Avaya Inc

Avaya — Q3 2015 Earnings Presentation

16 slides from Avaya's earnings presentation, Aug 4, 2015

  1. Slide 1: Avaya Q3 2015 Earnings Call

    Avaya Q3 2015 Earnings Call August 4, 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,. These statements may be identified by the

  3. Slide 3: Fiscal Q3 2015 Financial Highlights

    Fiscal Q3 2015 Financial Highlights (Amounts are non-GAAP)  Revenue of $999 million, up $4 million from the prior quarter In constant currency, 1% higher sequentially and 2% lower year-over-year In line with historical sequential pattern – Combined total of Flagship and Core product and service rev

  4. Slide 4: Quarterly Income Statement

    Quarterly Income Statement (All amounts non-GAAP and dollars in millions) Revenue: FQ3 2015 FQ2 2015 FQ3 2014 Product $494 $487 $511 Services $505 $508 $543 Total Revenue $999 $995 $1,054 Gross Margin: Product 62.3% 62.6% 61.1% Services 56.6% 57.9% 57.5% Total Gross Margin 59.5% 60.2% 59.2% Operatin

  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: FQ3 2015 FQ2 2015 FQ3 2014 Product $494 $485 $498 Services $505 $508 $520 Total Revenue $999 $993 $1018 Gross Margin: Product 62.3% 62.3% 61.0% Services

  6. Slide 6: Quarterly Revenue by Geographic Region

    Quarterly Revenue by Geographic Region (All amounts non-GAAP and dollars in millions) Revenue FQ3 2015 FQ2 2015 FQ3 2014 U.S. $538 $531 $543 EMEA $263 $266 $297 APAC $107 $104 $108 AI $91 $94 $106 Total $999 $995 $1,054 % of Total Revenue U.S. 54% 53% 52% EMEA 26% 27% 28% APAC 11% 11% 10% AI 9% 9% 1

  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 FQ3 2015 FQ2 2015 FQ3 2014 U.S. $538 $530 $543 EMEA $263 $266 $274 APAC $107 $104 $105 AI $91 $93 $96 Total $999 $993 $1018 % of Total Revenue U

  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) FQ3 2015 FQ2 2015 FQ3 2014 Total Cash and Cash $328 $332 $315 Equivalents Cash from Operations $40 $81 ($11) Capital Expenditures and $25 $34 $35 Capitalized Software Days Sales Outst

  9. Slide 9: Financial Summary

    Financial Summary ($M) 3Q14 2Q15 3Q15 Business Q3 Revenue 2% lower Non-GAAP Actual Actual Actual Model YoY in constant currency – Up slightly sequentially Revenue $1,054 $995 $999 $1,100 – $1,150 – In line with recent sequential Gross Margin % 59.2% 60.2% 59.5% 58.5% – 59.5% seasonal pattern – Cons

  10. Slide 10: Avaya – Well Distributed Debt Profile

    Avaya – Well Distributed Debt Profile ($ in Billions, by calendar year) $4.0 Overall Average Portfolio Interest Rate 7.3% $3.5 $3.0 $2.5 $2.1 $2.0 Today $1.5 8/4/15 $1.3 $1.4 $1.0 $0.6 $0.5 $0.5 $0.0 2015 2016 2017 2018 2019 2020 2021  Approximately $450M in liquidity (including cash & revolver cap

  11. Slide 11: Fiscal Q4 2015 Financial Outlook

    Fiscal Q4 2015 Financial Outlook (As Delivered 8/4/15) Revenue Adjusted for Constant Currency As of 8/3/15 ($M) As Reported In Constant Currency Q4 FY ’14 $1,126 $1,093 Q3 FY ’15 $999 $998  Given our sequentially lower beginning backlog, the impact of currency fluctuations on demand in Europe, econ

  12. Slide 12: 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 Q3’15 US Pension 108 23 24 59 54 160 15 25 26 Non-US 25 5 15 4 3 27 4 13 4 Pension OPEB 52 10 11 12 12 45 9 3 4 Total Cash 185 38 50 75 69 232 28 41 34 Contributions P&L Effect (1) FY’

  13. Slide 13: Non-GAAP Reconciliation

    Non-GAAP Reconciliation Adjusted EBITDA Avaya Inc. S upplemental S chedule of Non-GAAP Adjusted EBITDA (Unaudited; in millions) Three months ended Nine months ended June 30, June 30, 2015 2014 2015 2014 Loss from continuing operations $ (49) $ (64) $ (68) $ (244) Interest expense 113 112 335 347 Int

  14. Slide 14: Non-GAAP Reconciliation

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

  15. Slide 15: Non-GAAP Reconciliation

    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 June 30, S ept. 30, Dec. 31, Mar. 31, June 30, 2014 2014 2014 2015 2015 Reconciliation o

  16. Slide 16: Avaya – Engage The Power of We

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