AVID - Earnings call transcript Q1 2018

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Operator

Good day and welcome to the Avid Q1 Earnings Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Dean Ridlon, Vice President of Investor Relations. Please go ahead.

Dean Ridlon

Thank you, and good evening, everyone. Vice Investor Ridlon, Technology. at Dean am President Relations of Avid I to call. earnings QX Welcome XXXX our With are President and Brian Officer. me and Agle, CEO today Avid’s Jeff Rosica, Senior Vice and Financial Avid’s Chief our President; webpage. our operational and operational in datasheet our measures our available On both X-K and are Relations of certain today, on be metrics, we using call supplemental non-GAAP which Form both defined will financial Investor and press release These the are our the reconciled tables and GAAP financial with Investor of our on in in non-GAAP website. measures and operational measures also section available supplemental the to datasheet Relations I statements would meaning like remind expected and results about the such and of are call statements you that laws also future on progress operating this made transformation. within performance of to our forward-looking financial the example, statements the for considered securities certain as,

of from uncertain, required to differ cause call are materially inherently on certain Forward-looking projections. the we expectations this experience of date undertake update Any forward-looking and law. speaks as or and not actual information, uncertainties risks obligation subject by information no this statements performance could relayed our our and that to guarantees as except and present only are to historical results future

you to presentation find available department. our and effort Risk complement some also release Technology or information, including Relations website the Form forward-looking an of our sections We’ve a hope narrative. helpful. Forward-Looking XXXX We issued it the For as these additional Avid Annual and supplemental Statements a today our Report with well Factors discussion of press that today’s the associated the the of risks section Statements XX-K will SEC, on with of added as uncertainties key statements, Investor Forward-Looking see in please

recording today’s be available be will call, time. a replay a for which limited We as will

the Events given will call be I’d question-and-answer page and we Later, our & supplemental time. clicking will this access and the that Investor And Relations Presentations presentation conducting turn replay be Jeff. over of instructions on website at going You call now, the tab. to and the to may a conference by like session

Jeff Rosica

Thanks and Brian are can we cover looking our ground that results quickly I on taking our a thanks this Dean, everyone prepared today. remarks, opportunity and lot participate to call to of for in spend so management was be a clearly moment, together offering In performance your takeaways the of most for quarter on our time team. I transition questions. will my of the QX, answering which a

review difficult guidance of more due nonetheless, bookings our and The cash growth months China, over business also we EBITDA in and Greater seasonality order while help adjusted flow delivering coming during but aspects drive first to flow a key is to free to the the I’ll some continued quarter excluding generation. strategy performance business, margins better one the met improve growth initial margin and management’s typically of for cash gross revenue period. EBITDA in free

releases we XXXX, to rather product planned the host As the have to look future half especially we we’re of quarters, months. optimistic second over coming due the of new forward

SaaS. advantages drive our better mover soon and markets is forward the a see who strategy, understand I’ll availability. very reaction we where status launches, to begin investors NAB the in new of from clearly platforms, today, serve, major had we portfolio announcements we XXXX a from of event further Avid Connect opportunity as to software on comes product the are And enthusiasm Avid first our this Our for and to product layout which cloud customers’ recent our Show, for slated our means wave new going the with at new most and call,

Board. capacity the The leadership as elected working forward his performance shareholder being like technology move financial working years we Before companies. Chairman I the media and in He team with to of brings advantage to as services us congratulate in Peter with on drive on, Westley board Peter value. management better Avid’s looks and would of of we XX new experience closely

