Attachment: 8-K

Exhibit
Exhibit 99.1


avayalogoera14.jpg

Media Inquiries:                                Investor Inquiries:
Alex Alias                                    Michael McCarthy
669-242-8034                                    919-425-8330
alalias@avaya.com                                 mikemccarthy@avaya.com


Avaya Reports Third Quarter Fiscal 2020 Financial Results

GAAP Revenues of $721 million represented year-over-year growth
Revenue from Software and Services was 89%, a new record; Recurring revenue was 64%
Cloud, Alliance Partner & Subscription revenue increased from 23% to 30% of revenue
Booked ~$130 million of Avaya OneCloud Subscription Total Contract Value (TCV)

Santa Clara, Calif., - August 10, 2020 - Avaya Holdings Corp. (NYSE: AVYA) today reported financial results for the third quarter ended June 30, 2020.

Third Quarter Financial Highlights
•
Revenues of $721 million
•
GAAP Operating income was $53 million; Non-GAAP Operating income was $164 million
•
Net income was $9 million
•
Adjusted EBITDA was $187 million, 25.9% of revenue
•
104 deals signed with a TCV of over $1 million, 7 deals over $10 million TCV
•
Ending cash and cash equivalents were $742 million

Jim Chirico, President and CEO of Avaya stated, “We delivered strong quarterly results exceeding our guidance across all metrics. The company grew sequentially and year over year, which marks a major milestone for Avaya. Software and services as a percent of revenue was 89% - beating the record set this past March; recurring revenue was 64%, up 5 points year-over-year; and our CAPS revenue increased to 30% from 23% in the prior quarter. The strength in our business is a direct result of executing on the deliberate strategy we laid out over two years ago.”
Mr. Chirico added, “Response to our Subscription offering continues to be strong, with just over $200 million of TCV having been booked since its launch back in Q1. This offering differentiates Avaya within the enterprise segment and answers a very clear demand from our customers for flexibility, access to our latest innovations and to provide a seamless path to move to the cloud at a time and pace they choose.”




Financial Results for the Third Quarter
 
GAAP
 
Non-GAAP (1)
(In millions, except percentages)
 
3Q20
 
2Q20
 
3Q19
 
3Q20
 
2Q20
 
3Q19
Revenue
 
$
721

 
$
682

 
$
717

 
$
722

 
$
683

 
$
720

Gross margin
 
55.1
%
 
54.4
%
 
54.4
%
 
61.1
%
 
61.1
%
 
60.8
%
Operating income (loss)
 
$
53

 
$
(597
)
 
$
(613
)
 
$
164

 
$
125

 
$
145

Net income (loss)
 
$
9

 
$
(672
)
 
$
(633
)
 
n/a

 
n/a

 
n/a

 
 
3Q20
 
2Q20
 
3Q19
Adjusted EBITDA(1)
 
$
187

 
$
149

 
$
167

Adjusted EBITDA margin(1)
 
25.9
%
 
21.8
%
 
23.2
%
Cash provided by operations
 
$
45

 
$
20

 
$
52

Cash and cash equivalents
 
$
742

 
$
553

 
$
729

Additional Key Performance Highlights
•
Total Contract Value (TCV) of $2.2B*
•
Added approximately 900 new logos
•
Large deal activity with 104 deals over $1 million, 14 over $5 million, and 7 over $10 million
•
Avaya Cloud Office launched in Australia, Canada & the UK; enhanced with automated migration tools
•
Enhanced CCaaS offer with addition of digital channels
•
Avaya OneCloud Subscription TCV increased ~$130 million during the June quarter

(1) Non-GAAP revenue, Non-GAAP gross margin, Non-GAAP operating margin, Non-GAAP operating income, adjusted EBITDA, and constant currency are not measures calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Adjusted EBITDA margin is calculated based on non-GAAP Revenue. Refer to the "Use of non-GAAP (Adjusted) Financial Measures" below for more information on the calculation of constant currency. 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. Unless otherwise noted, all references in this release to revenue are to GAAP revenue.

