Louis Hernandez, Jr. - Chairman, President and CEO John Frederick - EVP, CFO and CAO Tom Fitzsimmons - VP, Investor Relations

Steven Frankel - Dougherty & Company

Good day, and welcome to the Avid Q1 2015 Earnings Release Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Tom Fitzsimmons, Vice President of Investor Relations. Please go ahead, sir.

Good afternoon. I’m Tom Fitzsimmons, Vice President of Investor Relations for Avid. I’d like to welcome you to today’s call. With me today are Louis Hernandez, Jr., Avid’s Chairman, Chief Executive Officer and President; and John Frederick, Executive Vice President, Chief Financial and Administrative Officer. Before we get started, we want to note that during this presentation, we will be making forward-looking statements, including among others, statements related to our recently filed financial statements, future performance related to revenue, operating expenses, earnings, bookings, revenue backlog, revenue backlog amortization, bookings conversion rates, cost savings and free cash flow, expected timing and closing of the proposed acquisition of Orad and term loan financing as well as refinancing of our existing credit facility, the anticipated benefits of the proposed acquisition, including estimated synergies, the effects of the proposed transaction, including effects on future financial and operating results, our future strategy and business plans, our product plans and our liquidity. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Also, these statements are based on expectations as of today, May 7, 2015 and we expressly disclaim any obligation or undertaking to update or revise these statements, whether as a result of new information, future events, or otherwise. Please review the description of these statements and risk factors described in our reports filed with the SEC. In addition, we have presented a number of non-GAAP financial measures that we use to monitor our business, including non-GAAP operating results, adjusted EBITDA, free cash flow, and non-GAAP gross margin and non-GAAP operating expense, all of which are defined and reconciled to the comparable GAAP measure in tables accompanying the release of our results. These non-GAAP measures reflect how Avid manages its businesses internally. Our non-GAAP measures may vary from all other companies presenting non-GAAP measures. Non-GAAP financial measures are not based on a comprehensive set of accounting principles or rules. Our non-GAAP information supplements and is not intended to represent a measure of performance in accordance with or disclosures required by generally accepted accounting principles or GAAP. When analyzing Avid’s operating performance, investors should not consider these non-GAAP financial measures as a substitute for net income or other measures prepared in accordance with GAAP. We also reference bookings and revenue backlog, which are operational metrics we use to measure our business. Our definition of bookings and revenue backlog are included in our SEC filings and our financial press releases. You may replay this conference call by going on the Investor Relations page of our Web site and clicking the Events & Presentations tab. And now, I would like to turn the call over to our Chairman, Chief Executive Officer and President, Louis Hernandez, Jr. Louis Hernandez, Jr.: Thanks, Tom. Good afternoon, everyone, and welcome. I’m pleased to be here today to provide a business update for the first quarter of 2015. This year has been an exciting year for us as we continue to make remarkable progress on our transformation strategy, highlighted with our groundbreaking product announcements MAM that many of you followed in January and then during the second annual Avid Connect Customer Association event just a few weeks ago right before NAB. We immediately followed the new product announcement with some exciting news that we have reached an agreement to acquire Orad Hi-Tec Systems. The game-changing product announcements, our successful customer event, and the first announcement of the acquisition all are prove points for the continued execution of our strategy to transform aimed at solving the industry’s most critical problems while position the company for long-term sustainable value for our investors. I know a lot of you have kept up-to-date on our announcement that Avid Everywhere has allowed us to package and price solutions that are tailored to the unique needs of each marketer as well as the segment, whether it’s a single application for an artist or a complete workflow for a global enterprise, we increasingly have a way for everyone to participate. And so it’s become important to be more clear about how we think about our customer tiers understanding that different groups participate differently in our ecosystem, and in a way that fits their unique needs. We’ve recently posted another installment of our investor video series to help investors better understand the opportunity by tier and our growth strategy for each. You can find that video on our Investor Relations Web site, and I encourage you to check it out to find a bit more about how we think about the various customer tiers. As a reminder, at the highest level, our strategy has been to solve some of the most industry’s critical business issues while initially focused on delivering sustained earnings and cash flow generation. We believe we’ve made strong progress towards both of these objectives and are well situated to achieve our 2015 financial targets. The combination of the first quarter’s results, the surge in bookings in early Q2 from large enterprise deals and new product announcements, the increased visibility and bookings pipeline combined with continued execution of our cost efficiency program provide adequate comfort to reaffirm the guidance at the high end of the adjusted EBITDA range. Now keep in mind that this guidance does not include any impact from the pending Orad acquisition, which is expected to be immediately accretive. We’ll discuss more of the metrics that I just went over later on this call. The Avid Everywhere platform has generated interest and excitement about what is possible for our large media enterprise clients. As we’ve talked about on earlier calls and some of you experienced by attending our events, our customers have begun to understand the value of the MediaCentral platform, and utilize more Avid products across the entire workflow as we begin to gauge and therefore strategic discussions that result in larger, more profitable and more strategic projects. They also tend to be longer discussions and have elongated as a result of sales process. As we’ve said in the past, we’re focused on growing profitability and signing the right deals for us and for our customers. And as a consequence of our financial discipline and the interest from our customers, we have already signed several of the large deals in Q2 and in fact, total bookings this far in the second quarter are substantially above where they were at the same point of this last quarter in Q1. As a reminder, in our last call, we discussed that 2015 bookings activity were expected to be bias towards the second half of the year, as more of our growth engines kick in, specifically our Tier 3 strategy and our new product launches. In fact, we have experienced early excitement in the products launched at NAB in April and the Pro Tools subscription offering that became generally available in the last week of March. The performance of these new products has already exceeded expectations and we’ll be