We believe in art, culture, in the power of creativity. For us, this business is more than a business. Our fantasies, our realities, our most important moments are made by you. We believe in our artists, in our future artists, in the future of our industry, in the future of media. We believe innovation drives evolution. That access drives inspiration. That your life's work is the thing that colors our perceptions and changes our world. We believe that your work moves us all forward, so we work to keep you moving. At Avid, we make many products, but we only do one thing: maximize the medium of amazing makers. Every minute of every day, we are powering greater creators. Good morning, or good afternoon, and welcome to Avid's 2021 Investor Day. I want to thank you all for attending today. We wish we could be meeting with you in person, but we're very pleased that you can join us virtually. It's great to see the increased attendance from our last Investor Day we held in 2019. Before we bring out the speakers, we need to cover a few things. During today's session, management will reference certain non-GAAP financial metrics and operational metrics. In accordance with Regulation G, the appendix to this presentation contains reconciliations of the most closely associated GAAP financial information to the non-GAAP measures, and also definitions for the operational metrics used in this presentation. In addition, certain statements made during today's presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our comments and answers to your questions on this call, as well as the accompanying slide deck, may include statements that are forward-looking and that pertain to future results or outcomes. Actual future results or occurrences may differ materially from these forward-looking statements. For more information, including a discussion of some of the key risks and uncertainties associated with these forward-looking statements, please see our earnings press releases and our most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. During today's session, we have several of Avid's executives here to provide an in-depth overview of our current performance and plans for driving additional value creation. We have designated time at the end of the day for Q&A. We will be taking questions through the Q&A window on your screen. We will do our best to answer as many of the questions as possible that come in from the attendees. Now, without further ado, let me introduce Jeff Rosica, our CEO and President, to start the day. Great. Thanks Whit. Thank you to everyone for joining us today and taking time to hopefully better understand Avid and why this management team is excited about the opportunity ahead of us. We look forward to sharing quite a bit of detail on our company strategy, our transformation, our business plans and our financial outlook. Let's get started. For those who may not know or be too familiar with us, let me take a few moments to highlight who Avid Technology is and what we're all about. While we're not really a household name, most people across the globe experience the amazing work that Avid tools and solutions help create. If you enjoy the movies, watch TV, listen to music, you're seeing or hearing our technology at work every day. In fact, we're quite proud of the fact that many of the top award-winning artists and media creators, as well as the leading studios, streaming providers, and major broadcasters around the globe, rely heavily on Avid to create their media content. We like to say that Avid literally powers the media and entertainment industry. While I won't dive into the key financial details here, I think this infographic helps frame up some of the key metrics that show the building momentum and strong performance we've been delivering, largely driven by the strong growth of our subscription business. It also reflects the positive evolution of the company's financials and key ratios over the past couple of quarters. Or excuse me, a couple of years. As important examples, today's software is nearing around 50% of the company's total revenue, and 75% of overall revenue is now recurring. I hope you'll indulge me a bit. I'd like to take and highlight a little bit about why we believe Avid is such an attractive investment opportunity. First, we're a market leader and innovator and technology provider with a loyal and sticky customer base with media creators all over the globe. We're also seeing big shifts in our markets that are driving technology refreshes that we think play well into Avid's unique strengths, offering us desirable opportunities. Third, we're in a period of accelerating subscription growth, driven by the expected continued growth from our creative user base, but also new growth coming from our enterprise customers, both from within media but also from the broader non-media segments. We're also in the very early stages of the transition to SaaS and cloud for the media industry, with Avid holding an early mover advantage in this space and leading both creatives and enterprises into the cloud. There is also an increasing demand for better interoperability and improved workflows between audio and video, which Avid is uniquely positioned to capitalize on, that we believe opens up much wider opportunities in a rapidly expanding market of tens of millions of creative pros. Finally, Avid is on a positive performance trajectory, and we're sharply focused on delivering continued improvements in revenue growth, profitability, and free cash flow. As you can see from the slide, Avid's tools and solutions empower a wide range of individuals, creative teams, and enterprise customers to create and manage media content. We serve several media entertainment segments, including broadcast and cable, TV and film production, and music, as well as we're increasingly targeting adjacent markets such as education and pro video. We win with these customers because of our solutions focus, our unique product differentiation, and the strong IP and technology innovation behind it all. From a product perspective, Avid's core software and solution offering are industry trusted and relied on every day by the who's who in media across the globe. Our offering can be put simply into three main buckets: the industry's preferred suite of creative software tools for creating high-quality film, television, and music content. Secondly, we've got the media's leading cloud-enabled platform and enterprise software suite, specifically designed and built for media workflows. Finally, we also have a portfolio of tightly integrated hardware and software solutions that offer advanced capabilities and help to uniquely position our overall solution offering. Today, we're seeing some really important market and business drivers that are creating good opportunities for Avid, including a very strong demand for more high-quality media content as a growth in distribution outlets, especially among the highly competitive streaming services, is driving demands for continuous, fresh, and original content. Democratization of media creation is unlocking opportunities for artists and creatives to get their work seen or heard. With far less barriers today for them to get access to the tools that they need that are easy to use. As I mentioned earlier, these are market shifts that are happening today that are driving technology refreshes and shaping key investments for most of our customers. These include lessons we've learned during COVID that has increased the demands for supporting distributed teams and people that can work from anywhere, to the increasing demand for SaaS and cloud solutions, to the trend for more immersive audio experiences like Dolby Atmos, which was further accelerated by the recent Apple news. All these drivers play well into Avid's strategy. Also, as I mentioned before, we are pursuing as part of our strategy, several broader market opportunities that will significantly expand the overall total market for Avid. These include going after a wider swath of the growing music creation segments, a more aggressive pursuit of the mid-tier pro video market, and expanding into the wider content and storage category through technology innovation and some go-to-market moves. These moves can more than double the TAM of the company. It could position us for better growth prospects and expand the potential user base we could attract by almost 10x. While we've experienced tremendous growth around our subscription business for some time now, we do anticipate this trend being sustained as more offerings come into play. First, we will continue to have a really heavy focus on driving the continued growth of our creative tool subscriptions. Secondly, the recent launch of enterprise subscriptions is now providing an additional growth driver for us. We're just at the beginning stages of a new growth engine with our developing SaaS and cloud offerings. This is why we remain bullish around the subscription growth opportunities that are still ahead of us. As we announced a few months back, we're evolving our organization to support the next phase of our growth. First, we sharpened focus with a new structure organized around three business solution areas. We've also added new leadership to accelerate innovation and to drive subscription, SaaS, and cloud growth. We're evolving our go-to-market and our commercial structure, and we're aligning the organization to help improve focus on the customer experience and driving the ultimate success of our customers and our users with Avid solutions. Let me take a moment to highlight a bit more about our recent move to align around a solutions-focused business structure, which was done to help drive the next phase of Avid's strategic growth. We believe this realigned structure brings us improved organizational focus to help drive even better strategy execution and continued business performance improvement across each area. We've organized around three business areas, each led by experienced senior executives. These are organized around the following core solution areas: Audio and Music Solutions, Video, Post & Storage Solutions, and our Media Platform and Cloud Solutions. Shortly, you're going to get a chance to meet each of these general managers as they will be presenting their businesses to you. We also announced several months back the appointment of Kevin Riley as our new CTO, who you will also be able to meet shortly. Kevin is an experienced senior technology leader who brings us a unique set of skills and experiences to help us navigate our SaaS and cloud innovation journey. Under the business GMs and Kevin's direction, we are making key technology investments to drive even greater innovation in support of our strategic growth plans. Part of our innovation focus is to accelerate our journey to the cloud, as I mentioned, and to further strengthen our market position in leading the media industry's transition to the cloud. As well, key investments in technology are being targeted to help enhance value creation, including supporting our Digital Transformation Initiative, enhancing our subscription licensing capabilities, building a unified cloud and SaaS platform, and improving our overall customer experience. We're also highly focused on continuing to evolve our commercial strategies and building an even more effective and more efficient go-to-market to better enable subscription and SaaS business across all routes to market, including our direct and channel and e-commerce. You'll get a chance today to hear from Tom Cordiner, our Chief Revenue Officer, as he lays out our achievements and continued focus in this area, including how we're also leveraging our global scale and our commercial engine to support the continued building of recurring revenues. Now, as I mentioned before, driving value through an improved customer experience is also a major priority for the company, with focus around key areas such as our digital transformation, implementing a more modern and streamlined UX and UI across our portfolio, and creating an even more efficient and effective customer care unit. Our Chief Customer Experience Officer and the head of our customer teams, Kathy-Anne McManus, will be presenting more on this a bit later. Now, another quite important focus area for the company is to continue our journey of improving the overall business operations, building an even more efficient business that is better prepared to drive growth. We started 2021 with a streamlined business positioned to deliver profitable growth, and we'll continue our sharp management focus on keeping the positive trajectory and delivering improving profitability and free cash flow, which Ken Gayron, our CFO, will share more on this a bit later. Let me wrap up my presentation here by sharing with you the high-level vision for Avid in 2025 that we laid out for our team as part of our strategic plan. First, we see Avid being predominantly a software subscription and SaaS business by 2025, if not sooner. Over the coming years, we plan to stake out a much larger and stronger competitive position in the very attractive music creation space, leveraging our strong brand and position in the high-end of the music market. We will continue to protect our leadership in the high-end TV and film entertainment space, as well as the news and sports production segments, but we are also focused on expanding our monetization of these markets. Additionally, we plan to establish a strong competitive position in the mid-market pro video content creation space, giving us another attractive and potentially lucrative op growth opportunity, all while ensuring that Avid is recognized by the next-gen of content creators as a top brand and a leading set of creative tools. As part of this strategic vision, we established a five-year financial plan with aspirational financial goals by 2025 that we will be laser-focused on, including the following. We're targeting $375 million or more in subscription and SaaS revenue by 2025, representing, at that point, a majority of company revenue. We'd like to further expand our recurring revenue base to be greater than 80% of our total revenues by then. We're targeting adjusted EBITDA margins of at least 27% and free cash flow conversion of at least 80% by 2025. While these are long-term financial aspirations, we believe these do present realizable targets for us. I hope that all I shared with you here today gives you a better understanding of my confidence in the direction of the company and the opportunity that lays in front of us. I've leveraged my deep knowledge and my 35 years experience in the media industry, along with my real intimate knowledge of Avid that I've gained over the past several years with the company, to help chart what I believe is a positive strategic course for the company and will drive long and strong value creation. Up next is our CTO, Kevin Riley. Before he speaks, let's take a look at this video from one of our partners in the U.K., Jigsaw24, and listen to what they are seeing around the uptake of cloud-based solutions and specifically the early response to Avid Edit On Demand, which you'll hear about shortly. Hello there. My name's Rupert Watson. I'm the sales director for media and entertainment at Jigsaw24 in the U.K. Jigsaw24 are a large reseller based in Nottingham in the U.K., but with offices all over the U.K., and we primarily focus on broadcasters, high-end post-production companies, and all of those kind of traditional Avid customers. Prior to the pandemic, a post-production company would, generally speaking, have been a physical location. It would be in a center of a large city, and it would be in a building that had been rented for a period of time and been equipped with computers and software and so on, which there would be a limited number of them. Let's say I bought myself a nice Georgian townhouse in the center of Soho. It's got 12 edit suites. It's got a machine room with all my kit in. I've got a massive rent to cover. I'm massively invested in this, and I need some customers who are very happy to pay decent rates to come and physically be in my building to take advantage of what I've invested in. Post-pandemic, all bets are off. You've got a situation where your customers don't necessarily want to come into central London. They certainly don't want to sit in cramped rooms with lots of people with whom they may or may not want to be in close proximity. The technology is allowing the customers to act upon the realization they've made, which is fundamentally that they missed an enormous trick, that their entire customer base are across the entire