New Avid CEO: Company to Further ‘Sharpen’ MediaCentral Execution
Avid will continue to “sharpen execution” on its MediaCentral cloud-enabled media workflow platform as part of its 2018 strategy, according to new company CEO Jeff Rosica.
“We will be making some minor adjustments to our strategic priorities, but not to our overall strategic plan for achieving growth, increasing our profitability and generating better free cash flow,” he said March 15 on an earnings call for Avid’s fourth quarter and fiscal year (ended Dec. 31).
Rosica, speaking on an earnings call for the first time as Avid CEO, will communicate “further specifics on these adjustments throughout the coming quarters,” he said.
But he told analysts: “My initial points of emphasis I want to share with you. First of all, in line with continuing our two-prong approach to grow enterprise and individual customers, you’ll continue to see Avid’s sharpen execution on the MediaCentral platform and our product strategy through continued innovation and an enterprise-wide and enterprise-level customer delivery.”
Although Avid executives have historically, during its earnings calls, named some of the latest companies that it’s signed MediaCentral deals with, CFO Brian Agle told analysts during the Q&A that he and Rosica decided to slightly change that policy. “We will name the deals at the appropriate time, but I’m not going to rush into naming them [on] the earnings calls, because often we’re working through with that customer the timing and when we’re going to deploy,” Agle said, adding he also didn’t want to “tip my hand to my competition” until it was “the right time to announce” such deals.
Avid this time said only that it “signed several large multi-year commercial agreements” in Q4 and that, as of Dec. 31, total licenses for the MediaCentral platform reached about 53,700, up 26% from a year earlier.
The company, meanwhile, is also planning to “augment our marketing efforts and our product development to drive even more uptake among individual creative users for our tools and solutions,” Rosica said on the call.
During the past year, the company “made important progress” and is “well ahead of our peers in delivering a cloud-ready platform that can meet the needs of our customers and users today,” he told analysts.
Avid’s planned “adjustments will focus on achieving optimal platform performance with the prioritization of our projects that offer near- to medium-term returns on those related investments,” he said, adding: “We’re also taking the needed steps to dramatically improve on our hardware strategy and to optimize our global supply chain, so we can deliver greater speed and flexibility, reduce costs and improve product quality.”
Although Avid was only three months into its new strategic go-to-market alliances with Hong Kong-based Digital Media Technology (DMT) and New Digital Technology Holdings (NDT), he said: “These are two organizations that have each got 20 years of experience reselling Avid. I will tell you that initial execution and results from these expanded partnerships are encouraging.”
The company is also “looking to more and more move our mix” from hardware “to software, where we’ll have greater margins,” Agle told analysts.
Avid’s Q4 digital sales, mainly targeted at individual creative professional users, grew 24% from a year ago, while software subscriptions grew 54%, Rosica said. The company is “approaching nearly 100,000 active cloud enabled subscriptions with these users, many of which are new to Avid,” he said.
Total fourth-quarter Avid revenue slipped to $107.3 million from $115.3 million a year earlier.
The company is gearing up for its fifth Avid Connect conference (April 6-8) and NAB (April 7-12), both in Las Vegas, Dean Ridlon, VP of investor relations, noted on the call. Its agenda for Avid Connect 2018 is “larger than ever and we’ll focus on helping attendees to interact and learn directly from their creative technical and business peers who are at the forefront of industry innovation and transformation,” he said. At NAB, Avid will “demonstrate our latest wave of new products which have been influenced through our deep commitment to Avid’s global customer and user community,” he said.