Avid Technology, Inc. reports 12.5% revenue decline in 2020 and almost no change in EBITDA Margin of 13.6%
03/09/2021 • About Avid Technology, Inc. (
$AVID) • By InTwits
Avid Technology, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Avid Technology, Inc. is a company in decline: 2020 revenue growth was -12.5%, 5 years revenue CAGR was -6.5%
- EBITDA Margin is quite volatile: 13.6% in 2020, 13.5% in 2019, 8.4% in 2018, 6.6% in 2017, 17.5% in 2016
- Avid Technology, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $15m in FY2020, $15m in FY2019, $7m in FY2018, $4m in FY2017, $5m in FY2016
- The company has highly profitable business model: ROIC is 30.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.3x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Avid Technology, Inc.'s Revenue dropped on 12.5%. Annual revenue decline showed slowdown in 20Q4 - revenue dropped on 10.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.3 pp from -3.5% to 1.9% in 2020. During the last 5 years EBITDA Margin bottomed in 2017 at 6.6% and was growing since that time.
Gross Margin increased on 2.9 pp from 60.5% to 63.3% in 2020. During 2016-2020 Gross Margin bottomed in 2017 at 57.8% and was growing since that time. SG&A as a % of Revenue showed almost no change in 2020.
Net Income margin increased slightly on 1.2 pp from 1.8% to 3.1% in 2020. During 2016-2020 Net Income margin bottomed in 2017 at -3.2% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.6% in 2020. Avid Technology, Inc.'s CAPEX/Revenue showed almost no change from 2017 to 2020. It's average level of CAPEX/Revenue for the last three years was 1.9%.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is 4.9x. Net Debt / EBITDA dropped on 0.2x from 3.5x to 3.3x in 2020. Debt decreased on 8.4% while cash surged on 15.7%. During 2016-2020 Net Debt/EBITDA topped in 2017 at 5.6x and was declining since that time.
Avid Technology, Inc. has no short term refinancing risk: cash is higher than short term debt (739.1%).
Valuation and dividends
Avid Technology, Inc.'s trades at EV/EBITDA 22.7x and P/E 86.1x.
Management team
The company's CEO Jeffrey James Rosica "Jeff" has spent 3 years with the company. The company's CFO Kenneth Gayron "Ken" has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2020
Avid Technology, Inc. ($AVID) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 511.9 | 419.0 | 413.3 | 411.8 | 360.5 | -12.5% |
| Gross Profit | 332.7 | 242.1 | 239.2 | 249.1 | 228.3 | -8.3% |
| SG&A | 171.8 | 160.1 | 156.5 | 153.3 | 134.7 | -12.1% |
| EBITDA | 89.5 | 27.6 | 34.8 | 55.4 | 49.2 | -11.3% |
| Net Income | 48.2 | -13.6 | -10.7 | 7.6 | 11.1 | 45.5% |
Balance Sheet
|
|---|
| Cash | 44.9 | 57.2 | 56.1 | 69.1 | 79.9 | 15.7% |
| Short Term Debt | 5.0 | 5.9 | 1.4 | 37.2 | 10.8 | -70.9% |
| Long Term Debt | 188.8 | 204.5 | 220.6 | 227.2 | 231.2 | 1.8% |
Cash flow
|
|---|
| Capex | 11.0 | 7.9 | 9.9 | 7.2 | 5.7 | -20.8% |
Ratios
|
|---|
| Revenue growth | 1.3% | -18.2% | -1.4% | -0.4% | -12.5% | |
| EBITDA growth | 230.7% | -69.2% | 26.3% | 59.2% | -11.3% | |
|
|---|
| Gross Margin | 65.0% | 57.8% | 57.9% | 60.5% | 63.3% | 2.9% |
| EBITDA Margin | 17.5% | 6.6% | 8.4% | 13.5% | 13.6% | 0.2% |
| SG&A, % of revenue | 33.6% | 38.2% | 37.9% | 37.2% | 37.4% | 0.1% |
| Net Income Margin | 9.4% | -3.2% | -2.6% | 1.8% | 3.1% | 1.2% |
| CAPEX, % of revenue | 2.1% | 1.9% | 2.4% | 1.7% | 1.6% | -0.2% |
|
|---|
| ROIC | | | 252.4% | 42.1% | 30.0% | -12.1% |
| Net Debt/EBITDA | 1.7x | 5.6x | 4.8x | 3.5x | 3.3x | -0.2x |
Avid Technology, Inc. ($AVID) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 86 | 79 | 90 | 104 | | -16.3% | -19.7% | -3.2% | -10.3% |
| EBITDA | 4 | 13 | 22 | 15 | | -66.1% | 33.5% | 73.6% | -26.8% |
| Net Income | -6 | 2 | 8 | 7 | | - | - | 152.4% | -53.9% |
Balance Sheet
|
|---|