country. You've got the guys who run London post-production companies realizing that they could all this time have been selling their services to people in Leeds and Glasgow and all over the U.K. rather than insisting on them coming to a physical location in central London in order to do what they need to do. Armed with that realization, there's been this sort of freeing effect. With Edit On Demand as a technology which is now maturing at just the right time, you've got a situation where previously you'd have to make an enormous investment in real estate, in personnel, in equipment, and rinse that investment pretty hard to get a return. An opportunity to use EOD to service that demand whilst not exposing their business to any more risk is hugely attractive. Riley. I'm the CTO of Avid. Happy to be here for my first Investor Day and be able to talk to you about our technology strategy in support of our strategic business initiatives and how we're fueling value creation here at Avid. Let's jump in. I'd like to first canvas our high runner technology and innovation focus areas. As you look at this slide and look at this outer ring, you'll see that where we are investing spans and touches on our entire product portfolio. Covers all of our business areas. The spectrum ranges from our core technology domains to leveraging new disruptive silicon and leveraging cloud as a go-to-market path and a place for us to run and host our offers. Embedded within these domains, we have breakout opportunities underfoot in the areas of security, AI, modernizing our platforms and UX so that we can make sure that we're capturing the next generation and new Avid customers as we move forward. As we work on all of this technology, we're constantly looking at it through a lens of how we operationalize it through subscription offers, SaaS offers, and supporting a work-from-anywhere model, which has become the new norm. I pivot off of this slide, what I'd like to leave you with is that Avid's innovation engine is expansive and strong and well-funded. A big part of our technology strategy is taking the industry to the cloud, and we feel that we are ideally positioned to do so and leading. Before we get to why Avid, I think it's important to first think about why the cloud. Why is the time now for cloud? We've gotten very strong industry and customer feedback that a new operating model is needed. Our customers in the industry is operating on compressed timelines, moving to highly distributed production environments, leveraging virtual collaboration, and operating under increasing budget pressures. These drivers all require on-demand infrastructure that's real time with global reach that only the cloud can satisfy. We were on this journey towards cloud, and we've been on this journey for a while now, but COVID has accelerated us over the hump and into a new world where this now is the new norm. Another motivating factor for moving to the cloud is artificial intelligence. At Avid, we believe this is going to play a significant role in media and entertainment as we move forward, and I'll elaborate on that a little later. The key point here is that artificial intelligence, big data, machine learning, lives in the cloud. To harness the upside and the potential of this technology, we really need to move to the cloud. Lastly, production complexity is increasing with a velocity that only cloud can match, and cloud scale can match with the compute, storage, and networking infrastructure that it provides. Why Avid? Why are we ideally positioned to take the industry to the cloud? The first is that we have, what Jeff referenced earlier, the sticky relationships with our customers. Most importantly, the trust in our customers so that we can partner with them to help them on their journey to cloud. I have found in the past, in my history, in other market sectors, that this is a highly collaborative journey. Having the customer base, the loyalty, and the trust is central to that partnership in taking our customers there. We have unique foundational IP and assets that we are directly leveraging to build our offers and solutions as we move to the cloud. This has allowed us to start first, and so far, we have already introduced software as a service for creators and production. We've introduced software as a service for collaboration and professional networking. We've taken several large enterprises into their private cloud infrastructure for asset management and storage. The time is now to capitalize on the move to the cloud. Avid started in the pole position, and we are leading. Leading is not enough. We have an opportunity, a unique opportunity here at Avid, to accelerate the journey and move the industry past the tipping point of early adoption to hyperscale adoption and production in the cloud. We do this by really focusing in on two key areas. The first is security. It's an essential enabler because it enables trust in the cloud. When we say security at Avid, we really focus along three main dimensions. Identity and access management to the systems that manipulate media, ensuring the provenance and authenticity of the media itself, and encrypting media and metadata when it's at rest and in flight. An important point to recognize is that the key assets that need to be secured are the media and metadata. They reside on Avid solutions today, which makes us uniquely positioned to take advantage of security to unlock and enable trust as our customers move to the cloud. Another key point to recognize is that we are well established with large enterprises in our industry, and this is where security is most valued and is in high demand. We have really cut our teeth over the last year, partnering with these large enterprises during COVID-19. We partnered with them to help take their entire workforces remote. We partnered closely with the end customers and departments that we deploy our solutions into. More importantly, we partnered with the CISOs and the IT organizations and became a trusted security partner to these enterprises through COVID-19 as we went remote and distributed with them. A big part of our strategy is to invest and monetize security with new capabilities, a series of new capabilities in our offers, and also entirely new capabilities that we can monetize independently as security as a service on top of our offers. The other key part that we think is going to accelerate us towards the tipping point is really unlocking AI and data analytics for the media and entertainment industry. Why does this matter? AI is central to fueling things like automation, smart assist for creators and producers, smart indexing and management of assets. Artificial intelligence has moved from the academic world, the scientific world, into a world where there are real, valuable, and more importantly, monetizable use cases with big data analytics and artificial intelligence. An important point to recognize is that Avid is the gatekeeper of the data that fuels artificial intelligence and big data, which puts us in a perfect position to take advantage of this. As I mentioned earlier, artificial intelligence lives in the cloud. If we get this right and we unlock AI and big data for the industry, it creates pull towards the cloud. In a similar way that security reduces the barrier to move by creating trust, artificial intelligence, big data analytics creates pull towards the cloud. Our strategy is focused on two fronts as it relates to AI and big data. The first is we're working on our own innovative technology in the areas of compression, smart assist, and media indexing. We are also investigating and researching how we build and deploy a framework in the industry to enable an ecosystem of artificial intelligence plugins and use cases for the broader industry. We do this by leveraging our industry know-how and our trust with the industry and what we've done in the past with our plugin frameworks for audio and video. The real opportunity here for us is to marry these two focus areas with our core innovation engine, our foundational cloud assets, and our Digital Transformation that we're driving in our enterprise that I'll speak to shortly, to create this synergy for us to accelerate the industry to the cloud and really create a new SaaS and subscription trajectory for the company. I've been talking about our externally focused investments on products, solutions, and offers. I'll spend a moment here to talk about our internal investments on the foundational components in support of value creation, and more specifically in support of value creation around our subscription and SaaS initiatives. The first is our Digital Transformation Initiative, which is really a complete rewire of our enterprise stack. I'll talk about the technology aspects briefly while my colleague, Kathy-Anne McManus, will talk about the customer experience and the customer journey improvements that we're driving as part of this program. Within DTI, the high level theme here is that we are rewiring to transact digital business at machine speed and machine scale. We are optimizing our business with a complete monetization of our enterprise stack. When all is said and done, we will have reduced our core systems by 45% and increased our order to cash time to a target of 50% reduction. We're going to expand our go-to-market by completely rewiring and rebuilding our e-commerce platforms, our web portals, our marketplaces, our partner portals to operate at the scale of the business that we are driving and to be highly automated in doing so. This will accelerate and increase our digital go-to-market strategy. Underneath that, we will bake in a highly automated, modernized configuration, pricing, and quoting engine that allows us to do it in a highly automated way so that we can quote faster to our customers and close business faster, and just as important, do it in a highly consistent way across all of our go-to-market paths so that we're maximizing our profitability. We wrap all of this with business insights and key business KPIs with 360-degree views of our customers on top of our products so that we can measure our business, we can assess our business, and we can tune and optimize it as we go. The second foundational pillar is our subscription licensing investment. The key theme here, key takeaway here is that we are focused on investing towards frictionless, self-serve onboarding of our customers and upsell of our customers so that we can accelerate our time to revenue. It's all about removing friction and accelerating our time to revenue. We're expanding our subscription offers, moving to things like teams subscriptions, multi-year subscriptions, offering subscriptions to new products, increasing our business aperture for our subscription offer. Lastly, we're completely revamping our installation processes, where we're going to reduce the number of steps that a user sees by 2/3. We're going to reduce our installation times for our products by 50%, minimizing the time to run, maximizing our customer satisfaction. The third foundational pillar of our internal investment is around our cloud platforms. It's really about creating a standard set of services and components that support our offers and the deployments of our offers so that we can get them to market faster. A common platform for deployment allows us to bring offers to market more consistently and in an accelerated way that allows us to minimize our time to revenue. Having a cloud platform that supports our offers that's always on-demand and always available, it basically delivers negligible setup time for our customers, which allows them to onboard new users and it allows them to expand their business with us much quicker than we have been able to do in the past. Being able to deploy our products on a modern cloud platform allows us to drive superior economics so that we maximize our profitability as we move forward and grow our cloud and SaaS business. These are just the three high runners of how we are rewiring and investing in technology internally at Avid in support of value creation. I'll pop the stack up for a second and really talk about how I see the total opportunity and how I evaluate the total opportunity for Avid. I like to look at points in time where there's a market or business inflection point that we can capitalize on, and I believe that we are at this point in time now. Our business is shifting to demand mobile, on-demand, secure, simplified user experiences. We're in the middle of a fundamental business shift. Parallel to that, we are seeing disruptive new technologies come to market in the areas of silicon, cloud, AI, big data, automation technologies. These technology shifts and business shifts are going to intersect to create incredible new user experiences. That's the opportunity, but it's not enough to win. To be able to take advantage of that opportunity, you need to be in a position of industry leadership. You need a pervasive customer base. You need loyalty and trust. You need a strong innovation engine and foundational components. We are at this point in time where we are intersecting with these three key components, and Avid is uniquely positioned, hitting on all three of these to take advantage of this inflection point. These windows open and close very quickly, and companies need to be opportunistic and be perfectly positioned to take advantage of it, and I really believe that Avid is at that point. It's interesting, I built a draft of this slide before I decided to join Avid six months ago. This is the exact decision process that I went through when I was thinking about the opportunity, and it's what has me incredibly excited about what is in front of us. I am very confident that we are at this key inflection point. It's the right time and the right place for a company like Avid to shift the industry, accelerate growth, and create value. With that, I will hand off to some of my colleagues, and they are going to detail some of the manifestations of this strategy and some of the specifics of it. The first person that I'm going to hand off to is going to be Dana Ruzicka. He's the GM of our audio and music products. Before I do, we're going to roll a really cool video that shows some of these products in action and what they're capable of. Thank you for the time. Hi, I'm Dana Ruzicka, General Manager of Avid Audio Music Solutions, and I'm really excited to be here today to share the opportunity we see before us in the audio space. Let's jump right in. In audio, Avid enjoys a strong position in professional audio with significant room for growth in both category expansion and new customer acquisition. Our main product focus is on software subscription of our creative tools. This is Pro Tools and Sibelius, along with our integrated solutions, including I/O acceleration, consoles, and control surfaces. We've received the highest possible industry recognition with both a Grammy and an Oscar for technical achievement and dozens of other top industry awards. We're used by the industry's top professionals and artists across three main segments, music creation, audio post, and live sound, with strong brand affinity with top-tier artists in every field and genre. Our total addressable market is about $1.7 billion, and we're about 8%-9% share, and the overall market's growing at about 5%. Our focus is on the sub-segment of software subscription, which is growing much faster. Over the past several years, we've been riding a wave of innovation that's accelerating moving forward with major new product introductions and releases across our entire line. A few highlights include Pro Tools | Carbon, which we launched in Q4 2020, which brings the power of our higher-end integrated systems to a whole new generation of users, and it's off to a great start in the market. Our recent Milan and VENUE 7 release, which brings leading-edge connectivity and software capability to our live sound users. Continuous enhancements, of course, across our flagship Pro Tools and Sibelius subscription offerings, with new features and capabilities rolling out every other month. New mobile apps like Avid Control, which literally gives you the ability to control your entire studio from your mobile phone. AvidPlay. This is a publishing service that we launched early last year that allows our users to easily publish their finished songs and soundtracks to Apple Music, Spotify, Tidal, and over 150 other streaming services. We're actually the only publishing service that enables independent artists to publish their tracks in Dolby Atmos music format for streaming playback, right from within Pro Tools. Now, the core of