimate of $110.43 million.

Fourth Quarter 2018 Financial and Business Highlights

• Revenue was $112.7 million, an increase of 5% year-over-year and 8% sequentially. Revenue excluding non-cash revenue was $112.4 million, an increase of 7% year-over-year and 10% sequentially.
• Gross Margin was 59.0%, up 450 basis points year-over-year. Non-GAAP Gross Margin was 60.8%, up 480 basis points year-over-year.
• Operating Expenses were $54.4 million, an increase of 1% year-over-year and 2% sequentially largely driven by a $5.2M legal settlement recognized as a credit in Q4 2017 offset by savings from operational efficiency initiatives. Excluding the non-recurring settlement, operating expenses declined by $4.4 million year-over year.
• Operating Income was $12.1 million, an improvement of $7.3 million year-over-year and $5.0 million sequentially.
• Adjusted EBITDA was $21.3 million, an increase of 42% year-over-year and 46% sequentially. Adjusted EBITDA Margin was 18.9%, up 490 basis points year-over-year and sequentially.
• GAAP net income per common share was $0.14, up from net loss per common share of ($0.02) in Q4 2017.
• Net cash provided by operating activities was $20.1 million.
• Free Cash Flow was $17.7 million.
• Software revenue from subscriptions increased 77% year-over-year, surpassing $10 million in the quarter.
• Revenue through the Company’s e-commerce activities was up 50% year-over-year.

“Our return to revenue growth and the improvement in our key financial metrics, including Free Cash Flow and Adjusted EBITDA, demonstrate an improving business profile for our Company,” said Jeff Rosica, Chief Executive Officer and President of Avid. “Additionally, the management team is focused on continuing to build upon a scalable recurring revenue model as evidenced by our double-digit growth in subscriptions and e-commerce revenue. We intend to continue to drive R&D investments in key product areas in 2019 which are expected to set the foundation for future growth for the Company.”

“We ended 2018 with strong momentum evidenced by our improving revenue streams, gross margin and cash flow. With our strong revenue backlog and the savings from our internal efficiency programs we have visibility to continued improvements in Free Cash Flow and Adjusted EBITDA during 2019,” commented Ken Gayron, Executive Vice President and Chief Financial Officer of Avid.

GUIDANCE:

Avid Technology sees Q1 2019 revenue of $96-104 million, versus the consensus of $101.37 million.

Avid Technology sees FY2019 revenue of $420-430 million, versus the consensus of $422.9 million.

For earnings history and earnings-related data on Avid Technology (AVID) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Z Squared outlines AI power strategy and Paradox Data acquisition
• Optimum Communications gets NYSE non-compliance notice over stock price