Avaya — Investor Day (December 2021)
103 slides from Avaya's investor day presentation, December 2021
Slide 1: Avaya 2021 Investor Day: Positioned to Win
Avaya 2021 Investor Day Positioned to Win 1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains certain “forward-looking statements.” All statements other than statements of historical fact are "forward-looking" statements for purposes of the U.S. federal and state securities laws. These statements may be identifie
Slide 3: Use of non-GAAP (Adjusted) Financial Measures
Use of non-GAAP (Adjusted) Financial Measures The information furnished in this presentation includes non-GAAP financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”). EBITDA is defined as net income
Slide 4: Avaya Investor Day Agenda
Avaya Investor Day Agenda 11:00 – 12:30 PM Management Presentations Jim Chirico, CEO Todd Zerbe, SVP Engineering Ahmed Helmy, GM CCaaS Stephen Spears, CRO 12:35 – 12:45 PM Break/Working Lunch Engagent Health, ACT and 12:45 – 1:10 PM Customer Panel Xcel Energy 1:10 – 1:40 PM Financial Model Kieran Mc
Slide 5: Jim Chirico
Jim Chirico President and CEO 5
Slide 6: Becoming The Company We Can Become
Becoming The Company We Can Become 6
Slide 7: Our Transformation Journey
Our Transformation Journey FY17-18 FY19-20 FY21 Build a Solid Transition and Growth and Foundation Transform Relevance Revenue Growth(1) -10% to -2% -4% to 0% 2% ARR N/A $35M to $191M $530M CAPS % revenue N/A 15% to 26% 40% Software / Services % 78% to 82% 83% to 88% 88% Revenue Recurring % Revenue
Slide 8: Consistent Execution on our Strategy
Consistent Execution on our Strategy Revenue(1) $M Recurring % $2,873 $2,973 63% 66% $760 67% $755 66% $743 65% $738 64% 64% 64% 64% $726 $732 $715 $721 59% 58% $682 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 $530 44% 40% 40% OneCloud ARR $M $344 $425 C
Slide 9: Leadership in the Enterprise
Leadership in the Enterprise ARR Mix from Enterprise Large Deals (>$1M TCV) Customers Avg. Per Quarter 94% 65% 111 97 85 26% FY20-21 Avg FY19 FY20 FY21 > $5m ARR % > $1m ARR % > $100k ARR % 9
Slide 10: Charting Our Course
Charting Our Course Peer Group ARR Trajectory ($M , Calendar Years) 2,000 Peer 1 1,800 1,600 Peer 2 1,400 Peer 3 1,200 1,000 Peer 4 800 Peer 5 600 400 Avaya OneCloud ARR 200 0 2019 2020 2021E Source: FactSet, Avaya estimates 10
Slide 11: Accelerating Our Pace
Accelerating Our Pace Peer Group ARR Trajectory ($M , Calendar Years) 4,000 Peer 1 3,500 Peer 2 3,000 Peer 3 2,500 2,000 Peer 4 1,500 Peer 5 1,000 Avaya 500 OneCloud ARR 0 2019 2020 2021E 2022E 2023E 2024E Source: FactSet, Avaya estimates 11
Slide 12: Executing, Doing What We Said We Would Do
Executing, Doing What We Said We Would Do Fortified Cloud New ARR and Leadership Growth First Offers CAPS Team Customer- Transformed Breadth of Highly Monetizing led R&D Portfolio Profitable Install Base 12
Slide 13: Focused on Becoming The Company That We Can Become FY22+
Focused on Becoming The Company That We Can Become FY22+ Enterprise Leader in Cloud Communication and Collaboration FY22 FY24 Long-Term Revenue $3B (~2%) 4%+ Double-digit % ARR ~$900M ~$2B >$5B Software / Services % 90% 95% >95% Revenue Recurring % Revenue 70% 75% >85% 13
Slide 14: Business Strategy for Enterprise Leadership in Cloud Communication and Collaboration
Business Strategy for Enterprise Leadership in Cloud Communication and Collaboration Transform to a Cloud and Grow Profitably and Drive Grow the Business SaaS Business Model Shareholder Value ▪ Monetize the Base ▪ Composable Platform ▪ New Metrics, Increased Transparency ▪ TAM Expansion, Share ▪ Ava