into the details. our get XXXX, gains our were X with channel up software strong of which XXXX. improvement expect and a going with a were Greater top is was tier and year-over-year, which quarter better bookings excluding XXX the as gross proceeded guidance, X% at let’s e-commerce With sold well revenues. performance the through moment product So, In weaker about products but our to driven guidance. decisions increasing projects issues to globally higher during first and revenue our slightly way in X I’m end resulting was continuing talk and in X though longer line experience key lower X. the X’s were even EBITDA for China, market subscription related mix I’ll which deliveries the which as the as previous further tier respect have in of with tiers cycles strong to Margin be progress line for key than in lower tier as sign was lower Tier significant in a China, growth several than tier largely multiple its came up of XX% driven driven of tier which GAAP from timing our channel up of and professional therefore, key did and to X purchase quite services with margins due is to due pleased creative performance Revenues of was did points quarter the was for some strategic customer priority offset which market subscriptions. commitments, on from this agreements to year, individuals. This year-over-year the quarter, sales margins is by so met enterprise X continued by us performance and continue been margins partners XX% customers year-over-year. in their well smoothly by our partially quarter. partners see improvement We digital is market our X exceeded some to we prior of Adjusted improvement distribution placed by contractual versus transition sequential the downward in our organizations new Non guidance, in with chain contribution and supply them in our collaborating audio basis showed in far. solid or pressure the expected each

our we driven $X.X the by growth payments flow restructuring in free the quarter. from and which collections at prior of in was also million lower Lastly, cash year delivered XX% strong

team. quarter transition. I rapidly realign to mentioned priorities this and the few management for our of began As opportunity free quarter with you We share management first earlier, seized and a I was to after explicit with of cash EBITDA goal generation. major want we our a expansion the the initiatives greater flow margin transition current that driving

plan we margin cross-functional action to continued major early which starting a of drive is benefits. improvements First, we believe launched show gross signs to

customer Next, our with indirect to non-personnel reducing optimize our on emphasis our we redoubling an structure are efforts related costs.

global efforts supply margins, We’re our increased also hardware working and our requirements. accelerating our velocity vastly better chain to drive chain supply capital reduce to improve

believe and processes that companywide soon. heavier fairly with bookings will I In to improvements show key emphasis addition, policy are that benefits on conversion revenue replacing being

optimize also during continue look drive opportunities priorities XXXX. and topline carefully calls product we on the progress to during and these near-term management our to forward growth adjusting plans updates roadmap Finally, are do I to reprioritizing help commercialization share and future provide our now.

the trade Show, Now, record demonstrated the customer some Connect both This influence tremendous NAB we number for range customer new response segments Avid event, Avid launch all the which is generated the which our which again biggest enthusiastic in events from gathered of products annual event Customer Association. our preceded our Avid capitalized with April, a innovations of year. and customers our of of Avid’s for of on base. immediately a to wide

on Azure key me XXXX believe Microsoft initial product that review of the for beyond. hosted is lift release the and XXXX. platform debuted margin and on We that Demand, Avid and a I half contribution Let second the us create slated late which of cloud SaaS announcements drive help during revenue our will in is offering, few

position impact the the industry. opportunity it on lead may media item limited will capitalize to have to well this cloud continue and SaaS While revenue and us growing in XXXX,

We also additional help platform UX MediaCentral and key late in out delivery new to improvements, start the more more win to help opportunities slated Cloud up in and will and expansion next June half, roll unveiled projects. to are which all generation customer upgrades, open second of continue these the us

business. Creative We also introduced capabilities opportunities expanded cloud-based our further are business for apps building second opening target Tools better to solutions new the a tiered out levels workflow This suite new is repositioning that services thus opportunity releasing up all us We quarter. actually for flagship approach, subscriber MediaCentral Company. and expanded market the cloud during growing is platform software our which the family at with users and our and new

our Finally, we and also is drive to the extend to points, up additional family in market product opportunities sound opening price live offering which revenue. expand order

point of family a also technology having of want of industry successful the innovation. enjoyed rollouts recognizing QX. year over number Avid out a course at product expanded of I the far, awards versions to end first this The delivery do QX won quite subsequent record begin with that so has our

innovation Emmy related Award collect for NAB, our Media to during to Composer fact, key technical excellence In we were the XXth product. with happy our

