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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Avaya Holdings Corporation | NYSE:AVYA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.2753 | 0 | 01:00:00 |
$723 million Q4 FY19 GAAP revenue; $2.887 billion FY19 GAAP revenue
83.8% of GAAP revenue from software and services, 58.9% of GAAP recurring revenue in FY19
352 deals signed with a TCV greater than $1 million, 40 over $5 million and 9 over $10 million in FY19
Avaya Holdings Corp. (NYSE: AVYA) today reported financial results for the fourth quarter and fiscal year ended September 30, 2019.
GAAP
Non-GAAP (1)
(In millions, except percentages)
Q4 2019
Q3 2019
Q4 2018
Q4 2019
Q3 2019
Q4 2018
Revenue
$
723
$
717
$
735
$
726
$
720
$
770
Gross margin
54.2
%
54.4
%
53.1
%
60.6
%
60.8
%
63.4
%
Operating margin
7.2
%
(85.5
)%
1.5
%
22.7
%
20.1
%
20.4
%
GAAP
Non-GAAP (1)
(In millions, except percentages)
FY19
FY18
FY19
FY18
Revenue
$
2,887
$
2,851
$
2,908
$
3,057
Gross margin
54.6
%
52.8
%
61.4
%
62.5
%
Operating margin
(16.4
)%
(3.1
)%
21.6
%
20.8
%
"Avaya made significant progress positioning the company for future growth and accelerating our relevance in cloud during fiscal 2019,” stated Jim Chirico, president and CEO of Avaya. “Notably, we grew our public cloud seats by approximately 160% year over year; we launched ReadyNow, an enterprise-class private cloud solution, and have already booked $90 million of total contract value; we announced a Microsoft partnership to bring our next generation CCaaS to market on Azure; and we recently closed our strategic partnership for UCaaS with RingCentral. The investments across our portfolio, especially in contact center, cloud, services and AI, have materially strengthened our position and solidified our platform for future growth.”
Mr. Chirico added, “Successfully concluding the strategic review process provided a decisive go forward path and, as a result, we announced three important initiatives to accelerate growth and deliver shareholder value. First, the partnership with RingCentral is a game changer for Avaya and is expected to fundamentally change the industry landscape. Second, we expect to begin to execute against our previously announced $500 million stock repurchase program shortly, and third, we have already completed the pay down of $250 million of debt that will result in significant annual interest expense savings and further enhance our balance sheet.”
Fourth Quarter Fiscal 2019 Financial Results(1)
Fourth Quarter Fiscal 2019 Business Metrics(1)
(1) Non-GAAP revenue, Non-GAAP gross margin, Non-GAAP operating margin, Non-GAAP operating income and adjusted EBITDA are not measures calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Refer to the Supplemental Financial Information accompanying this press release for more information, including a reconciliation of these measures to the most closely comparable measure calculated in accordance with GAAP.
* We define TCV as the value of all active ratable contracts that have not been recognized as revenue, including both billed and unbilled backlog.
Fourth Quarter Fiscal 2019 Company Highlights
The Avaya IX Collaboration Unit, an open “all-in-one” next-generation huddle-room video conferencing solution, was named a TMC 2019 Communications Solutions Products of the Year Award. An all-in-one collaboration device that does not require a laptop connection, it sits on top of the video screen, has integrated microphones, and provides a wide field of view which is important for huddle spaces that are typically not very deep but can be very wide.
Avaya’s Mobile Experience was named a 2019 Communications Solutions Products of the Year Award winner. Avaya Mobile Experience is an Avaya owned and operated cloud-based service that supports the advancement of a business’ digital transformation to become more mobile-centric. Avaya Mobile Experience helps enable omni-channel interactions with smartphone users, reducing the time callers spend on legacy voice interactions with an organization’s contact center.
The Avaya OneCloud™ unified communications and contact center platform was named a 2019 Communications Solutions Products of the Year Award. Avaya OneCloud helps meet the business needs for a cloud solution that delivers flexible features, functions, and value-without any compromise for small-medium businesses (SMB), mid-market or large enterprise organizations featuring public, private and hybrid cloud options.
