Revenue during the quarter dropped 13.40 percent to $119.02 million from $137.44 million in the previous year period. Gross margin for the quarter contracted 55 basis points over the previous year period to 63.34 percent. Total expenses were 92.85 percent of quarterly revenues, up from 89.52 percent for the same period last year. That has resulted in a contraction of 334 basis points in operating margin to 7.15 percent.

Operating income for the quarter was $8.50 million, compared with $14.40 million in the previous year period.

However, the adjusted operating income for the quarter stood at $19.10 million compared to $21.78 million in the prior year period. At the same time, adjusted operating margin improved 20 basis points in the quarter to 16.05 percent from 15.85 percent in the last year period.

"We are pleased that our non-GAAP Operating Expenses, Adjusted EBITDA and Adjusted Free Cash Flow were in-line with guidance and that growth of our cloud-enabled subscribers and enterprise users on the MediaCentral platform continues to be very robust," said Louis Hernandez, Jr, chairman, president, and chief executive officer of Avid. "Our Bookings and non-GAAP Revenue fell short of guidance due primarily to the transition of the storage product line, as some existing enterprise clients deferred normal upgrade and renewal decisions and new customers postponed investments until the release of functionality targeted to the enterprise market. We believe the enterprise-class functionality recently rolled out for NEXIS will set the course for improved growth, but not enough to make up the third quarter shortfall. In light of these factors and continued volatility in the enterprise market, we are more heavily risk-adjusting the timing of certain enterprise deals and reducing our financial guidance for full-year 2016."

For the fourth-quarter 2016, Avid Technology, Inc. forecasts adjusted revenue to be in the range of $105 million to $120 million.

For fiscal year 2016, Avid Technology, Inc. forecasts adjusted revenue to be in the range of $502 million to $517 million.

The company has spent $14.24 million cash to meet investing activities during the nine month period as against cash outgo of $78.70 million in the last year period.

Cash flow from financing activities was $92.59 million for the nine month period, down 17.88 percent or $20.16 million, when compared with the last year period.

Cash and cash equivalents stood at $47.72 million as on Sep. 30, 2016, up 117.09 percent or $25.74 million from $21.98 million on Sep. 30, 2015.

Working capital remains negative
Working capital of Avid Technology, Inc. was negative $91.65 million on Sep. 30, 2016 compared with negative $158.42 million on Sep. 30, 2015. Current ratio was at 0.63 as on Sep. 30, 2016, up from 0.49 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 32 days for the quarter from 55 days for the last year period. Days sales outstanding were almost stable at 37 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 59 days for the quarter compared with 86 days for the previous year period. At the same time, days payable outstanding went down to 64 days for the quarter from 69 for the same period last year.