converting to a financial expression throughout the remainder of 2015 and probably some of you who attended NAB and Connect saw some of that excitement. The momentum is particularly exciting for us as you put in the context of the overall market. You may have observed by now Q1 has been a challenging quarter for many in the media, technology industry reflecting certain regional considerations as well as a potential plan [ph] as customers think about how best to solve some of these emerging strategic challenges. While we’re certainly not completely immune from the overall marked additions, our experience in the first quarter has actually provided some interesting prove points about our strategic advantage. First, while many experienced contraction in Europe, we actually saw an increase an increase in bookings in that region as compared to the prior year, as customers who were economically challenged look to our platform approach as a way to drive costs out of their organization. Our comprehensive approach plus open architecture and pricing profitability are keys to unlocking long-term value and we believe this strategy is working. In general, given the observed variability of deal timing due to the large and more complex nature of our discussions, our first quarter results were about as expected with strong quarterly free cash flow of over 4 million, a substantial improvement over last year, a 63 million or 16% annual increase in post-2010 revenue backlog and about a 7% reduction in operating costs. While bookings revenue and adjusted EBITDA were lower than the prior year due primarily to the timing of both deal activity and new products announcement as well as the currency pressure and the general market softness that is impacting many global organization. John will review our results in more detail shortly, but first I’d like to touch on how we think about the customer tiers, how the product announcements that we’ve launched in 2015 further our strategy and finally, the Orad acquisition and how we expect to derive value from the acquisition by utilizing our platform-based approach? So we generally think about the media technology market in three tiers comprising a total addressable market of almost $8 billion. We define the three tiers as large media enterprises, businesses and institutions and finally individual creatives. It’s worth noting that there’s also a consumer market at the very low end of tier 3, which is not an area of focus for us. However, we do have tools for discovery so that nonprofessionals and enthusiasts can determine if they like to aspire to become a creative professional. We’ve designed our solutions and go-to-market approach to meet the specific needs of those customers in an efficient way, which we believe will unlock growth at each tier. Before I go onto the specific strategy for each tier, I’d like to touch on one tool that expands all the tiers and that’s our Connectivity Tool Kit. Its role is each tier is to connect to the rest of the ecosystem and allow Avid to participate in a portion of the economics by facilitating the connections between those who share our common tools. And thus solving one of the most costly problems of our industry which those customers are trying to connect hundreds of dispirit, siloed and proprietary technologies. This is a mind-bending development to many of our clients and I’ll share some exciting updates on the new connectivity partners in just a bit, but first let me spend some time on our growth strategy for each tier. At the Tier 1 level, the business issues for the largest media enterprise customers are much different than those of an individual creative. For these customers, it’s all about driving efficiency and managing large amounts of media through their entire lifecycle in a safe and secure way while maximizing the value of each asset. This can be achieved by leveraging a MediaCentral platform then adding incremental Avid and connectivity partner modules across the workflow from the creative process all the way to distribution. As a result, platform adoption, cross selling and up-selling are the most impactful growth engines for Tier 1. From a relative market perspective, we largely leverage our direct selling team to make the strategic connection with a customer and cultivate that relationship. So that’s how Tier 1 works. Tier 2 consisted businesses and institutions that don’t fall into the large media enterprise category. These could include everything from local and regional broadcasters to postproduction facilities to music studios to corporations and educational institutions. For the creative teams in Tier 2, Avid can provide a powerful way to find and hire the right talent through the artist community, then create and collaborate more efficiently and effectively using our cloud collaboration tools, customers can manage workflow for the media suite and both store and protect their assets either with on-premise, shared storage or cloud storage. Similar to Tier 1, we expect the platform adoption, then cross selling and up-selling to fuel future growth, but we do plan on leveraging our channel partners more heavily for Tier 2. We’ve recently rationalized our entire partner network to begin to align with the highest performing partners. And then we’ve invest in these relationships through a variety of measures including increased training, improved commercial turns design to specifically align partner incentives with our strategic goals. So that is Tier 2. Tier 3 consist of independent professionals, students, small work groups and aspiring professionals or what we call individual creatives. As we have mentioned, we’ve not historically participated in a meaningful way in this portion of market, which leaves significant wide space for growth. In fact, in the other tiers, we estimate that we have about 7% to 8% market share while in Tier 3, our estimated share is only about 3%. We believe that there are millions of potential customers in Tier 3 representing approximately 1.8 billion of annual spend. These individual creatives will likely use our solutions in a very different yet equally effective way as our institutional customers. Activities will be largely centered on the creative tools in the artist suite and those customers will be able to heavily leverage the Avid marketplace in the artist community to connect with other artists by plug-ins and apps, use cloud storage and sell their own creative assets. Now up until now, these customers didn’t have an efficient way to use some of the best creative tools in the world or be part of a complete ecosystem that connects them to the rest of the value chain. Customers now have a choice to use our creative tools either on premise or via the cloud through either perpetual license or subscription agreements. Further, we see our free first offerings as an efficient way to acquire new customers. Pro Tools First and Media Composer First are the same tools used to create the biggest Hollywood movies and Top 40 hits but with limits on features like cloud storage and number of projects and are feeding some of the more advanced functionality. Once in our ecosystem, we see the lifetime value of these first customers as quite significant as they purchase plug-ins, apps, cloud storage regardless of whether they upgrade to paid versions, they’re still significant long-term value. We’ll primarily use a focus digital marketing strategy to attract, engage, convert and enthuse those individual creatives that are new to the Avid family. In addition, we’ll supplement this digital