power on page. technology a lay well to uniquely to that capitalize this I our turning music navigate the how to an the endeavors. corner the help combined who Now users Avid the digital position of investors, the to by believe clear entire the our media call and market leadership taking really artists Avid base, should CEO, we I’ve of customer Thus, asked to tools we unrivaled markets our leading others media software professionals, provider transition companies their opportunity am positioned every technology strategy, that globe. and what thinking the analysts became and is on with from opportunity media creative and events. Company, our platforms film business TV And who’s the we, about I with as and Avid’s hope creative investment top significant of picture. from industry and and I opportunity. and customer and believe their they Since represents as the the and broadcast to begin of base overall is industry about out been many entertainment be a live is

are well-established we’re a key along more our SaaS and platform MediaCentral rich consists our and of picture about and Now, To suite. about simple strategy. all way well when as cloud-enabled product software applications, way the business which position markets, offerings. is Software with Suite on Avid’s The the an Creative extensible and we providing and of business The think subscription customers. entire of as present components and portfolio. these suite our slide and Composer standalone of Software software services long-term more Marketplace, family foundation with enterprise Artist and portfolio, open cloud is also platform a the you Pro the of Tools, suite our we diagram and our remember software that and the our way Suite the with that Tools, the really services, this product about commensurate ensures growing The think Media clear product in of think Community the Avid Creative is market which a modules the on includes our overall to Sibelius our software with our reflects built iconic pursue which rooted portion enterprise

in all are tell mainly several hardware Integrated common this the of part software the the the see offerings on software consists the and you designed strategy. midst complement our to cloud other recent many for future revenue SaaS from and elements to side platforms are over to when which launches. of of In of which business we combined, see powerful category key term, create for Solutions overall solutions, developing midterm, margin very with to solutions. we expect integrated And Solutions. the tightly our four employments they Now concepts product enhance the of longer chart, that continued you and that contribution I’d are these But Integrated for due significant do and of

our education. offerings, is and training Now, all including support, comprehensive this by professional customer services services, supported of

which growth while We categories, will our reported key plan of think positive to revenue SaaS to see see our you. of we related In well visibility align think breakthrough these this as we about software in half, metrics, results, trend business way continued to the offerings around our way improve cloud to all revenue start as including and later revenue with the several will contributions from the significance recurring [ph] of increasing be second we important year. we we new

think you customers content many important community the Avid’s creation, platforms we when to and success in iconic also are Now, which from it’s with about tools, the Software all cover solutions that drives management integral business Creative their Avid’s and our Avid. solutions essential Suite delivery. and is adoption subscription and of of note and Avid’s tools markets, to other to

IO to key Our ensures creative Avid paradigm are to customer that that teams and cloud-based will independent software optimize tools target professionals too. of relationships. expand enterprise solutions add-ons. all solutions the can to software needs product control producing our incrementally that for lifetime can enterprises important our and and the their focus hardware but and opportunities of growing hundreds continue software an market of software with of and and platform innovation Company capabilities also part essential But they surface of can take we storage our to And yield Avid’s suite are customer any our of value workflow markets. creative from platform easily on the advantage complementary integrated also

best common CFO, and now and their before a additional the more And of the to want differentiating partnership a that operations. and significant technology large turn opportunity all outlook, approach is major Brian? end make and step our operates in unique I you our and disruption believe details highlight just with investments as customers to that needing for tight us. outlined, and the back I’ve to transition changes and software face growing of solutions, before in workflow We let operational support He of business the is we positioned and underlie very Finally, We cloud, market over financial in are poised base. of heart some intercept really entertainment briefly and to Avid AI next as look with in large attributes that comes of leader Brian opportunity entrenched a this going uniquely demonstrating focus end capture execution ecosystem. as customer Agle. a SaaS a our as progress with well help navigate are now through to we our from emerging position a tools it the disruption industry our to loyal believe I’ll technology is with the your that me significant is our our we platform, of to this. to hearts and forward a and opportunity to connected come questions. to strategy, in to Microsoft. a XX-year our And company bearing open remarks performance ready through deeply Avid you to brief our closing being a with media the positioned innovator take

