Avid Technology, Inc.
May 4, 2006

Avid Reports First Quarter 2006 Results

TEWKSBURY, Mass.--(BUSINESS WIRE)--May 4, 2006--Avid Technology, Inc. (NASDAQ: AVID) today reported revenues of $218.1 million for the three months ended March 31, 2006 compared to $166.0 million for the same period in 2005. GAAP net income for the quarter was $3.3 million, or $.08 per diluted share compared to GAAP net income of $19.7 million, or $.53 per diluted share, in the first quarter of 2005.

Non-GAAP net income for the first quarter of 2006 was $16.1 million, or $.37 per diluted share, compared to non-GAAP net income of $22.2 million, or $.60 per diluted share in the corresponding quarter of 2005. In order to calculate non-GAAP earnings per share, which the company believes is a meaningful measure of our operating performance and will assist investors in understanding results of operations on a comparative basis, the following adjustments were made to first quarter 2006 and 2005 GAAP earnings per share:

                                               2006             2005

Non-cash acquisition-related amortization     $ .20              .05
Non-cash stock-based compensation charges       .10            $ .02
Non-recurring and other tax adjustments        (.04)              --
Restructuring charges                           .02               --
In-process research and development             .01               --

TOTAL                                         $ .29            $ .07

"Our results for the quarter were in line with the preliminary results announced on April 11. These results reflect lower-than-expected sales of broadcast products including playout servers and on-air graphics, add-on and local storage, and European consumer products," said David Krall, Avid's president and chief executive officer. "Looking forward, we're pleased with the momentum we created at last week's National Association of Broadcasters convention, where Avid just completed one of its strongest showings in years. In particular, Avid's new Open Storage Initiative was received well by partners and customers alike, and TV Technology Magazine recognized Avid as a Superior Technology Award Recipient (STAR) for our new Interplay nonlinear workflow engine. We also received Pick Hits awards for our new software-only Media Composer® and Avid Mojo® SDI, from Broadcast Engineering Magazine, as well as a VIDY award from Videography Magazine for Avid Unity ISIS. These products are all expected to be strong contributors to Avid's results this year."

Use of Non-GAAP Financial Measures

The non-GAAP operating results and non-GAAP earnings per share listed above are "non-GAAP financial measures" under the rules of the Securities and Exchange Commission. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, disclosures required by generally accepted accounting principles, or GAAP. We believe it is useful for ourselves and investors to review both GAAP and non-GAAP measures in order to assess our performance. We also believe these non-GAAP financial measures are a meaningful measure of our operating performance and will assist investors in understanding our results of operations on a comparative basis. The non-GAAP financial measures used in this release exclude the accounting treatment of stock-based compensation, and these non-GAAP measures should not be relied upon independently, as they ignore the contribution to our operating results that is generated by the incentive and compensation effects of the underlying stock-based compensation programs. In addition to the reasons stated above, we have excluded stock-based compensation from our non-GAAP measures based on our desire to offer consistent information that is comparable to previous information that we have publicly disclosed.

Conference Call

A conference call to discuss Avid's first quarter 2006 financial results and the company's outlook for the balance of 2006 will be held today, May 4, 2006, at 5:00 p.m. EDT. The call will be open to the public, and can be accessed by dialing (913) 981-5509 and referencing confirmation code 7315480. The call and subsequent replay will also be available on Avid's web site. To listen via this alternative, go to the Investor Relations page under the About Us menu at www.avid.com for complete details 10-15 minutes prior to the start of the conference call.

The above release is subject to the completion and filing of our Quarterly Report on Form 10-Q. This release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, about Avid's performance. There are a number of factors that could cause actual events or results to differ materially from that indicated by such forward-looking statements, such as market acceptance of Avid's existing and new products, Avid's ability to anticipate customer needs, competitive factors, including pricing pressures, fluctuating currency exchange rates, delays in product shipments, and the other important events and factors disclosed previously and from time to time in Avid's filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein represent Avid's estimate only as of today and should not be relied upon as representing the company's estimate as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimate changes.

About Avid Technology, Inc.

Avid Technology, Inc. is the world leader in digital nonlinear media creation, management, and distribution solutions, enabling film, video, audio, animation, games, and broadcast professionals to work more efficiently, productively, and creatively. For more information about the company's Oscar®, Grammy®, and Emmy® award-winning products and services, please visit: www.avid.com.

© 2006 Avid Technology, Inc. All rights reserved. Avid, Avid Mojo, Avid Unity ISIS, Digidesign, Film Composer, Interplay, Media Composer, and Pro Tools are either registered trademarks or trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. Avid received an Oscar statuette representing the 1998 Scientific and Technical Award for the concept, design, and engineering of the Avid® Film Composer® system for motion picture editing. Digidesign, Avid's audio division, received an Oscar statuette representing the 2003 Scientific and Technical Award for the design, development, and implementation of its Pro Tools® digital audio workstation. Oscar is a trademark and service mark of the Academy of Motion Picture Arts and Sciences. Emmy is a registered trademark of ATAS/NATAS. Grammy is a trademark of the National Academy of Recording Arts and Sciences, Inc. All other trademarks contained herein are the property of their respective owners.

