Avid Technology Announces Q4 and FY 2021 Results

Avid announces its financial results for the fourth quarter and full year ended December 31, 2021.

Total revenue increased 14.2% year-over-year in the fourth quarter, led by enterprise and creative subscription growth as well as favorable demand for integrated solutions, continuing the sustained growth trend with four consecutive quarters of year-over-year revenue growth. During the fourth quarter, the recurring revenue components of the Company's business remained strong with subscription revenue of $34.1 million, up 38.8% year-over-year, and subscription & maintenance revenue of $65.5 million, up 17.9% year-over-year.

The revenue growth, combined with an increased mix of higher-gross margin software subscription revenue and improving integrated solutions gross margin, resulted in fourth quarter Non-GAAP Earnings per Share of $0.46. This strong profitability resulted in net cash provided by operating activities of $27.1 million and Free Cash Flow of $25.0 million in the fourth quarter.

For the full year 2021, Avid's total revenue increased 13.7% to $409.9 million. Subscription revenue grew 48.9%, to $108.4 million, surpassing 26% of total revenue, up from 20% of total revenue in 2020. During 2021, the Company drove a 150 basis point increase in gross margin to 64.8%. The higher gross margin resulted in continued strong trends in profitability with net income per common share of $0.89 and Non-GAAP Earnings per Share of $1.25, an increase of 92.3% year-over-year. The strong profitability resulted in favorable cash generation with net cash provided by operating activities of $62.5 million and Free Cash Flow of $55.7 million, an increase of 64.4% year-over-year.

Jeff Rosica, Avid's CEO and president, states, "We ended 2021 with strong fourth quarter performance and good momentum heading into 2022. During the fourth quarter, we continued to exceed our expectations for adoption of subscription solutions by our enterprise customers, and we continued to see solid growth in subscriptions for our creative tools. This strength in our subscription business, combined with growing storage and audio integrated solutions revenue and stable maintenance revenue, allowed us to deliver continued improvement in profitability and strong Free Cash Flow." Rosica adds, "As we begin 2022, we continue to see strength across the end markets for our solutions, and we will continue to make selective investments in new products and innovation to enable Avid to continue delivering the industry-leading solutions that our customers depend on and to achieve our company strategy and our long-term growth and profitability targets."

Ken Gayron, executive vice president and chief financial officer of Avid, says, "We continued to make substantial progress in driving our higher gross margin subscription and maintenance revenue during the fourth quarter, which together accounted for 55% of our total revenue in the quarter. This growth, combined with improving integrated solutions gross margin, enabled us to deliver strong profitability and Free Cash Flow in the fourth quarter and positions us well as we enter 2022." Gayron continues, "Additionally, given our strong Free Cash Flow and high confidence in our strategy and long-term model, and with the goal of enhancing shareholder returns, we continued to repurchase shares in the fourth quarter under the Company's share repurchase program."