our growth engine is Pro Tools software subscription, where we're experiencing accelerating momentum. With nearly 2.8 million first downloads and 2 million Avid Link users, we have a healthy and growing new customer acquisition engine. These are our freemium products that allow new users to experiment with our tools and then ultimately graduate into paid subscriptions as their needs grow. This has been a wildly successful strategy for us and has translated into a vibrant base of over 200,000 Pro Tools paid subscriptions, growing over 50% year-over-year. This, the customer acquisition engine fueled by Pro Tools, is the molten core that fuels an end-to-end ecosystem, positioning Avid for ARPU growth through innovative creative tools, community, and marketplace and cloud services, all uniquely tailored for the serious music creator. Our model is really to help users navigate their creative journey. If you look at this diagram, we start at the bottom, it starts with the tools. We land customers with our freemium products and convert them to subscription for Pro Tools and Sibelius, then we might add a peripheral here or a control surface there. Then quickly when they're in our ecosystem, we can connect them with other artists. We have over 700,000 artist profiles that are active and with Avid Link in our artist community, so they can connect with others to actually make music together. We can connect them and have them collaborate together with our cloud services. Literally, somebody could be in California, another person in Boston, and they could work with each other through the cloud on the same session. We have a marketplace, so as our users' needs grow, if they need more sounds or loops or plugins or virtual instruments, they're all right there and they can purchase them from our marketplace right within their creative ecosystem. Finally, we're geared towards helping them be heard with cloud services like AvidPlay, which I just described, which allows our users, again, to publish their finished songs and soundtracks and be able to be streamed over 150 different streaming services, a nice connection into Media Composer in Avid's video ecosystem so they can be seen as well. Tim Claman will talk about that a little bit later in the next section. All of these are value-added capabilities and services for our customers and represent lucrative cross-sell and ARPU expansion opportunities for Avid. Let's check out a demo of how all this works. I'm going to introduce our Chief Audio Evangelist, Greg Stryke Chin, to give us a demo. Thanks, Dana. Hi, everyone. My name's Greg Stryke Chin. I'm Avid's audio evangelist, and I'm also an electronic music producer, remixer and DJ. I wanted to give a really quick real-world example of what Dana was just explaining to you all. As musicians, the most essential thing is to make sure that we stay in the most creative space possible, and that's what Pro Tools and Avid really enables me, as a musician, to do. I've got a record up here, a session, that I'm going to share with you in a second. This record, this session, actually started off as a collaboration with someone who reached out to me via Avid Link. It was a fan of mine that loved my work, reached out to me, found me, connected with me. I connected back with them, really, really kind of dug what they were doing. I said, "Sure, let's work on something. Send over some stuff of what you're working on, let's start a collaboration in Pro Tools." Now, as it turns out, this user was actually using Pro Tools | First. They've now since graduated to a full Pro Tools subscription, but this actually started off in Pro Tools | First. They live in California. I'm here in Miami. They sent over some stems. I got it. I got some vocals that they'd recorded. Kind of very, very simple vocals, but it was a really great vocal. I thought it was really great, and I wanted to work with that. Let's go ahead and take a look. Here we are in Pro Tools, and let me just give you a quick peek at the vocal that was sent over. Here it is, just by itself. Thinking about you like I'm getting paid for it. You got me spinning like records on turntables. That vocal's a little flat. It's got some clipping in there. I really need to fix this up. Pro Tools makes that really simple. I simply, without having to leave Pro Tools, can just go right up here into the marketplace via Avid Link, and I can actually find the plugins that I need for the project. In this case, I'm going to look for an EQ, and I can actually go ahead and install it, instantiate it directly in Pro Tools without having to leave Pro Tools. Fast-forward, I've got my EQ. I've got it instantiated in my vocal, and let's give a quick listen to that vocal now with everything kind of active. Loving you has been the easy part. A lot more dynamic. There's the EQ. Thinking about you like I'm getting paid for it. Of course, as we go along, I go ahead, I start adding some drums. Like records on turntables. Turning me on. Start adding synth. You're all that I want. I miss you whenever you're. Forth and so on. Then, of course, in Pro Tools, I go ahead and do all my editing, arranging, my mixing. Fast-forward, we finish the song. I'm now ready to bounce it and get it out there. Avid makes that really easy as well. I'm actually able to use AvidPlay inside of Avid Link to distribute my music and put it on any streaming service in the world that I want to. Really simple. Whether you're a signed artist, an independent artist, we're making it really easy for musicians and music creatives to get their music out there. I hope you enjoyed that. I'm going to turn it back over to Dana, and I'm going to get back to work here. Thanks, everybody. Have a great one. Hey, thanks, Greg. It's great to see the power of the ecosystem in action. Let's take a closer look at where the growth is coming from in music creation. The left-hand side of this chart shows our target subscriber base. Today we're focused more on the established professionals, so the upper part of this that's colored in purple, and we're dipping into that mid-market aspiring pro space in the middle. This has driven quite a bit of growth for us. Moving forward, we plan to expand further down market to go after that entire mid-market space and then start to dip into the enthusiast space. We believe we're uniquely positioned with our brand and our affinity with top-tier artists to attract that next generation of serious music creators. Those are folks who are really interested in refining their craft and sounding their best. Thus they'll spend more time and effort and money on technology than the casual user. They number in the millions of potential subscribers. A great opportunity there. The right side of this chart shows our expansion opportunity into new product categories where we have the right to win. Today we're mostly focused on the DAW and notation software, so the core in the bottom left of that chart, and we do sell some plug-ins. Our growth play here is to expand more into plug-ins, virtual instruments, sounds, and cloud services through the ecosystem we just walked you through. For every $1 a customer spends on DAW software, they typically spend another three in these other categories, and Avid is really well-positioned to go after that. Another great opportunity. Let's shift gears a bit and take a closer look at audio post-production. Now, Avid solutions deliver end-to-end workflow and integration that's uniquely suited for the rigors of TV, film, and streaming production. The market fundamentals in this space are strong. We continue to see an insatiable appetite for content among consumers across all of the popular streaming services. This is driving a steady increase in demand for highly produced content. That requires Avid's audio, video, and media management tools. We saw over 30% growth from the major streaming providers over the last year in new content creation. There seems to be no end in sight. Just more and more content being created every year. At the same time, an ever-increasing more stringent delivery requirements like multi-language dubbing, immersing sound mixing with Dolby Atmos, and Avid's end-to-end solutions are really uniquely geared towards these challenges, were designed to meet these needs. All of this demand drives more demand for our products and solutions. Finally, a closer look at live sound. From house of worship to theater and installed sound to top-tier touring artists and festivals, this space is poised for resurgence in the second half of 2021 after a temporary pause related to COVID-19. Throughout the pandemic, we continued to deliver innovative new software and hardware with our VENUE 7 release and AVB Milan support. We're really ideally positioned for when the market bounces back, and we can already see positive indicators, whether it's Live Nation projecting twice as many shows going into 2022 as they saw in 2019, or major festivals coming online already now and more planned for the second half of 2021, and our top-tier artists spinning up their touring operations. We expect this segment to start rebounding in the second half of this year, going into 2022 with a comeback even stronger than before. Keep an eye on this space. To sum it all up, Avid is well-positioned for growth in audio across music creation, audio post-production, and live sound. We have an unparalleled brand position in the professional market space. We are uniquely differentiated in our end-to-end solution, and we have strong momentum in software subscription with significant room for growth. As I walked through, we have four big growth drivers. We're going to grow new customer acquisition down market with serious next-gen music creators. We're going to further expand our sales of plug-ins, virtual instruments and sounds and samples and cloud services. We're going to continue to serve our growing television, film, and streaming space with our specialized solutions. We're well-positioned for the market to rebound in live sound and event sound later this year. That's audio. Up next is Tim Claman, our General Manager of Video Post and Storage. First, let's hear from one of our customers. Hi, my name is Ed Russo, and I'm the Senior Vice President of Production Operations for A&E Networks. A&E Networks is a multi-brand company. We're comprised of course, A&E, the History Channel, Lifetime Movies. We've got Vice, we've got Biography. The list goes on and on. At A&E Networks, our programming runs the gamut. On the History Channel, we've got "Modern Marvels" and "Curse of Oak Island." On A&E itself, we've got "Hoarders" and "Intervention." On Lifetime, we've got "Dance Moms" and "Married at First Sight." Our network dates back 30+ years, so we've got tens of thousands of hours of content living in our library. In our New York and L.A. facilities, it's a very finite amount of space. 30 something edit rooms, 10-plus edit stations in our tech center. Expansion really wasn't an option. We were just kind of maxed out in the building. When the pandemic hit and everybody was forced to work from home, we established a few remote virtual ways in which to work, one of which was using HP RGS software to remote into the Avid systems that we had back on-prem. That worked out great, and that's how we had to satisfy the marketing team. We got them up and running really, really quickly. The unscripted studio group, the long-form group, that was a challenge. Avid Edit On Demand has really proven for us that we don't have to edit back in a four-wall situation anymore. It's been a year-plus in the pandemic. We've proven we can edit from home. We're very productive with this product and all of our other workflows I think the future of A&E is that we'll probably never have 100% capacity back in the office again. Our president and our executive team has really committed to a better work-life balance for everybody. I really see the future where Avid Edit On Demand, the availability to edit and store in the cloud, is really what the future looks like. I don't see a situation where we're going to be relying on on-prem hardware anymore. In order to make that the most seamless situation you can is, your editor's working from home in the system he has at home. He's popping back into the office the next day, and he's still using Avid Edit On Demand. No matter where he's physically located, all of that content's there. It doesn't matter physically where that editor is. Thank you to my colleague, Dana Ruzicka, for introducing me, special thanks to Ed Russo and A&E Networks for giving us that great overview of the challenges content creation teams have faced during the past 12 months. Also, I think it really showcased how Avid has partnered closely with our customers to help them overcome those challenges with innovative technology. My name is Tim Claman, and I lead the video post and storage solutions business unit for Avid, and I'm very excited to be here today to tell you about our story for continued profitable growth. The video post and storage business unit is focused really on three primary product families. Video creation software like Media Composer, collaborative shared storage like Avid NEXIS, and video I/O peripherals like the DNxIQ you see there on the left. You can also see from the pie chart in the upper right that the revenue mix comes out to about 2/3 for storage and about 1/3 for video creation tools. If you don't know Avid already, we are the undisputed market leader in collaborative editing software and storage solutions for film, TV entertainment, news, and sports. Avid has a very long heritage of category-creating innovation, and we've been honored over the years with many awards for technical achievement, including two Oscars and 18 Emmys. The market opportunity within our core segments for this business unit alone, that opportunity is very large and growing, as you can see at the bottom there, with $6.7 billion of TAM at 7% compound annual growth rate just for storage and $2.2 billion in TAM with 6% compound annual growth rate for video creation software. Our growth story is fueled by the market conditions that we're in today. Dana and Jeff before him really touched on this. I'll just kind of emphasize some of these points. First, there is insatiable demand for professional content. As I think all of us can agree, we're watching more video content than ever before. Studies show that in the U.S., consumers watched, on average, 24 more minutes of video per day than they did in the prior year. That's a big increase in demand. The second macro trend here really is intense competition for subscribers as the industry continues its pivot towards direct-to-consumer business models. Media companies are commissioning more original, high-quality content than ever before. They're really winning or losing in the marketplace based on the quality of that content. The third macro trend I'd like to mention is really that the pandemic has created a headwind for our customers and for the industry. You can see in that statistic there that roughly 60% of television production was disrupted over the last year, and that delayed production, creating pent-up demand, not just for production services, but also for post-production services. We anticipate a rebound and demand for tools that help post-production professionals keep up with that demand. These three macro trends really create opportunities for Avid. As geographic regions get control of the pandemic, we're starting to see customers investing again in technology. To generate more content, our customers are adding software licenses so they can increase their capacity. For business agility, our customers are demanding pay-as-you-go OPEX business models like software subscriptions and SaaS. For operational agility, our customers are adopting tools that enable work- from- anywhere. Solutions like Avid Edit On Demand that Ed Russo mentioned. Avid Edit On Demand is a recently released SaaS solution, and we'll hear a little bit more about it, I'm sure, from Lior Netzer in the next section. Avid's footprint in the professional film and television industry positions us really well to capitalize on these opportunities. Today, Avid Media Composer and Avid NEXIS are deeply embedded into workflows for professional content creation teams. We have a diverse cross-section of customers, from individual creatives to post facilities to the world's largest media companies. Media Composer really sits at the very core of professional content production pipelines. As you heard from Ed Russo, we're working hard to give our customers the tools they need to embrace the new normal of work from anywhere, as well as