Fiscal 2019 Financial Highlights
Financial Outlook - Q1 Fiscal 2020 under ASC 606
Financial Outlook - Fiscal Year 2020 under ASC 606
Avaya’s outlook does not include the potential impact of any business combinations, asset acquisitions, divestitures, strategic investments, or other significant transactions that may be completed after November 20, 2019. Actual results may differ materially from Avaya’s outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Conference Call and Webcast
Avaya will host a live webcast and conference call to discuss its financial results at 8:30 AM Eastern Time on November 20, 2019. To access the live conference call by phone, listeners should dial +1-833-224-0545 in the U.S. or Canada and +1-647-689-4064 for international callers. To join the live webcast, listeners should access the investor page of Avaya's website at https://investors.avaya.com.
Following the live webcast, a replay will be available on the investor page of Avaya's website for a period of one year. A replay of the conference call will be available for one week soon after the call by phone by dialing +1-800-585-8367 in the U.S. or Canada and +1-416-621-4642 for international callers, using the conference access code: 6257079.
About Avaya
Businesses are built on the experiences they provide, and every day millions of those experiences are built by Avaya (NYSE: AVYA). For over one hundred years, we’ve enabled organizations around the globe to win - by creating intelligent communications experiences for customers and employees. Avaya builds open, converged and innovative solutions to enhance and simplify communications and collaboration - in the cloud, on-premise or a hybrid of both. To grow your business, we’re committed to innovation, partnership, and a relentless focus on what’s next. We’re the technology company you trust to help you deliver Experiences that Matter. Visit us at www.avaya.com.
Cautionary Note Regarding Forward-Looking Statements
This release 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 identified by the use of forward looking terminology such as "anticipate," "believe," "continue," "could,“ "estimate," "expect," "intend," "may," "might," “our vision,” "plan," "potential," "preliminary," "predict," "should,“ "will," or “would” or the negative thereof or other variations thereof or comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. These factors are discussed in the Company's Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), and may cause its actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. For a further list and description of such risks and uncertainties, please refer to the Company’s filings with the SEC that are available at www.sec.gov. The Company cautions you that the list of important factors included in the Company’s SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Avaya Holdings Corp.
Condensed Consolidated Statements of Operations (Unaudited)
(In millions, except per share amounts)
Successor
Predecessor
Non-GAAP Combined(1)
Three months ended September 30, 2019
Three months ended September 30, 2018
Fiscal year ended September 30, 2019
Period from December 16, 2017 through September 30, 2018
Period from October 1, 2017 through December 15, 2017
Fiscal year ended September 30, 2018
REVENUE
Products
$
314
$
325
$
1,222
$
989
$
253
$
1,242
Services
409
410
1,665
1,258
351
1,609
723
735
2,887
2,247
604
2,851
COSTS
Products:
Costs
113
115
442
372
84
456
Amortization of technology intangible assets
44
43
174
135
3
138
Services
174
187
696
597
155
752
331
345
1,312
1,104
242
1,346
GROSS PROFIT
392
390
1,575
1,143
362
1,505
OPERATING EXPENSES
Selling, general and administrative
240
275
1,001
888
264
1,152
Research and development
50
62
204
172
38
210
Amortization of intangible assets
40
41
162
127
10
137
Impairment charges
—
—
659
—
—
—
Restructuring charges, net
10
1
22
81
14
95
340
379
2,048
1,268
326
1,594
OPERATING INCOME (LOSS)
52
11
(473
)
(125
)
36
(89
)
Interest expense
(60
)
(57
)
(237
)
(169
)
(14
)
(183
)
Other income (expense), net
6
3
41
35
(2
)
33
Reorganization items, net
—
—
—
—
3,416
3,416
(LOSS) INCOME BEFORE INCOME TAXES
(2
)
(43
)
(669
)
(259
)
3,436
3,177
(Provision for) benefit from income taxes
(32
)
311
(2
)
546
(459
)
87
NET (LOSS) INCOME
$
(34
)
$
268
$
(671
)
$
287
$
2,977
$
3,264
(LOSS) EARNINGS PER SHARE
Basic
$
(0.31
)
$
2.44
$
(6.06
)
$
2.61
$
5.19
Diluted
$
(0.31
)
$
2.41
$
(6.06
)
$
2.58
$
5.19
Weighted average shares outstanding
Basic
111.2
110.0
110.8
109.9
497.3
Diluted
111.2
111.4
110.8
111.1
497.3
(1)
See "Use of non-GAAP (Adjusted) Financial Measures" below.