Brian Agle

Thank a took reins -- leadership reporting of adopted from was and the financial you, transition a Jeff, reporting the new standard. we standpoint, and good the revenue XXX, Jeff a revenue quarter the CEO; afternoon, change. From as ASC everyone. recognition standpoint, QX

new have reporting business forward. represent makeup we introduced strategy Additionally, to and the the of some revenue the better underlying going

strong the million, to positive with guidance. Let’s X% China quarter of well offset and targeted The and an both XX. for digital were by adjusted individuals We customers enterprise by for the the flow. businesses, subscription and and Bookings impacted EBITDA quarter was cash Revenue during Both creative partnerships bookings slide for growth of their e-commerce within meeting which results minimum QX revenue guidance. had mixed $XX.X quarter, teams have free a turn delaying were with revenues, year-over-year. QX. shipments. partners within our at was started growth commitments million $XXX.X were increase

We QX. to in expect enterprise improve

may margin. you disappointed recall, As our we with gross QX were

services been margins As discussed call, on higher focusing in last professional our improvement improvements. has such One were we in QX. making

revenue which points is first margin. an gross gross was margin Overall, XX% increase increased the QX. helped basis margin of Additionally, improve subscription over for XXX higher quarter,

progresses. million operating flow up for in quarter million from $X.X the the as We expect Non-GAAP for expenses improvement million, Free $X.X ‘XX. QX, quarter. the QX EBITDA were $XX.X further cash million was $X.X adjusted year was

slide the balance on to sheet XX. Moving

of the with supplier on hardware QX At ensure our hardware new current of we During the one to In letter connection on our million about the of transition We the old XXX, March transition, accounts cash. letter $XX sheet go this XXX -- under we restricted new our $X.X to balance quarter, $XX.X ASC receivable. added large reflected expected discussed million have ASC slide, as Inventory of credit what revenue The our impact, actually our I our increase to items approximate standard under but been talked to results we at those XXXX, adoption XXXX. call, supplier of to to an an transition we $XX would help the and have balance. flat financials. XXXX, the suppliers see million. million show is from On credit standard. plans the under to some recognition we XX, cash XXX issued of new expect balances a relatively transition had supplier. Last was would line hardware during our we the QX smoothly. ended of

revenue EBITDA has does and the to by was mind and $XXX.X million. by backlog revenue and billings, committed most reduced that approximately long-term I’ll as QX, of minutes backlog backlog million remain revenue, was As straight harvesting future reduction XX% line XXX, expected, Please the ratio affected end cash. cash. At over line the We our with deferred went grown keep contribute to ASC by QX. Contractually few through not this year. debt revenue $XX represents more about equity. in focused was talk on the compliant to having This been million we flow $XXX.X that the announced of In leverage today. increase a or were our was million. amendment We and $XX covenant past debt

to slide Now XX.

recall, of flow XXXX. quarterly shows well of cash QX in be a XXXX reported flow free view As bonus normalized prior graph more XXXX be of you will flow the $X.X for increase flow XXXX cash over will shown metric. The our the seasonal quarter an the indicative cash dotted as will million, by this made as as normalized flow cash was boxes the free million year, of first $X.X the trending. view free payment Free cash This primary year.

Our XXXX bonus in April XXXX. was paid

provided cash to have XX. million. flow. was On free of QX, Now, slide adjusted free we our and slide, cash adjusted free flow cash details this In $X.X

continue payments $X expect XXXX. nonrecurring total million We to to approximately for

slide to Turning XX.

This our a as disclosure with our $X.X initial QX. we plan steps as Jeff illustrates to The more provide quarter, revenue, help and it for services year is under reporting table than understand how additional associated will revenue our Sibelius. less in would lumpy XXX. and metrics and several We the been you business. mentioned, Composer, revenue million have enhancing under took Pro Tools progresses. subscriptions XXX, subscription This categories. Media inherently revenue represents be breakdown this We which that the expect towards do linear XX-Q in down breaks Included better our some totaled includes new across to

