AVID - Earnings call transcript Q3 2021

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Operator

Good afternoon, ladies and gentlemen and welcome to the Avid Technology's Third Quarter 2021 Earnings Conference Call. Today’s call is being recorded. At this time, let me turn the call over to your host for today’s call, Whit Rappole, Vice President of Investor Relations. Please go ahead.

Whit Rappole

Thank you, Kristie. thank quarter joining the XXXX September XXXX. and Avid today period everyone, XX, third Technology's earnings afternoon, you us for for ending Good call for Development Rappole, President My Avid's is Relations. Whit for name Corporate and Investor Vice our me and Executive Chief Officer President; With our Officer and Gayron, Chief EVP. Jeff Ken afternoon are Financial this Rosica, and operating time their remarks, Jeff review our your Ken then and a prepared will detailed of by In will our of results, questions. and financial business for provide an followed provide overview We issued earlier call. release to we earnings have prepared this this we our will afternoon a on that and slide presentation refer a The press time. at this website replay release our of presentation for and call will available on limited on and available a currently ir.avid.com be are website our

GAAP also certain which this call, earnings financial Investor non-GAAP metrics definitions and In the Unless the management operational metrics. G, reference of by are with non-GAAP during noted, our website and appendix closely for a call to of except all for today's measures appendix GAAP. this and otherwise presentation will accordance the the metrics Regulation most both reconciliation associated our contain today, in management non-GAAP and financial release on this operational figures used call the is noted the always figures, revenue, information to presentation. During

contain Act within the statements Private Reform today's meaning forward-looking Litigation of XXXX. In presentation addition, during statements certain the Securities made of

these or include future statements. as that that or and comments outcomes. accompanying Our are your to may results materially may on differ results to as and answers statements Actual future from occurrences pertain the call forward-looking questions slide deck this well forward-looking

call our with let please some the a uncertainties most SEC. that, including quarterly recent key me on forward-looking With and XX-K the Form Report and remarks. release to and discussion for filed reports President, see our Jeff statements, information, over CEO these the Form XX-Q issued and of turn today Rosica, on with press more Annual For of his risks our associated

Jeff Rosica

for results. to everyone to thanks quarter joining and Avid’s Whit, third review us Thanks,

which We deliver allowed us to continued in profitability by we the of QX and that continue and continued is this to are our the free us flow. and markets, the our business, trajectory seeing With is strengthening able we our that business, to revenue grow strategy strong and end strong recovery pleased with to of performance subscription the our the to significantly of clear results cash positive are it working benefits. due were

today. we all started, to there's lot So with let's get of share want a as you

During the third with to quarter, there into business like performance are three the you. main takeaways delve for I'd

driven revenue delivered we growth enterprise tools and by strong First, offerings. our creative subscription both

confidence the growth. we strength as seasonally on contributed to healthy And conversion. we in the consistent Next, exceeded towards third momentum Overall, expectations enter note, finally, we gives finish a with and we profitability the our we continued are look saw we high and deliver recovery quarter. And robust us to well-positioned quarter, is quarter, our strongest markets end that to free historically overall we which XXXX also of strong continued fourth flow believe for cash our XXXX. as

the solid to existing And business with both these subscription and a in Composer including each the during dig around new and the customers sales. signed subscription saw more the BBC. in enterprise world, third quarter our including see [indiscernible]. media on tools bit subscription creative subscription several strong across our and Endemol multi-year enterprise large areas. provide and in sales of to Media continue with MediaCentral we quarter, companies Shine specifics agreements and more overall offerings third performance in growth enterprise the me let some of strong including our Now We We quarter,

not moving Our products expectations, strategy trend well pay we to enterprise of ahead our did slow adopting enterprises this our continues and subscription subscription customers and for expect off, are to to down.

