Avid (NASDAQ: AVID) has announced its financial results for the first quarter of 2022, which ended on March 31, 2022, with total revenue increasing 6.7% year-over-year in the first quarter, led by enterprise and creative subscription growth as well as favorable demand across product offerings, continuing the sustained growth trend with the fifth consecutive quarter of year-over-year revenue growth.
During the first quarter, the recurring revenue components of the company’s business remained strong with subscription revenue of $33.0 million, up 32.5% year-over-year, and subscription and maintenance revenue of $61.3 million, up 12% year-over-year. The revenue growth, combined with improved gross margin, resulted in a 17.9% year-over-year improvement in Non-GAAP Earnings per Share to $0.33.
First Quarter 2022 Financial and Business Highlights:
— Subscription revenue was $33.0 million, an increase of 32.5% year-over-year.
— Paid Cloud-enabled software subscriptions increased by 24.1% year-over-year to approximately 431,800 as of March 31, 2022, and increased by approximately 21,200 during the first quarter.
— Subscription and Maintenance revenue was $61.3 million, up 12.0% year-over-year.
— Total revenue was $100.6 million, an increase of 6.7% year-over-year.
— Gross margin was 66.3%, an increase of 120 basis points year-over-year. Non-GAAP Gross Margin was 66.8%, an increase of 120 basis points year-over-year.
— Operating expenses were $53.5 million, an increase of 5.1% year-over-year. Non-GAAP Operating Expenses were $49.7 million, an increase of 7.4% year-over-year.
— Net income was $10.6 million, an increase of 141.1% year-over-year. Non-GAAP Net Income was $14.8 million, an increase of 13.6% year-over-year.
— Adjusted EBITDA was $19.3 million, an increase of 9.0% year-over-year. Adjusted EBITDA Margin was 19.2%, an increase of 50 basis points year-over-year.
— Net income per common share was $0.23, an increase of 130.0% year-over-year. Non-GAAP Earnings per Share was $0.33, an increase of 17.9% year-over-year.
— Net cash provided by operating activities was $7.9 million in the quarter, a decrease of ($4.4) million compared to the prior year period due to working capital changes.
— Free Cash Flow was $4.7 million in the quarter, a decrease of ($6.4) million compared to the prior year period due to working capital changes.
— LTM Recurring Revenue % was 79.1% of the Company’s revenue for the 12 months ended March 31, 2022, up from 75.3% for the 12 months ended March 31, 2021.
— Annual Contract Value was $339.0 million as of March 31, 2022, up 12.3% from $302.0 million as of March 31, 2021
— Repurchased 354,472 shares for $10.8 million during the first quarter, under the $115 million share repurchase authorization announced on September 9, 2021.
Avid CEO and president Jeff Rosica states, “We continued to have success growing our subscription business as more enterprise customers adopt subscription licensing coupled with continued strength in subscriptions for creative individuals. While we continue to see strong customer demand and business activity for our solutions, we have seen a tightening of supply for several components for our audio integrated solutions at the end of the first quarter that impacted our ability to meet customer orders, resulting in first quarter revenue at the lower end of our guidance.
“The global supply chain continues to present challenges, which could cause some uneven quarterly performance in the near-term. We currently believe these challenges to be temporary, and remain confident in our growing subscription and healthy maintenance business and in our ability to meet our 2022 targets. We’ve recently introduced several exciting new product enhancements for Pro Tools, Media Composer and MediaCentral, and in April, we added new pricing tiers for Pro Tools entry-level and high-end users, as we continue to execute on our subscription growth strategy.”
Ken Gayron, executive vice president and chief financial officer of Avid, adds, “We continued to make substantial progress in driving our higher gross margin subscription revenue during the first quarter. While we had strong customer demand for audio integrated solutions, we ended the quarter with about $10 million more integrated solutions backlog than typical because of tightening supply chain constraints late in the quarter. Notwithstanding these short-term challenges, we continue to feel confident in our business trajectory and our strategy for profitable growth. Consequently, we are not changing our full-year 2022 guidance.
“Additionally, given our high confidence in our strategy and long-term model, and with the goal of enhancing shareholder returns, we continued to repurchase shares in the first quarter under the company’s share repurchase program.”