Slide 15: Catalysts to Fuel The Journey
Catalysts to Fuel The Journey Platform Team Brand Incumbency Scale 15
Slide 16: Operating from a Strong Foundation
~90,000 9,000 Top 10 Customers Partners Airlines Automotive Banks Operating from a 120,000 8,000 Medical Facilities Strong Foundation Developers Employees Governments in 40 ~100M ~6M Countries UCC Seats CC Agents 16
Slide 17: Significant Capabilities Across Large Markets
Significant Capabilities Across Large Markets Simple CCaaS On-prem UC&C Devices & Hardware On-prem CC Market Maturity Complex CCaaS UCaaS CPaaS Rate of Growth Legend: Small TAM (2025) Large TAM (2025) 17
Slide 18: OneCloud
CCaaS UCaaS Efficiency Productivity OneCloud TM Experience Platform WSC CPaaS Future of Agility Work 18
Slide 19: Set up for Long-Term Success
Set up for Long-Term Success 19
Slide 20: FY22+ Perspective
Market Partner Defining Ecosystem Platform FY22+ Perspective Leading Total Experience Team and Right Place, Talent Right Time platform Profitable Cloud-Centric Business Portfolio Structure to Support 20
Slide 21: Now The Market Is Coming to Us
Now The Market Is Coming to Us 21
Slide 22: Experiences that Matter
Experiences that Matter 22
Slide 23: Innovation
Innovation Todd Zerbe SVP Engineering 23
Slide 24: Value of the Avaya OneCloud Platform Experience
Value of the Avaya OneCloud Platform Experience CAGR ‘20-’24 99.8 CCaaS UCaaS 17.7 33% Efficiency Productivity 31.2 10% 60 CPaaS 5.6 OneCloud TM WSC 21.4 18.2 14% CC 10.9 CPaaS Workstream Collaboration 32.6 10% Agility Future of Work UC 22.1 2020 2024 Drives Innovation TAM (in $ bn) 24
Slide 25: Avaya OneCloud CCaaS Portfolio
Avaya OneCloud™ CCaaS Portfolio Self-service & Automation ▪ Experts in Enterprise Innovation ▪ Redefining the Experience Contact Center Contact Powering Analytics and Reporting Center ▪ Architected for Easy 6 Million Cloud Consumption Contact Center seats ▪ Accelerating Time to Value Workforce AI &
Slide 26: Avaya OneCloud UCaaS and WSC Portfolio
Avaya OneCloud™ UCaaS and WSC Portfolio Calling ▪ Designed for Work from Anywhere ▪ Single Digital Conferencing 100 Messaging Workplace Platform Million Lines in ▪ Undisputed Leader in Service Media Processing Meetings Workstream Collaboration 26
Slide 27: Avaya OneCloud CPaaS Portfolio
Avaya OneCloud™ CPaaS Portfolio API Marketplace ▪ Foundational to Composability ▪ Harnessing our Unmatched Developer Ecosystem in Scale, Breadth ▪ Accelerating Time to and Depth Value Development Multi-Cloud and Integration Ecosystem Platform 27
Slide 28: What Makes Us Unique
What Makes Us Unique AVAYA ©2021 Avaya Inc. All rights reserved. 28
Slide 29: Composability at the Core
Cloud Services Composability at the Core Premise Public Private/Hybrid 29
Slide 30: Cloud Application Adoption and Capability Augmentation with CPaaS
Cloud Application Adoption OneCloud UCaaS OneCloud CCaaS Enabler for OneCloud CCaaS/UCaaS Agile with CPaaS OneCloud CPaaS Avaya Salesforce ServiceNow MSFT Capability Augmentation Prebuilt Apps for CC/UC Solutions Better with CPaaS OneCloud CPaaS Apps Enabling ‘Art of Possible’ Voice APIs Messaging A
Slide 31: Single Platform
Single Platform Workstream Collaboration Future of Work ▪ Technology Convergence ▪ Call Anchoring via MPC CCaaS UCaaS Efficiency Productivity ▪ Common Agent Desktop MPC CPaaS 31
Slide 32: OneCloud
CCaaS UCaaS Efficiency Productivity OneCloud TM Connected Everywhere Experience Platform WSC CPaaS Future of Agility Work 32
Slide 33: Ahmed Helmy