we we see to from annual move uplift in value. our these maintenance perpetual continue contract meaningful As to enterprise subscription, customers

of at we're we transition, there of opportunity business. the enterprise growing significant this As our early in stage believe ahead remains subscription us

net COVID new a tools year-over-year behind We us. of from creative creative third to creative XXXX central adds tools that the gets we Our continue our growth. continued tools. growth the recovering be quarter as And believe cohort in subscription piece of the during large for further strong is adds

in to regard These prior both seeing to enterprise creative with quarter like count the sales led healthy from the strong net we individuals we the And Specifically, Tools, versus Pro direction license and acceleration growth. subscription subscription revenue adds quarter. and third net we're far. in an saw adds so

stable digit third double strength business markets business quarter, with in the the QX. of our and all segments. to This combined During continued maintenance led strong stream, benefiting revenue revenue our product recovery end areas to performance of subscription strengthen and growth our the

also solid a gross in by strengthening The that this new growth, recovered, quarter. and XX%, agreements driven increase of volumes We agreements subscription as as from agreements and mix the focus in business in slightly signed, margins renewed growth the an a were annual annual mix contract solutions several and a the significant overall. management on product of the revenue increase year-over-year of of value was integrated different value realized improving saw over We strong both quarter. our contract by value of significant in long-term increase driven our

Our facilities, interfaces we due to and audio head business organizations normal for services be continue perform live for towards return solutions to of sound storage and live return touring as Demand globally. control strong to COVID was demand well many lifted. their see to healthy, productions and as see continue we back venues restrictions the activities continued continue to and to

and to revenue quarter EBITDA second with profitability, from of continued healthy growth margins quarter the deliver and in year margin flow at gross controls XXX% the the And adjusted profitability XXXX, Day employee combined plan. presented we've to our investing benefits looked transformation was temporary quarter, that quarters, which again $XX million May. manage efficiency finally, business. at strategy investing saving in strong cash we for smarter quarter-over-quarter. continued company cost this we to we delivered quarter. and Investor deliver with event our important continue Improving our back measures, fuel During consecutive digital flow. growth the free innovation And third Both our to cash and this of solid as did of as several overall certain such and third free elements important in We in ways as for steady also while to XX.X% remain the our operational over increase during while future, represented also and spending diligent furloughs are were once of an the our in in consistent,

from about things going forward business we where let's Now see talk a perspective.

we enter As well XXXX good the fourth positioned with are enter we believe momentum. XXXX strong quarter, we and to finish

solid We for strong enterprise tools, trajectory growth our net adds creative sales. of expect and software subscription a continued subscription anticipate continued

to We contribute partnerships and forge develop we solutions will plan, our and will contribute expectations. growth our will towards new with to continue that new strategic that unique believe strategic technologies, innovate

efficiency growth. of we fuel SaaS releases designed better and with more maintain of We past are And a for efforts the will expect new partnerships, stream organizations, have focused the constant as that opportunity see workflows our based also our workers for distributed business continue of workflows. so expansion adoption and to subscription on cloud plan support customers we deliver cloud of we our improve and our to enterprise to in and software demand discipline enabling more the we to cost continued its of years. that couple contribute remote Also, been

more evaluate ago, capital will sheet, investments a how financial investments while me plan. balance shareholder enhance in moment it mentioned be accelerate the of we I a turn making closing, whether support also five our that, Ken. Take this Ken, to strategic In to to review year continued we as deploy our continue or healthy over With value, of we share growth and growth will call strategic through to details. selective the maintaining However, let our to plan. now is away, making carefully buybacks

Ken Gayron

good and Jeff, everyone. you, Thank afternoon,

and are the financial XXXX. results our business for third pleased quarter of with We

our allowed us revenues revenue Our free an and driven year-over-year growth solutions maintenance and cash deliver profits by of business strong subscription strong performance acceleration continued to integrated of in flow. our

the Our renewal business be solutions. revenue, focus will to of to our and for portions remainder the maintenance non-recurring XXXX continue the business subscription of increase rates our integrated building in improve related

of on We office expanding prudently in to to our business continue plan, will in our areas set our long-term support are subscription our and in it back of R&D confident certain momentum invest flow cash cash approximately improving turn XX% through our conversion. financial now and and the to results. CAGR free let's With third by overall XXXX details quarter flow business that, free

growth the into well tool but by our institutions, are of subscription individual by a which channel being includes are also We creative encouraged base, subscriptions. high educational addition subscriptions paid that sold only subscriptions. the new multi as in subscriptions, not This seat of our continued partners reached our as enterprise

licenses, net the XX% the in count top acceleration increase subscriptions the third subscription adds with net end roughly added creative on the the of third total reached in enterprise XXX,XXX in an quarter. of continued year-over-year. Our XX,XXX we Tools subscriptions at quarter, quarter, an of adoption, of approximately new Pro In growth including

