Avaya — Q4 2014 Earnings Presentation
17 slides from Avaya's earnings presentation, Nov 13, 2014
Slide 1: Avaya Q4 2014 Earnings Call
The Power of We™ Avaya Q4 2014 Earnings Call November 13, 2014
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. These statements may be identified by the
Slide 3: Fiscal Q4 2014 Financial Highlights
Fiscal Q4 2014 Financial Highlights (Amounts are non-GAAP) Revenue of $1,126 million up $72 million from the prior quarter Strong finish to the fiscal year – Flagship product and services revenue grew 5% sequentially and 5% year-over-year – Year-over-year growth in Private cloud and managed servic
Slide 4: Fiscal 2014 Financial Highlights
Fiscal 2014 Financial Highlights (Amounts are non-GAAP) Revenue of $4,371 million down $208 million from the prior year – Flagship product and services revenue grew 6% versus fiscal 2013 – Private cloud and managed services increased 19% compared to fiscal 2013 – IP Office, Aura, and Contact cente
Slide 5: Quarterly Income Statement
Quarterly Income Statement (All amounts non-GAAP and dollars in millions) FQ4 2014 FQ3 2014 FQ4 2013 Revenue: Product $579 $511 $617 Services $547 $543 $552 Total Revenue $1,126 $1,054 $1,169 Gross Margin: Product 61.8% 61.1% 62.4% Services 57.4% 57.5% 55.3% Total Gross Margin 59.7% 59.2% 59.0% Oper
Slide 6: Annual Income Statement
Annual Income Statement (All amounts non-GAAP and dollars in millions) FY 2014 FY 2013 FY 2012 Revenue: Product $2,196 $2,338 $2,674 Services $2,175 $2,241 $2,347 Total Revenue $4,371 $4,579 $5,021 Gross Margin: Product 61.2% 58.9% 57.4% Services 56.5% 54.6% 51.9% Total Gross Margin 58.9% 56.8% 54.8
Slide 7: Quarterly Revenue by Geographic Region
Quarterly Revenue by Geographic Region (All amounts non-GAAP and dollars in millions) FQ4 2014 FQ3 2014 FQ4 2013 Revenue U.S. $588 $543 $628 EMEA $321 $297 $313 APAC $111 $108 $113 AI $106 $106 $115 Total $1,126 $1,054 $1,169 % of Total Revenue U.S. 52% 52% 54% EMEA 29% 28% 27% APAC 10% 10% 9% AI 9%
Slide 8: Annual Revenue by Geographic Region
Annual Revenue by Geographic Region (All amounts non-GAAP and dollars in millions) FY 2014 FY 2013 FY 2012 Revenue U.S. $2,267 $2,431 $2,636 EMEA $1,234 $1,239 $1,349 APAC $445 $457 $497 AI $425 $452 $539 Total $4,371 $4,579 $5,021 % of Total Revenue U.S. 52% 53% 52% EMEA 28% 27% 27% APAC 10% 10% 10
Slide 9: Balance Sheet and Operating Metrics
Balance Sheet and Operating Metrics (Dollars in millions, Balance sheet items as of the end of the period indicated) FQ4 2014 FQ3 2014 FQ4 2013 Total Cash and Cash $322 $315 $288 Equivalents Cash from Operations $15 ($11) $48 Capital Expenditures and $40 $35 $34 Capitalized Software Days Sales Outst
Slide 10: Financial Summary
Financial Summary ($M) 3Q14 4Q14 Business Q4 Revenue: $1.13B; Non-GAAP Actual Actual Model up $72M sequentially Revenue $1,054 $1,126 $1,100 – $1,150 – Driven primarily by increased Gross Margin % 59.2% 59.7% 58.5% – 59.5% Product and Professional Services revenues Oper Expense % 42.1% 40.9% 38.5%
Slide 11: Avaya Debt Maturity Profile
Avaya Debt Maturity Profile ($ in Billions, by calendar year) $4.0 Overall Average Portfolio Interest Rate 6.9% $3.5 $3.0 $2.5 $2.0 $2.0 $1.3 $1.4 $1.5 Today $1.1 11/13/14 $1.0 $0.5 $0.13 $0.0 2014 2015 2016 2017 2018 2019 2020 2021 Reduced overall average portfolio interest rate from 7.4% to 6.9%
Slide 12: Fiscal Q1 2015 Financial Outlook
Fiscal Q1 2015 Financial Outlook (As Delivered 11/12/14) In the past three years, the sequential change in revenue from the fourth fiscal quarter to the first fiscal quarter has been a decrease in the range of 2% to 3%. Given that history and our current visibility, we believe the company will p
Slide 13: Upcoming Events
Upcoming Events (See www.avaya.com/investors for additional details) Wednesday, December 3, 2014 – Bank of America/Merrill Lynch High Yield Investor Conference – Presenter: Dave Vellequette, CFO – Presentation Time: 6:30 AM Pacific / 9:30 AM Eastern Wednesday, December 10, 2014 – Avaya Engages S
Slide 14: Pension & Other Post-Employment Benefits Trend ($M)
Pension & Other Post-Employment Benefits Trend ($M) Cash Effect (1) Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 FY’13 FY’14 US Pension 19 20 23 46 23 24 59 54 108 160 Non-US 4 14 3 4 5 15 4 3 25 27 Pension OPEB 13 12 13 14 10 11 12 12 52 45 Total Cash 36 46 39 64 38 50 75 69 185 232 Contribution
Slide 15: 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 Fiscal year ended S eptember 30, S eptember 30, 2014 2013 2014 2013 (Loss) income from continuing operations $ (49) $ 12 $ (293) $ (307) Interest expense
Slide 16: 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 Fiscal year ended Dec. 31, Mar. 31, June 30, S ept. 30, Dec. 31, Mar. 31, June 30, S ept. 30, S eptember 30, 2012 2013 2013 2013 2013
Slide 17: 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 Fiscal year ended Dec. 31, Mar. 31, June 30, S ept. 30, Dec. 31, Mar. 31, June 30, S ept