Ahmed Helmy General Manager, CCaaS 33
Slide 34: Avaya Experience Platform
Avaya Experience Platform Chat Voice Video Analytics IM Automation SMS AI Capabilities WebRTC Secure Native Conferencing Voicemail Converged Platform Avaya MPC Email Mobility Personalized Common Configuration Items CPaaS Increase Control Unified UI/UX Avaya Third-party Marketplace Subscription Marke
Slide 35: Live Agents and Virtual Agents: Over 25M Seat Opportunity
Live Agents + Improve customer acquisition Virtual Agents = Over 25M Seat Optimize cost of operations Opportunity AI automation becomes core to Increase revenue delivering intelligent customer per user experiences! Reduce customer churn 35
Slide 36: Roadmap to OneCloud Experience Platform
Roadmap to OneCloud Experience Platform Avaya’s Customer Journeys OneCloud Private UCaaS / CCaaS CCaaS UCaaS Efficiency Productivity CPaaS Add-ons AI, Notifications & Digital Spaces Calling Integration CPaaS WSC Direct Migration to the Cloud Agility Future of Work CPaaS Add-ons AI, Notifications & D
Slide 37: Enablement, Multi-Cloud, Continuous Innovation
Vertical Focus & Intelligent Workflows Enablement Strategic Alliances Multi-Cloud Refined Converged Continuous Platform Innovation 37
Slide 38: CPaaS Segmentation & Offer Structure
CPaaS Segmentation & Offer Structure Customer ENTERPRISES DEVELOPERS Segment Type Of Offers Pre-Built We Build You Build ▪ Mass Notification ▪ SoW based Dev (APS) Numbers Candidate ▪ Cloud IVR Offers ▪ Integration services ▪ Call Back Assist Voice ▪ Inherited or new commercial model ▪ Post Call ▪ Ex
Slide 39: OneCloud
CCaaS UCaaS Efficiency Productivity OneCloud TM Connected Everywhere Experience Platform WSC CPaaS Future of Agility Work 39
Slide 40: GTM Strategy for Enterprise Growth
GTM Strategy for Enterprise Growth Stephen Spears Chief Revenue Officer 40
Slide 41: GTM Strategy for Growth
GTM Strategy for Growth Experience Sells OneCloud Experience Experience Platform for Enterprise Digital B2E Growth Revolution Revolutionized Experience Teams 41
Slide 42: Experience is Everything
Experience is Everything AVAYA ©2021 Avaya Inc. All rights reserved. 42
Slide 43: Revolutionized GTM Experience Teams
Revolutionized GTM Experience Teams Experience Sellers Experience Builders Experience Success • Delivering Innovation • Composable Applications • LAER Based Model • Technology Partners • Industry Specific • Value Creation Lifecycle • Selling Outcomes, not toolkits • Low Code/No Code • Integrated Sup
Slide 44: Experience Sells Experience
Experience Sells Experience 44
Slide 45: Platform Ecosystem Presence GTM Strategy
Platform Ecosystem Presence GTM Strategy Platform Ecosystem Presence • Speed to value CCaaS, • Hybrid that’s also a self- • E2E GTM in 190 countries UCaaS, WSC and CPaaS contained ecosystem • Embedded in 90,000 • Composers accelerating • Experience builder fusion workflows, globally and increasing T
Slide 46: Cloud First Not Cloud Only
Cloud First Not Cloud Only AVAYA ©2021 Avaya Inc. Alll rights reserved 46
Slide 47: Unique Cloud Adoption Design
Unique Cloud Adoption Design ON-PREMISE HYBRID CLOUD CLOUD Route 1 Avaya OneCloudTM Platform Upgrade & Subscribe Route 2 Multi-instance Multi-tenant Distributed Cloud Ops Micro-services Low/No-code APIs 47
Slide 48: Executing on Cloud Migration
Executing on Cloud Migration Personalization 3 Innovation 4 Personalize customer environment Innovate in partnership with customer at their speed ▪ Consulting ▪ Agile deployment approach ▪ DevOps deployment approach ▪ CPaaS as integration plafrom CPaaS 1 Foundation 2 Standard Add-On Building cloud f