XX for slide to guidance. Turning

guiding we As call, to be revenue EBITDA. adjusted and on will during quarterly said basis, we a our last

million, to For $XX $X a is $XXX EBITDA million adjusted QX million our range million. is XXXX, revenue $XX to guidance the

financing were today’s on without our expand facility we secured release, with in may entered press you the of into amendment have incurring more an to we fees. As partner Cerberus terms any senior pleased work favorable to our have Overall, facility. seen

to interest credit our the to in term specifics, years eliminated the by The this and five has our increase points. to our $XX including springing has XXX facility maturity We’ve basis to increased is The by notes June and have retire loan our of the we terms million, been rate million been $XX.X increase In reduced million. due basket convertible effective $XX notes undrawn related million revolver. term expanded $XX.X convertible XXXX. to

reduced additional We our amortization that the improving cash This to capital be can is addition, notes. structure. is retiring first will long-term In years. forward a a our schedule think this benefit cash our two convertible million of towards strong almost in agreement be of used step $X

strength outcome Jeff Avid’s remarks. credit think with We the and a like of also profile reflects closing to that, few business I’d our the turn confidence opportunity. to back the With call for

Jeff Rosica

Brian. thanks Great,

few and to improving closing, value. in a reaffirming behalf Avid’s work leadership I and a So execution of optimize There thus still driving team, business shareholder business of performance commitment to performance. operational make our points, simple want our to on to do is lot drive

our strategy gross our cost And visibility driving focus on continuing Avid, and and new Our opportunity management achieving on expenses, profitable to growth objectives by non-personnel should for we’re about to key our plans commercialization I growth flow. optimizing how priorities, team cash is become margins. focused reducing to improve top-line our better we’ve product now structure and further through our the drive improve and described roadmap which well-positioned. strategic think investors and earlier keeping

better to visibility The ever in Our that reporting a add the future. to new than today capacity clarity business value. and in goal our understand allow ensure more shareholder you confident team to is Avid way about that’s to with Avid’s deliver commensurate will we’re is

our We in outlook in our reflect performance improved our coming deliver execution demonstrating the call are Overall, XXXX optimizing business I’ll to focused back operator intensely confidence With expectations that hand and ability to your operational quarters. our strategy, guidance the and questions. to on take our improved and results. the for

Operator

go Instructions] Thank with Steve We Frankel first you. [Operator will to Dougherty.

Steve Frankel

tier revenue? lasts? were of going reduction some think get you in And how service you renegotiating you weakness this Is orders long agreement. more you in push-out little X? both of to and do a on thought questions. to go us a But Could congratulations there, before couple tell this and we were this Good a afternoon the projects that about going thought you

Jeff Rosica

This is Jeff.

that. answer me Let

it really is I push-out. most related of to So, think

that think lot kind Connect April, deployments. how in as the is I about do deployments are or especially NAB are quarter on-prem in thinking looming saw looking, going people people in to we with they and of of what much Avid and cloud a

longer cycle their to really spending the time are a evaluate got projects little I on think some more sales options. of people is bit our as

think our is I saw sales of a So, enterprise But deals force getting a focused more think with quarter, always heavily I really case these which difficult elongation. QX, they the in is especially customers, seasonally timely. on closed little bit of

and I on we in think, right think at look I as delivering guidance, are we QX at good coming the feeling tier the you results in about the quarters. look X

Steve Frankel

And clarification QX. some your strength in then, around

that’s these You say channel smaller being customers? the distributors end inventory through into to Is to channel was revenue or are sold talked the partners. that going those and about that

Jeff Rosica

usually commit a If that to about the business willing with -- strategic their that are These there to of when was but these usually partners you are over partners our agreements, talked bookings. that are year commitments. it purchase I aren’t period And are remember multiyear, are larger one agreements quarters.

go to the on future first have commitments only are and but going that not bookings commitments there So they are to delivery quarters. backlog for quarter they in the that

when off our bit as our help well to for of planning so, these better business go as and forecast level visibility get of our to forward production supply the And us kind chain. we a

Steve Frankel

Okay.

where revenue you… not that again, was So, bookings,

Jeff Rosica

bookings. strategic book, go But revenues revenue revenue through, quarter. can when quarter the But some of some agreements. with yes, current into some obviously, every -- revenue I flows was these associated because have we -- was speaking That they to

a we we start start committed as We just quarter, business are our that as each build a It’s we those, that each we quarter. as of a point with starting revenue because part building -- for quarter. bigger benefit higher start of business

