The mood of optimism pervading the industry at the moment is reflected in the first batch of financial results to be posted after Q1, with both Avid and Optibase showing a year-on-year rise on 2006 figures. However Avid's CEO David Krall remains cautious, writes Andy Stout.
Avid has reported revenues of $218.9 million for the three-month period ended March 31, 2007 compared to $218.1 million for the same period in 2006. "Although we're pleased that our bottom-line results were at the high end of our expectations due to careful cost controls and favourable one-time tax adjustments, sustained, profitable growth is our main objective," said David Krall, Avid's president and chief executive officer.
"In our professional video business, we believe that growth will come with continued focus on being at the core of our customers' businesses. In the first quarter, our overall bookings were up 9% from the same period last year, however, there was a noticeable drop-off in our run-rate business, despite the introduction of several new products late in the quarter.
"In discussions with our installed base, it has become clear that they are looking for us to provide them with the ability to migrate to our new solutions in stages, rather than having to do a wholesale upgrade all at one time. Therefore, in response to that feedback, we will be diverting some engineering resources to build this migration path. While this will negatively impact our ability to recognize incremental revenue out of our backlog by one to two quarters, it should have a positive impact on our run-rate business - and it's the best long-term strategy to meet the needs of our video customers."
Avid also announced that its Board of Directors approved a program to repurchase up to $100 million of stock through transactions on the open market, in block trades or otherwise.
Optibase's profits, meanwhile, jumped. Revenues for the first quarter ended March 31, 2007 were $5.6 million compared with $4 million for the first quarter of 2006 and with $5.4 million for the fourth quarter of 2006. Tom Wyler, Chairman and Acting Chief Executive Officer of Optibase, said, "We are very pleased with the continued progress we saw in the first quarter. We saw an uptrend in revenues from the fourth quarter, and a year-over-year increase of 40%. While still early in the year, we are seeing greater clarity in the market.
"In addition to several important customer wins during the first quarter, we are making significant strides toward our broader objective of advancing key strategic relationships including system integrator partnerships and OEM agreements. We believe that these catalysts, and our ability to capitalise on the opportunities that exist in the sector, position Optibase to continue growing as the market continues to mature.