XXXX, closed the certain as third as multi our native count for subscriptions, in be or adjusted number change each the licenses acted of books the reporting The of a increase is instead we recounted software subscription actual numbers of discovered, four the we of of for there As we and multi of the quarters. seat we and quarter, similar in impact cloud third paid past will that the XX,XXX an quarter approximately subscription and seats X%, in one are were under license. this amount seat our

similar and XXXX. in and chart XX% have to count Pro growth by up the adjusted XX% because Tools quarter tools, was XX% growth back alter subscriptions not materially going as in of creative the the did year-over-year. with trends We or for There a Composer change, strong of all the shown rates no is understated this year-over-year, quarters revenue up impact it third up relatively year-over-year, Subscription were all Media amount. Sibelius

see subscriptions subscription favorable Avid. than paid uplift with with our the large of customers in revenues, well third the during We estimated, MediaCentral revenue million, moving the an enterprise the Now our year-over-year. as quarter, reaching subscriptions as a as moving third subscription the XX.X% adopting our to in during previously growth of tools, $XX enterprises of new in to to creative year-over-year drove for continued we increase growth revenue from perpetual had several are momentum overall model faster quarter, continued subscription number for composition

a quarter. subscription, by for the revenue as Even subscription a XX% on Maintenance Total diluted continues focus to XX.X% subscription by third during calendar was despite each expect the year-over-year maintenance the quarter, perpetual that and Perpetual maintenance revenue, combined transition XX% licenses the software our to revenue in the third strong from to license for for maintenance to year-over-year decline quarter the subscription maintenance to X.X% in was contracts renewal above from revenue revenue increased revenue The by subscription quarter subscription. revenue sales, maintenance in our QX as growth X.X% contributor with customers of million was down saw converting slight stronger in quarter from subscription. strong continue down Although the fourth revenue $XX.X largest perpetual rates deemphasize given contracts by year-over-year have transition came strategic revenue, to year combined licenses enterprise third stable quarter. in year-over-year million was provide offset more be remains revenue but in up we renewal third sequentially. revenue. of cycle perpetual towards that our waited enterprises to the maintenance to contribution subscription the in the declining $X.X first the quarter, and enterprise guidance continue we product to quarter. Maintenance and of subscription improving the the total and increased Maintenance enterprise we third year-end. certain the fiscal and conversions, on opportunity

continue to increase healthy, storage. and integrated quarter, hardware, revenue year-over-year sequentially. revenue quarter year-over-year sales revenue year-over-year the consoles Pro The sound continued business in slightly increase continue live to the year-over-year and venues add was interface. surfaces, market up Audio audio due new many storage have from markets concerts the as and products hardware the quarter, third of an and as of year-over-year. solutions an service Revenue from recovery end flat our by well year-over-year many the year-over-year our third was the solutions Our revenue driven by XX.X% balance global in learning opened. to was was sound services recovery professional our as remained driven business. as third control up growth integrated studios comes improvement million capacity. $XX.X roughly Tools in carbon Live increased of product in improve. $X.X X.X% large of also revenue Professional The services audio revenue control of nicely with million

from recurring the agreements, purchasing revenue was as maintenance was third contract Now recent end percentage the higher continues revenue agreements XXXX. Annual moving the total quarter, channel years pay from million XX-months. off. on of in the XX-months, revenue stable subscription improvement as year-over-year to subscription up lower to long-term from recurring to from in year-over-year. of quarter and in in the contribution to value, in revenue LTM compared at in non-recurring with our growth the recurring In XX% to $XXX strategic annual revenue strong revenue due up ACV product The revenue, contract well strategy recurring quarter benefited our revenue revenue, LTM in under of third revenue XX% increased focus XX% prior last value the partners. sources