Slide 49: The New B2E Buying Journey Accelerated By OneCloud
The New B2E Buying Journey Accelerated By OneCloud 49
Slide 50: The Winning B2E Strategy
The Winning B2E Strategy Deliver Growth and Value Leader in Digital Workplace Expand Core TAM with to Customers, and their and Customer Experience Unique Technology Customers ▪ Cloud-First, Customer-First ▪ Composable Platform ▪ AI and Machine Learning at the core of every ▪ CX Market Leader Integra
Slide 51: Subscription Is An Essential And Complete Shift
Subscription Is An Essential And Complete Shift 51
Slide 52: The Power of Subscription
The Power of Subscription Public Cloud Composable Apps Cloud Services Partner Ecosystem On-Premise The Multiplier Existing Landscape Subscription / Effect Marketplaces Hybrid Private Cloud On-Premise 52
Slide 53: Positioned to Win
Positioned to Win Brand Platform Scale Incumbency Team 53
Slide 54: Break for 10 Minutes
BREAK for 10 Minutes AVAYA ©2021 Avaya Ine. All rights reserved. 54
Slide 55: Customer Panel
Customer Panel Engagent Health, ACT and Xcel Energy 55
Slide 56: Avaya Investor Day Financial Roadmap
Avaya Investor Day Financial Roadmap Kieran McGrath, CFO 56
Slide 57: Why Invest in Avaya?
Why Invest in Avaya? Only ~10% of massive customer base OneCloud ARR Revenue & converted to trajectory Cash Growth recurring One provides acceleration Cloud model visibility into in FY23/FY24 future revenue growth Disciplined execution + scaling cloud business = long-term profitability 57
Slide 58: Discussion Topics
Discussion Topics Progress to Date FY22 Guidance FY23-24 Financial Targets Long-Term Financial Model 58
Slide 59: Progress to Date
Progress to Date AVAYA ©2021 Avaya Ine. All rights reserved. 59
Slide 60: Financial Strength & Flexibility
Financial Strength & Flexibility As we return to growth, we remain highly profitable FY21 FY21 $2,973M $719M As of Q4 2021 As of Q4 2021 3.5% YoY 24.2% of $498M 3.2x Growth Revenue Revenue Adj. EBITDA* Cash Balance Net-debt / Adj. EBITDA(1) (1) Net-debt / Adj. EBITDA, defined as short term debt and
Slide 61: A Different Company
A Different Company Transformation Growth and Relevance OneCloud in Motion <$200M $500M to $1B $2B+ OneCloud ARR OneCloud ARR OneCloud ARR Invest, reskill, stabilize Execute, reposition, focus Scale, simplify, accelerate Software, SaaS, Cloud Strategic cloud platform Leading cloud company 61
Slide 62: Business Model Transformation
Business Model Transformation Pre-FY19 Today Perpetual license Recurring Subscription Hardware Software and Services On-premise delivery Cloud delivery Product centric Solutions centric 62
Slide 63: Business Model Transformation
Business Model Transformation (1) FY18* FY19* FY20 FY21 • FY21 up 3% Y/Y as reported, first year over year growth in a decade Revenue YoY Growth(2) (2)% (4)% —% +2% • Transforming the business to a Revenue from Software 82% 83% 88% 88% recurring revenue and software- and Services oriented model, inc
Slide 64: Stable Revenue at Scale and Robust Financial Model with Consistent Track Record of Profitability
Stable Revenue at Scale and Robust Financial Model with Consistent Track Record of Profitability Revenue Adjusted EBITDA* ($M) ($M) $760 $715 $721 $755 $743 $738 $732 $682 $200 $187 $190 $174 $177 $173 $179 $149 44% 40% 40% 33% 34% 30% 23% 18% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q20 2Q20 3Q20 4
Slide 65: Software and Services Business with Growing Recurring Revenue