strategy by leveraging our channel distribution network. So in summary, we’ve developed a directed product in go-to-market strategy to address each of the three customer tiers. These growth engines are designed to provide a specific solution most impactful to our customers, priced and packaged in a way that makes the most sense for them. Then we deliver these solutions in the most efficient manner possible, whether it’s through strategic selling efforts or a direct selling force, leveraging our massive global channel network or through a newly formed digital marketing organization. So we’re excited to be able to address all portions of the professional market and look forward to sharing updates with you on that progress. All right. With this tiered strategy as a backup, I’ll touch now on our new product launches thus far in 2015, and highlight how they fit into the Avid Everywhere strategy before I wrap up and turn it over to John. I’m pleased to say that we’ve had a very successful second annual Avid Connect event a few weeks ago in the days leading up to NAB. Over 1,000 participants from over 485 organizations in 50 countries joined us in Las Vegas to address the industry issues, collaborate on workflow needs and shape the future of the media industry. And following the pattern we’ve established with major trade events, we were proud to reveal the next phase of Avid Everywhere as it continued to enhance the platform with new applications and share services directed at each of the tiers we just discussed. We announced plans to further expand the media ecosystem to now include all storytellers with the Media Composer First free offering. This follows on the heels of a very successful launch of Pro Tools First in January at the NAMM Conference. In fact, to-date, over 1,000 new users have preregistered for Pro Tools First and Media Composer First since their respective launches. This build a trend that we saw in 2014 when we launched our paid subscription service for Media Composer and followed up with the paid subscription for Pro Tools just in this last January. We’re excited to be able to report that we now have approximately 8,000 paid active subscribers to use these tools. Given the recent launch of the Pro Tools subscription focused on digital strategy, we expect paid adoption to accelerate throughout the rest of 2015. We’re also excited to announce the ISIS 1000 shared storage solution, the Avid VENUE S6L live mixing system, Interplay, Media Asset Manager 5.0, the Sibelius notation and scoring and a number of new connectivity partners. There truly is something for everyone at each tier of the customer market, all leveraging the shared services of the MediaCentral platform. So I’ll quickly touch on just two of the products that really generated a lot of excitement at NAB and are really showing significant traction. The first is the ISIS 1000, which brings the same innovative real-time shared storage technology used by the largest media enterprises to small production teams and workgroups customized to their needs at a price point they can afford. We see this as a great fit at the lower end of the Tier 2 market and the top end of the Tier 3 market. On the audio side, the Avid VENUE S6L live sound mixing system allows professionals to interact with Pro Tools using a modern and intuitive touch-based interface to handle the largest most complex tours and events. The S6L builds off the successful S6 studio console and takes on the same modular, fully network architecture customizing it for the live environment. The early feedback on these two products has been overwhelming and we have had a ramp up production to keep pace with the demand. We expect both will begin shipping towards the end of Q3. Finally, we have made progress on growing the connectivity partner network. During our last call, we talked about the announcement that Avid shared storage system now supports Adobe Premiere Pro, an unprecedented collaboration demonstrating the openness of Avid Everywhere. Remember, the strategy is to expand the ecosystem to include partners and competitors alike. So it’s important to note that Adobe is just one example, albeit a symbolically important example of the momentum of the Avid ecosystem. During NAB, we announced the many more connectivity partners including Dolby Atmos, Blackmagic Design, Waves audio plug-ins and Fortium anti-piracy and inscription tools. I’d like to move on to the Orad acquisition now. We’re really excited to announce our first acquisition as a management team here at Avid. Right before NAB began, we announced the acquisition of Orad Hi-Tech Systems, which we expect to close at the end of June. As a reminder, we evaluate potential M&A candidates in the context of a set of consistent strategic filters designed to achieve above market cost synergies and accelerate growth through cross-selling opportunities. With the pending Orad acquisition, we feel that we’ve met all the strategic filters. Orad will add additional graphics, virtual studio and sports enhancement solutions that we plan to sell as applications on the platform. Their products will also allow us to move more forcefully into sports, live production and the corporate arena. As a reminder, these are higher growth areas that we see as key to our transformation strategy. overall, we believe the addition of Orad products will further differentiate the platform offering arguably one of the most complete solutions in the industry making the Avid Everywhere value to new customers more obvious. Further, we expect some attractive opportunities for cross-selling Orad’s products into our large customer base through our global distribution network that covers over 140 countries. Adding to the cross-selling opportunity, we believe Orad is underweighted in North America. When you overlay Orad’s geographic footprint onto our own, we believe that we’ll be able to meaningfully expand their product reach into North America given our own customer base, sales force and reseller network. We expect this acquisition will be accretive immediately from both an EBITDA and cash flow basis, and are looking forward to closing the transaction and beginning the work on integration. As I mentioned, the beginning of 2015 has been an exciting and productive time for us and has helped up laid a foundation for the rest of the year as we optimize existing growth engines and turn on to new ones, including addressing the multibillion dollar independent professional market through our Tier 3 strategy. We’re encouraged to see our financial deal discipline pay off regardless of the quarterly timing as we are signing large strategic deals on terms that meet our profitability targets. It’s apparent to us that customers are embracing the Avid Everywhere platform approach as a way to operate more efficiently in a challenging economy. The new product launches, which address all of the tiers and the largest broadcasters to the independent professionals, demonstrate our practice of continually rolling out new products and solutions that we see further differentiate Avid. We believe our well defined growth engines, financial discipline around customer deals and efficient operating model provide a platform for both organic, sustained earnings and future acquisitions as demonstrated by our pending acquisition of Orad. As we exit Q1, we’re proud of the progress we have made and are looking forward to seeing its financial expression over the remainder of the year. So with that, I’d like to ask John Frederick to review our financial results. John?