Avaya Holdings Corp.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except per share and shares amounts)
September 30, 2019
September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents
$
752
$
700
Accounts receivable, net
314
377
Inventory
63
81
Contract assets
187
—
Contract costs
114
—
Other current assets
115
170
TOTAL CURRENT ASSETS
1,545
1,328
Property, plant and equipment, net
255
250
Deferred income taxes, net
35
29
Intangible assets, net
2,891
3,234
Goodwill, net
2,103
2,764
Other assets
121
74
TOTAL ASSETS
$
6,950
$
7,679
LIABILITIES
Current liabilities:
Debt maturing within one year
$
29
$
29
Accounts payable
291
266
Payroll and benefit obligations
116
145
Contract liabilities
472
484
Business restructuring reserves
33
51
Other current liabilities
158
148
TOTAL CURRENT LIABILITIES
1,099
1,123
Non-current liabilities:
Long-term debt, net of current portion
3,090
3,097
Pension obligations
759
671
Other post-retirement obligations
200
176
Deferred income taxes, net
72
140
Business restructuring reserves
36
47
Other liabilities
394
374
TOTAL NON-CURRENT LIABILITIES
4,551
4,505
TOTAL LIABILITIES
5,650
5,628
Commitments and contingencies
—
—
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; 55,000,000 shares authorized, no shares issued or outstanding at September 30, 2019 and 2018
—
—
Common stock, $0.01 par value; 550,000,000 shares authorized; 111,046,085 shares issued and 111,033,405 outstanding at September 30, 2019; 110,218,653 shares issued and 110,012,790 shares outstanding at September 30, 2018
1
1
Additional paid-in capital
1,761
1,745
(Accumulated deficit) retained earnings
(289
)
287
Accumulated other comprehensive (loss) income
(173
)
18
TOTAL STOCKHOLDERS' EQUITY
1,300
2,051
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
6,950
$
7,679
Avaya Holdings Corp.
Condensed Statements of Cash Flows
(Unaudited; in millions)
Successor
Predecessor
Non-GAAP Combined(1)
Fiscal year ended September 30, 2019
Period from December 16, 2017 through September 30, 2018
Period from October 1, 2017 through December 15, 2017
Fiscal year ended September 30, 2018
Net cash provided by (used for):
Operating activities
$
241
$
202
$
(414
)
$
(212
)
Investing activities
(124
)
(199
)
(13
)
(212
)
Financing activities
(61
)
273
(102
)
171
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(4
)
(7
)
(2
)
(9
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
52
269
(531
)
(262
)
Cash, cash equivalents, and restricted cash at beginning of period
704
435
966
966
Cash, cash equivalents, and restricted cash at end of period
$
756
$
704
$
435
$
704
(1)
See "Use of non-GAAP (Adjusted) Financial Measures" below.
Use of non-GAAP (Adjusted) Financial Measures
The information furnished in this release includes non-GAAP financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”), including the combined twelve month period ending September 30, 2018 and financial measures labeled as “non-GAAP” or “adjusted.”
Although GAAP requires that we report on our results for the periods October 1, 2017 through December 15, 2017 (the "Predecessor" period) and December 16, 2017 through September 30, 2018 (the "Successor" period) separately, management reviews the Company’s operating results for the twelve months ended September 30, 2018 by combining the results of these periods because such presentation provides the most meaningful comparison of our results. The Company cannot adequately benchmark the operating results of the 289-day period ended September 30, 2018 against any of the previous or succeeding periods reported in its condensed consolidated financial statements and does not believe that reviewing the results of this period in isolation would be useful in identifying any trends regarding the Company’s overall performance. Management believes that key performance metrics such as revenue, gross margin and operating income, among others, when combined for the twelve months ended September 30, 2018 provide meaningful comparisons to other periods and are useful in identifying current business trends.
EBITDA is defined as net income (loss) before income taxes, interest expense, interest income and depreciation and amortization. Adjusted EBITDA is EBITDA further adjusted to exclude certain charges and other adjustments described in our SEC filings and the tables below.