AVID TECHNOLOGY, INC
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except for share data)

                               ------------------- -------------------
                                      GAAP             NON - GAAP
                               ------------------- -------------------
                               Three Months Ended   Three Months Ended
                                   March 31st,         March 31st,
                                 2006       2005     2006       2005
                                --------  --------  --------  --------
Revenue
  Product                      $194,022  $147,378  $194,022  $147,378
  Service                        24,048    18,623    24,048    18,623
                                --------  --------  --------  --------
       Total Revenue            218,070   166,001   218,070   166,001

Cost of Revenue
  Product                        91,361    60,897    91,222    60,897
  Service                        13,315    10,070    13,096    10,070
  Amortization of intangible
   assets                         5,080       281         -         -
                                --------  -------- --------- ---------
       Total Cost of Revenue    109,756    71,248   104,318    70,967

                               --------- --------- --------- ---------
Gross Profit                    108,314    94,753   113,752    95,034
                                --------  --------  --------  --------

Operating Expenses
  Research and development       35,496    24,679    34,190    24,624
  Marketing and selling          49,912    37,842    48,651    37,650
  General and administrative     15,137    10,302    13,627     9,778
  In-process research &
   development                      310         -         -         -
  Amortization of intangible
   assets                         3,665     1,592         -         -
  Restructuring charges           1,066         -         -         -
                                -------- --------- --------- ---------
       Total Operating Expense  105,586    74,415    96,468    72,052

Operating income                  2,728    20,338    17,284    22,982
Interest and other income
 (expense), net                   1,970       837     1,970       837
                                --------  --------  --------  --------
Income before income taxes        4,698    21,175    19,254    23,819
Provision for income taxes        3,123     1,602     3,123     1,602
Non-recurring and other tax
 adjustments                     (1,770)     (173)        -         -
                                --------  -------- --------- ---------
  Total provision for income
   taxes                          1,353     1,429     3,123     1,602

Net Income                     $  3,345  $ 19,746  $ 16,131  $ 22,217
                                ========  ========  ========  ========

Net income per common share -
 basic                         $   0.08  $   0.56  $   0.38  $   0.64

Net income per common share -
 diluted                       $   0.08  $   0.53  $   0.37  $   0.60

Weighted average common shares
 outstanding - basic             42,137    34,987    42,137    34,987

Weighted average common shares
 outstanding - diluted           43,200    37,263    43,200    37,263

Note

The above results include stock-based compensation related to the
adoption of SFAS 123R, the acquisition of M-Audio, and the issuance of
restricted stock and restricted stock units in Q1 2006, as follows:

Stock-based compensation included in:               Three Months Ended
                                                        March 31st,
                                                     2006        2005
                                                    --------  --------
  Cost of product revenues                         $    139  $      -
  Cost of service revenues                              219         -
  Research and development expense                    1,306        55
  Marketing and selling expense                       1,261       192
  General and administrative expense                  1,510       524
                                                    --------  --------
                                                   $  4,435  $    771
                                                    ========  ========


Reconciliation of GAAP net income to                Three Months Ended
Non-GAAP net income                                     March 31st,
                                                     2006        2005
                                                    --------  --------
  GAAP net income                                  $  3,345  $ 19,746
  Amortization of intangible assets                   8,745     1,873
  Stock-based compensation                            4,435       771
  Non-recurring and other tax adjustments            (1,770)     (173)
  Restructuring charges                               1,066         -
  In-process research & development                     310         -

                                                   --------- ---------
  Non-GAAP net income                              $ 16,131  $ 22,217
                                                    ========  ========


AVID TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(unaudited - in thousands)

                                            March 31,     December 31,
                                               2006          2005
                                           -------------  ------------
ASSETS:
Current assets:
   Cash and marketable securities         $     238,679  $    238,430
   Accounts receivable, net of allowances
    of $21,920 and $22,233 at March 31,
    2006 and December 31, 2005, respectively    131,700       140,669
   Inventories                                  100,717        96,845
   Prepaid and other current assets              26,119        25,733
                                           -------------  ------------
       Total current assets                     497,215       501,677

   Property and equipment, net                   38,036        38,563
   Goodwill                                     404,424       396,902
   Other intangible assets, net                 113,691       118,676
   Other assets                                   9,603         6,228
                                           -------------  ------------
       Total assets                       $   1,062,969  $  1,062,046
                                           =============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable                       $      36,097  $     43,227
   Accrued expenses and other current
    liabilities                                  90,548        96,311
   Deferred revenues and deposits                64,593        66,034
                                           -------------  ------------
       Total current liabilities                191,238       205,572

   Long term liabilities, less current
    portion                                      20,321        16,877
                                           -------------  ------------
       Total liabilities                        211,559       222,449
                                           -------------  ------------

Stockholders' equity:
   Common stock                                     423           421
   Additional paid-in capital                   934,093       928,703
   Accumulated deficit                          (85,450)      (88,795)
   Deferred compensation                              -        (1,830)
   Accumulated other comprehensive income         2,344         1,098
                                           -------------  ------------
   Total stockholders' equity                   851,410       839,597
                                           -------------  ------------

       Total liabilities and
        stockholders' equity              $   1,062,969  $  1,062,046
                                           =============  ============
    CONTACT: Avid Technology, Inc.
             Dean Ridlon, 978-640-5309
             Investor_Relations@avid.com

    SOURCE: Avid Technology, Inc.