Guidance raised reflecting improved performance
across key business metrics
Total revenue increased 4% year-over-year to
$743 million
Avaya OneCloud™ ARR increased 38% sequentially
to $262 million
Cloud, Alliance Partner & Subscription
revenue grew to 34%
Avaya Holdings Corp. (NYSE: AVYA) today reported financial
results for the first quarter of fiscal 2021 ended December 31,
2020.
First Quarter Financial
Highlights
- Revenues of $743 million
- OneCloud ARR was $262 million, up 38% sequentially
- CAPS (Cloud, Alliance Partner and Subscription) revenue was
34%, up from 18% a year ago
- Software and services were 88% of revenue, up from 86% a year
ago
- Recurring revenue was 65%, up from 59% a year ago
- GAAP Operating income was $62 million; Non-GAAP Operating
income was $163 million
- GAAP Net loss was $4 million; Non-GAAP Net income was $85
million
- Adjusted EBITDA was $190 million, 25.6% of revenue
- Ending cash and cash equivalents were $750 million
- GAAP Loss Per Share of $0.06; Non-GAAP Earnings Per Share of
$0.90
“We are pleased to report first quarter results that exceeded
expectations across all key metrics. Navigating a very challenging
business environment, we emerged from 2020 even stronger. This
success reflects the significant progress we continue to make on
our transformation into an enterprise leader in cloud-based
communications and collaboration solutions,” said Jim Chirico,
President and CEO of Avaya. “The investments we have made in the
business are generating strong traction across all segments in
which we operate and, as a result, we are increasing our guidance
for revenue, ARR, profitability and CFFO for the fiscal year.”
GAAP
Non-GAAP (1)
(In millions, except percentages)
1Q21
4Q20
1Q20
1Q21
4Q20
1Q20
Revenue
$
743
$
755
$
715
$
743
$
755
$
715
Gross margin
56.0
%
55.4
%
55.1
%
61.8
%
61.3
%
61.5
%
Operating income
$
62
$
74
$
15
$
163
$
170
$
151
Net (loss) income
$
(4
)
$
37
$
(54
)
$
85
$
86
$
75
(Loss) earnings per share - Diluted
$
(0.06
)
$
0.39
$
(0.54
)
$
0.90
$
0.93
$
0.61
1Q21
4Q20
1Q20
Adjusted EBITDA(1)
$
190
$
200
$
174
Adjusted EBITDA margin(1)
25.6
%
26.5
%
24.3
%
Cash provided by operations
$
48
$
70
$
12
Cash and cash equivalents
$
750
$
727
$
766
Additional First Quarter Fiscal 2021
Highlights
- Total Contract Value (TCV) of $2.2B*
- Avaya OneCloud Subscription booked additional TCV of over $180
million during the December quarter
- Added over 1,600 new logos
- Significant large deal activity with 119 deals over $1 million
TCV, 14 over $5 million, 6 over $10 million and 3 over $25
million
- Avaya Cloud Office™ launched in Austria, Belgium, Germany,
Italy, and Spain.
- The Company is launching a Term Loan Amendment transaction
today to extend the maturity of its outstanding Tranche B Term
Loans due December 2024 to September 2027. In connection with the
Amendment, the Company will make a $100 million prepayment of the
existing Tranche B Term Loans.
(1) Non-GAAP gross margin, Non-GAAP operating margin (used
below), Non-GAAP operating income, Non-GAAP net income, Non-GAAP
earnings per share, adjusted EBITDA, adjusted EBITDA margin and
constant currency are not measures calculated in accordance with
generally accepted accounting principles in the U.S. (“GAAP”).
Refer to the "Use of non-GAAP (Adjusted) Financial Measures" below
and the Supplemental Financial Information accompanying this press
release for more information on the calculation of constant
currency and a reconciliation of these non-GAAP 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.
Customer Highlights
- Prodec Networks, which has historically been focused on their
on-prem IP Office and Aura solutions to address their needs within
the public sector and enterprise space, continues to invest heavily
in its UCaaS strategy using Avaya Cloud Office to deliver
effective, easy to manage communication tools for home workers
based on their forecasted growth for organizations migrating to the
cloud.