We believe that including supplementary information concerning adjusted EBITDA is appropriate because it serves as a basis for determining management and employee compensation and it is used as a basis for calculating covenants in our credit agreements. In addition, we believe adjusted EBITDA provides more comparability between our historical results and results that reflect purchase accounting and our current capital structure. We also present adjusted EBITDA because we believe analysts and investors utilize these measures in analyzing our results. Adjusted EBITDA measures our financial performance based on operational factors that management can impact in the short-term, such as our pricing strategies, volume, costs and expenses of the organization, and it presents our financial performance in a way that can be more easily compared to prior quarters or fiscal years.
EBITDA and adjusted EBITDA have limitations as analytical tools. EBITDA measures do not represent net income (loss) or cash flow from operations as those terms are defined by GAAP and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. Adjusted EBITDA excludes the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations. In particular, our formulation of adjusted EBITDA allows adjustment for certain amounts that are included in calculating net income (loss), however, these are expenses that may recur, may vary and are difficult to predict. In addition, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.
We also present the measures non-GAAP revenue, non-GAAP gross margin, non-GAAP operating income and non-GAAP operating margin as a supplement to our unaudited condensed consolidated financial statements presented in accordance with GAAP. We believe these non-GAAP measures are the most meaningful for period to period comparisons because they exclude the impact of the earnings and charges noted in the applicable tables below that resulted from matters that we consider not to be indicative of our ongoing operations.
In addition, we present the liquidity measures of free cash flow and adjusted cash flow. Free cash flow is calculated by subtracting capital expenditures from Net cash provided by operating activities. We believe free cash flow is a measure often used by analysts and investors to compare the cashflow and liquidity of companies in the same industry. Adjusted cash flow is defined as cash flow from operations adjusted to remove one-time anticipated payments in connection with our strategic process in Q1 fiscal 2020. We provide guidance regarding Adjusted cash flow because we believe it provides a more meaningful way to analyze period over period results.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as substitute for, or superior to, the financial information prepared and presented in accordance with GAAP and may be different from the non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP.
We do not provide a forward-looking reconciliation of expected first quarter and full year of fiscal 2020 non-GAAP revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA or adjusted cash flow guidance as the amount and significance of special items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.
The following tables present Successor, Predecessor and combined results and reconcile historical GAAP measures to non-GAAP measures.
Avaya Holdings Corp.
Supplemental Schedules of Non-GAAP Adjusted EBITDA
(Unaudited; in millions)
Successor
Predecessor
Non-GAAP Combined (1)
Three months ended September 30, 2019
Three months ended September 30, 2018
Fiscal year ended September 30, 2019
Period from December 16, 2017 through September 30, 2018
Period from October 1, 2017 through December 15, 2017
Fiscal year ended September 30, 2018
Net (loss) income
$
(34
)
$
268
$
(671
)
$
287
$
2,977
$
3,264
Interest expense
60
57
237
169
14
183
Interest income
(3
)
(3
)
(14
)
(5
)
(2
)
(7
)
Provision for (benefit from) income taxes
32
(311
)
2
(546
)
459
(87
)
Depreciation and amortization
108
120
443
384
31
415
EBITDA
163
131
(3
)
289
3,479
3,768
Impact of fresh start accounting adjustments
(2
)
29
5
196
—
196
Restructuring charges, net
10
1
22
81
14
95
Advisory fees
8
3
11
18
3
21
Acquisition-related costs
1
4
9
15
—
15
Reorganization items, net
—
—
—
—
(3,416
)
(3,416
)
Non-cash share-based compensation
6
6
25
19
—
19
Impairment charges
—
—
659
—
—
—
Loss on sale/disposal of long-lived assets, net
—
—
—
4
1
5
Resolution of certain legal matters
—
—
—
—
37
37
Change in fair value of Emergence Date Warrants
(1
)
8
(29
)
17
—
17
(Gain) loss on foreign currency transactions
—
(4
)
8
(28
)
—
(28
)
Pension/OPEB/nonretirement postemployment benefits and long-term disability costs
—
—
—
—
17
17
Gain on investments
(1
)
—
(1
)
—
—
—
Adjusted EBITDA
$
184
$
178
$
706
$
611
$
135
$
746
Avaya Holdings Corp.
Supplemental Schedules of Non-GAAP Revenue
(Unaudited; in millions)
Three Months Ended
Three Months Ended Sept. 30, 2018 (4)
Change
Three Months Ended
Sept. 30, 2019
Adj. for Fresh Start Accounting
Non- GAAP Sept. 30, 2019
Amount
Pct.