| Cash | 81 | 56 | 49 | 80 | | 46.7% | 9.2% | -6.0% | 15.7% |
| Short Term Debt | 38 | 9 | 10 | 11 | | 323.6% | -75.3% | -73.1% | -70.9% |
| Long Term Debt | 248 | 256 | 234 | 231 | | -1.4% | 10.6% | 2.2% | 1.8% |
Ratios
|
|---|
| Gross Margin | 61.5% | 65.0% | 64.4% | 62.7% | | 2.2% | 7.6% | 2.5% | -0.3% |
| EBITDA Margin | 5.0% | 16.1% | 24.7% | 14.3% | | -7.3% | 6.4% | 10.9% | -3.2% |
| Net Income Margin | -6.8% | 2.3% | 8.8% | 6.8% | | -6.6% | 13.2% | 5.4% | -6.4% |
Peers in Technology Hardware, Storage & Peripherals
Below you can find Avid Technology, Inc. benchmarking vs. other companies in Technology Hardware, Storage & Peripherals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Ionix Technology Inc ($IINX) | - | 246.0% | -5.8% | 92.3% | 66.8% |
| Veritec Inc ($VRTC) | - | -52.2% | 53.1% | -38.5% | 42.9% |
| Pure Storage, Inc. ($PSTG) | - | 67.9% | 38.6% | 32.7% | 20.9% |
| USA Technologies, Inc. ($USAT) | - | 34.5% | - | - | 12.9% |
| CPI Card Group Inc. ($PMTS) | - | -17.4% | 0.4% | 8.7% | 12.3% |
| |
|---|
| Median (20 companies) | 1.4% | 2.1% | 5.6% | -3.7% | -8.8% |
|---|
| Avid Technology, Inc. ($AVID) | - | -18.2% | -1.4% | -0.4% | -12.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Immersion Corporation ($IMMR) | 99.7% | 99.4% | 99.8% | 99.5% | 99.4% |
| Datasea Inc ($DTSS) | - | 39.3% | 54.4% | - | 89.7% |
| Pure Storage, Inc. ($PSTG) | 61.9% | 65.9% | 65.5% | 66.4% | 69.0% |
| Socket Mobile, Inc. ($SCKT) | 50.2% | 53.5% | 51.4% | 52.5% | 53.1% |
| Veritec Inc ($VRTC) | 52.6% | 19.9% | 50.4% | 25.0% | 52.1% |
| |
|---|
| Median (21 companies) | 38.5% | 38.9% | 38.3% | 32.7% | 37.4% |
|---|
| Avid Technology, Inc. ($AVID) | 65.0% | 57.8% | 57.9% | 60.5% | 63.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Apple Inc. ($AAPL) | 32.7% | 31.2% | 30.8% | 29.4% | 28.7% |
| CPI Card Group Inc. ($PMTS) | 14.9% | -0.0% | 9.0% | 15.2% | 17.9% |
| Immersion Corporation ($IMMR) | -25.1% | -127.0% | 48.6% | -50.4% | 17.4% |
| Western Digital Corporation ($WDC) | 12.5% | 21.4% | 27.5% | 11.5% | 11.7% |
| NCR Corporation ($NCR) | 14.4% | 16.0% | 8.1% | 15.6% | 11.4% |
| |
|---|
| Median (19 companies) | 3.8% | 3.5% | 7.9% | 7.7% | 7.6% |
|---|
| Avid Technology, Inc. ($AVID) | 17.5% | 6.6% | 8.4% | 13.5% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Datasea Inc ($DTSS) | - | 0.0% | 0.0% | - | 20.9% |
| Hewlett Packard Enterprise Company ($HPE) | 10.8% | 10.9% | 9.6% | 9.8% | 8.8% |
| Pure Storage, Inc. ($PSTG) | 8.9% | 10.4% | 6.3% | 7.4% | 5.3% |
| Stratasys, Ltd. ($SSYS) | 6.7% | 3.3% | 3.5% | 3.5% | 5.2% |
| Western Digital Corporation ($WDC) | 4.5% | 3.0% | 4.0% | 5.3% | 3.9% |
| |
|---|
| Median (19 companies) | 1.7% | 1.8% | 2.2% | 2.3% | 2.3% |
|---|
| Avid Technology, Inc. ($AVID) | 2.1% | 1.9% | 2.4% | 1.7% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| HP Inc. ($HPQ) | 15.8% | 60.8% | 72.9% | 116.0% | 109.2% |
| Apple Inc. ($AAPL) | 27.0% | 23.8% | 28.0% | 29.5% | 33.0% |
| CPI Card Group Inc. ($PMTS) | 12.8% | -9.3% | 2.7% | 15.4% | 20.5% |
| NCR Corporation ($NCR) | 13.9% | 16.3% | 4.6% | 14.3% | 5.5% |
| Crossroads Systems Inc ($CRSS) | -175.9% | -96.3% | - | - | 3.9% |
| |
|---|
| Median (21 companies) | -0.4% | 0.9% | 2.2% | 2.9% | 2.0% |
|---|
| Avid Technology, Inc. ($AVID) | - | - | 252.4% | 42.1% | 30.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Diebold Nixdorf Incorporated ($DBD) | - | 8.3x | - | 6.6x | 7.3x |
| CPI Card Group Inc. ($PMTS) | 5.8x | - | 12.4x | 7.2x | 5.2x |
| Hewlett Packard Enterprise Company ($HPE) | 0.4x | 1.2x | 1.6x | 2.6x | 5.2x |
| NCR Corporation ($NCR) | 2.7x | 2.3x | 5.2x | 3.3x | 4.8x |
| Western Digital Corporation ($WDC) | 5.5x | 1.7x | 1.1x | 3.7x | 3.5x |
| |
|---|
| Median (11 companies) | 0.1x | 0.2x | 0.2x | 1.3x | 2.7x |
|---|
| Avid Technology, Inc. ($AVID) | 1.7x | 5.6x | 4.8x | 3.5x | 3.3x |
