NEWS & EVENTS
Avaya Reports Fourth Fiscal Quarter and Fiscal Year 2014 Financial Results
- Revenue of $1,126 million
- Operating Income of $62 million, Non-GAAP Operating Income(1) of $212 million
- Adjusted EBITDA(1) of $253 million, 22.5% of revenue
- Revenue of $4,371 million
- Operating Income of $197 million, Non-GAAP Operating Income(1) of $727 million
- Adjusted EBITDA(1) of $898 million, 20.5% of revenue
Total revenue for the fourth quarter was $1,126 million, up $72 million when compared to the prior quarter. On a year over year basis revenue was down $43 million compared to the fourth quarter of fiscal 2013. For the fourth fiscal quarter, adjusted EBITDA(1) was $253 million which compares to adjusted EBITDA of $223 million for the prior quarter and $291 million for the fourth quarter of fiscal 2013. GAAP operating income was $62 million and non-GAAP operating income was $212 million which compares to non-GAAP operating income of $180 million for the prior quarter and $240 million for the fourth quarter of fiscal 2013. Cash and cash equivalents totaled $322 million as of September 30, 2014.
For fiscal 2014, Avaya reported revenue of $4,371 million, down 4.5% compared to fiscal 2013 revenue of $4,578 million. Non-GAAP operating income was $727 million in fiscal 2014 compared to $700 million in fiscal 2013. Fiscal 2014 adjusted EBITDA of $898 million was down $24 million compared to fiscal 2013.
"Avaya's fourth quarter results delivered a strong finish to the fiscal year. Revenue increased sequentially evidencing progress in our sales and marketing transformation. Solid bookings and backlog indicate a favorable demand environment for our products and services," said Kevin Kennedy, president and CEO. "As we move into fiscal 2015, Avaya continues to focus on accelerating our sales and marketing transformation, enhancing our product portfolio, and generating growth."
Fourth Fiscal Quarter Highlights
- Revenue of $1,126 million increased $72 million compared to the prior quarter and decreased $43 million compared to the fourth quarter of fiscal 2013
- Product revenue of $579 million increased by 13% compared to the prior quarter and decreased 6% compared to the fourth quarter of fiscal 2013. Product book-to-bill was greater than 1.0
- Avaya Global Services revenue of $547 million increased 1% compared to the prior quarter and decreased 1% compared to the fourth quarter of fiscal 2013
- Gross margin was 58.2% compared to 57.6% for the prior quarter and 57.7% for the fourth quarter of fiscal 2013
- Non-GAAP gross margin was 59.7% compared to 59.2% for the prior quarter and 59.0% for the fourth quarter of fiscal 2013
- Fourth fiscal quarter 2014 non-GAAP gross margin was a record level for the company
- Operating income was $62 million which compares to operating income of $48 million for the prior quarter and operating income of $109 million for the fourth quarter of fiscal 2013
- Non-GAAP operating income was $212 million compared to non-GAAP operating income of $180 million for the prior quarter and $240 million for the fourth quarter of fiscal 2013
- Adjusted EBITDA was $253 million or 22.5% of revenue compared to $223 million or 21.2% of revenue for the prior quarter and $291 million or 24.9% of revenue for the fourth quarter of fiscal 2013
For the fourth fiscal quarter, percentage of revenue by geography was:
- U.S. – 52%
- EMEA – 29%
- Asia-Pacific – 10%
- Americas International – 9%
- Revenue of $4,371 million decreased 4.5% compared to fiscal 2013
- Product revenue of $2,196 million decreased 6% compared to fiscal 2013
- Avaya Global Services revenue of $2,175 million decreased 3% compared to fiscal 2013
- Gross margin was 57.2% compared to 55.3% for fiscal 2013. Non-GAAP gross margin was 58.9% compared to 56.8% for fiscal 2013
- Operating income was $197 million which compares to operating income of $145 million for fiscal 2013. Non-GAAP Operating Income was $727 million or 16.6% of revenue compared to $700 million or 15.3% of revenue for fiscal 2013
- Adjusted EBITDA was $898 million or 20.5% of revenue compared to $922 million or 20.1% of revenue for fiscal 2013
- Full fiscal year 2014 Non-GAAP Gross Margin % and Adjusted EBITDA % were records for the company in any fiscal year
Avaya will host a conference call to discuss these financial results and related Q&A at 2:00 p.m. PST on November 13, 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 800-862-9098 in the U.S. or Canada and 785-424-1051 for international callers, using the conference ID: AVQ414. 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. PST on November 13 through December 12, by dialing 800-753-0348 within the United States or 402-220-2672 outside the United States.
Avaya is a leading provider of solutions that enable customer and team engagement across multiple channels and devices for better customer experience, increased productivity and enhanced financial performance. Its world-class contact center and unified communications technologies and services are available in a wide variety of flexible on-premise and cloud deployment options that seamlessly integrate with non-Avaya applications. The Avaya Engagement Development Platform enables third parties to create and customize business applications for competitive advantage. Avaya’s fabric-based networking solutions help simplify and accelerate the deployment of business critical applications and services. 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 third quarter of fiscal 2014 see our Form 8-K filed with the SEC on August 5, 2014 at www.sec.gov.