for year-over-year contract in added renewed ACV. the to Avid the which million third growth two place increased our growth. Total conditions total the in the purchasing purchasing the agreements we improving the confidence partners and overall $X.X added XX%, contributing contract quarter market value quarter, strategic in renewed strategic the During to and new signifying strategic support And agreements we sequential in their agreements, value. successfully five of

innovation quarter. subscription Year-to-date in sequentially. higher million, share end an at a look quarter, was the up $XX the in million third million period. months third which prior the aided XX.X% Total third Non-GAAP support was Non-GAAP increase year-over-year and basis above through our XX rest our quarter for revenue the and increase business $XXX.X points improvement $X.X XXXX year-over-year, up and for million of a million sequentially. the high in Non-GAAP let's third $XXX.X included quarter our of At was and a XXXX operating the X.X% the nine third quarter guidance. top larger the continued the year-over-year XXX the in year-over-year, and giving made increased expenses The basis operating million XX% Now both over performance quarter, the true-up accrual points margin margin revenue and quarter, were revenue the business. of the improving the $X bonus growth results increase expenses delivering $XX.X for of third gross sequential September revenue XX.X% year-over-year. gross sequentially. in increased ended and business to was margin a quarter XX XX.X% a constant currency, third of year

expenses especially operating subscription help from With we growth accelerate remember strong margin high Please savings year-over-year third performance, in initiative expenses the a for non-GAAP $X cost our of significant employee slightly a in innovation recent including XXXX, put our temporary plan, that comparisons. COVID, R&D place to temporary company to million furloughs benefited due our increased affecting the quarter from offerings.

are we structure. managing no continued in longer efforts exercise temporary have similar discipline to saving While many expense the of cost in effect, our

temporary in put cost Free favorable to in and flow increase Year-to-date, trends. the working prior Non-GAAP third of offset subscription year at profit recurring our million $X.X less September last of million, $X.X above. as in sequentially period at revenue growth improvement subscriptions. the are strong results of flat million $XX million cash operating the million $XXX Adjusted period. or this months the year. the improved total year-to-date end continue cash was software free percentage through Avid’s reflecting $X.X million as saving gross from and variable from was expense offsetting to down of temporary flow operating benefit in of the was $XX $XX.X we place and and Adjusted XXXX. third from the third year-over-year, the September paid interest working We quarter, XX.X% million, free savings on profit due year, million more The year-over-year, moves by year, in continues our the non-GAAP of from nine the last $X.X continuing source operating months net fiscal million the quarter, expense capital XXXX, year million ended third was targeting in $X.X savings higher during an and slightly the our nine improved business, XX, the expense higher quarter to see XXXX up for to year described cycle the Capital up as expenses down sequentially quarter, were we quarter-to-quarter. in Working EBITDA in cash from XX% to revenue million $X.X this make share measures capital are a as year. quarter, our $XX from and the quarter reflecting benefits the up was million million cash XX flow adjusted EBITDA lower up expenditures same XXXX. revenue improved the ended million and gross business annual $X.X capital to income $X.X third EBITDA operating $XX.X year-over-year, last approximately per $X.XX upfront

our improve support mentioned, increase fourth expanding operations that XXXX, we quarter internal business. of expenditures to the investing during we'll subscription As will previously have our be capital we as expect and

the $X.X the third $XX.X from benefited the strong balance XX $X.X payable the to coupled $XXX.X associated with a increase balance $X.X of the Cash from towards June at spend the XX. third the year-over-year debt cash remained our also initiatives $XX.X was in $XXX.X decreased and million, to during at Accounts the end growth. third the free quarter Accounts debt receivable business collections. increased Total of at quarter. million September but million as let's Net shift due the flow year-over-year decreased with third to million repurchase subscription. of decreased use improved moderate quarter. down revenue inventory shares turn quarter, million reduction cost reflects to through cash during Net million the end through million million Now the software sheet, the XXXX quarter. $X.X year-over-year