Pct., net of fx impact
June 30, 2019 (1)
Mar. 31, 2019 (2)
Dec. 31, 2018 (3)
Revenue by Segment
Products & Solutions
$
315
$
—
$
315
$
336
$
(21
)
(6
)%
(5
)%
$
298
$
289
$
326
1
Services
411
—
411
434
(23
)
(5
)%
(5
)%
422
425
422
Unallocated amounts
(3
)
3
—
—
—
n/a
n/a
—
—
—
Total revenue
$
723
$
3
$
726
$
770
$
(44
)
(6
)%
(5
)%
$
720
$
714
$
748
Revenue by Geography
U.S.
$
392
$
1
$
393
$
417
$
(24
)
(6
)%
(6
)%
$
394
$
378
$
401
International:
EMEA
183
1
184
202
(18
)
(9
)%
(7
)%
183
189
200
APAC - Asia Pacific
85
1
86
81
5
6
%
9
%
85
80
79
Americas International
63
—
63
70
(7
)
(10
)%
(9
)%
58
67
68
Total International
331
2
333
353
(20
)
(6
)%
(4
)%
326
336
347
Total revenue
$
723
$
3
$
726
$
770
$
(44
)
(6
)%
(5
)%
$
720
$
714
$
748
(1) - (4) Reconciliation of Non-GAAP measures above:
(1) Q319 Non-GAAP Results
(2) Q219 Non-GAAP Results
Three Months Ended
Three Months Ended
June 30, 2019
Adj. for Fresh Start Accounting
Non-GAAP June 30, 2019
Mar. 31, 2019
Adj. for Fresh Start Accounting
Non-GAAP Mar. 31, 2019
Revenue by Segment
Products & Solutions
$
298
$
—
$
298
$
289
—
$
289
Services
422
—
422
425
—
425
Unallocated amounts
(3
)
3
—
(5
)
5
—
Total revenue
$
717
$
3
$
720
$
709
$
5
$
714
Revenue by Geography
U.S.
$
392
$
2
$
394
$
375
$
3
$
378
International:
EMEA
183
—
183
188
1
189
APAC - Asia Pacific
85
—
85
79
1
80
Americas International
57
1
58
67
—
67
Total International
325
1
326
334
2
336
Total revenue
$
717
$
3
$
720
$
709
$
5
$
714
(3) Q119 Non-GAAP Results
(4) Q418 Non-GAAP Results
Three Months Ended
Three Months Ended
Dec. 31, 2018
Adj. for Fresh Start Accounting
Non-GAAP Dec. 31, 2018
Sept. 30, 2018
Adj. for Fresh Start Accounting
Non-GAAP Sept. 30, 2018
Revenue by Segment
Products & Solutions
$
326
$
—
$
326
$
336
$
—
$
336
Services
422
—
422
434
—
434
Unallocated amounts
(10
)
10
—
(35
)
35
—
Total revenue
$
738
$
10
$
748
$
735
$
35
$
770
Revenue by Geography
U.S.
$
394
$
7
$
401
$
393
$
24
$
417
International:
EMEA
199
1
200
196
6
202
APAC - Asia Pacific
78
1
79
78
3
81
Americas International
67
1
68
68
2
70
Total International
344
3
347
342
11
353
Total revenue
$
738
$
10
$
748
$
735
$
35
$
770
Avaya Holdings Corp.