Brian Agle

Yes.

layers have roll that continue Yes. We revenue. to up increasing

Steve Frankel

an to cash I the that much of like was paid bonuses How in free going that I paid them QX. on free sounds was flow? QX, under assumption the And be you cash on then, flow, in impact were guess

Jeff Rosica

the Well, pay let we say, QX. me never in at a high level, bonus

pay So, we that. are I the -- apologize was and quarter if on results really for know are we the miscommunication final all until where don’t the there the a at. for We ready numbers are bonuses

So, go we there we point. get before that to through to work is have

Brian Agle

pay Yes. it unlike when we it pay We’ve always was we -- different, normally, in year last it April.

get basically audit As takes to complete When get paid. to by and pay audit. a the then completed, approval we it Jeff actually mentioned, it couple managers the we bonus the is weeks the and processed

Jeff Rosica

I QX, I’d paid been may or paid than it’s -- in been when May. case, say early other worse in in be this. always mean, it’s April last year

Steve Frankel

expect QX? Okay. free free because to negative And positive payment, expect would in you generate flow should cash cash we in the QX bonus or of flow

Brian Agle

Yes.

we So, at sort -- as the I the QX. seasonality dotted of would would -- looking on presented that box, that be in negative

Steve Frankel

the too to true. good sounds servers be on renegotiation, And then, almost Okay.

change. is What of list. wish they your get on this everything out basically got You

Brian Agle

They started. they got over mentioned I time continued bigger when a comfortable with our deal are got a more it They and becoming relationship. frankly credit. and customer I’ve more

some think and over way I a time I to last it half. credibility. And the some we’ve long was year year, trust took and it build think come -- some

mentioned time And has dealing them and been so, again, over with we’ve really very that happy, partnership positive a this thing.

Steve Frankel

a talk rest we of for little it can And more gross drive bit year? from here about the takes up margins what to the

Jeff Rosica

Yes.

levers have of there that, I is Steve. we a on think lot

They growth. pricing at help they aside, So, up, our our that’s margins. they really of I optimize of elements grow, discount pricing and Products that putting of direct closely all to margin of does have is strategies; gross looking our goods closely a that at some mean at channel; cost at led spun sales year got But higher in of looking is the where really of our strategies; that cost they looking look looking can our goods. force and are that’s strategies very revenues some levers by latter revenues are we obviously, the look focused at are typical, we’ve at Chief we team when that we’re part the which with our also as is, on

so, leverage all is optimize. that to obviously And taking we’re of

mix of higher to Secondly, growth, keep to continues its and a software solutions subscription contributing to as improve, the going higher content margins and business. continues our our it’s

to as We good our we for the chain get improvements of help about supply really margin supply also that to I initiatives chain also our pedal is, our mentioned, to last is quickly cost done accelerate Now, take of efficient. believe. we to a that out be more a because separately, is earnings of cogs way, quarter’s say foot down reduce not it have OpEx from of on will in actually, would a to as cost only that managing us the contribute one related the put some call both, there we better we’re as we lot initiative. It’s supporting doing because it can cogs, that but global I going will talked the will

So, margin. there number focus levers a is And have we that’s heavy our a to gross drive of team. heavy, of

Brian Agle

we improvement go that continue services we to QX, as Yes. just And saw through an the will in drive professional we as in year.

Steve Frankel

quick more And Okay. one. one

to the continue Is in something released MediaCentral number. want past that a license to subscriber you dispose on have quarterly the basis. You number and

Jeff Rosica

tier little saw area. because licenses again, XX%, strategic year-on-year, there. X sorry, looking remember, quickly, you if metrics our, XX% being we but the growth, I’m growth numbers of about than we a QX six, there was but lower on we that on went know the back, have growth corrected. on It’s Yes. bit XX% the slide probably saw and in those MediaCentral We I still

we just are at We get visibility. keep at keep to right reporting looking our categories, metrics sure to the revenue and going can make looking

to give and continue visibility right mentioned we’re and to So, give Steve, on for working as what we’re as going that help matters release you you visibility to better the before, will our that, information business. I

Brian Agle

may Steve, know on Hey, datasheet. particular you that includes our Relations is section a There Investor that document. that information

Steve Frankel

It’s looking it. why not That’s yet. up was for I

Jeff Rosica

Oh, it’s not.