and with Our and balance strong EBITDA year to flow reductions resulted explore times operate LTM end health of value. from shareholder in of X.X period. and growth its grow in debt free the leverage of to EBITDA long-term allocation debt drive to more the as in adjusted we prior times to LTM cash Overall, down alternatives sheet company our flexibility capital pleased at the business, the quarter, provide net total to long-term adjusted the are the and X.X

the quarter, we During shares for XXX,XXX approximately $XX.X third million. repurchased

an X, Additionally, method and authorization returning announced believe X.X a are to We capital repurchased the our total our in that we an our shareholders, bringing repurchases provide repurchases of under share plan. of given our shares, good additional $XX through million million long-term in we November $XXX million important return confidence date to September. for

in our revenue. coupled quarter XXXX and raising was given maintenance third guidance, the guidance, maintenance subscription year total our performance for to are recovery, our and turn full continued of now with guidance that our subscription revenue revenue market we Let's the in ahead

range revenue. for our We and the total are for end the full tightening guidance year high raising

free the August adjusted our asked net high on that We on non-GAAP and XXXX. guidance guidance income were revise share, flow XXXX the of full cash range year EBITDA X we per are tightening towards end for

guidance We are XXXX year providing as full follows.

XX% revenue are subscription to the growth for million of guidance at our raising revenue which $XXX the a our $XXX XXXX of the maintenance million, $XXX to which We at raising and midpoint. range year-over-year guidance full XX.X% million, represents midpoint. a $XXX revenue represents to year-over-year to million year full year XXXX We're range growth

share tightening outstanding. our guidance assuming the million are for We XX.X to XXXX to $X.XX per full year net non-GAAP income $X.XX, shares

to $XX million. guidance guidance We are to also $XX tightening for tightening flow for free our EBITDA million to adjusted full the year to cash full million XXXX our year I'd as We're XXXX in $XX performance our XXXX gives Whit. back to $XX to With free flow our million, turn that confidence cash cash the year-to-date free and our flow. like trajectory call us

Whit Rappole

remarks you, happy and go you, Ken. now Thank to we please your ahead. take Thank Jeff. That our prepared are Operator, questions. concludes

Operator

Thank Steven you. [Operator First Frankel take Colliers. from we'll Instructions]

line open. is Your

Steven Frankel

to the and a ask afternoon, opportunity for question. Good thanks

the wanted Just drill a little numbers subscription to down on bit.

MediaCentral you guys progress quarter, numbers. great You have made broke out And last the here.

seems at And the so XX,XXX Am sequentially prior disclosed you were like quarter. XX,XXX adds it what here, looking this creative in at I correctly? the versus about looking

Ken Gayron

that's correct. roughly increase count MediaCentral. XX,XXX the balance over adds were QX creative did in to Yeah. Steve, XX,XXX license our and by QX, We with from the that of

Steven Frankel

the Okay. was to XX,XXX restatement? right the still with that QX look in back that's over And change we number? creative QX, Or seats there added if any to

Ken Gayron

with trends reporting provided with similar count our new point. continue this the to we be that No, the at just license

Steven Frankel

through kind somewhere sequential at creative? the And go So, to we this another pace the in about way COVID the we Are this XX,XXX, is, the is I at growth business of add the this obviously? organic of is quarter bump, subscribers think point. should guess for a level for here new it to ability

Ken Gayron

direction the the QX, renewal the and point now that but in see you In adds, have fourth the at the general, at quarter. came abated, of those in Tools, especially, we of impact, net if for we for feel quarter, as accelerated net acceleration cohort this good obviously think did And about feel an good look adds. an is of which I the And that the Pro in of adds. we business up direction terms COVID about

increased As revenue. in business, we've our a strength result the of guidance maintenance for the and subscription

Steven Frankel

COVID? any churn us now that give on And we're can through insight you trends

Ken Gayron

And as the the feel at we're our the increasing and we of slightly the about the of improving. all business say COVID, why our would about end coming subscription is actually of key that's retention metrics. feel good and direction we business, I and confident out rate guidance,