- DB Systel UK Ltd, the UK IT arm of the 2nd largest global
transportation company, based in Europe, signed a three year ACO
deal that will initially cover several hundred users. Their key
criteria were flexibility, ease of use, and simple deployment in
order to serve their customers globally.
- Engagent Health adopted Avaya OneCloud CCaaS across locations
to meet existing needs and facilitate ambitious growth plans that
will see them increase their contact center capacity by over 5x in
2021. This customer also chose Avaya Cloud Office to communicate
internally to solve client and customer problems in real-time while
executive management and multiple global operation centers share
information quickly through one simple, mobile, easy-to-use
solution.
- Cenlar, the nation’s leading loan servicing provider, concluded
that Avaya offered a more comprehensive and integrated private
cloud UC/CC solution able to meet their performance requirements
and address future expansion plans as they migrated away from their
on-prem UC and CC deployment.
- United BioSource (UBC), a leading provider of pharmaceutical
support services, will deploy our AI-based Avaya Conversational
Intelligence cloud service into their on-site contact center as a
hybrid enhancement. Initial use cases include natural language
processing to extract key phrases from patient statements related
to medications.
- Nebraska Medicine adopted Avaya OneCloud CPaaS across its
organization to manage the enormous change in patient interactions
because of the pandemic. Menus are easily being altered based on
the changing environment and are providing direction on COVID-19
testing, vaccine administration and proactive appointment
management.
- In choosing Avaya OneCloud CPaaS, Ingolstadt Clinic, one of the
largest hospitals in Bavaria, Germany, extended their long-term
relationship with Avaya to create a highly-available and secure
communications platform that would digitize processes and enable
over 3,500 staff to work with each other, their partners and their
patients while they are in physically separate locations.
- Avaya Spaces was chosen by Dubai World Trade Centre to be the
workstream collaboration platform enabling blended conference
experiences, beginning with Gitex Technology week in December 2020.
Gitex is the largest technology event of its kind, and the only one
to go live in 2020. In a truly global event, over 30,000 virtual
attendees used Spaces to engage with 350 technology experts
representing 30 countries.
- The Contact Company, a longstanding UK-based customer, decided
to use Avaya OneCloud Subscription as it provides them with the
flexible consumption and commercial model they require to enable
1,500 agents to work remotely, as well as from 2 campus sites to
serve their large customer base.
Business Highlights
- Avaya Earned the Frost & Sullivan Award for Excellence in
Healthcare Solutions.
- Avaya named one of 2021 America’s Most Responsible Companies by
Newsweek magazine based on key performance indicators derived from
CSR Reports, Sustainability Reports, and Corporate Citizenship
Reports, as well as an independent survey of U.S. residents.
- TrustRadius recognized Avaya with the 2020 Tech Cares Award for
going above and beyond to provide global communities, clients, and
frontline workers with support during the COVID-19 crisis.
- Avaya Spaces placed in Leaders category in IDC MarketScape:
European Collaboration Tools for Education 2020 Vendor
Assessment.
Financial Outlook - 2Q Fiscal
2021 - unless otherwise noted, values reflect January
31, 2021 FX rates.
- Revenue of $710 million to $725 million
- GAAP operating income of $35 million to $50 million; GAAP
operating margin of 5% to 7%
- Non-GAAP operating income of $135 million to $150 million;
non-GAAP operating margin of 19% to 21%
- Adjusted EBITDA of $160 million to $175 million; Adjusted
EBITDA margin of 23% to 24%
- Non-GAAP EPS of $0.70 to $0.82
Financial Outlook - Fiscal Year
2021 - unless otherwise noted, values reflect January
31, 2021 FX rates.
- Revenue of $2.90 billion to $2.94 billion
- CAPS revenue growth of ~$300 million, which will represent
between 35% and 40% of Avaya’s total revenue in FY21.
