Leading technology provider of software tools and platforms that empower the media and entertainment industry, Avid (NASDAQ:AVID) announced its second quarter 2018 financial results and reaffirmed it 2018 guidance. The company said that its bookings generated US$110.3 million which was an increase of 12 percent year over year and nine percent sequentially. For the full …
Leading technology provider of software tools and platforms that empower the media and entertainment industry, Avid (NASDAQ:AVID) announced its second quarter 2018 financial results and reaffirmed it 2018 guidance.
The company said that its bookings generated US$110.3 million which was an increase of 12 percent year over year and nine percent sequentially.
For the full year 2018 guidance, the company expects to post a revenue in the range of US$410 million to US$420 million
As quoted in the press release:
“During the second quarter, Avid continued to see positive commercial momentum as our overall offering and new products are being well received by customers as evidenced through the strong bookings and continued growth in software, cloud-enabled subscriptions and our successful e-commerce business,” said Jeff Rosica, Chief Executive Officer and President of Avid. “Throughout the second quarter, we continued to execute on our aggressive transition plans while continuing work to improve gross margins, enhance our global supply chain, and reprioritize our product roadmap and commercial plans to capitalize on near-term opportunities. Guided by the new management team, this focus will intensify through the second half of this year with a goal of driving shareholder value.”
Highlights of Second Quarter 2018 Financial Results
- Bookings were $110.3 million, an increase of 12% year-over-year and 9% sequentially.
- GAAP Revenue was $98.6 million, representing a sequential improvement of 1% and in line with guidance.
- Continued strong software revenue growth from subscription and e-commerce sales, with cloud-enabled software subscriptions now at nearly 108,500 at the end of the second quarter and up 39% year-over-year, and bookings through the Company’s e-commerce activities up 48% year-over-year.
- GAAP Gross Margin was 57.1% and non-GAAP Gross Margin was 59.2%.
- GAAP Operating Loss was $2.1 million, and Adjusted EBITDA was $5.3 million, in line with guidance.
- GAAP Net Cash Used in Operating Activities was $5.9 million.
- Free Cash Flow was a deficit of $8.7 million, reflecting the scheduled payout of the Company’s 2017 bonus during the second quarter.
New Operational Metrics
- Recurring Revenue, a new operational metric, was 57% of the Company’s revenue in Q2’18 up from 51% in Q2’17, 49% in fiscal year 2017 and 22% in fiscal year 2014.
- Annual Contract Value (ACV), another new operational metric, was $245 million at the end of Q2’18 up from $227 million at the end of Q2’17, reflecting the growth in Avid’s high margin subscription and maintenance revenues plus revenues under long-term agreements.
Full Year 2018 Guidance
Avid is reaffirming and narrowing its annual financial guidance for full year 2018. This guidance reflects the adoption of the new revenue recognition standard ASC 606 as of January 1, 2018.
(in $ millions) Full Year 2018 Revenue $410- $420 Adjusted EBITDA $40 – $46 Free Cash Flow $4 – $12
At this point in time in the year and with the reaffirmation of the Company’s annual guidance, Avid will not be issuing quarterly guidance for the balance of 2018.