Steven Frankel

Okay. business? on chain supply integrated whole chain is talking solutions What's business, like then your supply for the And challenges. world the the about hardware

Jeff Rosica

this Steve, is Hi, Jeff.

facing I environment the tighter I'll all Look, supply that. components we're in a marketplace. think answer I think

I'll say team far, that staying So and to our good point. a at doing is is job of ahead team our it this that, very navigate

so And keep now, eye. are with been able everything. what so to pleased mitigate far on we're be close We to careful good quite to team's obviously going achieve. a right they've obviously, pretty the long-term a job done horizon, But

far, so up. should mean, And situation. I so a world that real that I good. say are is costs component also going

making of adjustments. both We ago. are prices did month price also storage sure was actually to margins, protect our can to We integrated optimize increased to price make and public that protect but very X% look our again, around we our our about closely increase, that to it at solutions. a XX%, we'll appropriate to even to We margins continue a further And margins honest in product. our be optimize

Steven Frankel

one into just Is margins business question issue on Or else insight lower some Great. a mix that’s that? that towards resulting basis. is that And a in there something then gross software year-over-year last enterprise? the

Ken Gayron

sales help driving cost costs margins with and software all, we in the I was renewal margin more year-over-year, professionals rates improved in improving Those Care gross margins, made first of to are investment gross in and sequentially. more are some did in terms this year-over-year, year add top-line. of that of slightly effort. would Customer impacting gross the And driving In say

Steven Frankel

Thank Okay, great. into I'll jump queue. back you. the

Operator

from we'll Nichols B. next, Josh Riley. take And

is line open. Your

Josh Nichols

subscription on to you enterprise in quarter. Great frame curious growth supposed there. a But, we growth did me bigger subscription taking such help for XQ frame my Could mentioned the for thanks it. kind maybe you the you XQ, and what I think to with opportunities about this enterprise side, was and acceleration you the relative potential lot to XQ, contributing this if could Yeah, there's base XQ? should to how even quarter. in see for question. of XQ rapid opportunities help the of Clearly be

Jeff Rosica

Yeah. Hey, Josh. Thanks.

think, strongest And maintenance general going that sense that strongest, QX subscription. always first our of that customers will the be have quarters, and converting the from a be been that to QX I were true. perpetual especially of are program think a all, for and enterprise naturally I to things

found, again, what think, we're we our a QX, customers, expectations qX, recaptured really or in new and that either is great well up moved in for have that even though, I customers enterprise definitely early. seeing we've take beyond adoption and

of too, seen lot and that it So think, Clearly, a of will for strong, while. -- quite in we've that we've got strength be part will very QX will business, a we believe. the strength QX continue, we be,

-- subscription be revenue guidance subscription revenue we've of should Of saw we specific be we on Ken maintenance -- course, also I think, Pro our the should probably good adds on see going say in Tools, performance don't forward. versus and tools, want to that we're not probably talked about hint cohort of this a did obviously, will creative acceleration giving tools, guidance what other pretty saw, the tool I especially we than see I net number QX the QX on in seen as the very QX. creative side, good the we creative in on

trajectory see there. said, So again, good like a we we

Josh Nichols

the like whatnot. of sales kind curious, of things. from or certain like, it's seeing or on it subscription whether you that much the a is quarters are like just these coming side, e-commerce lot in I'm before of is and coming other know call how out like how coming some channels you through – are I like customers direct

Jeff Rosica

question. good Yeah,

growth digital happening models. we partners in see to around see we're getting our and think are to migration continuing the direct positive I e-commerce what's engine. our subscription more But is our more channel engine,

really And and enterprise end improvement a both then subscription. subscription too. big channel direct seeing our business our play in we're in around sales team significant our performance so And role our higher channel partners

Josh Nichols

space tool you're it for last of question expectations. then enterprise acceleration creative that so good the and sounds And like seeing me, tracking ahead in

hit offset you like would from lift you you or you're the move when seeing If I benefit get expect any there. see, decline that potential is these ARPU kind more than would margin some I on of want that, to of that them versus creative? moved perpetual, over curious that subscription for profile kind there as people over And have that you then, was to you of people any