- OneCloud ARR expected to be $415 million to $425 million by
year end FY21
- GAAP operating income of $151 million to $191 million; GAAP
operating margin of 5% to 7%
- Non-GAAP operating income of $578 million to $618 million;
non-GAAP operating margin of 20% to 21%
- Adjusted EBITDA of $680 million to $720 million; Adjusted
EBITDA margin of 23% to 24%
- Non-GAAP EPS of $3.05 to $3.37
- Cash flow from operations of 3% to 4% of revenue
- Approximately 83 million to 86 million weighted average shares
outstanding
The company has not quantitatively reconciled its guidance for
adjusted EBITDA, non-GAAP Operating income, or non-GAAP EPS to
their respective most comparable GAAP measure because certain of
the reconciling items that impact these metrics including,
provision for income taxes, restructuring charges, net of sublease
income, advisory fees, acquisition-related costs, change in fair
value of warrants and gain (loss) on marketable securities
affecting the period, have not occurred, are out of the company’s
control, or cannot be reasonably predicted. Accordingly,
reconciliations to the nearest GAAP financial measures are not
available without unreasonable effort. Please note that the
unavailable reconciling items could significantly impact the
company’s results as reported under GAAP.
As Avaya’s CAPS metric reflects revenue that is already
recognized, management believes it would be helpful to provide
investors with a better view into the performance of the company’s
broader-based OneCloud software solutions that are driving the
company’s recurring revenue growth by also providing a
forward-looking metric, Annualized Recurring Revenue, or OneCloud
ARR.
OneCloud ARR represents our estimate of the annualized revenue
run-rate of certain components from active term OneCloud contracts
(whether or not terminable) at the end of the reporting period.
More specifically, OneCloud ARR includes OneCloud subscription
revenue, ACO recurring revenue and revenue from CCaaS, Spaces,
CPaaS, DaaS and private cloud, and excludes maintenance, managed
services revenue and ACO one-time payments. The One Cloud ARR
metric, combined with the company’s CAPS metric, provides investors
enhanced visibility into Avaya’s transformational Cloud journey.
Quarterly and annual OneCloud ARR are provided in the slides
published on Avaya’s website at http://www.avaya.com on the
Investor Relations page.
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 February 9, 2021. 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 February 9, 2021.
To access the live conference call by phone, listeners should dial
+1-877-858-7671 in the U.S. or Canada and +1-201-389-0939 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 +1-877-660-6853 in the U.S. or Canada
and +1-201-612-7415 for international callers, using the conference
access code: 13714638.
About Avaya
Businesses are built by the experiences they provide, and
everyday millions of those experiences are delivered by Avaya
Holdings Corp. (NYSE: AVYA). Avaya is shaping what’s next for the
future of work, with innovation and partnerships that deliver
game-changing business benefits. Our cloud communications solutions
and multi-cloud application ecosystem power personalized,
intelligent, and effortless customer and employee experiences to
help achieve strategic ambitions and desired outcomes. Together, we
are committed to help grow your business by delivering Experiences
that Matter. Learn more at http://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,”
vmight,” “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. These statements, including
the Company’s outlook, do not include the potential impact of any
business combinations, asset acquisitions, divestitures, strategic
investments or other strategic transactions completed after the
date hereof. 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. Risks and uncertainties that may cause these
forward-looking statements to be inaccurate include, among others,
termination or modification of current contracts which could impair
attainment of our OneCloud ARR metric; the duration, severity and
impact of the coronavirus pandemic (“COVID-19”), as well as
governmental and business responses to COVID-19, and the impact the
pandemic and such responses have on our business, financial
performance, liquidity; and other factors 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”). These risks and uncertainties may cause the
Company’s 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)
Three months ended
December 31,
2020
2019
REVENUE
Products
$
266
$
298
Services
477
417
743
715
COSTS
Products:
Costs
105
104
Amortization of technology intangible
assets
43
43
Services
179
174
327
321
GROSS PROFIT
416
394
OPERATING EXPENSES
Selling, general and administrative
255
283
Research and development
55
52
Amortization of intangible assets
40
41
Restructuring charges, net
4
3
354
379
OPERATING INCOME
62
15
Interest expense
(56
)
(58
)
Other income, net
—
14
INCOME (LOSS) BEFORE INCOME TAXES
6
(29
)
Provision for income taxes
(10
)
(25
)
NET LOSS
$
(4
)
$
(54
)
LOSS PER SHARE
Basic
$
(0.06
)
$
(0.54
)
Diluted
$
(0.06
)
$
(0.54
)
Weighted average shares outstanding
Basic
83.8
109.0
Diluted
83.8
109.0
Avaya Holdings Corp.