Thanks, Louis. As you can appreciate from Louis’ comments, we continued to make solid progress in our long-term transformation plans and we’re excited about the opportunities in each of the three targeted customer tiers. Before I get into the GAAP and non-GAAP results, I wanted to provide a brief overview of our three key metrics namely free cash flow, adjusted EBITDA and bookings. We ended the quarter with over $25 million in cash and nothing drawn on our revolver. Free cash flow for the quarter was $4 million or about an $18 million improvement over the same period last year. Much of this improvement was based on the timing differences of incentive compensation payments, which were paid in the first quarter of last year as compared to the second quarter of this year. Naturally, the timing shift from Q1 to Q2 for the incentive compensation payments will have the reimbursed effect on Q2 free cash flow. That said, even after normalizing for these payments, we still generated a meaningful year-over-year improvement in free cash flow during the first quarter. Adjusted EBITDA for the quarter was $12 million or approximately 10% of revenue as compared to approximately $20 million in the year-ago period. Adjusted EBITDA was lower reflecting about $10 million less pre-2011 deferred revenue amortization. A challenging year-over-year comp as Q1 2014 included the Olympics and World Cup creating about a $2 million headwind and lower sales of deemphasized products and higher costs related to a completed customer project implementation. We anticipated that continued large deal traction around the platform would cover these headwinds. However, we believe the sales cycle around some of the larger strategic deals have elongated. As it pertains to the elongation of the selling cycle for large strategic deals, the impact can be hard to quantify with precision and may continue to occur in future quarters. But a few observations may help articulate really how we see this transpiring. As Louis mentioned earlier, as customers see the value of the MediaCentral platform and utilize more of the Avid products across their workflow, we believe the opportunities become larger, more profitable and more strategic, which in turn ends up elongating the sales process. We’re seeing more involved in complex dialogues with our customers reflecting the increased strategic importance of our solution, hence deeper scrutiny within multiple functions across our customers. Therefore, we think this phenomenon is simply timing. We maintain a disciplined approach to optimizing profitability and contractual terms of a given deal as opposed to solving for timing. Simply put, we take a long-term view and find the best possible deal for Avid regardless of timing. A few additional data points might be helpful. First, as it relates to Q1 deals, approximately 74% of Q1 deals weren’t closed until March with over half of the entire quarter’s bookings not closed until the last two weeks of the quarter. This was a notable increase from Q4 and some of the earlier periods. Deals closing late in the quarter make it very challenging for us to meaningfully convert bookings to revenue in that same quarter. Additionally, we saw relatively higher number of deals which were anticipated to close during Q1 extend into the first month of Q2 resulting in a strong start for the second quarter. So although deals closed generally later, which impacts near-term revenue and EBITDA results, given the total quantum of closed deals to date, we have growing confidence and comfort around our full year guidance. Another item impacting adjusted EBITDA in the first quarter that we mentioned is the cost impact of certain large scale MAM customer implementations that were completed in the quarter. The costs for these projects aggregating $1.4 million had been accumulating on the balance sheet and were released into earnings once the projects were completed. However, the associated revenue will be amortized over a number of years. While this accounting is consistent with how we’ve treated these types of professional costs since the restatement, we completed a meaningful number of projects in the first quarter, so the cost in the quarter are atypically high compared to our experience in recent quarters. Offsetting these factors were lower operating expenses as we continue to execute on our cost savings programs. Looking through the first quarter, we’re 112 million as compared to 126 million last year on a reported basis. We’ve already talked about some of the timing impacts on customer deals and to a lesser extent both currency changes and the de-emphases of lower margin non-marketed products had an impact on first quarter bookings. The timing of these new product releases also had an impact on bookings as we had mentioned in the last call. We expect bookings to be weighted towards the second half of 2015. And based on the benefit of the new products announcements from NAB and the Pro Tools 12 launch late in Q1, we expect to see that play out for the balance of the year. The customer reaction to these announcements, as some of you may have seen, has been overwhelmingly positive and we began to see bookings traction immediately upon launch. When we combined the deals closed early in Q2 with the efficacy of new products introduced at NAB as well as the general deal visibility, we feel