smooth on-ramps to cloud-based workflows. There's lots of room for growth in our core markets. One data point I'd like to give you is that more than half of Avid's Media Composer customers are still on perpetual licenses. We're nowhere near done with that transition to subscription. As we heard in the clip, Avid customers continue to add net new licenses to help them cope with the increased demand for content. Okay, next, let's take a closer look at Media Composer software. We have seen tremendous growth in subscriptions as we transition existing customers to subscription while adding net new users. In the past 12 months, more than 18,000 new Media Composer subscription licenses were activated, and that grew our installed base by 41% while driving a 136% increase in revenue year-over-year. We accomplished these results by adding value to our subscription offers with technology innovation. Things like the ability to customize the application with Media Composer | Enterprise, the ability to accelerate your workflows with distributed processing, and we also enabled cloud-based workflows with Avid Edit On Demand. We can see that growth in subscription growing as well as paths to higher ARPU as we convert our perpetual customers to subscription and expand the offerings available to them both on-prem and in the cloud. As Jeff Rosica mentioned upfront, there is also a large adjacent opportunity available to Avid in the pro video segment. As I'm sure you're all aware, video has become really a ubiquitous communication medium. Today, Avid serves customers outside of media and entertainment, even though we really are synonymous with media and entertainment in most people's minds. The customers in the pro video segment create content for corporations, for government agencies, houses of worship, educational institutions, and the list goes on. Pro video is today a very small portion of Avid's current business, leaving lots of room for us to grow. What we've heard from pro video customers is that they're really generalists, jacks of all trades, who value an all-in-one creative toolset. They've said that they need more than just a video creation tool. They need to curate and then access and repurpose content libraries, so they need asset management. They need services for publishing their content for distribution in streaming services and to their viewers inside a corporation. They need to bring creative stakeholders into the process. They need more than just an editing tool. We believe we have the technology that we can bring together to form solutions that will be really powerful for pro video, including our tools for storage, asset management, and cloud solutions, in combination with our powerful video creation tools. All right, tying together our growth strategy for video creation tools, it really comes down to four things. On the left, you can see we're working hard to cultivate aspiring professional video creatives by creating freemium offerings that provide an easy path to commercial offers, and also increasing our focus on programs for education to really start to feed the ecosystem with more Avid-trained editors and users. At the top, you can see we're making moves to increase ARPU by providing compelling higher value subscription offerings and generating that value that customers can reward us for with higher ARPU. At the bottom, as I just talked about, we're looking to significantly expand our user base by extending further down market with solutions for pro video. On the right, you can see that we're infusing our proven workflows with new capabilities that enable work from anywhere while innovating unique picture and sound workflows with Avid Pro Tools. Dana mentioned it, but I think it's worth digging a little bit deeper here because we actually have a really great position. We have Avid Media Composer and Avid Pro Tools, both market leaders in post-production for picture and sound, and that positions us to deliver workflow efficiencies that no one else can deliver by enabling concurrent working while automating mundane tasks. If you're not familiar with the post-production process, it is a very complex, iterative process that takes you from a bunch of raw material to a really compelling finished program. That process takes a long time, and it often involves many people. It can be a very cumbersome process, and today it can be very inefficient. We have plans to radically advance the way picture and sound teams work together, the way they collaborate together to create finished shows which are more compelling than the competition. The way we're going to do that is through technology. We're going to enrich the interaction between Pro Tools and Media Composer so that our customers can spend more time creating content and less time on administrative data management tasks, for example. This will also help them accelerate their post-production schedules and get their content to viewers faster. I think that's a unique opportunity for Avid, and it's one we're very focused on. Now, delivering on those capabilities will help Avid as well. It will help reinforce our number one position in high-end post-production and will also help us drive ARPU up by offering new capabilities that our high-end customers will be happy to pay for because those capabilities will make them more efficient and creative. Okay, next I'd like to shift gears a bit and talk about storage. If you haven't followed Avid over the last couple of decades, you might not know that we are the market leader in collaborative, real-time, high-performance shared storage. The current product, Avid NEXIS, has been in the market for the last five years, and we've been evolving the product, extending its capability, its capacity, its bandwidth, and its user base. Today, we have an install base of over 5,000 systems, and those have all been sold and deployed over the last year. Some of those systems, they are very large. Some are smaller, so we can really fit that solution into any customer workflow scenario. Now, when you look at the aggregate capacity of all those 5,000 systems out there, we're now approaching an exabyte of storage installed at customer sites worldwide. Although NEXIS has been offered as integrated software and hardware, each NEXIS sale typically leads to recurring revenue in the form of maintenance renewals, system upgrades, and system expansions, and we also have the opportunity to upsell customers to MediaCentral. The value of Avid NEXIS really lies in the unique patented software that enables that ultra-high performance for media workflows, but not just with Avid's creation tools. One of the reasons we've been so successful with Avid NEXIS is that it supports an open ecosystem. We explicitly test and certify a broad range of third-party products, including products that compete with ours. Tools from Adobe, Blackmagic, Apple, Autodesk, and many others are officially certified to work with NEXIS. While NEXIS started its journey as a solution for on-premises co-located teams, we have re-engineered NEXIS and the software stack that powers NEXIS so that it can actually run in the public cloud. Avid NEXIS | Cloud is available today as a software solution. You can get software licenses from Avid, get a subscription from Microsoft for Azure infrastructure, and you can build your own NEXIS in the cloud that gives you the same capabilities you'd have on-premises. We also are taking Avid NEXIS and bundling it with other capabilities and creating new SaaS offers like Edit On Demand. Edit On Demand is really Media Composer running in virtual machines in the cloud and connected to Avid NEXIS software running on top of Azure object storage. We put that together in a pay-as-you-go SaaS solution for customers. We have lots of customers using Avid NEXIS today on-prem, we have customers using it in the cloud, and having those two elements positions us really well to offer easy migration paths for any customer. As you heard earlier from Ed Russo at A&E, our customers are really looking for the best of both worlds. They want to harness the power of the investment they've already made in on-prem infrastructure. They want to combine that with the elastic scalability and immediate deployability of cloud solutions and really have hybrid workflows. The combination, this special combination we have of this large installed base with our intellectual property and also the NEXIS Cloud solution, this really positions us well to address the $2.1 billion TAM in cloud storage. All right. With that, I'd like to summarize the key takeaways here. First, Avid is really well-positioned for continued profitable growth in video creation tools and storage. We have a really strong brand, we have a large installed base, we have great customers, we have unique technology, and that provides us with a really solid foundation for continued growth. We also have really strong momentum in software subscriptions that's been building as an annuity with lots more room to grow. There are large adjacent opportunities for Avid for us to grow into. Both think of cloud storage and pro video as the two biggest adjacent opportunities for this business unit. This whole story is really underpinned by favorable market conditions, the insatiable demand for professional content, pent-up demand for post-production services as the industry rebounds from the pandemic, the shift to cloud and pay-as-you-go business models, and the continued growth in video production outside of media and entertainment and pro video. With that, I'd like to thank you very much for your time, and I invite you to rejoin us in about 10 minutes after a break. When you come back, you'll hear from many other people, starting with Lior Netzer, who heads up the Media and Cloud business unit. [Break] Hi everybody. My name is Adde Granberg. I'm the Chief Technology Officer of Swedish Television. My role as Chief Technology Officer on SVT includes production, distribution, and technology. SVT have been in the public service since 1950, and that means a lot of legacy. The broadcast market right now is not only a broadcast market, it's an online market as well. We don't know what kind of rights we need. We don't know how many journalists we will need, and we definitely don't know any location we will be on. SVT have went from 14 cities to do local news up to 40. We need to scale that. We need to get more editors on, more journalists on. In the past, we didn't need to care about so much about that. We bought the Olympics for 10 years, and we need to know for 10 years what we should do and not to do. That's not the case right now. When the pandemic come, we went definitely into an environment where we need to work at home. We really transformed the SVT and the way we produce anything to the software and not hardware. That's been a big struggle for a big legacy company. We really need to be up to date all the time with the latest software, the latest workflow. We are really going from fixed boxes with fixed knowledge to really focus on workflows. We really need to have the efforts to scale up or scale down and do it in a software environment as soon as possible to be up to date with our competitors. When it comes to enterprise agreement, it definitely support that kind of workflow for us, especially for the journalists that actually need to be out on the field to work and not in the office. It's really bring the work together where I am not where the equipment is. With Avid will suit us in the future, it's really have take us to the position we have had today, which is strong in Sweden. For me, it's quite a good partner to go with the future. Hello everyone. My name's Lior Netzer. It's great to be here today. I'm very excited about where we are and where we're heading. You just saw a video of some innovations happening with SVT in the newsroom, a big segment from the media and cloud business. We have four product lines sold as end-to-end solutions and all migrating to the cloud in the future. We have a substantial install base with the most prominent brands and trusted solutions. They're buying mostly on-prem today and cloud in the future as we help them become next generation enterprises. In Q4 of 2020, we introduced subscription for MediaCentral, which is expected to be the main business model for all products going forward. We have a lot of room to grow within our TAM of $1.2 billion, which more than doubles when we add the cloud TAM of $1.3 billion with a market growing 20% year-over-year. COVID-19 has acted as the Chief Digital Transformation Officer for cloud. Unlike two or three years ago where cloud was an option to consider, customers now realize it's a must-have and are going through the transition zone. If in the short term, cloud means a little less functionality as you see in the diagram, many customers choose to transition for the future benefits. There are also other proof points for us. Avid Edit On Demand, which saw a strong start after general availability in Q1, which gives any user the power of a data center grade machine, even working from a simple laptop. Combining software, subscriptions, and SaaS in a unique offering, we've seen over 80 trials, 15 live systems, and over 300 evaluations. In news and current affairs, we see new use cases, like mobile journalist workflows. With some sports production buyers, we are also seeing cloud-first buying decisions versus on-prem with some of our largest customers as customers renew their contracts. Avid is a natural partner for them as we are also integrated into their workflows. Some key trends we are seeing are highlighted here, and all of our engineering efforts are aligned to one or a few of these trends. We're delivering savings, reducing risk, and enabling operations to be consolidated and simplified. I'll highlight a few of these. 100% of those surveyed answered that total cost of ownership is the most significant purchase decision factor. 85% of broadcast and media companies have employed or are planning to employ cloud-based workflows. 88% of those surveyed stated that cybersecurity is essential for their operations. Reminder of what we do with MediaCentral. The newsroom is so complex that just fitting this all on one slide was a challenge. I can talk about it, but let's listen to a short video by our media evangelist, Craig Wilson. The world of news is changing. Teams are distributed from the newsroom to the field, reporting from the scene of the story, and MediaCentral is meeting the need to help teams work more closely together. News is no longer just about the nightly show. It's much more than that. It's a connected world of social media posts, website updates, and remote working. The MediaCentral | Collaborate app in MediaCentral | Cloud UX brings teams together in new ways. Available in a web browser and via a secure connection, the subscription-only app makes the newsroom more efficient by providing a single place where everyone can see everything related to a story. Reporters in the field are also connected, either with a browser or on their phones via the mobile app, getting notifications and updating the status of stories as they develop. With the newsroom in the palm of their hand, reporting teams can get stories to air quicker, boosting audiences online, promoting the on-air broadcast, driving new revenue generating opportunities, and more traffic for stations across all platforms. As a subscription, MediaCentral | Collaborate also gives news teams flexibility on deployment to get what they need when they need it, with floating licenses available to use on the web in the office or on the reporter's mobile device from the heart of the story. The app is, of course, not the first subscription for MediaCentral. Building on MediaCentral | Publisher, news teams can get their stories out to multiple platforms faster than ever, and the recently launched MediaCentral | Stream, making the process of IP-based ingest much more efficient. The MediaCentral | Collaborate app helps get stories to viewers wherever they are, when they want to watch, and on whatever device they're using. Part of the broader MediaCentral suite of products, it's further enhancing Avid's integrated newsroom solution, delivering efficiencies in every part of the workflow. As you saw, there's a rush to get news out fast with sources being journalists in the field, sometimes user-generated news, and to get it out to broadcast, but also to social media quickly. In a nutshell, we turn chaos into order with our asset management and creative tools, and we provide enterprises with much greater operational flexibility and lower total cost of ownership. Avid has