Condensed Consolidated Balance
Sheets (Unaudited)
(In millions, except per share
and shares amounts)
December 31, 2020
September 30, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
750
$
727
Accounts receivable, net
258
275
Inventory
53
54
Contract assets, net
325
296
Contract costs
128
115
Other current assets
124
112
TOTAL CURRENT ASSETS
1,638
1,579
Property, plant and equipment, net
276
268
Deferred income taxes, net
38
31
Intangible assets, net
2,476
2,556
Goodwill, net
1,482
1,478
Operating lease right-of-use assets
162
160
Other assets
158
159
TOTAL ASSETS
$
6,230
$
6,231
LIABILITIES
Current liabilities:
Accounts payable
292
242
Payroll and benefit obligations
153
198
Contract liabilities
408
446
Operating lease liabilities
49
49
Business restructuring reserves
21
21
Other current liabilities
190
181
TOTAL CURRENT LIABILITIES
1,113
1,137
Non-current liabilities:
Long-term debt
2,893
2,886
Pension obligations
766
749
Other post-retirement obligations
203
215
Deferred income taxes, net
38
38
Contract liabilities
362
373
Operating lease liabilities
131
129
Business restructuring reserves
26
28
Other liabilities
309
312
TOTAL NON-CURRENT LIABILITIES
4,728
4,730
TOTAL LIABILITIES
5,841
5,867
Commitments and contingencies
Preferred stock, $0.01 par value;
55,000,000 shares authorized at December 31, 2020 and September 30,
2020
Convertible series A preferred stock;
125,000 shares issued and outstanding at December 31, 2020 and
September 30, 2020
129
128
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; 550,000,000
shares authorized; 83,781,354 shares issued and outstanding at
December 31, 2020; and 83,278,383 shares issued and outstanding at
September 30, 2020
1
1
Additional paid-in capital
1,463
1,449
Accumulated deficit
(976
)
(969
)
Accumulated other comprehensive loss
(228
)
(245
)
TOTAL STOCKHOLDERS' EQUITY
260
236
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
6,230
$
6,231
Avaya Holdings Corp.
Condensed Statements of Cash
Flows
(Unaudited; in
millions)
Three months ended
December 31,
2020
2019
Net cash provided by (used for):
Operating activities
$
48
$
12
Investing activities
(27
)
268
Financing activities
(6
)
(271
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
9
5
Net increase in cash, cash equivalents,
and restricted cash
24
14
Cash, cash equivalents, and restricted
cash at beginning of period
731
756
Cash, cash equivalents, and restricted
cash at end of period
$
755
$
770
Avaya Holdings Corp.
Supplemental Schedule of
Revenue by Segment and Geography
(Unaudited; in
millions)
Three Months Ended
Change
Three months ended September
30, 2020
Dec. 31, 2020
Dec. 31, 2019
Amount
Pct.
Pct., net of fx impact
Revenue by Segment
Products & Solutions
$
266
$
298
$
(32
)
(11
)
%
(12
)
%
$
269
Services
477
419
58
14
%
13
%
488
Unallocated amounts
—
(2
)
2
(1)
(1)
(2
)
Total revenue
$
743
$
715
$
28
4
%
3
%
$
755
Revenue by Geography
U.S.
$
414
$
394
$
20
5
%
5
%
$
447
International:
EMEA
195
186
9
5
%
2
%
178
APAC - Asia Pacific
75
77
(2
)
(3
)
%
(3
)
%
74
Americas International
59
58
1
2
%
—
%
56
Total International
329
321
8
2
%
—
%
308
Total revenue
$
743
$
715
$
28
4
%
3
%
$
755
(1) Not meaningful.
