Image source: Avid.

What happened

Shares of audio and video production technology company Avid Technology (NASDAQ:AVID) have gotten clobbered today, down by 24% as of 12:00 p.m. EST, after the company reported third-quarter earnings.

So what

Revenue in the third quarter came in at $119 million, which was slightly below the company's guidance and down year-over-year "due to the transition of the storage product and higher proportion of recurring revenue bookings." Adjusted gross margin fell slightly to 65.1%, and GAAP net income was $9.1 million, or $0.23 per share. The company now has over 50,000 cloud-enabled paying subscribers and 40,000 enterprise users of Avid's MediaCentral platform.

Now what

Investors were also disappointed in Avid's guidance, which was reduced due to the aforementioned storage product transition as well as uncertainty in the enterprise market. Bookings in the fourth quarter are now expected to be $107 million to $137 million, which should bring full-year bookings to $391 million to $421 million. In August, full-year bookings were expected to be $500 million to $536 million. However, Avid is improving its cost structure, and adjusted operating expenses in the fourth quarter should be just $56 million to $62 million.