confident in our bookings guidance for the full year. Although we continue to monitor factors such as continued progress of our new products, impact of currency and continued or further elongation of the sales process. So with that as a backdrop, let me shift over to our operating results on both a GAAP and non-GAAP basis. As a reminder, the tables in our press release provide a description and a reconciliation of our non-GAAP to GAAP results. Revenue for Q1 was 120 million, which was down 11% or $50 million from the first quarter of 2014. Many of the same factors that drove adjusted EBITDA performance also impacted revenue including lower amortization of pre-2011 deferred revenue and the revenue that was recognized last year related to the 2014 Olympics, and the FIFA World Cup, as well as lower sales of non-marketed products and timing of large deal closure. In Q1, product revenues were $80 million and services revenues were 40 million, of which about three-quarters related to support agreements. In fact, our total support and subscription revenue has increased both in absolute amount as well as, as a percentage of overall revenue. In Q1, support and subscription revenue made up about 25% of our overall revenue while comprising only 21% in the same quarter last year. This increase in recurring revenue base is also a helpful metric when assessing future visibility. GAAP gross margin for the first quarter was 60.3%, which represented a decrease of 210 basis points from the prior year. Non-GAAP gross margin was 60.5% for the first quarter, which was down about 210 basis points. Our variable direct product margin of approximately 74% was up 20 basis points as compared to 2014 on a constant currency basis but down on a year-over-year as reported basis. There were a few other factors impacting our gross margin for the quarter including about $1.4 million of professional services costs related to large projects. These were the MAM projects I referred to earlier; finalized in the first quarter that I touched on along with the $10 million less of non-cash pre-2011 deferred revenue. GAAP operating expenses were 71 million, down 3.6 million from Q1 2014. These GAAP operating expenses included $1.8 million or restatement-related expenses as compared to 4.2 million in the same period last year. These lowering restatement expenses largely relate to continued investment in our systems, some accounting and consulting as well as process remediation costs. Also, GAAP expenses include $2.3 million related to M&A activity which is excluded from our non-GAAP results. Non-GAAP operating expenses of 64.2 million were down 4.6 million or 7% from the first quarter of 2014 as we continue to benefit from our strategic initiative to drive to a leaner, more directed cost structure. In addition to our international expenses benefiting from a strengthening dollar, a significant portion of our decrease was related to compensation savings as we begin to execute our wage rate arbitrage project. We’ve now begun hiring associates in earnest in both Taiwan and in Philippines, and by the end of the quarter we had nearly 50 new employees in lower cost areas significant with our average wage costs. These efforts will accelerate through 2015 particularly after we close on the Orad acquisition and begin to leverage their development center in Poland, and continue to execute on the rest of our labor arbitrage strategy. Upon completion of this project, we’d anticipate that our non-GAAP adjusted operating costs could indeed fall below 250 million on a pre-acquisition annual run rate basis. We expect to see a portion of that benefit this year, but we’re not currently anticipating completing the project until the end of 2015. Non-GAAP operating income for the quarter was 8.1 million as compared to 15.6 million in the same period last year. Similar to the change in adjusted EBITDA, the decrease in operating income was largely attributable to the lower 2011 non-cash deferred revenue amortization as compared to last year. So we’ll go ahead and turn away from the income statement for a moment and turn to the balance sheet. We ended the quarter with $25 million of cash and no amounts drawn on our available line of credit. As we mentioned in our investor update for the Orad acquisition, we’re in the midst of a process to extend our asset-backed line of credit and have also received a commitment for a $100 million term loan to finance the acquisition. As a reminder, we posted the video on our Investor Relations site which discusses the Orad acquisition in a little bit more detail along with the agreed upon terms of that $100 million term loan. Accounts receivable of 52 million represents a DSO of 39 days, which is consistent with last quarter and last year. Inventory at 40 million, the lowest level in over 10 years, was down 17% as compared to the end of 2014. Our annualized inventory turns for the first quarter were 5.0 as compared to 3.8 in the same period last year. We’ve been focusing on working capital management and our manufacturing, logistics and sales teams have just done a tremendous job in improving our inventory turns performance. Deferred revenue was 413 million at the end of the quarter as compared to 415 million at the end of 2014. And if you exclude deferred revenue related to transactions prior to 2011, our deferred revenue was up about $16 million over the past three months. Revenue backlog was 529 million at the end of Q1 as compared to 540 million at the end of 2014. Again, if you remove the impact of pre-2011 deferred revenue, our revenue backlog grew about 7 million to 462 million in the last quarter reflecting the continued trend towards increased revenue visibility. If you look back a year ago, we’ve grown our post 2010 backlog about 63 million or about 16% in the last 12 months. As I mentioned on the last call, our practice is to provide annual guidance and update you on a quarterly basis. The guidance I’m providing excludes any impact we may see from the Orad acquisition. We’ll update our guidance for 2015 with the addition of Orad once we close the acquisition. As a reminder, in 2014, Orad had approximately $41 million of revenue, 5.3 million of EBITDA and generated approximately $4.5 million of free cash flow. We estimate that the company can generate about $10 million of pro forma adjusted EBITDA after giving effect to cost synergies identified in our diligence process. And as a consequence, we believe the acquisition will be immediately accretive on both in earnings and free cash basis. Incidentally, we also incrementally cited some opportunities for revenue synergies as we turn on the cross sales, growth engines and leverage our global distribution model. While we’ve not quantified the 2015 impact from the anticipated revenue synergies, it’s fair to say that our work thus far on the integration planning has been very encouraging and we expect those revenue synergies to be a meaningful uptick to our guidance. As we’ve mentioned earlier, we are reaffirming our 2015 full year guidance based on a number of factors including the impact of the first quarter results, Q2 activities to-date, visibility for the remainder of the year from growing both pipeline as well as assigned [ph] backlog, anticipated impact of our new product launches and further cost reductions. As a reminder, we expect 2015 adjusted EBITDA to be in a range of 72 million to 78 million with bias toward the high end of that range. We expect free cash flow generation to be in a range of $18 million to $30 million, as compared to $13 million that we reported in 2014. Free cash flow includes estimated spending between $18 million and $20 million on capital. The anticipated spike in cap spending is going to be related to our investments in our digital strategy and facility and infrastructure costs in lower cost regions as we execute on our wage arbitrage projects. We believe both the investments that we’re going to be making on these projects have compelling returns on investment in the near term. We will expect capital spending after 2015 to track closer to our depreciation. Annual bookings on a constant dollar basis are still expected to be up 1% to 5% over 2014. We expect the currency headwind to be a net 2 percentage point headwind with a gross impact of about 4 points from the strengthened dollar, partially offset by a 2 point improvement from local pricing actions as well as favorable mix. Again, we expect bookings to be weighted to the second half of the year and again, this is primarily due to the new product launches and our Tier 3 strategy as well as a typically strong fourth quarter seasonality. We continue to expect 2015 revenue to be flat to up 3% from last year with non-GAAP gross margins between 60% and 61%. Non-GAAP operating expense is expected to be flat – between flat and down 4% compared to 2014 with a bias toward the high to midpoint of that range as we expect to realize full year cost savings from the cost programs that we’ve already implemented as well as capitalize on some new cost refinement projects like our wage rate arbitrage efforts. GAAP to non-GAAP adjustments are expected to be between 17 million and 20 million. These items, if you’ll recall, include cost associated with stock-based compensation, restatement, restructuring expenses, amortization of intangibles, mergers and acquisitions and tax related adjustments. Finally, we expect non-GAAP taxes and other interest expense to be approximately $5 million for the year. So with that look on the guidance, I’ll turn it back to Louis for some closing remarks. Louis Hernandez, Jr.: Thanks, John. Reflecting on 2015 so far, we’re pleased with the organization’s work as it rolled out the next phase of Avid Everywhere innovations became clear on our strategy to grow in each tier of the market, sign some very large and strategic customer deals and execute it on our continued cost savings and cash flow generation, and reach agreement on our first acquisition that we believe will drive significant value for Avid strategically. This work has laid the foundation for creating sustainable EBITDA growth and cash flow generation in the coming years, as we optimize existing growth engines and turn to new ones including attacking the multibillion dollar individual creative markets through our cloud-based subscription and collaborative community marketplace. We’re looking forward to the remainder of 2015, as we expect to start seeing the impact more demonstrably from the work we’ve done as described earlier on this call. On behalf of the entire Avid management team, thank you again for you support and we look forward to talking to you all soon. This time, we’ll be happy to take any questions. Operator?

