Avid Technology, Inc. EBITDA surged on 26.3% while Revenue decreased slightly on 1.4%
03/14/2019 • About Avid Technology, Inc. (
$AVID) • By InTwits
Avid Technology, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 8.4% in 2018, 6.6% in 2017, 17.5% in 2016, 5.4% in 2015, 7.1% in 2014
- Avid Technology, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 5.2%.
- CAPEX is quite volatile: $38m in 2018, $36m in 2017, $44m in 2016, $56m in 2015, $80m in 2014
- The company has highly profitable business model: ROIC is 252.4%
- It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is -2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased slightly on 1.4%. Annual revenue decline showed slowdown in 18Q4 - revenue increased on 5.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.8 pp from 6.6% to 8.4% in 2018.
Gross Margin showed almost no change in 2018. SG&A as a % of Revenue showed almost no change in 2018.
Net Income margin increased slightly on 0.65 pp from -3.2% to -2.6% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.4%. CAPEX/Revenue decreased slightly on 0.63 pp from 3.0% in 2015 to 2.4% in 2018. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.8x and Debt / EBITDA is 6.4x. Net Debt / EBITDA dropped on 0.8x from 5.6x to 4.8x in 2018. Debt increased on 5.5% while cash decreased slightly on 2.0%.
Avid Technology, Inc. has no short term refinancing risk: cash is higher than short term debt (3,993.1%).
Management team
The company's CEO Jeffrey James Rosica "Jeff" is a founder and has spent 1 year with the company.
Financial and operational results
FY ended 12/31/2018
Avid Technology, Inc. ($AVID) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 530.3 | 505.6 | 511.9 | 419.0 | 413.3 | -1.4% |
| Gross Profit | 325.8 | 308.2 | 332.7 | 242.1 | 239.2 | -1.2% |
| SG&A | 214.2 | 196.6 | 171.8 | 160.1 | 156.5 | -2.3% |
| EBITDA | 37.7 | 27.1 | 89.5 | 27.6 | 34.8 | 26.3% |
| Net Income | 14.7 | 2.5 | 48.2 | -13.6 | -10.7 | |
Balance Sheet
|
|---|
| Cash | 25.1 | 17.9 | 44.9 | 57.2 | 56.1 | -2.0% |
| Short Term Debt | 0.0 | 5.0 | 5.0 | 5.9 | 1.4 | -76.2% |
| Long Term Debt | 0.0 | 96.0 | 188.8 | 204.5 | 220.6 | 7.9% |
Cash flow
|
|---|
| Capex | 13.3 | 15.3 | 11.0 | 7.9 | 9.9 | 25.6% |
Ratios
|
|---|
| Revenue growth | -5.9% | -4.6% | 1.3% | -18.2% | -1.4% | |
| EBITDA growth | -20.8% | -28.1% | 230.7% | -69.2% | 26.3% | |
|
|---|
| Gross Margin | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% | 0.1% |
| EBITDA Margin | 7.1% | 5.4% | 17.5% | 6.6% | 8.4% | 1.8% |
| SG&A, % of revenue | 40.4% | 38.9% | 33.6% | 38.2% | 37.9% | -0.4% |
| Net Income Margin | 2.8% | 0.5% | 9.4% | -3.2% | -2.6% | 0.7% |
| CAPEX, % of revenue | 2.5% | 3.0% | 2.1% | 1.9% | 2.4% | 0.5% |
|
|---|
| ROIC | | | | | 252.4% | |
| Net Debt/EBITDA | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x | -0.8x |
Avid Technology, Inc. ($AVID) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 98 | 99 | 104 | 113 | | -5.9% | -3.7% | -1.2% | 5.1% |
| EBITDA | 2 | 3 | 12 | 17 | | -73.7% | | 32.1% | 70.0% |
| Net Income | -9 | -9 | 1 | 6 | | | | 1,119.4% | |
Balance Sheet
|
|---|
| Cash | 48 | 60 | 50 | 56 | | 2.1% | 26.9% | 14.4% | -2.0% |
| Short Term Debt | 6 | 1 | 1 | 1 | | 17.7% | -72.0% | -72.4% | -76.2% |
| Long Term Debt | 203 | 231 | 229 | 221 | | 7.4% | 21.5% | 19.9% | 7.9% |
Ratios
|
|---|
| Gross Margin | 56.9% | 57.1% | 58.3% | 59.0% | | -4.2% | -1.2% | 0.9% | 4.5% |
