Avaya Inc

Avaya — Q2 FY2016 Earnings Presentation

17 slides from Avaya's earnings presentation, May 16, 2016

  1. Slide 1: Avaya Q2 Fiscal Year 2016 Earnings Call

    Avaya Q2 Fiscal Year 2016 Earnings Call May 16, 2016

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements Certain statements contained in this presentation may be forward-looking statements, including statements about our future financial and operational performance, planned and unrealized future savings, as well as statements about our future growth plans and drivers. These s

  3. Slide 3: Fiscal Q2 2016 Financial Highlights

    Fiscal Q2 2016 Financial Highlights (Amounts are non-GAAP, comparisons in constant currency)  Revenue of $904 million - 5% lower sequentially and 8% lower than Q2 FY’15 – Software and Services accounted for over 76% of total revenue, a new record – Recurring revenue represents 53% of total revenue,

  4. Slide 4: Quarterly Income Statement

    Quarterly Income Statement (All amounts non-GAAP and dollars in millions) < ------------------ As Reported ------------------ > Revenue: FQ2 2016 FQ1 2016 FQ2 2015 Product $424 $464 $487 Services $480 $494 $508 Total Revenue $904 $958 $995 Gross Margin: Product 63.4% 64.7% 62.6% Services 58.3% 58.1%

  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 2016 FQ1 2016 FQ2 2015 Product $424 $462 $481 Services $480 $493 $499 Total Revenue $904 $955 $980 Gross Margin: Product 63.4% 64.9% 62.6% Services 5

  6. Slide 6: Quarterly Revenue by Geographic Region

    Quarterly Revenue by Geographic Region (All amounts non-GAAP and dollars in millions) < ------------------ As Reported ------------------ > Revenue FQ2 2016 FQ1 2016 FQ2 2015 U.S. $505 $528 $531 EMEA $218 $239 $266 APAC $104 $106 $104 AI $77 $85 $94 Total $904 $958 $995 % of Total Revenue U.S. 56% 5

  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 2016 FQ1 2016 FQ2 2015 U.S. $505 $528 $531 EMEA $218 $238 $262 APAC $104 $107 $103 AI $77 $82 $84 Total $904 $955 $980 % of Total Revenue U.

  8. Slide 8: Q2 FY ‘16 Financial Highlights

    Q2 FY ‘16 Financial Highlights Notable Q2’16 Stats: ($M) 2Q15 1Q16 2Q16 • New record of over $3.1B total Non-GAAP Actual Actual Actual estimated contract value, up 5% YoY Revenue $995 $958 $904 • Total estimated contract value for Cloud and Managed Services of Gross Margin % 60.2% 61.3% 60.7% ~$900M

  9. 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) FQ2 2016 FQ1 2016 FQ2 2015 Total Cash and Cash $312 $344 $332 Equivalents Cash from Operations ($2) $55 $81 Capital Expenditures and $24 $26 $34 Capitalized Software Days Sales Outsta

  10. Slide 10: Debt Profile

    Debt Profile ($ in Billions, by calendar year) $4.0 Overall Weighted Average Interest Rate 7.3% $3.5 $3.0 $2.5 $2.1 $2.0 Today $1.5 5/16/16 $1.3 $1.4 $1.0 $0.6 $0.5 $0.5 $0.0 2016 2017 2018 2019 2020 2021  $312M Cash Balance as of 3/31/16  Q2 FY ‘16 YTD free cash flow(1) of $3M  Q2 FY ‘16 YTD ope

  11. Slide 11: Fiscal Q3 2016 Financial Outlook

    Fiscal Q3 2016 Financial Outlook (As Delivered 05/16/2016) Revenue Adjusted for Constant Currency ($M) As Reported In Constant Currency Q3 FY ’15 $999 $993 Q2 FY ’16 $904 $909  Given our current visibility, we believe FQ3 revenue will be in the range of $870M to $910M.  This reflects headwinds whi

  12. Slide 12: Upcoming Events

    Upcoming Events (See www.avaya.com/investors for additional details)  Tuesday, May 17, 2016 – Goldman Sachs 2016 Leveraged Finance Conference – Rancho Palos Verdes, CA – No company presentation  Thursday, June 9, 2016 – Barclays 2016 High Yield Conference – Colorado Springs, CO – Presenter: – Dave

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

    Pension & Other Post-Retirement Benefits Trend ($M) Cash Effect (1) FY’13 FY’14 Q1’15 Q2’15 Q3’15 Q4’15 FY’15 Q1’16 Q2’16 US Pension 108 160 15 25 26 29 95 20 19 Non-US 25 27 4 13 4 4 25 3 14 Pension OPEB 52 45 9 3 4 12 28 10 9 Total Cash 185 232 28 41 34 45 148 33 42 Contributions P&L Effect (1) FY

  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, 2016 2015 2016 2015 Net loss $ (103) $ (22) $ (130) $ (19) Interest expense 117 110 235 222 Interest income - (1) -

  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, 2015 2015 2015 2015 2016 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, 2015 2015 2015 2015 2016 Reconciliation o

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