Thank you. [Operator Instructions]. We’ll take our first question from Steven Frankel of Dougherty & Company.

Good afternoon. I, like everybody else, are trying to get my arms around that significant shortfall relative to investor expectations. And just maybe can you give us a little more detail on the stretching out of products like Golden [ph] and why you don’t think that’s something that might happen every quarter this year, and so you have trouble converting to revenue? Louis Hernandez, Jr.: So the enterprise selling cycle around these products we’re talking about, which is really around large strategic enterprise deals really what we saw was – we had a pretty good line of sight at the end of the quarter on a number of very large deals. And we saw those deal close in a matter of weeks after the end of the quarter. And really the battle lines around those deals were the things that you’d expect as you become more strategically relevant. It was primarily around terms and conditions. Now if we wanted to, literally we could have said yes to a number of these deals at the end of the quarter and took the deals the way they were. Instead, we made a choice to really sign [ph] for deals that we thought were generally better for the company. And we felt like, as we got through the month of April and we saw those deals indeed closed, that gave us the comfort that this really was a trend that was manageable and frankly, it’s a byproduct as the platform is becoming more relevant. But more importantly, we also saw it as a way to really look out into the year and look at some of the deals that we had, look at the efficacy of our new products, really look at absolutely everything that we had baked into the year and get very comfortable. And as you can imagine, as we’re reaffirming guidance, we spent a fair amount of time looking at this. And one of the ways we looked at this was, gee, what would the world look like if bookings were flat? And our analysis of the year would suggest that even with flat bookings we can hit our guidance for the year.