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 financial measures
labeled as “non-GAAP” or “adjusted.”
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 but that still affect our net income. 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 gross margin, non-GAAP
operating income, non-GAAP operating margin, non-GAAP net income
and non-GAAP earnings per share 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.
The company presents constant currency information to provide a
framework to assess how the company’s underlying businesses
performance excluding the effect of foreign currency rate
fluctuations. To present this information for current and
comparative prior period results for entities reporting in
currencies other than U.S. dollars, the amounts are converted into
U.S. dollars at the exchange rate in effect on the last day of the
company’s prior fiscal year (i.e. September 30, 2020).
In addition, we present the liquidity measures of free 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 cash flow and liquidity of companies in
the same industry.
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
second quarter and full year fiscal 2021 non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP operating income, non-GAAP
operating margin, non-GAAP earnings per share or adjusted EBITDA
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 reconcile historical GAAP measures to
non-GAAP measures.
Avaya Holdings Corp.
Supplemental Schedules of
Non-GAAP Adjusted EBITDA
(Unaudited; in
millions)
Three months ended,
December 31, 2020
September 30, 2020
December 31, 2019
Net (loss) income
$
(4
)
$
37
$
(54
)
Interest expense
56
64
58
Interest income
—
—
(3
)
Provision for (benefit from) income
taxes
10
(20
)
25
Depreciation and amortization
103
104
107
EBITDA
165
185
133
Impact of fresh start accounting
adjustments
—
1
—
Restructuring charges
4
2
1
Advisory fees
—
—
39
Share-based compensation
14
9
6
Change in fair value of Emergence Date
Warrants
5
3
3
Loss on foreign currency transactions
2
—
4
Gain on investments in equity
securities
—
—
(12
)
Adjusted EBITDA
$
190
$
200
$
174
Avaya Holdings Corp.
Supplemental Schedules of
Non-GAAP Earnings per Share
(Unaudited; in
millions)
Three months ended,
December 31, 2020
September 30, 2020
December 31, 2019
GAAP Net (Loss) Income
$
(4
)
$
37
$
(54
)
Non-GAAP Adjustments:
Impact of fresh start accounting
—
1
4
Restructuring charges, net
4
2
1
Advisory fees
—
—
39
Share-based compensation
14
9
6
Change in fair value of Emergence Date
Warrants
5
3
3
Loss on foreign currency transactions
2
—
4
Gain on investments in equity
securities
—
—
(12
)
Amortization of intangible assets
83
83
84
Income tax expense effects (1)
(19
)
(49
)
—
Non-GAAP Net Income
$
85
$
86
$
75
Dividends and accretion to preferred
stockholders
$
(1
)
$
(1
)
$
(5
)
Undistributed Non-GAAP Income
84
85
70
Percentage allocated to common
stockholders (2)
91.2
%
91.2
%
95.4
%
Numerator for Non-GAAP diluted earnings
per common share
$
77
$
78
$
67
Diluted Weighted Average Shares - GAAP
83.8
84.3
109.0
Incremental shares (3)
1.4
—
0.2
Diluted Weighted Average Shares -
Non-GAAP
85.2
84.3
109.2
GAAP (Loss) Earnings per Share -
Diluted
$
(0.06
)
$
0.39
$
(0.54
)
Non-GAAP Earnings per Share - Diluted
$
0.90
$
0.93
$
0.61
(1) The Company’s calculation of non-GAAP
income taxes reflects a 25% fixed non-GAAP effective tax rate based
on a blended U.S. federal and state tax rate, given the Company’s
operating structure. The non-GAAP effective tax rate may differ
significantly from the GAAP effective tax rate. The non-GAAP
effective tax rate could be subject to change for a number of
reasons, including but not limited to, changes resulting from tax
legislation, material changes in revenues or expenses and other
significant events. The Company will continuously assess its
estimated non-GAAP effective tax rate in connection with its
calculation of non-GAAP net income and non-GAAP net income per
diluted share in future periods.