| EBITDA Margin | 2.4% | 3.2% | 11.6% | 15.4% | | -6.2% | 3.8% | 2.9% | 5.9% |
| Net Income Margin | -9.1% | -8.6% | 0.8% | 5.2% | | -7.3% | 2.0% | 0.8% | 6.1% |
Peers in Technology Hardware, Storage &
Below we provide Avid Technology, Inc. benchmarking against other companies in Technology Hardware, Storage & industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Crossroads Systems Inc ($CRSS) | | -90.6% | -35.5% | -89.5% | 39,959.5% |
| Immersion Corporation ($IMMR) | | 19.8% | -9.9% | -38.7% | 217.0% |
| Veritec Inc ($VRTC) | | -42.2% | -28.0% | -52.2% | 53.1% |
| Boxlight Corporation ($BOXL) | | -88.5% | 503.2% | 26.4% | 47.0% |
| Pure Storage, Inc. ($PSTG) | | 308.2% | 152.4% | 67.9% | 38.6% |
| |
|---|
| Median (30 companies) | -16.9% | -3.2% | -5.0% | 2.1% | 5.6% |
|---|
| Avid Technology, Inc. ($AVID) | | -4.6% | 1.3% | -18.2% | -1.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 99.1% | 99.3% | 99.7% | 99.4% | 99.8% |
| Pure Storage, Inc. ($PSTG) | 43.5% | 55.5% | 61.9% | 65.9% | 65.5% |
| NetApp, Inc. ($NTAP) | 62.0% | 62.6% | 60.8% | 61.3% | 62.7% |
| Datasea Inc ($DTSS) | | | | 39.3% | 54.4% |
| Socket Mobile, Inc. ($SCKT) | 43.6% | 48.6% | 50.2% | 53.5% | 51.4% |
| |
|---|
| Median (29 companies) | 35.6% | 35.0% | 38.5% | 38.9% | 38.3% |
|---|
| Avid Technology, Inc. ($AVID) | 61.4% | 60.9% | 65.0% | 57.8% | 57.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Immersion Corporation ($IMMR) | 12.3% | 9.0% | -25.1% | -127.0% | 48.6% |
| Apple Inc. ($AAPL) | 33.1% | 35.3% | 32.7% | 31.2% | 30.8% |
| Western Digital Corporation ($WDC) | 20.1% | 18.7% | 12.5% | 21.4% | 27.5% |
| NetApp, Inc. ($NTAP) | 16.9% | 16.7% | 11.3% | 15.4% | 22.9% |
| Seagate Technology PLC ($STX) | 19.3% | 21.1% | 11.3% | 16.7% | 20.0% |
| |
|---|
| Median (29 companies) | 8.6% | 7.4% | 3.8% | 3.5% | 7.9% |
|---|
| Avid Technology, Inc. ($AVID) | 7.1% | 5.4% | 17.5% | 6.6% | 8.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hewlett Packard Enterprise Company ($HPE) | 6.6% | 6.4% | 10.8% | 10.9% | 9.6% |
| Pure Storage, Inc. ($PSTG) | 28.7% | 24.2% | 8.9% | 10.4% | 6.3% |
| 3D Systems Corporation ($DDD) | 3.5% | 3.4% | 2.6% | 4.8% | 5.9% |
| Apple Inc. ($AAPL) | 5.2% | 4.8% | 5.9% | 5.4% | 5.0% |
| Western Digital Corporation ($WDC) | 4.2% | 4.2% | 4.5% | 3.0% | 4.0% |
| |
|---|
| Median (29 companies) | 2.7% | 2.9% | 1.7% | 1.8% | 2.2% |
|---|
| Avid Technology, Inc. ($AVID) | 2.5% | 3.0% | 2.1% | 1.9% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ionix Technology Inc ($IINX) | | | | 23.9% | 204.5% |
| Immersion Corporation ($IMMR) | 7.6% | 5.8% | -21.5% | -138.9% | 96.8% |
| HP Inc. ($HPQ) | 8.0% | 8.7% | 15.8% | 60.8% | 72.9% |
| NetApp, Inc. ($NTAP) | 12.5% | 14.8% | 7.3% | 14.0% | 28.1% |
| Apple Inc. ($AAPL) | 40.0% | 41.8% | 27.0% | 23.8% | 28.0% |
| |
|---|
| Median (37 companies) | 5.9% | 5.4% | -0.4% | 0.9% | 2.2% |
|---|
| Avid Technology, Inc. ($AVID) | | | | | 252.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CPI Card Group Inc. ($PMTS) | 3.4x | 3.5x | 5.8x | | 12.4x |
| NCR Corporation ($NCR) | 4.9x | 6.6x | 2.7x | 2.3x | 5.2x |
| Xerox Corporation ($XRX) | 3.5x | 3.5x | 3.1x | 3.0x | 3.0x |
| Electronics for Imaging, Inc. ($EFII) | -0.2x | 1.4x | 1.3x | 1.6x | 1.7x |
| Hewlett Packard Enterprise Company ($HPE) | -0.1x | 1.1x | 0.4x | 1.2x | 1.6x |
| |
|---|
| Median (19 companies) | -0.2x | 0.3x | 0.1x | 0.2x | 0.2x |
|---|
| Avid Technology, Inc. ($AVID) | -0.7x | 3.1x | 1.7x | 5.6x | 4.8x |
