Connect your employees to your customers across the channels they use most.
Automate and personalize business processes with prebuilt or customized apps.
Call, meet, message, and more—all in one app.
Connect people, tasks, tools, and more in a customizable app built for immersive collaboration.
Rely on our team of experts to help you get the most from your investment.
Consult with the experts to create your best customer journey.
Find a cloud that’s flexible, secure, and dedicated to your organization.
Explore our complete portfolio of devices for individuals and conference rooms.
See what’s next for your full-featured call center.
Explore your options for communications innovation.
Take collaboration, both inside and out, to the next level.
Move at your pace with Avaya’s hybrid cloud options.
Deliver effortless experiences for customers and employees at every touchpoint.
Help your contact center run smoothly, no matter where your employees are.
Find an Authorized Avaya Channel Partner in your part of the world.
Build new, innovative communications solutions via Avaya’s open solution platforms.
See our partnerships with leading technology companies for unique and value-adding solutions.
Explore all of the partner types and programs available at Avaya
Sell the Avaya portfolio with benefits, incentives, lead gen, training, and marketing resources.
Transition customers to the cloud fast and on budget, supported by Avaya services and features.
Stay up to date on Avaya's latest news and solutions.
Deliver innovative and complete solutions to your customers.
Get to know Avaya through our blogs. Insights on collaboration, customer experience, AI, digital.
Watch videos and listen to podcasts by topic or just browse what’s new. Interviews, solutions, how-to’s, more.
See inspiring ways companies are using Avaya solutions to change the world of work.
Look at what's new in our world—and how it benefits yours.
Engage with us in an immersive and interactive experience—on site, virtually, or a combo.
Listen in on conversations with tech innovators who are transforming the experience economy.
Learn about the privacy, compliance, and security inside Avaya solutions.
Review the terms and policies associated with Avaya software and services.
Learn about Avaya’s progress and ongoing work to better serve our customers.
Access a full range of information and assistance for your Avaya solution.
For research and support, access our product documentation resources.
Meet Avaya experts at our events, webinars, expos, conferences and more.
In person or online, gain a full understanding of your Avaya solution and its capabilities.
Second Quarter Fiscal 2017:
Santa Clara, Calif., — May 17, 2017 – Avaya reported financial results for the second fiscal quarter ended March 31, 2017.
Total revenue for the second quarter was $804 million, down $71 million compared to the prior quarter and down $100 million year-over-year primarily as a result of lower demand for products and services due to seasonality and extended procurement cycles resulting from the chapter 11 filing. Non-GAAP gross margin was 60.6%, which compares to 61.5% for the prior quarter and 60.7% for the second quarter of fiscal 2016. GAAP operating income was $64 million, which compares to $65 million in the prior quarter and $17 million during the second quarter of fiscal 2016. Non-GAAP operating income was $148 million which compares to $187 million for the prior quarter and $162 million for the second quarter of fiscal 2016. For the second quarter, adjusted EBITDA(1) was $199 million or 24.8% of revenue, a record percentage of revenue for a second fiscal quarter, and compares to adjusted EBITDA of $238 million for the prior quarter and $205 million for the second quarter of fiscal 2016.
Cash provided by operating activities was $97 million for the second fiscal quarter 2017, compared to $44 million cash used from operations during the first fiscal quarter 2017. Cash and cash equivalents totaled $764 million as of March 31, 2017.
“Avaya’s balance sheet strengthened during the quarter as we continue to take actions to improve our capital structure. We are pleased to have recently filed a restructuring plan, paving the way to emerge from chapter 11 later this year,” said Kevin Kennedy, president and CEO.”
“In addition, we delivered a very successful ENGAGE 2017 conference for our customers, partners, and developers during the second quarter, attracting approximately 2,600 attendees, as we showcased the capabilities of Avaya’s market-leading products, services, and technologies” continued Mr. Kennedy. “We continue to invest to create value for all of our stakeholders as we continue to innovate and pursue operational excellence.”
Second Fiscal Quarter Highlights
Links to this financial results press release and accompanying slides are available on the investor page of Avaya’s website (www.avaya.com/investors).
Avaya enables the mission critical, real-time communication applications of the world’s most important operations. As the global leader in delivering superior communications experiences, Avaya provides the most complete portfolio of software and services for contact center and unified communications with integrated, secure networking— offered on premises, in the cloud, or a hybrid. Today’s digital world requires some form of communications enablement, and no other company is better positioned to do this than Avaya. For more information, please visit www.avaya.com.