Software and Services Business with Growing Recurring Revenue Revenue Mix in FY21 Recurring Revenue(1) 63% 66% 57% 58% 48% Hardware 12% FY15 FY18 FY19 FY20 FY21 Services Software and Services Revenue(1) 24% Software 82% 83% 88% 88% 64% 71% FY15 FY18 FY19 FY20 FY21 (1) FY18 and FY19 calculated with N
Slide 66: Software Now Dominates Share of Revenue
Software Now Dominates Share of Revenue 100% 100% Includes: 18% 12% 18% 12% 90% 90% 80% 80% Professional Services, 24% Managed Services, and 70% 70% 32% Hardware Maintenance 60% 60% 50% 50% 88% 40% 82% 40% Subscription, Public 30% 30% 64% and Private Cloud, 50% Perpetual Licenses and 20% 20% Softwar
Slide 67: Cloud & ARR Progress
Cloud & ARR Progress CAPS as % Revenue(1) All Other CAPS (1) FY19 calculated with Non-GAAP Revenue*; FY20 and FY21 calculated with GAAP revenue. * For a reconciliation of GAAP to non-GAAP financial information, please see the Appendix of this presentation. 67
Slide 68: Enterprise-Grade OneCloud ARR
Enterprise-Grade OneCloud ARR OneCloud ARR ($M) $600 $500 $400 60% $300 $200 60% $100 40% 40% $0 FY19 FY20 FY21 UC CC FY20 & FY21 Average 68
Slide 69: Avaya Compares Favorably with Prior Software Industry Model Transitions
Avaya Compares Favorably with Prior Software Industry Model Transitions Software Model Transition Composite 8 6 4 ▪ Transition periods vary 2-4 2 years, depending on the 0 -2 Year 1 Year 2 Year 3 Year 4 complexity of the business -4 -6 ▪ Revenue, profit and cash flow -8 are negatively impacted durin
Slide 70: 2022 Financial Guidance
2022 Financial Guidance AVAYA ©2021 Avaya Ine. All rights reserved. 70
Slide 71: 2022 Transformational KPIs
2022 Transformational KPIs FY22 Growth YoY: FY22 Growth YoY: FY22 Growth YoY: As Reported: + 0-2% ~20% ~70% Constant Currency(1): + 1-2% 71 (1)Unless otherwise noted, values reflect October 31, 2021 FX rates.
Slide 72: FY22 Guidance
FY22 Guidance FY22 Transformation $2,975M to $3,025M Revenue reaching +1% to 2%(1) inflection point $700M to $720M exiting FY22 Adj. EBITDA ~24% of Revenue OneCloud ARR CFFO % of Revenue ~1% of Revenue growth of ~70%. On track for $1B in OneCloud ARR $880M to $910M CY22. (1) Growth rates reflect con
Slide 73: FY23-24 Financial Targets
FY23-24 Financial Targets 73
Slide 74: FY24E Objectives Underpinned by Shift to OneCloud
FY24E Objectives Underpinned by Shift to OneCloud Revenue OneCloud ARR ~$2,250M 85% CAGR 55% CAGR 110% 90% CAGR CAGR (20%) CAGR (10%) CAGR 70% 40% CAGR CAGR (20%) CAGR (30%) CAGR FY20A FY24E FY20A FY24E+ FY20A FY24E Premise Product Managed Services Subscription Cloud Subscription Cloud Premise Maint
Slide 75: Financial Targets: The Roadmap
Financial Targets: The Roadmap FY21 FY22 FY23 FY24 Actuals Guidance Targets Targets $530 ~$900M ~$1.6B ~$2B ARR [% of Revenue] [18%] [30%] [50%] [60%] 2% 1 - 2% Low-to-Mid Mid-to-High Revenue(1) Constant Currency Constant Currency Single Digit Single Digit Adj. EBITDA Margin* % 24% ~24% 23 - 24% 23
Slide 76: A Cloud Growth Company
A Cloud Growth Company New TCV Bookings OneCloud ARR: 85% CAGR 27% 57% 110% CAGR 73% 43% 70% CAGR FY20 FY24E FY20 FY24E OneCloud TCV Premise TCV Subscription Hybrid Cloud 76
Slide 77: OneCloud Adoption Leads to 2X Recurring Revenue by FY24E
OneCloud Adoption Leads to 2X Recurring Revenue by FY24E $2B OneCloud ARR Cloud $1B Premise From migrations/new logos ACV Subscription Installed Base 110-200% ACV Hybrid From migrations/new logos Over $1B annual incremental revenue OneCloud recurring revenue ~2X Premise Retention rates represent ill
Slide 78: Cash Flow Normalizes Heading into FY23-24
