Raises Expectations for Non-GAAP Revenue and
Adjusted EBITDAAdjusted Free Cash Flow Expected Comfortably within
Original Guidance RangeLowers Bookings Expectations Efficiency
Program on Track
Avid® (Nasdaq:AVID) (“Avid” or “the Company”) today updated its
previously announced financial guidance for Q1 2016 and reaffirmed
its full year 2016 guidance. In the first quarter, the
Company executed across several growth initiatives and the
previously announced efficiency program is on track for completion
as anticipated in 2016. Avid is increasing first quarter
guidance for Non-GAAP revenue and adjusted EBITDA due to higher
than expected revenue resulting from the latest release of Pro
Tools in late Q1 2016, which included the highly anticipated Avid
Cloud Collaboration feature. Avid is also tightening the
first quarter range for adjusted free cash flow to $9 to $11
million and is lowering the range for bookings primarily due to
delayed buying decisions for Avid’s shared storage solutions as a
result of the impending next-generation storage solution product
release in the second quarter, as well as the ongoing transition of
the broader enterprise media market.
“Our updated guidance for Q1 reflects the transformative force
of our platform-based approach,” said Avid Chairman, President, and
CEO Louis Hernandez, Jr. “As we continue to release new
innovations across the MediaCentral Platform, such as Avid Cloud
Collaboration for Pro Tools and next generation Avid NEXIS shared
storage, we unlock more opportunities for long-term growth, we
expand our wallet share potential while delivering tangible savings
to our clients. We believe we are well positioned to
capitalize on the growth opportunities created by the changes
sweeping the media sector, which at times can be
unpredictable. Our open platform approach allows Avid to
deliver greater innovation more efficiently driving both gross and
operating margin expansion. This will be enhanced by our
efficiency program which is on track.”
Avid’s updated 2016 first quarter financial guidance and its
originally issued guidance is presented in the table below. Based
on management’s assessment of the Company’s performance and
outlook, the full year 2016 guidance remains unchanged.
Guidance for Q2 2016 will be provided during the Company’s first
quarter business update call on May 4, 2016.
2016 Q1 Guidance
|
(in $ millions) |
Original |
Updated |
Bookings
(Constant Currency) |
$108-$118 |
$97.5-$98.5 |
|
Bookings |
$100-$112 |
$92.0-$93.0 |
|
Non-GAAP
Revenue |
$120-$125 |
$140.0-$143.0 |
|
Adjusted
EBITDA |
$11-$14 |
$34.0 to $37.0 |
|
Adjusted Free
Cash Flow |
($15)-($9) |
($11.0)-($9.0) |
|
Adjusted
Operating Expenses |
$64-$66 |
$67.0-$68.0 |
|
|
|
|
|
Avid anticipates its 2016 first quarter non-GAAP revenue and
adjusted EBITDA will exceed its previously issued guidance as a
result of accelerated revenue recognition of the latest Pro Tools
release. In late Q1 2016, Avid released the latest version of
Pro Tools, which included Avid Cloud Collaboration functionality
and converted approximately $16 million of revenue backlog that was
scheduled to be recognized throughout the remainder of 2016 into
revenue in the first quarter, with a corresponding favorable impact
on non-GAAP gross margin and adjusted EBITDA. Excluding the
impact of the cloud collaboration feature release, Avid expects Q1
2016 non-GAAP revenue to be at or slightly above the original
guidance range.
Avid has also updated expectations for adjusted free cash flow
to a use of $9 to $11 million in the first quarter of 2016, which
is tightened from the original range of a use of $9 to $15
million. Additionally, expectations for adjusted operating
expenses have increased to $67 to $68 million from $64 to $66
million, primarily related the adverse impact of foreign currency
balance sheet translation. Execution of the $68 million
efficiency gain program is on track and reflected in the Company’s
expected total spending in the first quarter.
Expectations for first quarter 2016 bookings have been reduced
primarily due to delayed purchasing decisions of shared storage
solutions by customers anticipating the next-generation shared
storage product that Avid recently launched in Q2 2016.
Avid’s new NEXIS solution, the media industry’s first and only
software defined storage platform, was announced with great success
at the National Association of Broadcasters conference, earning the
Best of Show award. Avid has begun taking orders and
anticipates shipping the first units during the second quarter of
2016. Also contributing to the change in bookings
expectations were more volatile market conditions in the Tier 1
enterprise space.
Both of these breakthrough innovations, Avid Cloud Collaboration
for Pro Tools and next-generation Avid NEXIS further demonstrate
the continued momentum of Avid’s unique enterprise-wide
platform-based approach and underscore Avid’s growth
potential. Other recent announcements will be discussed on
the business update call on May 4, 2016. These new
announcements all represent fertile cross- and up-selling
opportunities into the Company’s growing platform base. As of
March 31, 2016, Avid’s MediaCentral Platform user base had grown to
almost 36,000 licenses, up from just over 32,000 licenses at the
end of 2015.