Ken Gayron

removed, bigger subscription, we're perpetual enterprises getting a it wallet. the was So from to share

you outlook. uplift I we're lifts to the that we've revenue value, the XXX%. the seen of of reaffirm discussing we've can But, the historical come our of uptick about as the having, confident as very on been dollars line. the models. company's they providing those been XXX% we in the driving we long-term And market. terms more think in, but nice an move gross continuing, the dollars sub revenue And probably that the of is revenue We've margins. see performance are in to given to And think subscription in plan getting of see, provide And more that dollars we And strong subscription, as our we average XXX% we that with margins. in very up that to more continue We are general total dollars.

Josh Nichols

Thanks, guys.

Jeff Rosica

you, Josh. Thank

Operator

from And Northland next Chokshi Nehal from question Markets. our comes Capital

line open. is Your

Nehal Chokshi

acceleration above guidance you, strong Thank results. of well and results and on the congrats subscription

but you Any behind have you acceleration You have thoughts there? an provided mentioned the don't guys that net think Tools multiple Pro in happened? why saw I both times that adds, driver

Jeff Rosica

a of think things. couple I

in the a job now. one we attracting net and team team focusing not both number is will mirror rearview to are our seeing really done churn people add think, good general channel well, very the reduction. I stop marketing But going doing One in to we're just a the doing performing lot important on we metric, numbers. gross terrific I to metrics. of combined And we've or adds obviously, this talked also, churn we minimize think, and work space, bring acquisition on is on that continuing job our efforts fact marketing big churn. we have as with this been great before the cohort efforts our sure starting a that XXXXs has focus, better and been in that's been a from get in in overall our digital making And, about and

Nehal Chokshi

explicit for subscription, guidance then, had about and that implied a you guidance maintenance the subscription. And maintenance despite million million read The beat you is of and I $X the midpoint. XQ maintenance dollar on And got less XQ to treat great. way have and or more at increase for now an a ’XX subscription. so you huge ‘XX That's about

you're recognized have higher So in is base this of also enterprise And than in QX at to expected. a subscriptions than forward QX due that deals, then looking basically you a QX. pull got of eggs rather

Ken Gayron

look I our would performance our say, hey, for guidance we're QX. look QX as we pleased at at but we with

So typically an as out if you we our what area guidance, look see at we set we over kind that of want to as performance, that achieve.

work midpoint the hard we over to and So, to good look we've at what at about this very towards point, laid the QX, we're publicly, achieve to work we when the point, out is and get assume going feel numbers. end. market to those we But to to continue performance on this drive higher this reasonable is to feel where we're over going and on the that for at

Nehal Chokshi

did LTAs? value driver long-term you the question in then final also mention agreements. that great. of that Okay, What seeing is is that the value And of increase you're my primary increasing

Jeff Rosica

Nehal, it’s Jeff. Hi,

been really in think have are purchase partner strategic he I remarks, Ken had of prepared said his I program our successful it's is And focused on agreements and focusing these as we real strategically largest think have us, having and success and our successful So question partners. with great previous benefits, very strategic again, and grow that of for we've also to them. some been And their a channel a it's with also it's been but agreements. for most them has business helped both The seen us. for

these it's that increases partners. basically as the business really with program to has team commercial year-on-year been So, and grow success, our to allowed drive in the big delivering commitments

as say good great success these So, very they just program. renewals come of in. it's I come the see And in to it's strong would

Nehal Chokshi

great. Okay,

clear, functionality? to enterprise adopting your is reflection it a Just of be customers increasing

Jeff Rosica

it's the No, above. all

and enterprise, that the they and seeing Our growth those across all sell sized small And levels teams. customers, businesses or of we're also individual they success the sell partners medium they segments. to the channel creatives sell sell and creative large all

drive good One think kind business is convert business more that for just more for focused customers really is subscription. And them I them. which They for Avid. for but move getting getting delivering are also, two though, are allowing and and Avid go with partners things. to results not of more us they're drive to the strategic they're think and and more Avid, new good I that's embracing out the again, on good

really it's I So been for think them. successful

the all it's Nehal. above, It's across. So

Nehal Chokshi

Right.

