Avid Technology, Inc. (NASDAQ:AVID)
Shares of Avid Technology, Inc. (NASDAQ:AVID) gained 26.24% after the global media technology company reported better than expected Q3 2017 financial results. Revenues and bookings exceeded guidance in the quarter. Strong improvement in adjusted EBITDA allowed the company to post a fourth consecutive quarter of positive cash flow.
AVID Investors Reaction
Investors reacted to the stellar financial results by pushing the stock from this year’s lows to $5.10 a share. The stock is up by more than 10% for the year. Avid Technology, Inc. (NASDAQ:AVID) faces resistance at the $5.50 mark above which it could make a to this year’s highs of $6 a share.
Renewed investor interest in the stock is as a result of the company exceeding guidance in all its key metrics. According to Chief Executive Officer, Louis Hernandez, Jr., completion of transformation should allow Avid technology to drive profitable growth as well as increase revenue visibility and cash flow.
AVID Q3 Results
For the three months ended September 30, 2017, Avid technology bookings came above the upper end of guidance at $102.8 million. Constant currency bookings totaled $107.9 million which were in line with guidance. GAAP Revenue was $105.3 million above the upper end of guidance. Gross margin came in at 57.3%.
Net income in the quarter came in at $72,000 as adjusted free cash flow came in at $0.5 million at the upper end of the guidance. Adjusted free cash flow for the first nine months rose to $55.7 million,
According to the Chief Executive Officer, customers ranging from the largest media enterprise continue to adopt Avid Technology, Inc. (NASDAQ:AVID)’s innovative solutions.
“With our cloud-enabling MediaCentral platform, enterprises are unlocking greater strategic value from their Avid partnership as we help them to achieve new economies of scale while they work to engage audiences on any device with increasing amounts of content,” said Mr. Hernandez.
During the quarter, Avid Technology, Inc. (NASDAQ:AVID) signed several multi-year enterprise deals with large customers, including Viacom and NHK. Total licenses for the MediaCentral platform increased 27% year-over-year to 51,000. Direct digital bookings with individual creative professionals increased 35% year-over-year.
For the fourth quarter Avid Technology, Inc. (NASDAQ:AVID) expects bookings to range between $118 and $132 million. Revenue, on the other hand, should range between $103 and $113 million.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.