The updated guidance is based on preliminary results and
therefore subject to Avid’s completion of its first quarter 2016
closing and review procedures. Accordingly, all other Company
guidance remains unchanged with no additional adjustments currently
contemplated. The re-affirmation of full year guidance is based
upon our ability to navigate the changing buying landscape, which
can be volatile, deliver new product and service releases and
execute on available efficiency gain opportunities. Avid
expects to release its first quarter financial results and hold its
related quarterly conference call on May 4, 2016 at 5:00 pm
EST.
- The dial-in number is: 719-325-2463
- The replay number is: 719-457-0820
- The confirmation code and replay passcode is:
4563906
- The conference call will also be available via live audio
Webcast and subsequent replay on the company's website. To listen
online, please visit http://ir.avid.com
Guidance and Financial and Operational Metrics
All guidance presented by the Company is inherently uncertain
and subject to numerous risks and uncertainties. Our actual
future results of operations and cash flows 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”.
Avid includes non-GAAP financial measures in this press release,
including non-GAAP revenue, adjusted EBITDA, adjusted free cash
flow, non-GAAP operating income (loss), non-GAAP operating income
(loss) per share, adjusted operating expenses and non-GAAP gross
margin. The Company also includes the operational metric of
bookings, revenue backlog and recurring revenue bookings 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 information is reported
based on actual exchange rates. Definitions of the non-GAAP
financial measures are included in our Form 8-K filed today.
Reconciliations of the non-GAAP financial measures in this release
to the Company's comparable GAAP financial measures for the periods
presented are set forth below and are also included in the
supplemental financial and operational data sheet available on our
investor relations webpage at ir.avid.com, which also includes
definitions of the operational metrics.
About AvidThrough Avid Everywhere™, Avid delivers the
industry's most open, innovative and comprehensive media platform
connecting content creation with collaboration, asset protection,
distribution and consumption. Media organizations and creative
professionals use Avid solutions to create the most listened
to, most watched and most loved media in the world—from the most
prestigious and award-winning feature films, to the most
popular television shows, news programs and televised sporting
events, as well as a majority of today’s most celebrated music
recordings and live concerts. Industry leading solutions include
Pro Tools®, Media Composer®, ISIS®, Avid NEXIS™, Interplay®, ProSet
and RealSet, Maestro, PlayMaker, and Sibelius®. For more
information about Avid solutions and services,
visit www.avid.com, connect with Avid on Facebook, Instagram,
Twitter, YouTube, LinkedIn, or subscribe to Avid Blogs.
Cautionary Note Regarding Forward-Looking StatementsCertain
information provided in this press release, including the tables
attached hereto, include forward-looking statements that involve
risks and uncertainties, including projections and statements about
our anticipated plans, objectives, expectations and intentions.
Among other things, this press release includes estimated results
of operations for fiscal 2016, which estimates are based on a
variety of assumptions about key factors and metrics that will
determine our future results of operations, including, for example,
overall market growth rates in the range of 3.0-3.3%, realization
of identified efficiency programs and market based cost inflation.
Other forward-looking statements include, without limitation,
statements based upon or otherwise incorporating judgments or
estimates relating to future performance such as future operating
results and expenses; earnings; bookings; backlog; revenue backlog
conversion rate; product mix and free cash flow; our long-term and
recent cost savings initiatives and the anticipated benefits
therefrom; our future strategy and business plans; our product
plans, including products under development, such as cloud and
subscription based offerings; our liquidity and ability to raise
capital; the anticipated benefits of the Orad acquisition,
including estimated synergies, including effects on future
financial and operating results; and our liquidity. The projected
future results of operations, and the other forward-looking
statements in this release are based on current expectations as of
the date of this release and subject to known and unknown risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements, including but
not limited to the effect on our sales, operations and financial
performance resulting from: our liquidity; our ability to execute
our strategic plan, including cost savings initiatives, and 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; our higher indebtedness and ability to
service it and meet the obligations thereunder; restrictions in our
credit facilities; our move to a subscription model and related
effect on our revenues and ability to predict future revenues;
elongated sales cycles; fluctuations in foreign currency exchange
rates; seasonal factors; adverse changes in economic conditions;
variances in our revenue backlog and the realization thereof; the
identified material weaknesses in our internal control over
financial reporting; and the possibility of legal proceedings
adverse to our company. Moreover, the business may be adversely
affected by future legislative, regulatory or changes, including
tax law changes, as well as other economic, business and/or
competitive factors. The risks included above are not exhaustive.
Other factors that could adversely affect our business and
prospects are set forth in our public filings with the SEC.
Forward-looking statements contained herein are made only as to the
date of this press release and we undertake no obligation to update
or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
© 2016 Avid Technology, Inc. All rights reserved. Avid, the Avid
logo, Avid Everywhere, iNEWS, Interplay, ISIS, AirSpeed, Media
Composer, Pro Tools, and Sibelius are trademarks or registered
trademarks of Avid Technology, Inc. or its subsidiaries in the
United States and/or other countries. The Interplay name is used
with the permission of the Interplay Entertainment Corp. which
bears no responsibility for Avid products. All other trademarks are
the property of their respective owners. Product features,
specifications, system requirements and availability are subject to
change without notice.
Media contact:
Sara Griggs
Avid
sara.griggs@avid.com
310-907-6909
Investor contact:
Jonathan Huang
Avid
Jonathan.huang@avid.com
978-640-5126
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