Cash Flow Normalizes Heading into FY23-24 ▪ CFFO Improves to Double Digit % of Revenue ($M) OneCloud ARR CFFO Contract Assets Working Capital Requirements Driven by Growth in Contract Assets with $606 launch of OneCloud Portfolio $367 ~$900 CFFO low double digit % $241 $530 of revenue $147 $203 ~$30
Slide 79: Financial Policy & Capital Allocation
FY24 Targets Financial Policy & Capital Allocation 2.5x ~$400M Minimum ~$250-300M Prioritized net leverage improvement Net Leverage(1) Cash Balance M&A focusing on strategically aligned tuck-ins Low to Mid Limited use of share buybacks until leverage close to target ~$550M BB/Ba range Minimum Liquid
Slide 80: Long-Term Financial Model
Long-Term Financial Model 80
Slide 81: Value of Cloud Conversion Opportunity from Avaya's Installed Base
Value of Cloud Conversion Opportunity from Avaya’s Installed Base Represents a Significant Revenue Multiple CCaaS UCaaS Efficiency Productivity OneCloud TM WSC CPaaS Future of Agility Work Self-service & Calling Automation Experience Analytics Base Converted Contact and into ARR ($M) 10% 20% 30% 40%
Slide 82: Long-Term Target Model
Long-Term Target Model Premise/ OneCloud Portfolio Transforms OneCloud Adoption Capex Business Model Acceleration >$5B >$2B OneCloud ARR Revenue OneCloud ARR ~15% CAGR ~$900M $530 $35 $191 FY19 FY20 FY21A FY22E FY24E Long Term FY20A FY21A FY22E FY24E Long Term Revenue Growth y/y(1) -% 2% ~2% Mid-to-
Slide 83: Drivers of Long-Term Profitability
Drivers of Long-Term Profitability Recurring revenue model creates regular customer touchpoints, enhancing lifetime value Net retention rates over 120% Protecting the base lowers customer acquisition costs: LAER model focused on High LTV-to-CAC ratio Adopt, Expand and Renew Robust innovation roa
Slide 84: Why Invest in Avaya?
Why Invest in Avaya? Only ~10% of massive customer base OneCloud ARR Revenue & Cash converted to trajectory Growth recurring One provides acceleration in Cloud model visibility into FY23/FY24 future revenue growth Disciplined execution + scaling cloud business = long-term profitability The Market is
Slide 85: Thank you for your time! Now to Q&A
Thank you for your time! Now to Q&A… 85
Slide 86: Appendix
AVAYA ©2021 Avaya Inc. Alll rights reserved. Appendix 86
Slide 87: Subscription Revenue & Cash Dynamics
Subscription Revenue & Cash Dynamics Avaya is transforming our Subscription-based software generally relates business by shifting to a to a monthly or annual licensing model, Subscription Licensing Model allowing users to pay a per-user fee over a pre-determined time period (pay over time). Subscrip
Slide 88: Subscription Revenue, ARR & Cash Dynamics
Subscription Revenue, ARR & Cash Dynamics 88
Slide 89: Business Model Transformation Appendix
Business Model Transformation Appendix (1) FY18 and FY19 calculated with Non-GAAP Revenue*; FY20 and FY21 calculated with GAAP Revenue. (2) FY18 revenue growth as-reported; FY19, FY20, and FY21 revenue growth on a constant currency basis using foreign exchange rates as of September 30th of the respe
Slide 90: 4Q FY21 Update
• Florida’s Leon County Government is benefiting from migrating to an Avaya Aura Subscription solution that 4Q FY21 Update brings Avaya Spaces™ collaboration and ease of growth/license management. • U.S. national rail operator Amtrak recently chose an Avaya OneCloud Public solution for workforce eng
Slide 91: Quarterly Income Statement
Quarterly Income Statement (Amounts are GAAP and dollars in millions) Revenue: 4Q21 3Q21 4Q20 Product $ 246 $ 254 $ 269 Services 514 478 486 Total Revenue $ 760 $ 732 $ 755 GAAP Gross Margin: Product 40.2 % 44.5 % 44.2 % Services 61.5 % 61.5 % 61.5 % GAAP Total Gross Margin 54.6 % 55.6 % 55.4 % GAAP
