Blog: AVID TECHNOLOGY, INC. : Results of Operations and Financial Condition, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 2.02 Results of Operations and Financial Condition.

On August 2, 2022, Avid Technology, Inc. (the “Company”) issued a press release
announcing its financial results for the quarter ended June 30, 2022 (the “Press
Release”). The full text of the Press Release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

The information contained in Item 2.02 is incorporated by reference herein.

Non-GAAP and Operational Measures. The attached Press Release includes financial
measures that are not based on generally accepted accounting principles, or
GAAP. These non-GAAP financial measures, which are not based on a comprehensive
set of accounting rules or principles, include the following: Non-GAAP Gross
Margin, Non-GAAP Operating Expenses, Non-GAAP Operating Income, Adjusted EBITDA,
Adjusted EBITDA Margin, Non-GAAP Net Income, Non-GAAP Earnings Per Share, and
Free Cash Flow.

•Non-GAAP Gross Margin is defined as GAAP gross margin, excluding stock-based
compensation expense.

•Non-GAAP Operating Expenses are defined as GAAP operating expense excluding
restructuring costs, stock-based compensation, amortization of intangible assets
as well as other unusual items such as costs related to M&A related activity,
efficiency program, transformation costs and COVID-19 related costs.

•Non-GAAP Operating Income is defined as GAAP operating income excluding
restructuring costs, stock-based compensation, amortization of intangible assets
as well as other unusual items such as costs related to M&A related activity,
efficiency program, transformation costs and COVID-19 related costs.

•Adjusted EBITDA is defined as Non-GAAP operating income excluding depreciation
expense.

•Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by GAAP Net
Revenues.

•Non-GAAP Net Income is defined as GAAP net income excluding restructuring
costs, stock-based compensation, amortization of intangible assets, loss on
extinguishment of debt, tax impact of Non-GAAP adjustments, as well as other
unusual items such as costs related to M&A related activity, efficiency program,
transformation costs and COVID-19 related costs.

•Non-GAAP Earnings Per Share is defined as Non-GAAP Net Income divided by
weighted-average common shares outstanding.

•Free Cash Flow is defined as GAAP operating cash flow less capital
expenditures.

Reconciliations of these non-GAAP financial measures to their most comparable
GAAP measures are contained in the tables accompanying the Press Release. The
Press Release furnished herewith also includes forward-looking non-GAAP
financial measures, including estimated Adjusted EBITDA, Non-GAAP Earnings Per
Share and Free Cash Flow for future periods. Reconciliations of these
forward-looking non-GAAP financial measures are not included in the Press
Release furnished herewith due to the high variability and difficulty in making
accurate forecasts and projections of some of the excluded information, together
with some of the excluded information not being ascertainable or accessible at
this time. As a result, the Company is unable to quantify certain amounts that
would be required to be included in the most directly comparable GAAP financial
measure without unreasonable efforts.

These non-GAAP financial measures reflect how Avid manages its businesses
internally. Avid’s Non-GAAP measures may vary from how other companies present
non-GAAP measures. This non-GAAP information supplements, and is not intended to
represent a measure of performance in accordance with, disclosures required by
GAAP. Non-GAAP financial measures should be considered in addition to, not as a
substitute for or superior to, financial measures determined in accordance with
GAAP.

The Press Release furnished herewith also includes or references the operational
metrics of Cloud-enabled software subscriptions, Recurring Revenue, LTM
Recurring Revenue %, Annual Recurring Revenue, Annual Contract Value and Revenue
Backlog. Definitions of these operational metrics appear below and are also
included in the supplemental financial and operational data sheet available on
our investor relations webpage at ir.avid.com.

——————————————————————————–

•Cloud-enabled software subscriptions as of the end of a quarter represent the
number of paid subscription licenses under an active contract as of that date,
excluding any licenses that may be receiving service under an active contract
but that are not paid for at that time by the customer, whether due to a
promotion, cancellation or otherwise.
•Recurring Revenue is defined as the sum without duplication of subscription
revenue, maintenance revenue and revenue under our long-term contractual
agreements.

•LTM Recurring Revenue % is Recurring Revenue divided by Total Net Revenue for
the most recent four quarters.

•Annual Recurring Revenue (ARR) is an operating metric that represents the
contracted value of all subscription, cloud and maintenance customer support
agreements normalized to a one-year period. Total ARR includes only active
contractually committed agreements and is the sum of Subscription ARR and
Maintenance ARR. Subscription ARR represents the contracted value of our term
subscription offerings and our cloud offerings normalized to a one-year period.
Subscription ARR is calculated at the end of a period as the sum of (1) the
total contract value of each active term subscription agreement divided by the
term of the agreement plus (2) the annualized value of active recurring cloud
subscription and services agreements. Maintenance ARR represents the contracted
value of all term maintenance customer support agreements normalized to a
one-year period. Maintenance ARR is calculated at the end of a period by
dividing the total contract value of each active maintenance customer support
agreement by the term of the agreement.

•Annual Contract Value is defined, as of a given date, as the sum of the
following three components: (i) the annual value of all long-term contractual
agreements in effect on such date, calculated by dividing the total value of
each contract (excluding expected maintenance revenue included in (ii) below and
expected subscription revenue included in (iii) below) divided by the total
number of years of such contract, (ii) maintenance revenue for the quarter ended
on such date, multiplied by four, and (iii) subscription revenue for the quarter
ended on such date, multiplied by four.

•Revenue Backlog consists of firm orders received and includes both (i) orders
where the customer has been invoiced in advance of our performance obligations
being fulfilled and (ii) orders for future product deliveries or services that
have not yet been invoiced by us.

Limitation on Incorporation by Reference. The information furnished in Items
2.02 and 7.01, including the Press Release furnished herewith as Exhibit 99.1
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the
liabilities of that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements. This Form 8-K, and the
Press Release furnished herewith as Exhibit 99.1 contain forward-looking
statements that involve certain risks and uncertainties that could cause actual
results to differ materially from those expressed or implied by these
statements. Please refer to the cautionary notes in the Press Release regarding
these forward-looking statements.


Item 9.01  Financial Statements and Exhibits.

(d)          Exhibits.
Exhibit
Number              Description
99.1                  Press Release announcing financial results, dated August 2, 2022
104                 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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