Cautionary Note Regarding the Chapter 11 Cases
The Company’s security holders are cautioned that trading in securities of the Company during the pendency of the Company’s Chapter 11 proceeding will be highly speculative and will pose substantial risks. It is possible some or all of the Company’s currently outstanding securities may be cancelled and extinguished upon confirmation of a restructuring plan by the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”). In such an event, the Company’s security holders would not be entitled to receive or retain any cash, securities or other property on account of their cancelled securities. Trading prices for the Company’s securities may bear little or no relation to actual recovery, if any, by holders thereof in the Company’s Chapter 11 proceeding. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
Cautionary Note Regarding Forward-Looking Statements
This document contains certain “forward-looking statements.” All statements other than statements of historical fact are “forward-looking” statements for purposes of the U.S. federal and state securities laws. 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," "preliminary," "predict," "should," "will," or “would” or the negative thereof or other variations thereof or comparable terminology and include, but are not limited to, statements regarding timing of exit from the Chapter 11 proceeding, technology innovation and operational projections. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. These factors, including, but not limited to adjustments in the calculation of financial results for the quarter, or the application of accounting principles, discovery of new information that alters expectations about financial results or impacts valuation methodologies underlying financial results, accounting changes required by United States generally accepted accounting principles, and those risks discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015, may cause its 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 further list and description of such risks and uncertainties, please refer to the Company’s filings with the SEC that are available at www.sec.gov. The Company cautions you that the list of important factors included in the Company’s SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
 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 2017.
Use of non-GAAP (Adjusted) Financial Measures
The information furnished in this release includes non-GAAP financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”), including adjusted EBITDA and non-GAAP gross margin.
EBITDA is defined as net income (loss) before income taxes, interest expense, interest income and depreciation and amortization. Adjusted EBITDA is EBITDA further adjusted to exclude certain charges and other adjustments described in our SEC filings.
We believe that including supplementary information concerning adjusted EBITDA is appropriate because it serves as a basis for determining management and employee compensation. In addition, we believe adjusted EBITDA provides more comparability between our historical results and results that reflect purchase accounting and our current capital structure. Accordingly, adjusted EBITDA measures our financial performance based on operational factors that management can impact in the short-term, such as our pricing strategies, volume, costs and expenses of the organization and it presents our financial performance in a way that can be more easily compared to prior quarters or fiscal years.
EBITDA and adjusted EBITDA have limitations as analytical tools. EBITDA measures do not represent net income (loss) or cash flow from operations as those terms are defined by GAAP and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. While EBITDA measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Adjusted EBITDA excludes the impact of earnings or charges resulting from matters that we consider not to be indicative of our ongoing operations. In particular, our formulation of adjusted EBITDA allows adjustment for certain amounts that are included in calculating net income (loss) as set forth in the following table including, but not limited to, restructuring charges, certain fees payable to our private equity sponsors and other advisors, resolution of certain legal matters and a portion of our pension costs and post-employment benefits costs which represents the amortization of pension service costs and actuarial gain (loss) associated with these benefits. However, these are expenses that may recur, may vary and are difficult to predict.
The estimate of adjusted EBITDA provided in this press release has been determined consistent with the methodology for calculating adjusted EBITDA as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.
Non-GAAP gross margin excludes the amortization of acquired technology intangible assets, share based compensation, costs to settle certain legal matters, impairment of long lived assets, and purchase accounting adjustments. We have included non-GAAP gross margin because we believe it provides additional useful information to investors regarding our operations by excluding those charges that management does not believe are reflective of the Company’s ongoing operating results when assessing the performance of the business.
Non-GAAP operating income excludes the amortization of acquired technology intangible assets, restructuring and impairment charges, acquisition and integration related costs, third party sales transformation and advisory costs, share based compensation, costs to settle certain legal matters, impairment of long lived assets and purchase accounting adjustments. We have included non-GAAP operating income because we believe it provides additional useful information to investors regarding our operations by excluding those charges that management does not believe are reflective of the company’s ongoing operating results when assessing the performance of the business.
These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and have limitations as analytical tools in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. As such, these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures.
The following tables reconcile GAAP measures to non-GAAP measures:
Corporate Communications, North America
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.