It's a tough day for Avid, following yesterday afternoon's earnings report that saw a 4 percent year-over-year decline in the company's revenue. The company also cut forecasts for the full year, projecting 2015 bookings will be between $490 million and $503 million, a decrease of 3 to 6 percent compared to 2014.
The company's stock took a hit after the markets opened, falling from $8.98 yesterday to $6.10 at press time — a 52-week low for the company, which had rebuilt to nearly $18/share following its NASDAQ relisting after a long and difficult financial that it finished in September 2014.
CEO Louis Hernandez Jr. put the best face on the numbers, arguing that Avid's revenue decline was much better than that experienced by "legacy vendors" in the industry — he named Belden, EVS, and Harmonic — whose quarterly revenue declines he said averaged 23 percent. He also cited the average 36 percent quarterly revenue growth that he said was experienced by "new" vendors in the market — he named Amazon Web Services, Akamai and Adobe — and said Avid was moving away from market segments "where traditional broadcasters are focused on efficiencies and cost savings" and toward more profitable areas.
Avid's ongoing "transformation" should be complete by the second quarter of 2017, Hernandez said, promising a focus on "sustainable profitable growth" thereafter.
CFO John Frederick blamed the lower guidance for yearly bookings partly on underperformance among "tier three" customers—the independent studios and enthusiasts Avid is targeting with its subscription options for Media Composer and Pro Tools—especially for audio products. "We think we're about two to three quarters behind where we expected to be for tier-three progress," he said, "but have a number of planned releases in the roadmap that will specifically address this group of customers."
Hernandez reported new numbers for Avid market adoption, saying that the company now has a total of more than 20,000 subscription customers, more than 28,000 users of its MediaCentral platform, and more than 2,100 deployments of its asset management systems.
And he announced that the formation of the company's new leadership was complete, naming Kyle Kim-Hays, formerly of Verizon's streaming video business, senior VP and CMO; Rashid Desai, former MD, CIO and CTO at Barclaycard, senior VP and CTO; and Avid's own Dana Ruzicka, formerly VP of segment strategy and planning, VP and Chief Product Officer.