* 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
•
A large US-based retailer signed a new three-year Avaya OneCloud Subscription agreement to fully modernize their Avaya infrastructure which supports 75,000 Unified Communication users and 25,000 Contact Center agents.
•
Vodafone, a long time Avaya customer, signed a new five-year Avaya OneCloud Subscription agreement to address their immediate collaboration and communications challenges responding to COVID-19, as well as to support their long term strategy to modernize their agent and customer experience. By upgrading its communications infrastructure with Avaya OneCloud Subscription to support 4,600 agents, this flexible model is ideal to support Vodafone’s digital transformation journey at a time when work from anywhere



requirements have become a priority. Leveraging Avaya solutions, Vodafone has stated that its customer service team in the UK was running at full capability despite the pandemic, to serve the consumers and businesses who rely on them.
•
A leading European financial services company is leveraging our Avaya OneCloud Subscription offering to replace their UC and contact center systems. This customer needed to facilitate an enterprise wide systems transformation and wanted the flexibility, access to innovation like Spaces on demand, and the ability to integrate new digital applications that an opex model provides.
•
Closed the first seven-figured TCV deal for Avaya Cloud Office with a government customer based in the United Kingdom.
•
Waldorf Woodlands, a leading family of not-for-profit schools in Kenya that operates from two campus locations, is using Avaya Spaces to provide an immersive virtual learning experience. They are leveraging our cloud-based capability to integrate chat, voice, video, online meetings, content sharing and more, to deliver structured learning to their students through interactive virtual classes.
•
CTIntegrations adopted Avaya OneCloud CPaaS technology for their flagship product, CT Suite, a user-friendly agent desktop and multimodal contact center. APIs from Avaya’s CPaaS portfolio enable CT Suite to smoothly deliver proactive SMS messaging to mobile callers so their agents can provide faster service during peak demand periods.
•
Cincinnati Bell is implementing a new Avaya OneCloud CCaaS solution to support nearly 300 agents working remotely. They required a stable and reliable public cloud solution that could be deployed quickly and cost effectively to extend the capabilities of their existing Avaya contact center.


Business Highlights
•
IBM presented Avaya with the 2020 IBM Award for Hybrid Cloud Excellence in recognition for outstanding performance in providing enterprise organizations with a fast, convenient and automated path to a cloud communications solution using Avaya OneCloud ReadyNow.
•
Entry into a new partnership with NVIDIA, a leading graphics processor unit (GPU) design company that has helped to not only redefine modern computer graphics but more recently modern AI capabilities through GPU-enabled deep learning, has enabled Avaya to increase the impact and value of visual, audible and collaborative experiences through our Spaces offering.
•
Aragon Research included Avaya in their Aragon Research Globe for Intelligent Contact Center for 2020, recognizing that Avaya is at the forefront of applying emerging artificial intelligence technologies. In doing so, Aragon highlighted the depth and breadth of Avaya’s capabilities, which are both native and the result of strategic partnerships such as Google Contact Center AI, designed to enhance a customer’s experience and to help anticipate future customer needs.
•
Frost & Sullivan recognized Avaya with their 2020 North American Growth Innovation Leadership Frost Radar Award for innovative workforce engagement management solutions deployed across its contact center portfolio.



Financial Outlook - 4Q Fiscal 2020 - unless otherwise noted, values reflect June 30th, 2020 FX rates.
•
GAAP revenue of $719 million to $739 million; Non-GAAP revenue of $720 million to $740 million
•
GAAP operating income of $51 million to $71 million; GAAP operating margin of ~7% to 10%
•
Non-GAAP operating income of $146 million to $166 million; non-GAAP operating margin of ~20% to 22%
•
Adjusted EBITDA of $170 million to $190 million; Adjusted EBITDA margin of ~24% to 26%
Financial Outlook - Fiscal Year 2020 - unless otherwise noted, values reflect June 30th, 2020 FX rates.
•
GAAP revenue of $2.84 billion to $2.86 billion; Non-GAAP revenue of $2.84 billion to $2.86 billion
•
GAAP operating loss of $478 million to $458 million; GAAP operating margin of ~(17)% to (16)%
•
Non-GAAP operating income of $585 million to $605 million; non-GAAP operating margin of ~21%
•
Cash flow from operations is expected to be ~4% of full year GAAP revenue
•
Adjusted EBITDA of $680 million to $700 million; Adjusted EBITDA margin of ~24%
•
Weighted shares outstanding are expected to be ~93 million and total shares outstanding are expected to be ~83 million

The company has not quantitatively reconciled its guidance for adjusted EBITDA to its most comparable GAAP measure because certain of the reconciling items that impact adjusted EBITDA, 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.