Steve Frankel

you. let back Thank somebody some All questions else and right. I’ll I’ll in. jump ask

Jeff Rosica

All right. Steve. Thanks,

up. Steve, not Sorry, put I yet. apologize, we’re it going it’s to up

Operator

[Operator Financial. next go BWS with Hamed you. Instructions] Thank We’ll Khorsand to

Hamed Khorsand

Hi.

really this talking issue? more here I Just or about quality the about new a and will of later. coming more new products products on follow-up out is you Is control guys enterprise be know push-outs.

Jeff Rosica

question I’m I what got your not was sure, was. There Hamed, nothing…

Hamed Khorsand

is that enterprise products? quality your was for customers purely there issue holding control this the quarter, seeing softness on enterprise, new or past On with you’re products this off a

Jeff Rosica

really that is your customer -- really No, really latter, customers no, it timing. more about

deploy that some high really in Now, for tier QX. going releases are waiting doing the our tier MediaCentral the to of very differently. a but a they’re lot obviously of there’re X customers end especially space, of to in lot of planning our new customers wasn’t It how really factored understand X is

on taking cloud cusp We’re to the those some finish a projects line. the of of deployments, are and get so little virtualized and now longer bit over

Hamed Khorsand

gone your customers paid -- last declining is gone And has year? have your year, you revenue but up, because has from subs last license your lost since up, MediaCentral

Brian Agle

No, I wouldn’t say that’s the case.

it’s lumpy think did -- X and about some a of tier and a mix bit There’s I more business. well. products product the products which is bit

tier that in down as of see company. to kind and a you So, ups always about going talked X. We’ve are

don’t any think indication we losing we’re So, have customers. that I there’s

Hamed Khorsand

of or mix -- -- far audio as more is Is a kind as video? or seeing Tools more it go? the as you Pro it you are what far product And as the the about are customers just for seeing

Jeff Rosica

It’s the we’re -- bringing business the No, the it’s we’re contracts the in. winning I don’t it’s that think really I standpoint think across board. from of

single our card but did solutions from that’s have a getting of that’s now our supply did slower, resolved, side, QX lot part specifically. which our had a talk -- impact actually in revenue a little a supplier, the softness was it was chain. deliveries in did on audio of On but key bit part we been a audio, I large we’re about We see that of

Operator

We’ll to next with go Matthew you. Galinko Thank Sidoti.

Matthew Galinko

get what guess, risk ready embracing several-quarter move fully confidence this gives I is that with decision-making a guess fully guess So, the see ends you that comfortable forward does on year? process that Do digging I process any work? you conclude being X before they that investment? up Tier Why cloud I to

Jeff Rosica

not of be as kind it’s going event. this a the a is operations migrate just going of provider. optimism, say are to to we a their I to first This going I be why all, to think, of be not first of environments. reason have I’d multiyear is some Matt, people one-time all -- those event cloud

soon, have of provider are offerings. we we’ll So, we SaaS and of on-prem a even full solutions; cloud are provider solutions;

the revenue, lot it have where our way getting and approach the we are tier say, matter And the is at move I transitory of the as hearing So, more like confidence and offer quite through customers degree NAB heels especially active a transition are we for us, recurring that to which Connect. myself doesn’t period. at I’d them to going, set talking why in a big of we X can to or reason customers projects personally them their and a but I’d to know are where they of customers. go, a say a executives meetings because key the just hundreds and they’re hybrid Avid

pretty about fresh is and laying information media plans our high-level think their I plans. space in the talking executives from that their So, are out

