Avaya — Q3 2014 Earnings Presentation
13 slides from Avaya's earnings presentation, August 2014
Slide 1: Avaya Q3 2014 Earnings Call
The Power of We™ Avaya Q3 2014 Earnings Call August, 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 Q3 2014 Financial Highlights
Fiscal Q3 2014 Financial Highlights (Amounts are non-GAAP) Revenue of $1,054 million down $6 million from the prior quarter In line with historical sequential change – Cloud and managed services grew 7% sequentially and 22% year-over-year – Flagship product and services revenue grew 5% sequentially
Slide 4: Fiscal Q4 2014 Financial Outlook
Fiscal Q4 2014 Financial Outlook (As Delivered 8/5/14) In the past four years, the sequential change in revenue from the third fiscal quarter to the fourth fiscal quarter has been an increase in the range of 1% to 5%. We believe the company continues to perform in line with historical seasonality We
Slide 5: Income Statement
Income Statement (All amounts non-GAAP and dollars in millions) FQ3 2014 FQ2 2014 FQ3 2013 Revenue: Product $511 $532 $561* Services $543 $528 $556 Total Revenue $1,054 $1,060 $1,117 Gross Margin: Product 61.1% 61.8% 58.5% Services 57.5% 55.3% 55.2% Total Gross Margin 59.2% 58.6% 56.8% Operating Mar
Slide 6: Revenue by Geographic Region
Revenue by Geographic Region (Amounts GAAP and dollars in millions) FQ3 2014 FQ2 2014 FQ3 2013 Revenue U.S. $543 $532 $607* EMEA $297 $313 $296* APAC $108 $112 $105 AI $106 $103 $109 Total $1,054 $1,060 $1,117 % of Total Revenue U.S. 52% 50% 54% EMEA 28% 29% 27% APAC 10% 11% 9% AI 10% 10% 10% Total
Slide 7: 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 2014 FQ2 2014 FQ3 2013 Total Cash and Cash $315 $384 $271 Equivalents Cash from Operations ($11) ($28) $11 Capital Expenditures and $35 $27 $33 Capitalized Software Days Sales Out
Slide 8: Financial Summary
Financial Summary ($M) 2Q14 3Q14 Business Q3 Revenue: $1.05B – Non-GAAP Actual Actual Model down $6M sequentially Revenue $1,060 $1,054 $1,100 – $1,150 – In line with recent historical sequential seasonality Gross Margin % 58.6% 59.2% 58.5% – 59.5% – Increased Services offset by lower Product revenu
Slide 9: Avaya Debt Maturity Profile
Avaya Debt Maturity Profile ($ 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 $1.1 $1.0 Today 8/5/14$0.5 $0.14 $0.0 2014 2015 2016 2017 2018 2019 2020 2021 Refinanced 2018 Term Loan in February; reduced rate: 8.0% to 6.5% Comp
Slide 10: Upcoming Investor Events
Upcoming Investor Events (See www.avaya.com/investors for additional details) Thursday, September 18, 2014 – Credit Suisse Credit/High Yield Conference – Presenter: Dave Vellequette, CFO – Presentation Time: 7:35 AM Pacific / 10:35 AM Eastern Webcast links and details with supporting slides will be
Slide 11: 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 Nine months ended June 30, June 30, 2014 2013 2014 2013 Loss from continuing operations $ (64) $ (118) $ (244) $ (319) Interest expense 112 122 347 346 I
Slide 12: 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 June 30, S ept. 30, Dec. 31, Mar. 31, June 30, 2013 2013 2013 2014 2014 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Mar
Slide 13: 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 June 30, S ept. 30, Dec. 31, Mar. 31, June 30, 2013 2013 2013 2014 2014 Reconciliation o