Slide 92: Quarterly Non-GAAP Income Statement Information
Quarterly Non-GAAP Income Statement Information (All dollars amounts are in millions) Revenue*: 4Q21 3Q21 4Q20 Product $ 246 $ 254 $ 269 Services 514 478 486 Total Revenue $ 760 $ 732 $ 755 Non-GAAP Gross Margin*: Product 58.1 % 61.4 % 60.2 % Services 61.5 % 61.5 % 61.9 % Non-GAAP Total Gross Margin
Slide 93: Quarterly Revenue by Region
Quarterly Revenue by Region (All dollars amounts are in millions) Revenue 4Q21 3Q21 4Q20 U.S. $ 459 $ 418 $ 447 EMEA 169 181 178 APAC 73 72 74 AI 59 61 56 Total $ 760 $ 732 $ 755 % of Total Revenue U.S. 60 % 57 % 59 % EMEA 22 % 25 % 24 % APAC 10 % 10 % 10 % AI 8% 8% 7% Total 100 % 100 % 100 % 93
Slide 94: Balance Sheet and Operating Metrics
Balance Sheet and Operating Metrics (Dollars in millions unless indicated otherwise, Balance sheet items as of the end of the period indicated) 4Q21 3Q21 4Q20 Total Cash and Cash Equivalents $ 498 $ 562 $ 727 Cash (used for) provided by Operations $ (5)$ 11 $ 70 Capital Expenditures and Capitalized
Slide 95: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted EBITDA 1. The impact of fresh start accounting adjustments in connection with the Company's emergence from bankruptcy. 2. Restructuring charges represent employee separation costs and facility exit costs (excluding the impact of accelerated depreciation expense) rela
Slide 96: Non-GAAP Reconciliation
Non-GAAP Reconciliation Successor Predecessor Non-GAAP Combined Adjusted EBITDA cont'd Fiscal years ended September 30, Period from December Period from October 1, 16, 2017 through 2017 through December Fiscal year ended (In millions) 2021 2020 2019 September 30, 2018 15, 2017 September 30, 2018 Net
Slide 97: Non-GAAP Reconciliation
Non-GAAP Reconciliation Gross Margin and Operating Income Three months ended, (In millions) Sept. 30, 2021 June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin Gross Profit $ 415 $ 407 $ 412 $ 416 $ 418 Items excluded: Adj. for fr
Slide 98: Non-GAAP Reconciliation
Non-GAAP Reconciliation Gross Margin 98
Slide 99: Non-GAAP Reconciliation
Non-GAAP Reconciliation Operating Expenses Three months ended, (In millions) Sept. 30, 2021 June 30, 2021 Sept. 30, 2020 Reconciliation of Non-GAAP Operating Expenses Operating Expenses $ 382 $ 366 $ 344 Items excluded: Adj. for fresh start accounting — 1 — Amortization of intangible assets 40 40 39
Slide 100: Non-GAAP Reconciliation
Non-GAAP Reconciliation Revenue and Gross Margin Successor Predecessor Non-GAAP Combined Period from December Period from October Fiscal year ended 16, 2017 through 1, 2017 through Fiscal year ended (In millions) September 30, 2019 September 30, 2018 December 15, 2017 September 30, 2018 Reconciliati
Slide 101: Non-GAAP Reconciliation
Non-GAAP Reconciliation Product and Services Gross Margins Three months ended, Fiscal years ended, (In millions) Sept. 30, 2021 June 30, 2021 Sept. 30, 2020 Sept. 30, 2021 Sept. 30, 2020 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Products & Solutions Revenue $ 246 $ 254 $ 26
Slide 102: Non-GAAP Reconciliation
Non-GAAP Reconciliation Supplemental Schedules Free Cash Flow Net-Debt / Adjusted EBITDA Sept. 30, Three Months Ended 2021 Sept. 31, June 30, Mar. 31, Dec. 31, Sept. 30, Debt maturing within one year $ — (In millions) 2021 2021 2021 2020 2020 Long-term debt, net of current Net cash (used for) provid
Slide 103: www.avaya.com
| Experiences That Matter www.avaya.com