Avid, the makers of Pro Tools, has announced Q2 2020 results, which show some impressive numbers. If nothing else it shows just how valuable the software subscription model is for them, the company reported record subscription revenue of $16.4 million, up 68% year-over-year, a net increase of 24,000 Subscriptions in the Quarter. However total revenue was $79.3 million, down 19.7% year-over-year.

In summary;

• Subscription revenue was $16.4 million, up 68.3% year-over-year.

• Paid Cloud-enabled software subscriptions increased by approximately 24,000 during the quarter, to approximately 242,000 at June 30, 2020, an increase of 63.9% year-over-year in total paid subscriptions.

• Subscription and Maintenance revenue was $47.0 million, up 13.5% year-over-year.

• Total revenue was $79.3 million, down (19.7%) year-over-year.

• Gross margin was 65.0%, up 760 basis points year-over-year.  Non-GAAP Gross Margin was 65.4%, up 600 basis points year-over-year.

• Operating expenses were $43.5 million, a decrease of (19.6%) year-over-year.  Non-GAAP Operating Expenses were $40.5 million, a decrease of (21.7%) year-over-year.

• Operating income was $8.1 million, an increase of 214.0% year-over-year.  Non-GAAP Operating Income was $11.3 million, an increase of 65.2% year-over-year.

• Adjusted EBITDA was $13.5 million, an increase of 43.3% year-over-year.  Adjusted EBITDA Margin was 17.0%, up 750 basis points year-over-year. 

• Net income per common share was $0.04, up from a loss per common share of ($0.25) in the second quarter of 2019.  Non-GAAP Net Income per Share was $0.12, up from Non-GAAP Net Income per Share of $0.02 in the second quarter of 2019.

• Net cash (used in) operating activities was ($3.5) million in the quarter, a decrease of ($0.8) million compared to Net cash (used in) operating activities of ($2.7) million in the second quarter of 2019.

• Free Cash Flow was ($5.2) million, a decrease of ($0.7) million compared to ($4.5) million in the second quarter of 2019.

• LTM Recurring Revenue was 69.8% of the Company’s revenue for the 12 months ended June 30, 2020, up from 58.1% for the 12 months ended June 30, 2019.

• Annual Contract Value was $265.3 million as of June 30, 2020, up 8.5% from $244.6 million as of June 30, 2019.

Jeff Rosica, Avid’s CEO and President stated,

“While the COVID-19 pandemic continued to negatively impact the Company’s business during the second quarter, we are pleased with the strength of our creative subscription business, which continued its strong growth in the quarter, and with the resilience of our recurring revenue business.  COVID-19 continues to temporarily reduce customer demand for parts of our non-recurring product business, but we expect demand to gradually improve as we get further into the second half of 2020.”  Mr. Rosica continued, “The COVID-19 pandemic has also created opportunities to grow strategic portions of the business.  We are adjusting our strategy and our investments to respond to the changes in the market which are informed by ongoing discussions with customers across the media industry, placing greater focus on the products and solutions that we believe will drive profitable growth as we emerge in the post-COVID environment.  We are committed to making the changes we need to make to ensure that Avid exits this pandemic as a stronger and more profitable company.”

For more information and to read the release in full visit avid.com