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Third Quarter Fiscal 2016:
Santa Clara, Calif. — Thursday, August 11, 2016 – Avaya reported financial results for the third fiscal quarter ended June 30, 2016.
Total revenue for the third quarter was $882 million, down $22 million compared to the prior quarter, and down $117 million year-over-year, as demand for unified communications hardware continued to decline. GAAP operating income was $58 million and non-GAAP operating income was $180 million which compares to non-GAAP operating income of $162 million for the prior quarter and $161 million for the third quarter of fiscal 2015. For the quarter, adjusted EBITDA(1) was $223 million which compares to adjusted EBITDA of $205 million for the prior quarter and $207 million for the third quarter of fiscal 2015.
“Avaya’s third fiscal quarter results demonstrate the progress of the company’s transformation and the effects of a challenging global economy. Despite slowing economic conditions, revenue was within our stated range and adjusted EBITDA exceeded our stated range. In constant currency, cloud and managed services revenue grew 6 percent year-over-year and contact center revenue increased year-over-year. Non-GAAP gross margin, non-GAAP operating margin, and adjusted EBITDA as a percentage of revenue all improved year-over-year, with adjusted EBITDA percentage at a record level, driven by improved services margins and lower operating expenses,” said Kevin Kennedy, president and CEO. “As we move towards the end of the fiscal year, we’ll remain focused on improving our capital structure and progressing further on our key initiatives.”
Third Fiscal Quarter Highlights
Conference Call and Webcast
Avaya will host a webcast and conference call to discuss its financial results at 2:00 PM PDT on August 11, 2016. 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. Note that since the ongoing process to assess alternatives for improving the company’s capital structure includes exploration of various potential asset-related transactions, there will be no Q&A during the call. At the time of the webcast, this financial results press release, supplementary slides, and links to Avaya’s SEC filings will all be available on the investor page of Avaya’s website (www.avaya.com/investors).
To join the financial results webcast, listeners should access the investor page of Avaya’s website (www.avaya.com/investors). Following the webcast, a replay will be available at the same web address in the event archives.
To access the financial results webcast by phone, dial 888-632-3384 in the U.S. or Canada and 785-424-1675 for international callers, using the conference ID: AVQ316. 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 financial results webcast and conference call will be available beginning at 2:00 PM PDT on August 12 through September 12, 2016, by accessing event archives from the investor page of Avaya’s website (www.avaya.com/investors).
About Avaya 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-premises and cloud deployment options that seamlessly integrate with non-Avaya applications. Avaya Breeze enables third parties to create and customize business applications for competitive advantage. The Avaya 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, including statements about our future financial and operational performance, planned and unrealized future savings, capital structure alternatives, as well as statements about our future growth plans and drivers. These statements may be identified by the use of forward-looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "our vision," "plan," "potential," "predict," "should," "will" or "would" or the negative thereof or other variations thereof or other comparable 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 are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance, or achievements to differ materially from any future results, performance, or achievements 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 and in particular, our 2015 Form 10-K filed with the SEC on November 23, 2015. Avaya disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
[1] Refer 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 2016 see our Form 8-K filed with the SEC on May 16, 2016 at www.sec.gov.
crknittel@avaya.com
408-496-3417
Businesses are built by the experiences they provide, and every day, millions of those experiences are delivered by Avaya. Organizations trust Avaya to provide innovative solutions for some of their most important ambitions and challenges, giving them the freedom to engage their customers and employees in ways that deliver the greatest business benefits. Avaya contact center and communications solutions power immersive, personalized, and unforgettable customer experiences that drive business momentum. With the freedom to choose their journey, there’s no limit to the experiences Avaya customers can create. Learn more at https://www.avaya.com.