Avaya Inc

Avaya — Q2 2015 Earnings Presentation

17 slides from Avaya's earnings presentation, May 7, 2015

  1. Slide 1: Avaya Q2 2015 Earnings Call

    Avaya Q2 2015 Earnings Call May 7, 2015

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements Certain statements contained in this presentation are forward-looking statements, including statements regarding our future financial and operating performance, as well as statements regarding our future growth plans and drivers, including statements about our anticipated

  3. Slide 3: Fiscal Q2 2015 Financial Highlights

    Fiscal Q2 2015 Financial Highlights (Amounts are non-GAAP)  Revenue of $995 million, down $84 million from the prior quarter In constant currency, down 6% sequentially and 3% year-over-year In line with historical sequential pattern – Cloud and managed services, professional services, and leading e

  4. Slide 4: Quarterly Income Statement

    Quarterly Income Statement (All amounts non-GAAP and dollars in millions) Revenue: FQ2 2015 FQ1 2015 FQ2 2014 Product $487 $549 $532 Services $508 $530 $528 Total Revenue $995 $1,079 $1,060 Gross Margin: Product 62.6% 63.0% 61.8% Services 57.9% 57.2% 55.3% Total Gross Margin 60.2% 60.1% 58.6% Operat

  5. Slide 5: Quarterly Income Statement – Constant Currency Comparison

    Quarterly Income Statement – Constant Currency Comparison (All amounts non-GAAP and dollars in millions) As Reported In Constant Currency Revenue: FQ2 2015 FQ1 2015 FQ2 2014 Product $487 $543 $520 Services $508 $520 $507 Total Revenue $995 $1,063 $1,027 Gross Margin: Product 62.6% 63.2% 62.1% Servic

  6. Slide 6: Quarterly Revenue by Geographic Region

    Quarterly Revenue by Geographic Region (All amounts non-GAAP and dollars in millions) Revenue FQ2 2015 FQ1 2015 FQ2 2014 U.S. $531 $572 $532 EMEA $266 $301 $313 APAC $104 $101 $112 AI $94 $105 $103 Total $995 $1,079 $1,060 % of Total Revenue U.S. 53% 53% 50% EMEA 27% 28% 29% APAC 11% 9% 11% AI 9% 10

  7. Slide 7: Quarterly Revenue by Geographic Region Constant Currency Comparison

    Quarterly Revenue by Geographic Region Constant Currency Comparison (All amounts non-GAAP and dollars in millions) As Reported In Constant Currency Revenue FQ2 2015 FQ1 2015 FQ2 2014 U.S. $531 $572 $532 EMEA $266 $291 $291 APAC $104 $99 $109 AI $94 $100 $95 Total $995 $1,063 $1,027 % of Total Revenu

  8. Slide 8: Balance Sheet and Operating Metrics

    Balance Sheet and Operating Metrics (Dollars in millions, Balance sheet items as of the end of the period indicated) FQ2 2015 FQ1 2015 FQ2 2014 Total Cash and Cash $332 $328 $384 Equivalents Cash from Operations $81 $64 ($28) Capital Expenditures and $34 $33 $27 Capitalized Software Days Sales Outst

  9. Slide 9: Financial Summary

    Financial Summary ($M) 2Q14 1Q15 2Q15 Business Q2 Revenue down 3% Non-GAAP Actual Actual Actual Model YoY in constant currency Revenue $1,060 $1,079 $995 $1,100 – $1,150 – In line with recent sequential seasonal pattern Gross Margin % 58.6% 60.1% 60.2% 58.5% – 59.5% – Private cloud & managed Oper E

  10. Slide 10: Avaya Debt Maturity Profile

    Avaya Debt Maturity Profile ($ in Billions, by calendar year) $4.0 $4.0 PROFORMA $3.5 Overall Average Portfolio Interest Rate 6.9% $3.5 Overall Average Portfolio Interest Rate 7.3% $3.0 $3.0 $2.5 $2.5 $2.1 $2.0 $2.0 $2.0 $1.3 $1.4 $1.3 $1.4 $1.5 $1.1 $1.5 Today $1.0 $1.0 5/7/15 $0.6 $0.5 $0.5 $0.1 $

  11. Slide 11: Fiscal Q3 2015 Financial Outlook

    Fiscal Q3 2015 Financial Outlook (As Delivered 5/7/15) Revenue Adjusted for Constant Currency As of 5/6/15 ($M) As Reported In Constant Currency Q3 FY ’14 $1,054 $1,020 Q2 FY ’15 $995 $995  In the past three years, the sequential change in revenue from the second fiscal quarter to the third fiscal

  12. Slide 12: Upcoming Events

    Upcoming Events (See www.avaya.com/investors for additional details)  Wednesday, June 3, 2015 – Morgan Stanley Leveraged Finance Conference – New Orleans, LA – No company presentation  Thursday, June 11, 2015 – Barclays High Yield Bond and Syndicated Loan Conference – Colorado Springs, CO – Presen

  13. Slide 13: Pension & Other Post-Retirement Benefits Trend ($M)

    Pension & Other Post-Retirement Benefits Trend ($M) Cash Effect (1) FY’13 Q1’14 Q2’14 Q3’14 Q4’14 FY’14 Q1’15 Q2’15 US Pension 108 23 24 59 54 160 15 25 Non-US 25 5 15 4 3 27 4 13 Pension OPEB 52 10 11 12 12 45 9 3 Total Cash 185 38 50 75 69 232 28 41 Contributions P&L Effect (1) FY’13 Q1’14 Q2’14 Q

  14. Slide 14: Non-GAAP Reconciliation: Adjusted EBITDA

    Non-GAAP Reconciliation Adjusted EBITDA Avaya Inc. S upplemental S chedule of Non-GAAP Adjusted EBITDA (Unaudited; in millions) Three months ended S ix months ended March 31, March 31, 2015 2014 2015 2014 Loss from continuing operations $ (22) $ (123) $ (19) $ (180) Interest expense 110 116 222 235

  15. Slide 15: Non-GAAP Reconciliation: Gross Margin and Operating Income

    Non-GAAP Reconciliation Gross Margin and Operating Income Avaya Inc. S upplemental S chedules of Non-GAAP Reconciliations (Unaudited; in millions) Three Months Ended Mar. 31, June 30, S ept. 30, Dec. 31, Mar. 31, 2014 2014 2014 2014 2015 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Mar

  16. Slide 16: Non-GAAP Reconciliation: Product and Services Gross Margins

    Non-GAAP Reconciliation Product and Services Gross Margins Avaya Inc. S upplemental S chedules of Non-GAAP Reconciliation of Gross Profit and Gross Margin by Portfolio (Unaudited; in millions) Three Months Ended Mar. 31, June 30, S ept. 30, Dec. 31, Mar. 31, 2014 2014 2014 2014 2015 Reconciliation o

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