Avid 2Q Revenue Grows 19.7% To $94.9M

Technology provider Avid reported that its total revenue increased 19.7% year-over-year in the second quarter, driven by continued growth in subscription revenue, which was $21.5 million, an increase of 30.9% year-over-year, and a recovery in integrated solutions revenue, which was $31.3 million, an increase of 50.5% year-over-year.

During the second quarter, net income was $7.0 million, an increase of 279.7% year-over-year, and Adjusted EBITDA was $15.8 million, an increase of 17.1% year-over-year. The improvement in profitability also resulted in significant year-over-year improvement in net cash provided by operating activities to $6.6 million, and free cash flow to $5.6 million.

Second Quarter 2021 Financial and Business Highlights

• Subscription revenue was $21.5 million, an increase of 30.9% year-over-year.
• Paid Cloud-enabled software subscriptions, including MediaCentral subscriptions, increased by 43.2%, year-over-year to approximately 346,000 at June 30, 2021, and increased by approximately 19,000 from March 31, 2021.
• Subscription and Maintenance revenue was $52.0 million, an increase of 10.5% year-over-year.
• Total revenue was $94.9 million, an increase of 19.7% year-over-year.
• LTM Recurring Revenue % was 76.1% of the Company’s revenue for the 12 months ended June 31, 2021, up from 69.8% for the 12 months ended June 30, 2020.
• Annual Contract Value was $293.1 million as of June 30, 2021, an increase of 10.5% from $265.3 million as of June 30, 2020.
• Gross margin was 63.4%, a decrease of 160 basis points year-over-year. Non-GAAP Gross Margin was 63.9%, a decrease of 150 basis points year-over-year. One-time items of $1.2M negatively impacted GAAP and Non-GAAP Gross Margin by 120 basis points in the second quarter of 2021.
• Operating expenses were $51.1 million, an increase of 17.6% year-over-year, as the second quarter of 2020 included significant temporary cost savings initiatives put in place due to the COVID-19 pandemic.   Non-GAAP Operating Expenses were $47.0 million, an increase of 16.0% year-over-year.
• Net income was $7.0 million, an increase of 279.7% year-over-year.  Net income was 7.4% of revenue, an increase of 510 basis points year-over year. Non-GAAP Net Income was $11.6 million, an increase of 128.5% year-over-year. Non-GAAP Net Income was 12.2% of revenue, an increase of 580 basis points year-over-year.
• Net income per common share was $0.15, up from net income per common share of $0.04 in the second quarter of 2020. Non-GAAP Net Income per Share was $0.25, up from Non-GAAP Net Income per Share of $0.12 in the second quarter of 2020.
• Adjusted EBITDA was $15.8 million, an increase of 17.1% year-over-year. Adjusted EBITDA Margin was 16.7%, a year-over-year decrease of 30 basis points, as the second quarter of 2020 included significant temporary cost savings initiatives put in place due to the COVID-19 pandemic.
• Net cash provided by operating activities was $6.6 million in the quarter, an increase of $10.1 million compared to Net cash used in operating activities of ($3.5) million in the prior year period.
• Free Cash Flow was $5.6 million in the quarter, an increase of $10.8 million from ($5.2) million in the prior year period.

Jeff Rosica, Avid’s chief executive officer and president, said: “We are pleased by the continued strong performance from our Subscriptions business and by the recovery of our Integrated Solutions business, including storage and live sound, during the second quarter.”

Rosica continued: “We experienced gradual improvement in end market demand during the second quarter, and expect that the momentum from this recovery trend will continue into the second half of 2021 as we introduce several new product innovations across our portfolio.”

Ken Gayron, chief financial officer and executive vice president, added: “We continued to grow our recurring revenue streams and deliver year-over-year growth in profitability and free cash flow during the second quarter. Having delivered this strong first half performance and favorable trajectory we are raising our 2021 free cash flow guidance and reaffirming all other items of our 2021 annual guidance.”