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Press Release -- August 10th, 2021
Source: Avaya

Avaya Reports Third Quarter Fiscal 2021 Financial Results

  • Total revenue increased 2% year-over-year to $732 million
  • Avaya OneCloud ARR increased over 275% year over year to $425 million
  • Raising ARR guidance and expects ARR to reach $1 billion by end of 2022

Sydney, Australia – August 10, 2021 – Avaya Holdings Corp. (NYSE: AVYA) today reported financial results for the third quarter of fiscal 2021 ended June 30, 2021.


Third Quarter Financial Highlights

  • Revenues of $732 million, up 2% from a year ago
  • OneCloud ARR was $425 million, up 23% sequentially
  • CAPS (Cloud, Alliance Partner and Subscription) was 40% of revenue, up from 30% a year ago
  • Software and services were 88% of revenue, down from 89% a year ago
  • Recurring revenue was 64%, flat to 64% a year ago
  • GAAP Operating income was $41 million; Non-GAAP Operating income was $146 million
  • GAAP Net income was $43 million; Non-GAAP Net income was $73 million
  • Adjusted EBITDA was $173 million, 23.6% of revenue, down 230 basis points year over year
  • Ending cash and cash equivalents were $562 million
  • GAAP Earnings Per Share of $0.43; Non-GAAP Earnings Per Share of $0.75

“Our third quarter represents the fifth consecutive quarter of year over year revenue growth and speaks volumes to the significant progress we’ve made on our transformational strategy.  We are executing ahead of plan and I could not be prouder of the Avaya team,” said Jim Chirico, president and CEO of Avaya. “Annual recurring revenue, a key indicator of our progress, is outperforming our expectations, up over 275% percent from a year ago to $425 million, 64% of which is from deals greater than $1 million, consistent with our strong traction in large enterprises. Given this performance, we are again raising our ARR guidance and now expect to cross the $1 billion mark by the end of calendar 2022, about a year ahead of schedule.”

Additional Third Quarter Fiscal 2021 Highlights

  • Total Contract Value (TCV) of $2.1B*
  • Added approximately 1,700 new logos
  • Significant large deal activity with 100 deals over $1 million TCV, 19 over $5 million and 3 over $10 million
  • ~60% of OneCloud ARR came from customers generating $1 million or more in annual recurring revenue
  • ~95% of OneCloud ARR came from customers generating $100K or more in annual recurring revenue
  • ~60% of OneCloud ARR came from contact centre customers

(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

  • Australia Gas and Light (AGL) moved into an Avaya OneCloud Private to support the 1500+ agents across multiple locations. Avaya’s long-time partnership and ability to deliver innovation and value positioned it over 9 competitors (including: Microsoft, Genesys, Amazon, Cisco and 8×8). The solution sets this customer up for success and growth in their three-year plan that includes the consideration of a move to a full CCaaS cloud solution in the future.
  • 9mobile, one of the largest telecoms operators in Nigeria, has moved 1,500 users to Avaya OneCloud Subscription as the first step in delivering a flexible, multichannel contact center experience to customers.
  • Agnes Scott College selected Avaya Cloud Office for its more than 1,000 users, citing affordability, a more modern experience, and compliance as key decision factors.
  • The Atlanta Group, part of the worldwide Ardonagh Group and one of the largest and fastest-growing brokers in the UK insurance market, is using Avaya OneCloud CCaaS to deliver a single-agent experience, regardless of location. Avaya expanded its footprint across the business, displacing competitive systems previously used within the specific brands of their portfolio.
  • A customer in South America who runs a very large family compensation fund with more than 3.4 million users signed an Avaya OneCloud Subscription contract to provide a total experience transformation for service users, including UC, multi-experience Contact Center applications, and video across social media and traditional channels.
  • Avaya Cloud Office was selected by Empire State Realty Trust for over 500 users across their 14 retail and office locations.  In a competitive deal, Empire State Realty Trust said that the flexibility, scalability and cost savings Avaya Cloud Office brings were the key reasons behind their decision.
  • General Atomics, one of the largest defence contractors in the United States, has chosen Avaya OneCloud Private to address their needs for a secure UC cloud solution. The solution will maintain compliance with Federal Information Processing Standards and a secure remote working environment for 18,000 users across more than 25 sites. In a competitive situation, General Atomics put their trust in Avaya to deliver, manage, and ensure the long-term needs of their workforce and the country are being met.
  • Nicholls State University signed a five-year deal to deploy Avaya Cloud Office for over 1,100 users across its Thibodaux, Louisiana campus.  Nicholls State selected Avaya Cloud Office for flexibility to meet the communications demand of their students in an efficient manner, whether the users are on campus or off.
  • Yellow, formerly YRC – the national trucking, shipping, and logistics company and a long-time Avaya customer, signed a deal to for 12,000 Avaya Cloud Office licenses.  They were seeking a cloud-based UC solution for their mobile workforce. Requirements centred around ease of deployment and scalability and Avaya delivered.


Business Highlights

  • Avaya was identified as a Leader in The Aragon Research Globe for Video Conferencing 2021.
  • Avaya has been designated an Innovative Vendor and a Value Index Leader in the Capability category, and ranked among the top five CCaaS providers overall in the Ventana Research ‘2021 Value Index for Contact Center in the Cloud.’
  • Avaya was named a Leader in The Aragon Research Globe for Unified Communications and Collaboration (UC&C) 2021. The evaluation was based on completeness of strategy and performance.
  • Avaya was named a “Major Player” in the 2021 IDC MarketScape for the worldwide CPaaS (Communications Platform as a Service) market. Avaya OneCloud™ CPaaS enables organizations to create and deliver more memorable experiences by assembling and combining business capabilities to achieve the outcomes they need, in the moment, for their customers and their teams.


Financial Outlook – 4Q Fiscal 2021 – unless otherwise noted, values reflect July 31, 2021 FX rates.

  • Revenue of $720 million to $750 million
  • GAAP operating income of $14 million to $29 million; GAAP operating margin of 2% to 4%
  • Non-GAAP operating income of $131 million to $146 million; non-GAAP operating margin of 18% to 19%
  • Adjusted EBITDA of $160 million to $175 million; Adjusted EBITDA margin of 22% to 23%
  • Non-GAAP EPS of $0.66 to $0.78


Financial Outlook – Fiscal Year 2021 – unless otherwise noted, values reflect July 31, 2021 FX rates.

  • Revenue of $2.930 billion to $2.960 billion
  • CAPS revenue will represent between 39% and 40% of Avaya’s total revenue guidance for FY21
  • OneCloud ARR expected to be ~$490 million to $500 million by year end FY21
  • GAAP operating income of $161 million to $176 million; GAAP operating margin of ~6%
  • Non-GAAP operating income of $588 million to $603 million; non-GAAP operating margin of ~20%
  • Adjusted EBITDA of $700 million to $715 million; Adjusted EBITDA margin of ~24%
  • Non-GAAP EPS of $3.05 to $3.16
  • Cash flow from operations has been revised to approximately 1% of revenue, as an outcome of the company’s accelerated success in moving to a recurring revenue model which is resulting in higher working capital requirements
  • Approximately 87 million to 88 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 and change in fair value of warrants 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 recognised, 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. Per period OneCloud ARR figures are provided in the slides published on Avaya’s website at 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 the date hereof. Actual results may differ materially from Avaya’s outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

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

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. 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”), including the emergence of new variants, 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 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.

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