differentiated itself by integrating the creative tools with media asset management and workflow elements of the newsroom, providing speed and consistency that is crucial in an always-on news cycle with speed to broadcast and speed to publish critical. In the past, you could think of what we were doing like an ERP system, an SAP for the newsroom. With a workforce moving to being globally distributed and moving to cloud, expects us to be more like Salesforce: open, software subscription, and SaaS. COVID-19 accelerated this and took our already distributed workflows to a new level of work from anywhere. In our media solutions segment, our pervasive and loyal install base is transitioning from support and maintenance contract to subscription and SaaS. Our core value proposition is proving itself. In the future, expect to see innovative solutions such as artificial intelligence and machine language, leveraging our production data and further remote collaboration. In cloud and SaaS, unlike two or three years ago, like I showed before, 85% of broadcast and media companies have employed or are planning to employ cloud-based workflows. We have a first-mover advantage in SaaS-based edit, media management, and storage, and we are moving more products to the cloud every quarter. In the future, expect Avid to work effectively with each of the main cloud vendors and support multi-cloud ecosystems. I talked about this before about Avid Edit On Demand. This is one of our most interesting launches. Although in early stages, it shows a strong start and proves our cloud assumptions. The great thing is that it's based on our familiar industry gold standard Media Composer product. Graphics and servers are the ins and out of our system, our edges, and part of our end-to-end solutions. Graphics is one of the most effective storytelling tools, allowing customers to stand out from the competition. With servers, we now offer cloud-based ingest and soon cloud-based playout. Across the portfolio, we are moving to software-based subscription solutions, enabling future SaaS and cloud offerings, and we're exiting lower margin hardware products. In the future, expect even further integration with MediaCentral and new offerings such as AI and ML to enhance workflows. To sum up our strategy, we're going to double down on distributed, remote and secure workflows, attach to high growth market segments using cloud and SaaS, build cloud and SaaS platform solutions for Avid overall, and maintain a leadership position in end-to-end media and news workflows. I'd like to thank you all for your time today, and I'd like to introduce Tom Cordiner, our Chief Revenue Officer. First, let's hear from one of our new distribution partners, Adistec, about how they are helping Avid to expand into new markets. I'm Fabián Sperman, founder and president of Adistec. Adistec is a company based in Miami. We deal with in data center, security, and solutions space. We have operations in 17 countries in Latin America, covering the whole region. One of the unique capability that Adistec have, is not only I spoke about the market coverage and how we have operation locally, but we are a company that have, other than the standard fulfillment, that's what most of the distributor does. We have a strong support team. We integrate our own hardware solution in partnership with Intel, and also we run our own data center. We have in-country data center to really provide a fully and truly integrated solution in the region. You're looking the opportunity ahead of us after the COVID-19 in Latin America, it's this trend to cloud. I see a tremendous opportunity for the channel and in particular in the enterprise market. I think that the presence in the traditional media and entertainment market for Avid is very strong, as we can add value there. The opportunity, the tremendous opportunity for growth that we see is in the enterprise. We started conversation with Avid approximately May last year. We saw a perfect match between what Avid was doing in the region and our capabilities, and then we built the master distributor contract that we signed by late last year. Since they're a leader in media and entertainment, we are making a vision special division for inside the company to target the media and entertainment industry in Latin America. The master distributor agreement with Avid will give the opportunity to invest more in the region. Together with Avid, we can make this ecosystem stronger and better result in the region. Hello there, everybody. We're starting to see a real acceleration of our transformation into a subscription and a SaaS oriented business. I'm going to talk today about how we are driving sustained revenue growth while we build a more targeted, a more growth oriented and efficient commercial engine to help us go after a number of new adjacent markets, in addition, of course, to our traditional media and entertainment segments. Our overall commercial strategy is focused really on growing subscription, SaaS, and thus recurring revenue. That's obviously core to our efforts. There are three pillars to our strategy and three distinct routes to market. Obviously, we're focused on growing subscription across all of our customer types, whether that's enterprise, channel partners, or our growing e-commerce and business to consumer engine. We're also focused very much on nurturing and growing these long-term agreements with both our customers and our partners and focusing them very much on subscription offerings. We also want to protect our maintenance revenue stream through this important transition through to subscription. As you can see on the right-hand side, our routes to market. We've seen down the bottom, especially substantial web store growth. That's nearly doubled in three years, and it's continuing. It's allowed us to take a lot of share and also is enabling us to drive significant efficiencies through our overall commercial organization. One example of which, of course, is how we're becoming more targeted and spending less money on, for example, trade shows and repurposing that spend to invest in digital marketing and other persona driven strategies. Avid is a global brand. We're very fortunate we get to sell in more than 130 markets around the world. That gives us great scope to expand our subscription bases. The most penetrated and our largest market is the U.S. We've seen a lot of earlier subscription adoption there. There's a significant web store presence here in North America. You can see that grew 66% year-over-year in terms of subscription. We fully expect that to continue. EMEA and APAC also offer great opportunities for rapid subscription growth and SaaS growth too, from a far less penetrated base. From a worldwide level, we've got a huge creative tools user base, and obviously with new language and localization features that we're building into our commercial offerings, we expect to drive a lot of growth there too. Worldwide, as you can see, $370 million in the last 12 months, $83.7 million of subscription and 68% year-on-year growth. We certainly see that trend continuing. How are we going to focus on building recurring revenue streams? Three main levers help us do this, and the first one, of course, is subscription. We continue to drive the creative tool momentum, but also our commercial teams in the enterprise are leading very much with subscription-first offerings, as well as being able to convert a number of significant maintenance contracts to higher value, higher ARPU, more margin-rich MediaCentral Flex subscription agreements. The great thing here is that we've got 1,000-plus platform customers to convert from maintenance streams to subscription, and that's several years' worth of opportunities that the teams can work through. There's also great scope here for growth outside of our core media markets. Think about corporate video production, think about government and defense, creative agencies too, that really will allow us to penetrate the Adobe heartland. Second pillar, of course, is maintenance, where I've talked about managing the migration of software to long-term enterprise subscription. We'll show you some examples of that very shortly, but also how we can grow our remaining hardware maintenance too. The third pillar is these long-term agreements, and these are enterprise agreements, which is a mix of software and hardware and services, but also increasingly more and more enterprise subscription agreements. That's actually one of the fastest-growing opportunities for us. The third pillar with LTAs are these strategic purchasing agreements we do with our partners. Again, I'll talk about those shortly. Speaking of enterprise subscription, we've seen some great acceleration in the past three quarters. This represents a snapshot, we've in fact signed 21 new specific long-term agreements focused on enterprise subscription. We've been able to win these deals across all the market segments we serve. Whether that's TV broadcast, film studios, news production, sports franchises, educational bodies, corporate companies, government institutions, and of course, some of the big streaming platforms. All of them are starting to do long-term agreements with Avid that drive subscription and SaaS, and thus recurring revenue. It's also very international. You can see there Ikegami in Japan using our Edit On Demand service and the Public Sénat in France using our MediaCentral | Flex platform and many others too. The other reason I think why we're seeing such great adoption here is we have a very targeted and rewarding sales compensation scheme for selling subscription and SaaS. It's got accelerators built in, it's got extra bonuses too, and it's a very effective tool for helping drive our commercial engine forward. If we look at our enterprise markets, we work with some of the largest media brands in the world, and this gives us a really rich customer base, which is frankly on the cusp of a very significant transition to these new subscriptions and SaaS models. Great opportunities for us to target. That's going to let us build even stickier revenue streams and of course give us greater wallet share too. What I'm also doing is we're working hard with Kathy-Anne McManus' organization to ensure that we build a great CSM, customer success management model to ensure great adoption to drive cross and upsell as well. These long-term agreements, these are also very important here in the enterprise market for us and for driving enterprise subscription. It's a significant recurring revenue driver, and we're seeing, as you can see in the chart, more and more uptake now in these higher margin enterprise subscription agreements. We're also able to scale these number of agreements too. We now have 37 in place, and they're typically being signed for 3-5 years, again, creating a long-term great revenue backlog for us. Okay, as you can see, there's some very favorable economics of moving these enterprise customers to subscription. We've got two examples here. As I said, there's more than 20 we could talk about, and these sort of represent, I think, a whole sort of range of the business that we're doing. One's in Europe, one's in the U.S. Both of these customers committed to a five-year agreement with no break clause. Customer A, that's a European public broadcaster. They basically deployed nearly 600 MediaCentral Flex licenses, that's our platform license product, across the whole organization, including news production, where we're starting to see some competitive moves by Adobe and this subscription offering and this large agreement that we've done has enabled us to completely neutralize that. Very pleased to win that. Customer B on the right-hand side, that's a local U.S. TV station. This was a combination of both MediaCentral Flex and Media Composer and more than 300 licenses in total. Customer B is probably an extreme case of growth. You can see how much the deal value increased, 200%. Across both these deals, we saw significant margin improvement for Avid. On average, I would say we're seeing between 20% and 30% deal uplift at more ARPU and obviously greater profit as well across all of these agreements. Very pleased to be doing more and more of these. Let's look at our channel. The recurring revenue growth story is equally relevant here as it is in enterprise. One of the big objectives we've been focused on over the last couple of years is really a smaller number of larger strategic partners, and Adistec, who you just heard from, is a great example of that. We've actually been able to reduce the total number of partners we have worldwide from 450 a couple of years ago down to 200. That obviously enables us to lower our channel sales cost to drive a more efficient engine because the partners take up more of the heavy lifting of helping us get into markets. Three-quarters of these channel partners are now 100% digitally enabled and providing transactions via digital platforms into Avid. We are also able to outsource certain subscale markets that are difficult for us to operate in to these larger partners. You just heard from Adistec in Latam. We probably saved more than $1.2 million in terms of headcount cost there. We have done the same thing in China. We have done the same thing in Qatar as well in the Middle East. The other thing that is important with our partners is we are starting to drive new partner recruitment that allows us to target some of these adjacent markets. Again, think about us going into the Adobe heartlands and think about us selling SaaS and subscription offerings via Avid Edit On Demand. The other big part of our channel strategy is these long-term agreements, these SPAs. A great recurring revenue driver, as we've said, and they now actually constitute about 1/3 of our total revenue. We've also seen a huge subscription explosion, as you can see in terms of the channel. These SPAs themselves are representing now about 50% of our total channel business. They've been a great part of our program. We've got four formal tiers to it now, and I expect that to continue to grow as well. For e-commerce, this is our direct-to-consumer sales. The focus here is very much on our creative tools, both for individuals and for team licensing, it's about 80% of our e-commerce revenue is in these tools. It's our fastest growing, as you saw at the beginning, route to market, I predict this year more than 25% of our total revenue will come from direct to consumer. It's also, of course, a great customer acquisition tool, which then allows us to upsell and cross-sell further users as they get more comfortable using our technology. One of the great things as well that I'm very pleased to see is this improvement in our search engine mechanics and the optimization that we're doing there. That's a key driver for growth, it's been especially effective for new users, that's a big part of our marketing, our digital marketing strategy. As we think of the future evolution, this orientates us a lot more towards business to business. We're investing significantly in digital marketing to drive funnel into this very effective conversion engine that we've been able to build. I'm very pleased with our progress here. The final part is really how do we optimize our maintenance? The split is roughly 50/50 in terms of revenue. Clearly on software, we're starting to convert those to subscription, these longer-term subscription agreements, as I've said. We've also, on the hardware side, we've got a dedicated worldwide team. We have new senior leadership in place, and it's the sole focus of this group is to drive our maintenance revenue. That's been working very well. We've seen a great uptick in our hardware renewal rates. Of course, on some of the older legacy hardware platforms, such as our ISIS storage, we're able to charge significant price increases there or drive the customers to new sales of NEXIS. From the software perspective, we're seeing this rapid conversion to these longer-term subscription agreements that drives higher ARPU for us. We're also working inside our Digital Transformation Initiative to help optimize and automate the quoting. It's currently a very manual process on thousands of quotes for support contracts that we do every year, we're making very good progress here, and it's a further example of how we're driving and creating a lot more efficiency through our commercial engine. In terms of sort of wrapping up in our sort of commercial strategy and our summary, six main themes. Clearly a lot of focus on growth and accelerating subscription, recurring revenue, and of course, these longer-term agreements across all parts