Shares of Avid Technology (NASDAQ:AVID) have plunged today, down by 32% as of 2 p.m. EDT, after the company reported disappointing second-quarter earnings results. The digital media solutions specialist also elaborated on its full-year outlook.
Revenue in the second quarter was essentially flat at $98.7 million, missing the consensus estimate of $101.3 million in sales. Avid's guidance had called for $97 million to $105 million in Q2 sales. E-commerce revenue increased 19% and recurring revenue accounted for 58% of sales on a trailing-12-month basis. That all translated into adjusted earnings per share of $0.02, shy of the $0.04 per share in adjusted profits that analysts were expecting.
"Despite some slight revenue headwinds in the second quarter related to our supply chain transition, I am pleased with our overall performance in the first half of 2019 as our results are in line with our plans," CEO Jeff Rosica said in a statement. On the conference call, Rosica added that Avid was unable to fill some orders for audio and video hardware due to the transition, but is now ramping up production at its new supply chain partner and that relationship is expected to yield cost savings.
Avid's guidance calls for revenue of $101 million to $109 million in the third quarter, which should result in $13.5 million to $18.5 million in adjusted EBITDA. The company also reaffirmed its full-year 2019 forecast, which calls for $420 million to $430 million in sales and $60 million to $65 million in adjusted EBITDA. Free cash flow is expected to be in the range of $12 million to $17 million. Avid also issued guidance for adjusted earnings per share in 2019, which should be $0.60 to $0.72.