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Avid postpones Q4 earnings call "indefinitely," accounting under investigation
Old 6th August 2019
  #1921
Lives for gear
 
skira's Avatar
 

Avid posted its 2nd quarter 2019 earnings. Total revenue same as same period last year ($98.7m), same gross profit ($56.6m), and an even larger net loss, $10.7 million, compared to $8.5m this time last year.

New CEO Jeff Rosica waved it away, saying "slight revenue headwinds that we encountered during the quarter impacted our results"

Revenue guidance remains flat for this year. (No profit guidance.)

Hey remember all the happy talk about outsourcing all of China's sales to Beijing Jetsen? Well.... never mind. Now, "the transition out of the partner in Asia is complete."

And how's the Pro Tools business? They ain't sayin'. They didn't break out audio vs video in their quarterly SEC filing and in the earnings call, they sidestepped saying anything about audio and only mentioned video in response to analyst questions about 'software':

Samad Samana

Great. And then the last one and I'll hop out. Just today was clearly there's a lot of noise going on from a macro perspective, software earnings have been a little bit mixed at least as far as what we've seen. I'm just curious if there's any change in behavior at your customers from a high level or there's any increased either caution or if it's business as usual just as from a macro view that you've gotten in terms of feedback from customers?

Jeff Rosica

I wouldn't say that it's any different. I think we – it's pretty much like we've said all along, I think the video creative, the content creation business is really doing quite well and people are really adopting those tools pretty quickly. The enterprise customers as we’ve said before, is a bit lumpy quarter-to-quarter. So I don't think there's any change in trajectory on that, it’s about the same.

We actually benefit from having a couple of dozen customers in our facility last week who was on the strategic summit with us and talking about market dynamics and are they looking at our product plans, and I can talk about this because we’re very public with this on social media. So it's not like people wouldn't see that we’re promoting it.

And so our feedback from Melissa sample of our customers is pretty fresh, and I think we've got a pretty good views. I wouldn't say anything significantly has changed in our views from what we've talked about the last couple of quarters.
Old 7th August 2019
  #1922
Lives for gear
And prior to the results for Q2, the share price closed at a nervous $9.68. Then came those results and it opened at $8.15 and by the end of play, the referee blew the whistle at $6.13.

So mildly disappointing results, continued losses and a sideways drift (i.e. normality!) has been resumed.

Avid has negative shareholder equity (liabilities exceed assets) and this is a more serious situation than just having a high debt level. Avid's debt level continues to increase and is not properly covered by operating cash flow (it is at 9%, i.e. less than a healthy 20% of total debt).

In short, Avid is making a loss, thereby endangering interest payments which are not properly covered by earnings.

The Q2 results are not disastrous - but the $10+ share price was a bubble based on wild hopes and dreams of revenues to come and these didn't happen. Revenue in the second quarter was essentially flat at $98.7 million, missing the consensus estimate of $101.3 million in sales. Avid's guidance called for $97 million to $105 million in Q2 sales. E-commerce revenue increased 19% and recurring revenue accounted for 58% of sales on a trailing-12-month basis. That all translated into adjusted earnings per share of $0.02 and not the $0.04 per share in adjusted profits that analysts were expecting.

Anyway - this thread (predicting the imminent demise of Avid) began six-and-a-half years ago and this company is still here and still trading. The question you have to ask is - is Avid a zombie company or a cockroach company? In other words, is it the walking dead or is it just unkillable?
Old 7th August 2019
  #1923
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noiseflaw's Avatar
 

Quote:
Originally Posted by The Byre View Post

is Avid a zombie company or a cockroach company? In other words, is it the walking dead or is it just unkillable?
Lol.

Avid 'Dawn of the Living Dead IV'.
Old 7th August 2019
  #1924
Solid State Logic
 
Jim@SSL's Avatar
 

What if it was a zombie cockroach?
Old 7th August 2019
  #1925
Lives for gear
 
noiseflaw's Avatar
 

Quote:
Originally Posted by [email protected] View Post
What if it was a zombie cockroach?
Dayuum! That's some scary stuff.

'Post nuclear' audio software explosion the Pro Tools guy's will be the only survivors...

Actually - that's a great outcome, Avid could use that as positive PR reach.
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