Supplemental Schedules of Non-GAAP Reconciliations
(Unaudited; in millions)
Three Months Ended
Sept. 30, 2019
June 30, 2019
March 31, 2019
Dec. 31, 2018
Sept. 30, 2018
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin
Gross Profit
$
392
$
390
$
386
$
407
$
390
Items excluded:
Amortization of technology intangible assets
44
43
44
43
43
Adj. for fresh start accounting
4
5
9
19
54
Non-cash share-based compensation
—
—
—
—
1
Non-GAAP Gross Profit
$
440
$
438
$
439
$
469
$
488
GAAP Gross Margin
54.2
%
54.4
%
54.4
%
55.1
%
53.1
%
Non-GAAP Gross Margin
60.6
%
60.8
%
61.5
%
62.7
%
63.4
%
Reconciliation of Non-GAAP Operating Income
Operating Income (Loss)
$
52
$
(613
)
$
38
$
50
$
11
Items excluded:
Amortization of intangible assets
84
84
85
83
84
Adj. for fresh start accounting
4
4
12
20
48
Restructuring charges, net
10
1
4
7
1
Advisory fees
8
1
1
1
3
Acquisition-related costs
1
1
4
3
4
Non-cash share-based compensation
6
8
5
6
6
Impairment charges
—
659
—
—
—
Non-GAAP Operating Income
$
165
$
145
$
149
$
170
$
157
GAAP Operating Margin
7.2
%
-85.5
%
5.4
%
6.8
%
1.5
%
Non-GAAP Operating Margin
22.7
%
20.1
%
20.9
%
22.7
%
20.4
%
Avaya Holdings Corp.
Supplemental Schedules of Non-GAAP Reconciliation of Gross Profit and Gross Margin by Portfolio
(Unaudited; in millions)
Three months ended
Sept. 30, 2019
June 30, 2019
March 31, 2019
Dec. 31, 2018
Sept. 30, 2018
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Products
Revenue
$
314
$
297
$
287
$
324
$
325
Costs
113
109
105
115
115
Amortization of technology intangible assets
44
43
44
43
43
GAAP Gross Profit
157
145
138
166
167
Items excluded:
Amortization of technology intangible assets
44
43
44
43
43
Adj. for fresh start accounting
2
2
2
5
16
Non-GAAP Gross Profit
$
203
$
190
$
184
$
214
$
226
GAAP Gross Margin
50.0
%
48.8
%
48.1
%
51.2
%
51.4
%
Non-GAAP Gross Margin
64.4
%
63.8
%
63.7
%
65.6
%
67.3
%
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Services
Revenue
$
409
$
420
$
422
$
414
$
410
Costs
174
175
174
173
187
GAAP Gross Profit
235
245
248
241
223
Items excluded:
Adj. for fresh start accounting
2
3
7
14
38
Non-cash share-based compensation
—
—
—
—
1
Non-GAAP Gross Profit
$
237
$
248
$
255
$
255
$
262
GAAP Gross Margin
57.5
%
58.3
%
58.8
%
58.2
%
54.4
%
Non-GAAP Gross Margin
57.7
%
58.8
%
60.0
%
60.4
%
60.4
%
Avaya Holdings Corp.
Reconciliation of ASC 606 to ASC 605 GAAP results
Three months ended September 30, 2019
(Unaudited; in millions)
Q4 FY19 results under ASC 606
ASC 606 Impact
Q4 FY19 results under ASC 605
REVENUE
Products
$
314
$
(26
)
$
288
Services
409
(16
)
393
723
(42
)
681
COSTS
Products:
Costs
113
(6
)
107
Amortization of technology intangible assets
44
—
44
Services
174
(5
)
169
331
(11
)
320
GROSS PROFIT
392
(31
)
361
OPERATING EXPENSES
Selling, general and administrative
240
(1
)
239
Research and development
50
—
50
Amortization of intangible assets
40
—
40
Restructuring charges, net
10
—
10
340
(1
)
339
OPERATING INCOME
52
(30
)
22
Interest expense
(60
)
—
(60
)
Other income, net
6
—
6
LOSS BEFORE INCOME TAXES
(2
)
(30
)
(32
)
Provision for income taxes
(32
)
15
(17
)
NET LOSS
$
(34
)
$
(15
)
$
(49
)
Avaya Holdings Corp.
Supplemental Schedules of Free Cash Flow
(Unaudited; in millions)
Three months ended
Sept. 30, 2019
June 30, 2019
March 31, 2019
Dec. 31, 2018
Sept. 30, 2018
Net cash provided by operating activities
$
66
$
52
$
37
$
86
$
25
Less:
Capital expenditures
29
37
26
21
25
Free cash flow
$
37
$
15
$
11
$
65
$
—
Source: Avaya Newsroom
View source version on businesswire.com: https://www.businesswire.com/news/home/20191120005249/en/
Media Inquiries: Alex Alias 669-242-8034 alalias@avaya.com Investor Inquiries: Michael McCarthy 919-425-8330 mikemccarthy@avaya.com
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