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AVID's Latest TV & Media Subscription Service to Aid Prospect

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Avid Technology (AVID - Free Report) is expanding its portfolio with the launch of next-gen Maestro, a new subscription-based software solution for real-time broadcast television graphics.

The latest Maestro software can be deployed on commercial off-the-shelf hardware or existing Avid Maestro | Engine hardware. It can be used for any live production workflow, whether it’s news, sports, current affairs, or special events.

The next-gen Maestro is backward compatible, which means it supports content created in earlier versions of Maestro. The solution is closely integrated with Avid’s solution portfolio, including the MediaCentral platform, which enables production teams to easily incorporate graphics into their workflows.

Subscription-Based Solutions & Expanding Partner Base Aids Avid

Avid’s shares have outperformed the Zacks Computer and Technology sector year to date. The company’s shares have declined 30.5% compared with the sector’s decline of 31.9% year to date.

The outperformance can be attributed to strong subscription revenue growth and an expanding partner base that includes the likes of Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) .

Avid has been focusing on launching subscription-based solutions in recent times. The company launched NEXIS Flex with its virtual file system software as a subscription in second-quarter 2022, which gained rapid adoption instantly.

The NEXIS virtual file system runs on either Avid’s NEXIS storage appliances, or on its NEXIS cloud storage to deliver the same media storage performance whether using on-premises, cloud-based storage, or both.

Subscription revenues in the last concluded quarter (second-quarter 2022 that ended Jun 30) jumped 58.7% year over year to $34.1 million. Subscription and Maintenance revenues were $61.9 million, up 19.2% year over year. Moreover, subscription annual recurring revenues were $121.2 million, up 45.8% year over year.

Avid benefited from strong demand for the MediaCentral platform. The company added 3800 MediaCentral flex subscriptions in the second quarter of 2022.

Meanwhile, Avid has partnered with Amazon studios to help Amazon’s content production in the cloud with software such as Media Composer, Nexis storage and media control platform.

Avid is also benefiting from its multi-year agreement with Microsoft, which includes technology collaboration, co-development of cloud bases solutions and the launch of several software-as-a-service offerings. This partnership is helping Avid to create new technologies, which are attracting new users to many of its subscription-based product offerings.

Avid expects third-quarter 2022 subscription and maintenance revenues between $67 million and $70 million. For 2022, subscription and maintenance revenues are expected between $266 million and $274 million.

For 2022, Avid expects revenues between $425 million and $455 million. Earnings are expected between $1.37 and $1.53 per share.

The Zacks Consensus Estimate for 2022 revenues is currently pegged at $435 million, indicating 6.11% growth from the figure reported in 2021. Moreover, the consensus mark for 2022 earnings has been steady over the past 30 days at $1.44 per share.

Zacks Rank & Stock to Consider

Avid currently has a Zacks Rank #3 (Hold).

Absolute Software (ABST - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present, is a stock to consider in the same sector. You can see the complete list of today’s Zacks #1 Rank stocks here.

Absolute shares have gained 16.5% in the year-to-date period. The Zacks Consensus Estimate for ABST’s fiscal 2023 earnings has moved 487.5% higher over the past 30 days to 47 cents per share.

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