Avaya Reports Third Quarter Fiscal 2016 Financial Results
Thu August 11, 2016 4:01 PM|Marketwire
SANTA CLARA, CA -- (Marketwired) -- 08/11/16 -- Third Quarter Fiscal 2016:
•Revenue of $882 million
• Operating Income of $58 million, Non-GAAP Operating Income(1) of $180 million
• Adjusted EBITDA(1) up sequentially and year-over-year to $223 million at a record 25.3% of revenue
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
•Estimated total contract value was approximately $3.1 billion up 7% from the third quarter of fiscal 2015 in constant currency. This amount includes over $850 million for private cloud and managed services, an 11% increase from the third quarter of fiscal 2015 in constant currency
•Cloud & managed services revenue grew 6% year-over-year, and contact center product revenue increased slightly year-over-year, each in constant currency
•Gross margin was 61.5% compared to 59.8% for the prior quarter and 58.5% for the third quarter of fiscal 2015
•Non-GAAP gross margin was a record 62.4% compared to 60.7% for the prior quarter and 59.5% for the third quarter of fiscal 2015
•Adjusted EBITDA was $223 million or a record 25.3% of revenue compared to $205 million or 22.7% of revenue for the prior quarter and $207 million or 20.7% of revenue for the third quarter of fiscal 2015
•For the third fiscal quarter, percentage of revenue by geography was: • U.S. - 55%
•EMEA - 23%
• Asia-Pacific - 12%
• Americas International - 10%
•Continued assessment of capital structure improvement opportunities:•Constructive dialogue with creditor groups and their advisors
•Assessment of intellectual property portfolio underway and monetization effort in process
•Trend of consolidation in our markets is enabling us to obtain competitive and market-based valuations for our businesses