Okay. for that clarification. Thank you

Jeff Rosica

Okay.

Operator

go Aarde Group. to And from next, we'll Jack Maxim Vander

Your open. line is

Jack Vander Aarde

me questions. remarks was, didn't detail. Great. taking touch Hey, kind each really my questions Thanks anything pretty have you lot spoke solutions My answered. granular guys, of in in my let about key been of hear just negative. prepared guys results. on, for But takeaway A your I integrated great

levels? live context, fair any from guess, And categories pre-COVID? they takeaway, then maybe if this struggling two, how performance these for some revenue those so recent compares maybe not above to just that those categories, greater the Or storage, just audio, a are of I across first, COVID can improving? much are Or, levels compare Thanks. of sound, you and were how that control, they during negative

Jeff Rosica

Yeah, hey, Jack.

in of sound, as growing to on to happened margins. to about Remember of we're going and levels, like much pre-COVID lines hard again, returning some seeing though, So through levels, we're that apples really parts product back improve the what of say, all the and to that I a live bit world are but to, business that, just pre-COVID I we businesses about as of we we've as categories, reduced deemphasized to comparisons. them, apples because lines I'd COVID, pivot all those and think some of would can bit it's a the focus forward. working of year say an to in profitable not that did strategic returning But we do ways so what most them our most above. that, still the actually, there's in or last have part talked the compare product it's we've some trimmed go. talked little a you And as

kind it's been think – I is returning say, way it's our Things I’d so expectations, are in And which great. look, of a robust now. very

But don't we're go maximize I'd better business where with that going. been forward happy, that that happy potential, on really with are picture. that we and opportunities to overall, part want basis, we're being margin, higher a are and because our directionally fit those say, more careful we the remember margins we've that of So it's more things growth deemphasizing

Jack Vander Aarde

opportunity given in that's Okay, the an all you How how you then, the and at Just of new kind unrelated this create there are stuff in are Are you great. a guys the new an maybe for creative Metaverse physical the of in guys all to in is the just all? all the there? there NFPs staying world? guys all create blockchain Is in well? guys this with but of created all? And the topic, -- to market worlds opportunities Avid buzz kind announcements that, prior at of and sorts you been content, involved as place and new recent and Is universe creating are innovations. Metaverse the involved

Jeff Rosica

is mean, virtual with I it I we directly can content I tools. are Avid that's yeah, a Well, mean, the world, too. of a is Metaverse, well, very obviously I not on and the new answer in subject. I'd I'm think lot created created say sure virtually,

using areas, us to clearly, whether opportunity high the of participate, I'm they in an Avid middle those in squarely though think not are gives quality it I content sure is space. that

is will of that as like don't in I to us, at I the that's we're blockchain, technologies successful Hopefully, some associated opportunities. NFT itself It wouldn't Fox to from movement. some and implementing But and are we the of et areas I right say for a middle their important strategic say do look That's very those cetera that create for company. obviously and trend. today see will Fox necessarily others valuable at too. no, looking things NFTs, content with say, people as we're interesting because we have see NFTs of that the that, that makes space. others content say that more far who as good like security been the As a let's though,

Jack Vander Aarde

it That's color. me, the appreciate I for Thanks. it. guys. Got

Jeff Rosica

Thanks.

Operator

closing And back remarks. we'll with no Rosica, questions, for further it turn to Jeff

Jeff Rosica

and for participation again all your of your you questions. thank Well,

momentum we to the you that confidence gives I out with As look and mentioned me XXXX well-positioned let as believe leave to XXXX strong, we're beyond. finish our us and message before, we

thanks So with that, again for now. and goodbye

Operator

our you conclude does participation. that for today. Thank for And call your

now may You disconnect.

Avid Technology (AVID) 10 Nov 212021 Q3 Earnings call transcript