of our business. Our channel strategy is working. We've got a lot of new partner recruitment in place. That's going to help us fuel growth in our adjacent markets too. We continue to shape the commercial organization to maximize our efficiency. Annually, we've taken out more than $9 million of cost in terms of serving our enterprise and selling organization and partnering with Kathy-Anne McManus in building us a great CSM function too. From a marketing and lead generation perspective, a lot of work here around persona-driven marketing and digital new logo lead generation strategies. Overall, I feel we've made a good start, but there's a lot more growth to come on this journey. Up next is Kathy-Anne McManus, who's our Chief Customer Experience Officer. First, I'm excited to have you listen to one of our recent strategic educational customers, and they just re-signed their enterprise agreement with us for a further period of time to serve their growing needs at Belmont University in Nashville. Thank you. Hey, my name is Ron Romano. I'm the technology specialist for the Mike Curb College of Entertainment & Music Business at Belmont University. We're the first university in the world to have a Dolby Atmos theater where you can actually render a full project and mix it right here on campus. Since we're located right in Music Row, we're in the heart of all the action. Our students have the unique opportunity to come here, get a great education, whether it's in music business, audio engineering, motion pictures, film production. We're uniquely set here with our partnership with Avid. We've got all the professional tools that they're using, whether it be Pro Tools, Media Composer. You can see the S6 behind me. Our students get to hands-on work with that stuff their entire tenure at school, then go right into the real world, and they're prepared to have those skills where the professionals need them to have them. Remote access has been something we've been entertaining for quite some time. We've got a great facility, and with our student demand, at times it can get full. As part of our upgrade, we added 87 remote machines here so that students have access to Media Composer and Pro Tools from a web browser anywhere, their dorm, at home, almost anywhere in the world where they have great internet access. It really gives a lot of flexibility for remote access, building capacity moments where we might need a little extra space. It was really a big win for us and for the students. Our relationship with Avid has really grown strong over the last 12- 16 months, even stronger than it had been in the past. We really appreciate it. It's very important to us as a university so involved and so deep with Pro Tools and Media Composer to have that two-way street on support and our sales support, technical support. Avid has really continued to deliver with that. We were really excited to renew our enterprise agreement with them. We look forward to what the future holds. We like to be a partner right back to Avid, so we appreciate everything they're doing with us. Thank you, Tom. A great message from Ron Romano of Belmont University on our partnership and an excellent segue for speaking about customer experience and customer success. Good afternoon, everyone. Back at Investor Day in November of 2019, I spoke about the focus and investments we were embarking on to support our transition to subscription and SaaS and to create better customer experience and value. I'm pleased to say that even with the impacts of COVID-19, we have delivered all we set out to achieve and more in the last 18 months. Developing and evolving to provide an exceptional customer experience is the foundation for sustained growth for any recurring revenue business model. We want to secure loyal customers that will grow with us and be our advocates to attract new customers. To achieve that, we need a high level of engagement and the constant capturing of what is valuable to them and delivering on it. It isn't just a matter of saying we care about our customers. We need to provide great experiences that shift from focusing on siloed functional customer touchpoints to addressing the end-to-end customer journey and the end-to-end experience. In September of 2020, as planned, we embarked on critical work to capture our current end-to-end customer journeys and key customer personas that are within that. The work provided us invaluable insights into what we need to change and what we need to invest in to successfully deliver a new subscription and SaaS offering. This customer voice and engagement will also enable us to focus on the right things and make a difference to our customers as part of our Digital Transformation Initiative and ensure we're spending in the right areas for improvement over the next three years to support our continued growth in subscription. Jeff Rosica has provided me the exciting opportunity to lead Avid's Digital Transformation Initiative, or DTI, as we call it. The DTI strategy underpins the entire transformation roadmap and operational plan. Our mission is to be a customer-centric, collaborative, creative, and cloud-focused company. There are four key pillars to the strategy that all of our areas of investment align to. As you've heard from our business leaders and from Kevin Riley earlier, we're delivering compelling products and solutions that are visionary and deliver market-leading innovation under a unified user experience and user interface strategy. I'll speak more about this shortly. There must be subscription cloud and SaaS-enabled offerings that empower and deliver collaboration, and first and foremost, need to solve customer business needs. Our new modern business models will provide flexible and adaptable offerings and deliver a faster time to value to our customers than our traditional business did in the past. At the center of all of this, of course, is exceptional customer experiences through customer-centric, customer success-focused outcomes that provide frictionless, transparent, metrics-driven experiences for our customers. A key outcome from digital transformation investments is creating more efficient and adaptable operations that have been modernized to deliver much higher velocity and, of course, at lower cost to our overall business. As I touched on, improving our user experience and user interface is a core component of DTI. We're already in flight and creating a company UX strategy and a UX blueprint that will be applied to all of our products, services, and customer engagement tools. Our UX and user interface are the face of Avid to our customers. A frictionless user experience is table stakes in the subscription economy and to achieve high renewal rates and increase customer lifetime value from our existing customers. It is absolutely critical when attracting new customers and users to our product. A differentiated UX and UI is essential when you're in market as a premium brand and you're looking to expand into new markets. Taking that detailed work I talked about earlier, the customer journeys and personas, and conducting additional research and testing to define our best practices that will then be standardized across Avid. Our goal is that our customers, when engaging with our products, applications, websites, and portals, that all the journeys that the user experiences is valuable, easy to use, desirable, consistent, accessible, secure, frictionless, and most of all, should create joy. Along with improving our user experience, ongoing customer engagement is important for strong retention of our customer base. There are continued investments this year to build out a customer success management team that Tom touched on. There are two key paths of development. First, we recently completed the implementation of Gainsight, an industry leader in customer success management, to provide an automated nurture and retention campaign management, and also it manages our Net Promoter Score surveys and customer health metrics. Second focus is to build out an enterprise and channel customer success management team. This provides a more focused hands-on attention to ensure that our enterprise customers are optimizing their products and solutions. This is also metrics-driven, delivered through customer success business plans that are done with the customer to ensure that we meet the customer's KPIs and as well as providing knowledge sharing, deploying the right resources, and escalation paths that can provide an uninterrupted feedback loop and fast course of action for the customer. As we continue to rapidly grow our customer base of subscribers, we are applying acute focus on reducing and minimizing our churn, as well as strengthening our position with our customers, for expansion with upsell and cross-sell focus. Customer success management also plays a pivotal role in supporting the customer with a faster adoption of our products and making sure that the customer sees a faster time to value and return on their investment. Speaking of adoption, over the last 18 months, we have made continual investments in our learning portfolio to shift from offering more walls in classroom to now fully remote and electronic-based or e-learning-based curriculum. That not only addressed the customer requirements that we had with COVID-19 that was created, but also provided a much-requested flexible approach to learning. We also formally launched in Q3 of last year our new learning subscription offering, Avid Learning Central. This delivers content in a way that empowers our customers to learn at their own pace, provides greater value, and also easier adoption of our products through a continuous learning engagement. This is an all-you-can-eat model for learning. Our focus is on developing new and compelling, consistent content to ensure that we have strong learning subscription renewal, and that we also have upsell capabilities to attach learning subscriptions to our product subscription offering, and therefore, increasing our ARPU. Our Avid Learning Partner Program has currently around 620 unique institutions around the globe certified to deliver Avid official courses and certify students. This also generates a significant amount of recurring learning revenue as well. It isn't just about that. It's also about nurturing our education community. We launched a new diversity, equity, and inclusion ALP Sponsorship Program last month in partnership with our ACA or Avid Customer Association. This is for not-for-profit schools in both high school and college with a focus in DE&I. We have also formed new content certification partnerships with Dolby and Seneca, where we host their learning paths on our Avid Learning Central platform. We're working at adding several other partners to our ALC offering. Finally, in April, we launched our new Avid Learning Academy program with Avid First certification and curriculum for K- 12 schools in partnership with Rowman & Littlefield, a certified partner in K- 12 education. This program is specifically designed to nurture our next generation of Avid creators on our products. Let's hear from Emily Tyler from Rowman & Littlefield. Hi, I'm Emily Tyler, the digital product manager at Rowman & Littlefield. Rowman & Littlefield is one of the largest independent publishing houses in the United States. We focus on publishing in the humanities, in higher ed, and to the library market. Avid's Learning Academy program is bringing the powerful professional tools of Media Composer | First and Pro Tools | First to students and easing the transition into the workflows of those programs. The potential market for this program is huge. Even just focusing on our top seven states for, let's say, year two, we project about 30,000 students per program. That's 30,000 students for the Pro Tools | First and 30,000 for Media Composer | First. Bear in mind, that's just 4% of the overall market. We're looking at a very modest share in our projections, and it could go much beyond that into 100,000- 200,000 students per product per year. What excites me most about this partnership is really bringing to high school students something that will benefit them both in college and in their professional lives. There's so many times in high school when you're just wondering, "What will I actually use this for?" In this case, we have a very concrete sense of how these tools will be used throughout their entire career, and that's very exciting. We are very excited about our partnership with Rowman & Littlefield. Ongoing support and care services have been and will remain one of our core customer service strengths. We have an incredible customer base that are very loyal to our brand and depend on us with critical, creative, studio, and live production timelines. We continue to be focused on providing the best-in-class follow-the-sun services for all of our customers and ensuring we're using the right scaled approach for our customer base. Last year, we realigned the customer care organization globally to our customers' tiers or swim lanes. The voice of the customer feedback really drove this shift for us in terms of delivering more personalized white glove and critical situation services to our enterprise customers. We're also enhancing our engagement with our channel partners to enable them to serve their own excellent first lines of support to our customers. To also provide a frictionless handover to us if needed, and then a new expedited escalation path. This will be further enhanced with the introduction of a new auto case creation capability in the second half of this year. This drives efficiencies and also a much improved customer experience and partner experience as well. As part of our Digital Transformation Initiative, we recently launched our new call center technology, Five9, and made even critical investments in our chatbot technology, increased knowledge-based articles, and new snackable video tutorials called Avid Shorts to provide automated self-help capabilities to our individual creative communities to help solve issues quickly and efficiently, and also improve our case deflection rates. We have already seen 100% improvement in case deflection from 20%- 40% in the three months that these tools have now been live. I'm going to wrap up now. In a world where there's choice, it is so important to focus on the customer and develop a trusted relationship that will drive loyalty and ultimately advocacy for our brand. We at Avid are driven to deliver remarkable customer experience while building an even bigger and stronger base of new passionate customers. By focusing on this, we'll continue to see growth in our recurring revenue streams in both maintenance and subscription, as well as faster adoption of cloud and SaaS offerings. This equates to a greater share of wallet in the market, stronger margins, higher revenue, and an increasing market value of the company and share price for our shareholders. Thank you very much for your time. I now have the great pleasure to hand you over to Ken Gayron, our Chief Financial Officer. Thank you, Kathy-Anne McManus. I want to thank first all the participants for joining us today to see the progress we are making in Avid's business model. Avid's strategy is clear under Jeff's leadership, our number one financial priority is to drive continued robust growth in our subscription business while improving margins, profitability, and free cash flow. As you can see from our recent financial results, Avid is clearly in the stage 2 of rapid subscription growth, driven by, first, an expanding addressable market from creative individuals that is fueling the growth in our creative subscription products. Second, new growth from enterprise customers that are embracing subscription and cloud models to drive remote and collaborative workflows. While we are focused on driving our high-margin subscription revenue streams, we are also driving efficiencies in our operations. We made good progress on managing our cost base in 2020 and have taken actions to permanently reduce our expenses by approximately $18 million since 2019. All of these actions have been completed, and we are seeing clear improvement in Avid's overall profitability as we are managing our expense structure more effectively to support growth in our strategic revenue streams and reduce investment in areas that have a lower return on capital. As we return to growth and drive strong profitability, we expect continued substantial improvement in free cash flow. We are proud with the 172% growth in free cash flow since 2019, but we are only getting started and see tremendous upside in free cash flow with the rapid