Matthew Galinko

out kind you that understand And customers a a that’s catalysts I called maybe UX MediaCentral I the been I why X Is Why point Cloud highlight driver just did guess tier particularly as then, that door. generation I that more something that getting in next of And release? see you mean, think of for the product conversation? for a as -- that you. right? possible

Jeff Rosica

we are is user talk very talk that street and UX In user it’s the it of keep platform. to the reality when a modern how only lot -- state-of-the-art or customers, experience new the To Cloud name when -- is simple, platform, it MediaCentral we interface the new to a just actually not not represents a infrastructure MediaCentral our expressed. a the users software but platform experience is it to a for environment second presents how and call platform services. I paradigm kind and there presented. It generation, completely new to can really in approach and new modules very new applications the is a is It’s And whole its if is the ways modulized of -- that. very It’s it. express

talking is a that infrastructure. not of operations or cloud, where provider. private are so, customers a their cloud part hybrid their your we saying, where split But or infrastructure Microsoft cloud between it And part thing you miss to deployment the to for of a traditional building and they important hybrid deployment let’s shouldn’t a want the of environment really in is on-prem cloud part in reason. looking simple a deploy environment. infrastructure industry, say your of public in deploy about previously like that, we’ve their like they it And operators another two, our customers cloud is in talked SaaS. way is looks it lot want and In users at where Hybrid deployments Azure about but the of remember, or want in transparent one the

the UX Our hybrid which of. new deployment platform model Cloud is part MediaCentral a is of part

Cloud So, platform. new we Cloud are generation the of UX talking UX whole represents but a

a almost that’s a opportunities. fully just get going lot ability for really the market. our are in response customer it’s upgrades us pretty to product people give as lot seeing aggressively They So of us is base drive exciting. of attack dying new the to in the released we’re to from as and expansions it a well But, and exciting customer really

Operator

with Steve We Frankel will go Dougherty. to next

Steve Frankel

go called out. want that you back I interesting collections to to your comment,

and it to business the to did in customers quarter with you business [ph] on to what collect pay So, was this do something faster PaaS faster? is or incent

Jeff Rosica

service agreements that quarter. was to around it all in QX. make a work that we also in lot normal try later in of and both -- I of to to efforts from done our but did think lot part processes early time; excuse was billing also sure lot do agreements. But on done behavior that was sure agreements time, enterprise of me enterprise a a done procedures every There billing - we make QX, of that that it’s was

it chase. bigger you receivables But, Brian, specific. So, accounts team maybe gave make a our opportunity to some

Brian Agle

agree within it’s organization with tax execution; I just I an is that. think clearly a as focus. fundamentally also No. better

finance, with just And to we’re so, whether timely. sales, more collect able that it’s working cash

Jeff Rosica

cash we that in think and DSO is really I good getting on and say, have minimizing our a time. would operation good I very team And good at

Steve Frankel

would the versus you how orders And last NAB this that couple you the characterize year years? at of took

Jeff Rosica

sure will part First don’t paper. the obviously dollar of with that QX all, since and in part get April, just an QX. a floor to Usually, was months on hold Connect them get give as we’ll purchase announce orders to be afterwards will I multimillion pen takes of update say that moment, or the to until -- we QX the the But, orders earnings our weeks we’ll because write and NAB of and it for people in.

will response mentioned, marketing when NAB. say I I are the and slides, we’re NAB encouraged I earlier key However, the got in at got, through that as slide both And metrics enthusiastic Avid our we by really Connect number really pointing an have quite NAB QX funnel we of for of course over the a and event frankly to has and QX, across our to execute good direction. to team builds now, execute because quarters. But like

Operator

or to I today’s the this with turn back concludes conference remarks. Jeff time, additional closing will That session. question-and-answer Rosica At

Jeff Rosica

think to and the coming everybody the we just will thanks and continue questions to look talk soon. call. over finished I forward all we’ve dialogue the appreciate quarters, and I the we

Brian Agle

joining. for you Thank

Operator

That concludes today’s participation. conference. your for And thank you

Avid Technology (AVID) 10 May 182018 Q1 Earnings call transcript