NEWS & EVENTS
Avaya Reports Third Fiscal Quarter 2014 Financial Results
- Revenue of $1,054 million
- Gross Margin of 57.6% of revenue, non-GAAP Gross Margin of 59.2% of revenue
- Adjusted EBITDA of $223 million, 21.2% of revenue
Total revenue for the third quarter was $1,054 million, down $6 million when compared to the prior quarter. On a year over year basis revenue was down $62 million compared to the third quarter of fiscal 2013. For the third fiscal quarter, adjusted EBITDA(1) was $223 million which compares to adjusted EBITDA of $185 million for the prior quarter and $217 million for the third quarter of fiscal 2013. GAAP operating income was $48 million and non-GAAP operating income was $180 million which compares to non-GAAP operating income of $142 million for the prior quarter and $163 million for the third quarter of fiscal 2013. Cash and cash equivalents totaled $315 million as of June 30, 2014.
"Avaya's third quarter results reflected revenues which were in line with recent historical sequential seasonality and further strength in margins," said Kevin Kennedy, president and CEO. "The company continues to demonstrate strong execution of our strategy to broaden our innovative product portfolio and drive our sales and services transformation addressing both the enterprise and mid-market segments."
Third Fiscal Quarter Highlights
- Revenue of $1,054 million decreased $6 million compared to the prior quarter and decreased $62 million compared to the third quarter of fiscal 2013
- Product revenue of $511 million decreased by 3.9% compared to the prior quarter and decreased 8.8% compared to the third quarter of fiscal 2013. Product book-to-bill was greater than 1.0
- Avaya Global Services revenue of $543 million increased 2.8% compared to the prior quarter and decreased 2.3% compared to the third quarter of fiscal 2013
- Gross margin was 57.6% compared to 56.3% for the prior quarter and 55.4% for the third quarter of fiscal 2013. Non-GAAP gross margin was 59.2% compared to 58.6% for the prior quarter and 56.8% for the third quarter of fiscal 2013.
- Third fiscal quarter 2014 non-GAAP gross margin and non-GAAP Services gross margin were record levels for the company.
- Operating income was $48 million which compares to breakeven operating income for the prior quarter and operating income of $6 million for the third quarter of fiscal 2013. Non-GAAP operating income was $180 million compared to non-GAAP operating income of $142 million for the prior quarter and $163 million for the third quarter of fiscal 2013
- Adjusted EBITDA was $223 million or 21.2% of revenue compared to $185 million or 17.5% of revenue for the prior quarter and $217 million or 19.4% of revenue for the third quarter of fiscal 2013
- Non-GAAP operating income and adjusted EBITDA on both a dollar basis and a percentage of revenue basis were record levels for the third quarter of any fiscal year for the company.
For the third fiscal quarter, percentage of revenue by geography was:
- U.S. – 52%
- EMEA – 28%
- Asia-Pacific – 10%
- Americas International – 10%.
Conference Call and Webcast
Avaya will host a conference call to discuss these financial results and related Q&A at 2:00 p.m. PDT on August 5, 2014. On the call will be Kevin Kennedy, president and CEO, and Dave Vellequette, CFO. The call will be moderated by John Nunziati, senior director of investor relations.
To join the live webcast and view supplementary materials, listeners should access the investor page of Avaya’s website (www.avaya.com/investors). Following the live webcast, a replay will be available at the same web address in the event archives.
To access the live webcast by phone, dial 800-894-5910 in the U.S. or Canada and 785-424-1052 for international callers, using the conference ID: AVQ314. Listeners should access the webcast or the call 10-15 minutes before the start time to ensure they are connected prior to the start time.
A replay of the conference call will be available beginning at 5:00 p.m. PDT on August 5 through September 5, by dialing 800-839-2418 within the United States or 402-220-7210 outside the United States.
Avaya is a global provider of business collaboration and communications solutions, providing unified communications, contact centers, networking and related services to companies of all sizes around the world. For more information please visit www.avaya.com.
Certain statements contained in this press release may be forward-looking statements. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "should" or "will" or other similar terminology. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these are reasonable, such forward looking statements involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results to differ materially from any future results expressed or implied by these forward-looking statements. For a list and description of such risks and uncertainties, please refer to Avaya's filings with the SEC that are available at www.sec.gov. Avaya disclaims any intention or obligation to update or revise any forward-looking statements.
1Refer to Supplemental Financial Information accompanying this press release for a reconciliation of GAAP to non-GAAP numbers and for reconciliation of adjusted EBITDA for the second quarter of fiscal 2014 see our Form 8-K filed with the SEC on May 7, 2014 at www.sec.gov.