growth in our subscription business. Avid has had consistent performance in adding new subscriptions every quarter. We added 28,000 new subscriptions in the first quarter of 2020, with continued strong growth of Pro Tools, but also significant growth in Sibelius and Media Composer. Our subscriptions grew at a 54% compound annual growth rate the last two years and 49% in Q1 2021. With approximately 324,000 subscriptions through the first quarter of 2021, we believe we are still in the early stages of growth as the addressable market for creative individuals continues to grow at healthy rates. We have leading brands in audio and video creative tools, as Avid moves down market, we believe we can attain more market penetration of the large and growing addressable market. We see the convergence of picture and sound in the creative tools, given our strong position in both areas, we see additional growth opportunities. Avid currently has three models, monthly paid monthly, annual paid monthly, annual paid upfront. In the third quarter of 2019, Avid implemented price increases on most subscription solutions and will be implementing the additional price increases in 2021. The goal of the price changes was to improve ARPU and gross margin and incentivize customers to select annual paid upfront subscriptions, which provide a higher quality revenue stream for the company with cash upfront. Share of subscriptions from annual paid upfront have grown from 6% in 2018 to 28% in the first quarter of 2021. We see this trend of moving to more annual paid upfront subscription growing as enterprises become a more important piece of our subscription business. As we look at the underlying details of our subscription revenues, we are clearly seeing accelerating revenue dollar growth. Our revenue growth is being driven by our license growth and improving ARPU. As shown by our first quarter results, our subscription revenue was up 78%, which is a clear proof point we are in the stage 2 of rapid subscription growth as enterprises become an important piece of our subscription business. Over the last three years, our subscription business has grown from 9% of revenue to 26% of revenue in our last quarter, and we see our subscription business becoming over 50% of revenue in the next 24 months. From a dollar perspective, on a run rate basis, our subscription revenue is $100 million. Up from $36 million in 2018, and believe the dollar growth of our subscription revenue will continue to accelerate. Avid has a rapidly expanding license base. We have converted a portion of our software maintenance contracts to subscription. You can see the net adds for subscription of 187,000 the past eight quarters far exceed the decline of active software maintenance contracts of 18,000 as we continue to attract and expand our user base. Our total user growth, comprised of active subscription licenses and active maintenance contracts, grew 23% over the last eight quarters. This clearly shows we are bringing in new users to our subscription business and monetizing perpetual customers that were not currently on maintenance. Although we are growing the number of subscriptions aggressively, our perpetual user base with maintenance contracts still represents 34% of the total users, providing further monetization opportunities. Although we do expect to see software maintenance contracts declining over time, we expect to see our total paid user base continue to expand and drive strong growth. This page highlights our historical subscriptions and maintenance revenue. Overall, our subscription and maintenance revenue grew 12% in 2020, which exceeded our guidance for the year of high single-digit growth. We believe that the sum of subscription plus maintenance will continue to experience favorable growth in the low- double digits and will become a large portion of our revenue streams. We do expect that our total maintenance revenue will slightly decline as customers migrate to subscription, but due to improving renewal rates and the gradual recovery of certain hardware products that have high attach rates for maintenance, we expect improving performance in hardware maintenance in the second half of 2021. When looking at our total revenue for our software business, which includes both subscription and perpetual licenses, one can see that we are also accelerating total software growth. We grew our software revenue 26% in 2020, and saw it expand to over 60% growth in the first quarter of '21 from the growth in subscription. Although some customers do prefer our perpetual and maintenance software programs, we do expect over time that subscription will be the dominant portion of our software revenue. Overall, we expect our total software subscription and license revenue to continue to expand annually at 25%+. That should continue to drive favorable gross margins for the business. Overall, we expect Avid total revenue to rebound in 2021 as our high-margin subscription and maintenance business expands, including growth in our cloud software business, plus expected recovery in certain hardware revenue streams in the second half of the year. In addition to the rebound in total revenue, we also expect to see an improvement in overall gross margin. Since 2018, Avid has shown an improving gross margin line. We expect this to continue in 2021 and throughout our forecast. Overall, the improving mix shift to a higher percentage of subscription and maintenance revenue should drive improving margins. As you can see in the first quarter of 2021, the mix of subscription and maintenance contributed 65% of our total revenue, up from 59% in the prior year, and helped drive a 300-basis point improvement in our gross margin to 66% in the quarter. Also, in addition to the improving revenue mix, Avid is continuing to improve its supply chain and reducing investment in certain low-margin hardware revenue to improve our hardware margins. Moving to our expense structure. As you can see from the top graph, we have reduced our operating expenses in 2020 through more efficient operations and impacts of a temporary furlough. We indicated that we expected that 60% of the savings in 2020 would be permanent. As a result, you are seeing significant improvement in our cost structure in 2021 versus 2019. As you look further in the expense structure, you will see that all the savings are in the areas of sales and marketing and general and administrative. We are seeing improvement in sales and marketing efficiencies as we move towards a more modern go-to-market marketing strategy focused on direct digital marketing and a digital sales strategy, and away from a marketing strategy focused on trade shows that had a lower ROI. Additionally, we continue to see improvement in G&A as we drive efficiencies in finance, legal, HR, and facilities. We're investing more in R&D to support our roadmap and expect R&D expense to move up in our forecast to accelerate roadmaps in our key business areas. The significant portion of the R&D expense will be directed at our creative and enterprise subscription products to drive our subscription and cloud revenue. This chart highlights the great progress Avid is making in driving its free cash flow. Free cash flow grew 170% in fiscal year 2020 to $34 million. We expect to see continued strong growth in free cash flow. Free cash flow is expanding at a rapid rate due to three main reasons. First, improving profitability. Second, a more favorable working capital cycle. Third, cash interest savings from our recent bank refinancing that was completed in January. As our free cash flow expands, we expect to see strong improvement in the conversion of EBITDA to free cash flow and a significant improvement in free cash flow per share. We do note to support the growth in our subscription business, we will be making additional investments in capital expenditures in 2021 and through 2023. Our capital structure, balance sheet, and leverage position continue to show great improvement. We have reached an important inflection point. Our leverage position is in the mid-twos, which is prudent for a public technology company. We plan to operate our business with 2-3 times leverage moving forward. Now that we have reached our target leverage position and obtained a flexible and cost-effective bank facility with J.P. Morgan, the excess cash flow and incremental borrowing capacity we generate will allow us to start returning capital to shareholders. We'll be working with our board on the options for capital deployment. We expect that this will take the form of share repurchases and strategic M&A. Before we review our long-term model, I wanted to reaffirm both our Q2 2021 guidance, shown on the left side of this page, and the annual guidance for 2021 that we reviewed on our first quarter earnings call on May 5th, 2021. As you can see for 2021, Avid provided guidance showing a strong rebound in our total revenue, with total revenue guidance of $382 million-$402 million, reflecting a 9% growth rate at the midpoint. Subscription and maintenance revenue guidance of $217 million-$225 million for 2021 reflects continued strong double-digit growth of 12% at the midpoint. Non-GAAP net income per share guidance for 2021 is $1.05-$1.27, assuming 46.6 million shares outstanding, with our free cash flow generation now matching closely dollar for dollar our forecasted non-GAAP net income, signifying the strong quality of our earnings. Adjusted EBITDA guidance for 2021 of $69 million-$79 million reflects our growing revenue and gross profit and continued improvement in our OpEx ratios, all of which should result in a 26% improvement in adjusted EBITDA at the midpoint. Free cash flow guidance of $47 million-$55 million represents growth of 51% at the midpoint in demonstrating our improving profitability and working capital cycle. This slide is a summary of Avid's long-term financial targets, which reflect an organic model and does not assume any contribution from M&A or share repurchases. This first point I want to note is that Avid's actual performance showed significant achievement against the targets we set at our Investor Day in November of 2019. All of Avid's 2019 financial targets related to the growth of our higher-quality subscription and maintenance revenue, gross margin, EBITDA margin, and free cash flow were achieved and are colored green. We do note that due to the pandemic, certain hardware and integrated solutions revenue streams, such as live sound, were adversely impacted, causing a shortfall against the total revenue target in 2020. Although we managed our cost structure aggressively during the pandemic to achieve our 2020 free cash flow guidance, we did have a small miss on OpEx as a percentage of revenue associated with the sales decline. As we look forward, our financial model for 2022- 2025 shows a rebound in total revenue and accelerating growth in subscription and maintenance revenue. We expected total revenue to grow in the high- single digits with incremental improvement in total revenue growth each year. As the model moves to more subscription and cloud products, we expect total subscription revenue to grow to over 50% of revenue by the end of 2023 and be roughly a majority of revenue by 2025, or 2/3. With the forecasted growth in our subscription revenue, we see an acceleration of our subscription and maintenance revenue as subscription becomes a more meaningful portion of that revenue stream. We expect subscription and maintenance revenue to grow and accelerate to the high- teens growth rate in our model. As our high margin revenue streams continue to show strong growth, we expect to see continued improvement in our overall gross margin, which should be close to 70% by 2025. With that said, our forecast assumes continued investment in customer experience, which is accounted for in cost of sales to help drive retention and growth of our subscription business. Although our forecast shows strong investment in research and development, we expect operating expenses as a percentage of sales to fall from the high- 40% area to the mid-40s as we achieve cost efficiencies in both G&A and sales and marketing as the business scales and we move to a more efficient back office. With the improving margin and cost profile, we expect EBITDA margin to continue to improve from the 20% area in 2022 to the high 20% margin by 2025. As we look at the detailed components of our cash flow, we see our free cash flow more than doubling in our model from the mid-$60 million area in 2022 to over $130 million in 2025. We are at a strong inflection point in free cash flow generation with our forecasted growth, improving profitability, the cash savings from the refinance, and our improving working capital cycle. Our free cash flow is also aided by an NOL position with over $700 million of NOLs at the end of 2020 that can be carried forward as they are used for approximately the next 15 years. The NOLs have strategic value to the company as our cash tax rate in the U.S. will likely be 0% for at least the next 10 years, where approximately 50% of our profit is recorded. The remaining portion of our profit is overseas, with a large portion in Ireland, where the tax rate today is 12%. Our cash tax rate is expected to be approximately 2%-5% in the next few years and should not exceed 8% through 2025. Avid's cash flow is also benefited by the relatively low level of capital expenditures in our model. Although we are investing to automate certain back-office infrastructure and improve the customer experience to further scale our subscription business, our capital expenditures will grow slightly in 2022 and 2023 to roughly 3.5%-4% of revenue before falling back to the mid- 2% area at the end of our forecast model. The next slide highlights our key financial metrics from 2020 to 2025, given our organic model. As you can see, the expected growth rates and total revenue from our organically should reach $580 million-$600 million by 2025, reflecting a compound annual growth rate of 10.4% at the midpoint. Our subscription and maintenance revenue will grow from $197 million in 2020 to a range of $430 million-$442 million by 2025, reflecting a compound annual growth rate of 17% at the midpoint. With our continued growth in our higher margin subscription business, we see our non-GAAP gross margin expanding to roughly 70% and adjusted EBITDA margin growing to 27%-28% by 2025. We also see strong upside in non-GAAP net income per share and free cash flow per share given the improving organic model coupled with additional shareholder value that will be created from prudent capital deployment. Avid's internal forecast model drives over $700 million of cumulative capital, which can be deployed to create additional shareholder value through 2025. The $700 million in available capital is created by approximately $425 million of excess free cash flow and approximately $275 million from additional borrowings, assuming a responsible 2.5x Leverage profile. In terms of capital deployment, our priorities to drive shareholder return are to invest in the most prudent organic projects that have strong returns on capital that are already factored into this organic model that we just reviewed. While maintaining a prudent target leverage of 2.5x, we will evaluate strategic and accretive M&A that fills a product need for our customers to further grow our solutions and expand our revenue. Share repurchases to improve share ownership and accelerate share price. We believe by deploying the additional $700 million of capital prudently, we can drive significant shareholder value and will be actively looking to deploy this capital in the near future and throughout the forecast. Avid management will be evaluating decisions on capital deployment in partnership with Avid's board, all of whom have a meaningful ownership percentage in Avid, to drive the best returns for all shareholders. Overall, we believe that with our organic model plus prudent capital deployment, we can drive non-GAAP net income per share to roughly $3.15 and free cash flow per share to $3.75 by 2025. Now I'll ask Jeff to join me so we can take some questions. Thank you. Let me remind everyone that if you wish to submit a question, please enter your question into the Q&A box on your screen, and we'll try to answer as many of the questions as we have time for. Okay. Our first question comes from Steven Frankel at Colliers. Jeff, as enterprises adopt subscription and Avid Edit On Demand, does that change the number of upfront seat licenses, and will they elect to have lower upfront seat and then burst with Avid Edit On Demand when needed? That's a good