Okay. And the deals, for example, that were pushed into April, will they produce revenue in Q2 or are these deals tied to the new products that they’ll ship until the back half?

So those deals were related to large enterprise deals that weren’t related to the new products naturally because we didn’t release the new products until NAB. Because of the size and complexity of these deals, they could have a deferred revenue component; don’t have the number to them sitting in front of me, but my suspicion is given the size of them and the complexity of them, they’ll have a revenue expression over the course of a period of time, which could be one to two years. Louis Hernandez, Jr.: Steve, if I could just add...

Go ahead. Louis Hernandez, Jr.: Go ahead and finish that question.

I just want to make sure, I understand that they’ll last over a long period of time but does that begin in Q2?

So some of it could get carved out into the quarter. I don’t have the numbers specifically in front of me, Steve, so I could – we can certainly go back and look at it. But I think what I would say is, all this is programmed into our full year guidance and we thought about how all these deals weren’t growing including everything that’s coming out of backlog, which then actually leads me to one other thing to give you a little bit of comfort is – one of the underpinnings to the flat bookings thesis getting you the guidance and the thing that gives us confidence is a chunk of that revenue and EBITDA is rolling out of year-end backlog.

Okay. Louis Hernandez, Jr.: Steve, I was just going to add before we get too far above because you had asked what comfort do we have that it’s not going to keep rolling out. All I wanted to say was that Q1 was a little bit unique in that we had a significant amount of new products also being announced. And so our comfort comes from the combination of everything you’ve been asking about. Number one, there was a lot of deals that were signed very late and there’s a variety of reasons for that. The very late conversion of revenue had some impact. Obviously, we know what that’s going to do for Q2. Second, we had these large enterprise deals that are more complex that we had just unusual surge in the first month that we know is not sustainable. That’s just those deal have rolled over. So we have fantastic visibility on those. We also launched new products that aren’t actually going to be delivered until Q3 and the bookings on those products were much higher than expectations already in Q2. And that’s why we gave that first month, because that happened right after NAB. And so when we take all those, it gives us both comfort on the next couple of quarters visibility. When you take that plus the increase in backlog and then our cost programs, that’s what provided us the comfort overall. Also, we don’t think by the end of the year, you’ll have the same unusual kind of dynamic of Q1 because number one, the market is learning that we’re not going to give season-to-season pricing. We don’t care if it’s the end of the period. And two, budgets typically clear at the end of the year and Q4 has seasonally been a high quarter for us. So because we saw what happened already in Q2, because of the new product bookings that will hit in Q3 that really leaves Q4. And we look at our pipeline, we look at visibility plus the cost flexibility, we felt as strongly as we did before on the guidance we gave for the full year. And so just adding to your first question, because I know you’re trying to understand that for you and your investors, that’s how we looked at it.

Okay. And should we expect bookings to be up in Q2 year-on-year given the surge or --?

We give full year guidance on bookings. We don’t give quarterly guidance, Steve. But I think if I reflect on some of the remarks I’ve made as well as I think some of the remarks you’ve made in some of your write-ups, there are a lot of fundamental reasons why we’re going to be a back half loaded year. And I think I mostly focus on what the full year is going to look like. And also to Louis’ point, we’re not going to be too concerned with quarter-to-quarter timing if the difference really is taking deals that really aren’t in the company’s best interest.

Okay. And I have a couple of more questions, let me change the subject a little bit. You talked on the conference last time about extending your plan to get more customers on maintenance into Q1. How did that promotion go?

I think what you were talking about was our move to try to get more people from Pro Tools onto the current version, and I think that promo and the promotion that we had at year end to get more people onto Media Composer both worked pretty well. In fact, I think what you’d see generally is if I just pivot back to support revenues, we’ve seen both the absolute dollars go up as well as the year-over-year. Louis Hernandez, Jr.: Steve, if you look at the deemphasized products, which we were able to reduce even more than we thought plus the headwinds of 10 million, if you added back what rolled in, essentially it was everything else pretty much did what we expected. So a lot of those promotions, people getting on the platform and the cross selling that was still very effective. It was just some of these – mostly these large enterprise deals and then of course the FX that we didn’t plan on. And the fact that so many of these large enterprise deals signed right after shows you these customers want these products. It’s not like they even tried to make us wait to show that – because they were upset that we didn’t give on – they just signed basically right after the next quarter, because these projects need to be instituted because there’s real savings for them. And so we’re hoping that if we continue to see that trend, we’ll train the market that Avid no longer is cutting deals at the end of the quarter that are not in our best interest. And we believe we’re pretty unique in the offering that we have and that’s why we’re excited about the long term. We did a careful analysis on the year when we thought about guidance, and we’re feeling very good about the full year.

So one quick last question. What drove the decision to pay incentive comp in Q2 rather than Q1?

There was a timing of when all the approvals came together and when we could get it through all the global payrolls. Louis Hernandez, Jr.: The company, Steve, hadn’t had – we instituted a requirement that evaluations and rating with all employees had to be completed and that hadn’t been a policy before, and that just meant globally a little more nation than before. But we wanted to make sure that we understood exactly who was getting what and why, and the employees in good standing and performing better were getting a disproportionate amount of the reward. So that just took a little couple of more cycles, because it was new to a lot of us.

Okay, great. I’ll let somebody else ask some questions. Louis Hernandez, Jr.: Thanks, Steve.

[Operator Instructions]. This does conclude today’s question-and-answer session. I would now like to turn the conference back over to Tom Fitzsimmons for any additional or closing remarks.

Thank you all for joining today’s call. We look forward to speaking to you soon. Thanks.

This does conclude today’s conference. We thank you for your participation. You may now disconnect.