(2) The Company’s preferred shares are
participating securities, which requires the application of the
two-class method to calculate diluted earnings per share. Under the
two-class method, undistributed earnings are allocated to common
stock and participating securities according to their respective
participating rights in undistributed earnings. The percentage
allocated to common stockholders reflects the proportion weighted
average common stock outstanding to the weighted average of common
stock and common stock equivalents (preferred shares).
(3) In periods with a GAAP Net Loss, the
incremental shares reflects the dilutive impact of certain
securities, which are excluded from the computation of Diluted GAAP
(loss) earnings per share as they are anti-dilutive.
Avaya Holdings Corp.
Supplemental Schedules of
Non-GAAP Reconciliations of Gross Margin and Operating
Income
(Unaudited; in
millions)
Three months ended,
December 31, 2020
September 30, 2020
December 31, 2019
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin
Gross Profit
$
416
$
418
$
394
Items excluded:
Amortization of technology intangible
assets
43
44
43
Adj. for fresh start accounting
—
1
3
Non-GAAP Gross Profit
$
459
$
463
$
440
GAAP Gross Margin
56.0
%
55.4
%
55.1
%
Non-GAAP Gross Margin
61.8
%
61.3
%
61.5
%
Reconciliation of Non-GAAP Operating
Income
Operating Income
$
62
$
74
$
15
Items excluded:
Amortization of intangible assets
83
83
84
Adj. for fresh start accounting
—
1
4
Restructuring charges, net
4
3
3
Advisory fees
—
—
39
Share-based compensation
14
9
6
Non-GAAP Operating Income
$
163
$
170
$
151
GAAP Operating Margin
8.3
%
9.8
%
2.1
%
Non-GAAP Operating Margin
21.9
%
22.5
%
21.1
%
Avaya Holdings Corp.
Supplemental Schedules of
Non-GAAP Reconciliation of Gross Profit and Gross Margin by
Portfolio
(Unaudited; in
millions)
Three months ended,
December 31, 2020
September 30, 2020
December 31, 2019
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin - Products
Revenue
$
266
$
269
$
298
Costs
105
106
104
Amortization of technology intangible
assets
43
44
43
GAAP Gross Profit
118
119
151
Items excluded:
Amortization of technology intangible
assets
43
44
43
Adj. for fresh start accounting
—
(1
)
—
Non-GAAP Gross Profit
$
161
$
162
$
194
GAAP Gross Margin
44.4
%
44.2
%
50.7
%
Non-GAAP Gross Margin
60.5
%
60.2
%
65.1
%
Reconciliation of Non-GAAP Gross Profit
and Non-GAAP Gross Margin - Services
Revenue
$
477
$
486
$
417
Costs
179
187
174
GAAP Gross Profit
298
299
243
Items excluded:
Adj. for fresh start accounting
—
2
3
Non-GAAP Gross Profit
$
298
$
301
$
246
GAAP Gross Margin
62.5
%
61.5
%
58.3
%
Non-GAAP Gross Margin
62.5
%
61.9
%
59.0
%
Avaya Holdings Corp.
Supplemental Schedules of Free
Cash Flow
(Unaudited; in
millions)
Three months ended,
Dec. 31, 2020
Sept. 30, 2020
June 30, 2020
March 31, 2020
Dec. 31, 2019
Net cash provided by operating
activities
$
48
$
70
$
45
$
20
$
12
Less:
Capital expenditures
27
26
24
22
26
Free cash flow
$
21
$
44
$
21
$
(2
)
$
(14
)
Source: Avaya Newsroom
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210209005414/en/
Media Inquiries: Alex Alias 669-242-8034
alalias@avaya.com
Investor Inquiries: Michael McCarthy 919-425-8330
mikemccarthy@avaya.com
Avaya (NYSE:AVYA)
Historical Stock Chart
From Apr 2024 to May 2024
Avaya (NYSE:AVYA)
Historical Stock Chart
From May 2023 to May 2024