question. I think it's mixing a couple different dynamics that are going on. I think first of all, Steven, when we talk about enterprise subscriptions, we're generally either converting current customers on maintenance or bringing in new customers that are deploying the MediaCentral platform. Generally, when we're moving people from, let's say, a current maintenance stream, as Tom talked about, there's an uplift. We're generally at that time taking the chance to really try to show the customer that we've got more value to bring them, and really our goal is to get more seats into that environment at that time. I think that generally what we're seeing is the people who are moving to subscription, either new customers or moving from another commercial model they were in. We're generally seeing not just an uplift, but also part of that uplift is getting more seats from the customers. We're not really seeing Avid Edit On Demand, a SaaS like that being a pressure point for the subscription. Avid Edit On Demand is really allowing us to, in some ways, people who rent equipment or rent things in the marketplace, or they want to look at Avid or another editing solution. We're trying to give them the ability to basically rent a service of Avid in a different environment. It's really not that competitive with it. I think longer term, obviously, there's going to be a migration to cloud. That will be part of it. We don't see that as impacting seat count. We actually think that Avid Edit On Demand and the subscription enterprise offering is expanding our seat count, not contracting it. I hope I answered the question right, Steve. All right, our next question comes from Nehal Chokshi at Northland Securities. Jeff and Ken, you mentioned a five-year aspirational target of $375 million for subscription in SaaS. Does that include the maintenance, or what does that include? Well, thank you, Nehal. The 375 target that we mentioned is subscription and SaaS. Maintenance would be additive to that. That was just subscription and SaaS revenue. Next question is from Samad Samana at Jefferies. How large is the channel partner ecosystem, and how do you work with the partners? Is it rev share, joint go to market, or other way? Well, let me bring Tom Cordiner in, who I think is off camera. He can probably answer that for us. Hi there, Jeff. Hi there. We've got a partner ecosystem of about 200 partners that are directly contracted with Avid. Those partners themselves, of course, particularly the large master distributors, they build out their own ecosystem, so they have resellers contracted with them. That's going to probably add a further 100, maybe 50, something like that, partners to them. We basically give them discounts off MSRP, and they then use that to build out their own commercial models and their commercial offerings. Of course, we support them in terms of some of the larger enterprise customer engagements that they have too. Why don't you just stay there, Tom? Another question from Samad. How are you changing the sales compensation for the enterprise subscription compared to the prior perpetual maintenance? Yes, we basically have some accelerators at typically $1.50 on every dollar sold for subscription and SaaS, another kind of key recurring revenue products that we want to emphasize. There's also team bonuses for the signature on long-term agreements, both for partners and for enterprise as well. Great. Now we have a question from Martin Hale at Hale Capital. How do we expect the storage market to grow if there's a broad adoption of cloud storage across media? Won't the on-premises market decline as cloud storage grows? Well, I'm going to actually bring Tim in, as storage is part of his business, so maybe we'll have him address that. Yeah, thanks very much, Jeff. Yeah, I'd say that if you look at the market data, consumption of storage is growing overall. What we're looking at really is how do we broaden our portfolio of offerings so we can participate in sales of different tiers of storage. In the past, we specialized really in high-performance on-prem storage, we're seeing customers expand in their adoption of storage in other tiers and other categories, including cloud storage. There's actually a lot of nuance in the different tiers of storage that are available to customers, but overall, their storage spend is growing. even if customers are de-emphasizing on-prem storage, even still, their storage budgets overall are increasing, and it's our goal through the efforts we've made to get into cloud storage, it's really our goal to participate in that growing spend from them, not just essentially stick to what we've been doing, which is on-prem high-performance storage. I hope that answers the question. Great. We have another question from Nehal Chokshi. How is Avid planning to address the AI opportunity? I mean, will we be working with the big players like Google, or who will own the data, and what value and benefits will Avid bring to the customer? Well, our CTO should probably come into this one. All right. Thanks, Jeff. Great question. For us, it's a multidimensional strategy. First and foremost, we're not setting out to develop all of the AI and machine learning algorithms on our own. We are going to partner with the hyperscalers. We've announced Azure as a key partner with us, and they maintain a center of excellence and significant investment around the advancement of AI and models and algorithms that can benefit our end users. We're also going down a path of looking to enable an ecosystem of participants in this area that can integrate into our platform and add value for our end users, much in the same way that we've done with video and audio plugins. There are some particular areas that we're focusing in on for ourselves, where we think that we can develop and add value, namely in the areas of video compression, in the areas of enriching metadata on ingest into our products so that you can then do richer searches, more intelligent searches on that content, and then also enabling kind of smart assist during the creative process. It's a multifaceted answer where we're going to partner with the hyperscalers, look to enable an ecosystem of developers and advanced data analytics types that integrate algorithms onto our platform, and also own some for ourselves. At the end of the day, AI on its own isn't the value creator, it's really the use cases that we enable. we're really focused in on around the enrichment of the metadata, rich searching and indexing, and smart assist for the creators that we serve. Great. Ken, we now have a question from Josh Nichols at B. Riley. The 2021 guidance implies about 40% subscription growth. What are the growth expectations incorporated into the company's longer-term model? Yeah, in terms of the longer-term model through 2025, the dollar revenue growth each year accelerates, and we expect subscription to be a large driver of that, plus additional opportunities from cloud and SaaS. As we pointed out, the subscription dollar revenue that we expect will be 50% of revenue of the total company by 2023 and roughly over $375 million by 2025. The revenue dollar growth will accelerate every year, and we'll have strong year-over-year growth every year. Great. We got a couple of questions related to music. First, from Steven Frankel, what niches in music creation is Avid not as strong today? Well, maybe we should bring an expert in on that one. Bring Dana in to talk about it. Sure. Yes, if you think about the music creation industry and where we are, Avid and Pro Tools, really, we created the category for recorded music in editing and mixing. Any production that makes its way to streaming or on television will have made its way through Pro Tools at one point or another. That's our position of strength. The areas for growth for us are more the looping and EDM side of the house, which is really using electronic music creation and looping. That's an area that we plan to expand in, and is a great growth opportunity for us. A follow-up on music is, from Nehal, can you give some examples of sort of recognition by the market of Avid by next-generation creators? Sure. I think probably the best example of recognition there is the 2.8 million first downloads that I talked about in my presentation. The lion's share, the vast majority of those folks downloading that software to try it out and explore what Avid has to offer are next-gen music creators. We have a very high conversion rate of those users to paid subscriptions. I think that's probably the best example there, but lots more room to grow as we expand into the electronic music side. actually, while you're up here, a question just came in. what% of the audio 1.7 billion addressable market is represented by more the post-production versus the overall music market? Yeah, that's interesting to dissect it that way. I think, if I had to put a number on it, probably 60% would be music creation, the other 40 would be post-production. Keep in mind that 1.7 billion number has a lot of different categories in it. There's software, there's hardware, there's mixers, there's hardware acceleration. If I had to put a number on it would probably be 60/40. Okay. Actually, just one last one before you jump off. In sort of what's the incentives for plug-in providers to? How much of the marketplace for that is free or paid, and what incentives for plug-in providers to make the plug-in work with us, or how does the plug-in market work? Sure. I think the incentive or the attraction for a plug-in provider to develop products for the Avid ecosystem is we give them direct access to our users. They're literally, as we pull in first users and convert them to paid subscriptions, our plug-in vendors can actually serve up their products in that same user experience that our customers are. They have direct access to our users. They're able to sort of monetize their IP much faster than going through a multi-tiered channel. Revenue splits, I think, are very favorable for our partners in our marketplace. Great. Now off of music. Another question from Nehal: Can we provide any examples of success with mid-market pro video customers? Yes. Maybe I can take that one. Today, Avid actually does operate in a very small slice of the professional video market or the pro video market. Generally, we're at the very high end, where sophistication is needed in the video production or audio production that they're doing. Today, we sell to government organizations, defense, from federal, state, and municipal government environments. We sell to corporations. We sell to banks. We sell to sports teams, not necessarily for the broadcast itself, but for the actual work the team is doing internally to obviously coach and to communicate. There's a lot of opportunity in video and audio. First of all, as I said in my talk earlier, the barrier to entry for people has come down a lot. In fact, if you think about Edit On Demand, that's a service that people can purchase and deploy and get using very easily, very rapidly. There's a very low barrier to entry. The demand for using video and audio for communications, for marketing, for training, et cetera, is really a real ubiquitous adoption of this across the industry and across the world. The situation with COVID-19 only accelerated that. I can speak as a business leader that, as Ken talked about, we're leveraging less with trade shows. We're doing more with digital marketing. We're doing more with social videos. We're doing a lot more using video and audio communication. We're a video-audio company, and I would say, looking at our head of marketing who's in the room here, but I know that we're probably almost, it feels like we're about double what we were in producing video content and audio content. There's a real huge opportunity here where Avid, I think, could take a wider position than we do today. Great. One more question from Samad, and I think this one's for Ken. Has Avid measured sort of any of the subscription profitability metrics like LTV or CAC of the different types of subscription models? Yes. Thank you for your question, Samad. Great question. In terms of LTV to CAC, we've looked at it in terms of our core creative software products, and the LTV to CAC ratios are very, very healthy, above what I would call SaaS quality benchmarks. As enterprises kind of move more into our subscription revenues, we'll be providing more data on LTV to CAC ratios publicly. They're very, very healthy, and that's why we're excited about deploying more capital in this area, and we really see really strong growth. Obviously, a proof point is our first quarter, but we'll be providing more metrics as enterprises become a more important piece of that. Thank you so much. We have a question from Adam Crocker at Logbook: As you work to migrate downmarket, can you talk about the differences in go-to-market, how you cast your net differently versus traditional business, and what have you learned so far in the early days of migration to subscription? It's a good question. It's actually a broad question. Subscription in general does take. I mean, part of the market does take a real direct digital engagement with the potential user base. Dana talked about our first product, which is basically an acquisition vehicle, a freemium acquisition vehicle to get users in. Obviously, digital aspects of how we engage, how we- create attention on our products, how we engage with them, and how we convert them obviously is a big part of the business, and it will be a big part of the business for subscription and SaaS. However, there is a pretty broad market out there. One of the areas that we leverage highly is our channel. In fact, part of the work that Tom talked about earlier is really creating a much more digitally enabled channel and really building our channel network out, that they too can have that level of digital engagement with the user base to be able to attract new customers and new users to Avid. what we have learned is that we've got to work with a channel base in a way that really builds out better strength in their capability to do things in new ways and do things in very subscription-centric or SaaS-centric ways. It does require some changes on the partners in some areas where we need a partner that understands that better. hopefully, most of the work we're seeing is just hopefully successfully helping our partners get into a new way to market, et cetera. There's a lot to learn in this space, but so far it is a good lesson learned and we're seeing great success, as Ken said. Our metrics are pretty impressive. What I look at internally, I like what we see from conversion metrics and what that costs us to acquire and convert people. Great. I see one more question. That'll just remind people if they want to ask questions, please enter them into the Q&A box. While we wait to see if there's others, let me just ask the one last one that I have, which is a follow-up from Nehal. You mentioned sort of improved interoperability between Pro Tools and Media Composer. Do we have a timeline for when that becomes a reality? Yeah, I'd say we haven't publicly told our customer base the exact timeline on this, so I can't really answer that completely, Nehal, but let me say this. It'll be a phased approach. It won't be a big bang kind of thing. We will each year deliver functionality that gets us closer and closer to the desired state. The team has set out a desired state that probably is a couple of years out from where we'd like to be ultimately. Again, it's not going to be a wait and see until two years from now. It's going to be a year by year or even half by half addition of capabilities as we march to our future state. Great. I don't see any further questions here, so just let me turn it back to Jeff and Ken for their closing remarks. Okay, great. Thanks, Whit. That will be all for today. I hope you found the information we provided to you very helpful, including our long-term model, and it also gave you some additional insights into our strategy going forward. Jeff, you'd like any additional comments? Yeah, thanks, Ken. I think I agree. I think it was a great session. I too hope that you'll have a better feel for where we're going as a company and why we're excited and why we have the confidence we do about our future opportunity for the company. I also want to thank all of you for spending time with us today. I'm glad we got done a little bit early for you and give you back some time. We really do appreciate your interest in learning more about Avid, and we look forward to speaking to each of you again in the future. Until then, have a great day.