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 August 10, 2020. 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: 13705768.
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. 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, 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
June 30,
 
Nine months ended
June 30,
 
2020
 
2019
 
2020
 
2019
REVENUE
 
 
 
 
 
 
 
Products
$
261

 
$
297

 
$
804

 
$
908

Services
460

 
420

 
1,314

 
1,256

 
721

 
717

 
2,118

 
2,164

COSTS
 
 
 
 
 
 
 
Products:
 
 
 
 
 
 
 
Costs
103

 
109

 
299

 
329

Amortization of technology intangible assets
43

 
43

 
130

 
130

Services
178

 
175

 
527

 
522

 
324

 
327

 
956

 
981

GROSS PROFIT
397

 
390

 
1,162

 
1,183

OPERATING EXPENSES
 
 
 
 
 
 
 
Selling, general and administrative
232

 
253

 
763

 
761

Research and development
52

 
49

 
155

 
154

Amortization of intangible assets
40

 
41

 
122

 
122

Impairment charges
—

 
659

 
624

 
659

Restructuring charges, net
20

 
1

 
27

 
12

 
344

 
1,003

 
1,691

 
1,708

OPERATING INCOME (LOSS)
53

 
(613
)
 
(529
)
 
(525
)
Interest expense
(51
)
 
(59
)
 
(162
)
 
(177
)
Other income, net
27

 
12

 
56

 
35

INCOME (LOSS) BEFORE INCOME TAXES
29

 
(660
)
 
(635
)
 
(667
)
(Provision for) benefit from income taxes
(20
)
 
27

 
(82
)
 
30

NET INCOME (LOSS)
$
9

 
$
(633
)
 
$
(717
)
 
$
(637
)
EARNINGS (LOSS) PER SHARE
 
 
 
 
 
 
 
Basic
$
0.08

 
$
(5.70
)
 
$
(7.61
)
 
$
(5.75
)
Diluted
$
0.08

 
$
(5.70
)
 
$
(7.61
)
 
$
(5.75
)
Weighted average shares outstanding
 
 
 
 
 
 
 
Basic
83.1

 
111.0

 
95.1

 
110.7

Diluted
83.3

 
111.0

 
95.1

 
110.7





Avaya Holdings Corp.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except per share and shares amounts)
 
June 30, 2020
 
September 30, 2019
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
742

 
$
752

Accounts receivable, net
260

 
314

Inventory
56

 
63

Contract assets
276

 
187

Contract costs
124

 
114

Other current assets
111

 
115

TOTAL CURRENT ASSETS
1,569

 
1,545

Property, plant and equipment, net
256

 
255

Deferred income taxes, net
27

 
35

Intangible assets, net
2,637

 
2,891

Goodwill, net
1,477

 
2,103

Operating lease right-of-use assets
167

 
—

Other assets
135

 
121

TOTAL ASSETS
$
6,268

 
$
6,950

LIABILITIES
 
 
 
Current liabilities:
 
 
 
Debt maturing within one year
$
50

 
$
29

Accounts payable
250

 
291

Payroll and benefit obligations
166

 
116

Contract liabilities
514

 
472

Operating lease liabilities
49

 
—

Business restructuring reserve
23

 
33

Other current liabilities
192

 
158

TOTAL CURRENT LIABILITIES
1,244

 
1,099

Non-current liabilities:
 
 
 
Long-term debt, net of current portion
2,888

 
3,090

Pension obligations
734

 
759

Other post-retirement obligations
194

 
200

Deferred income taxes, net
55

 
72

Contract liabilities
336

 
78

Operating lease liabilities
135

 
—

Business restructuring reserve
28

 
36

Other liabilities
315

 
316

TOTAL NON-CURRENT LIABILITIES
4,685

 
4,551

TOTAL LIABILITIES
5,929

 
5,650

Commitments and contingencies
 
 
 
Preferred stock, $0.01 par value; 55,000,000 shares authorized at June 30, 2020 and September 30, 2019
 
 
 
Convertible Series A, 125,000 shares issued and outstanding at June 30, 2020 and no shares issued and outstanding at September 30, 2019
128

 
—

STOCKHOLDERS' EQUITY
 
 
 
Common stock, $0.01 par value; 550,000,000 shares authorized; 82,864,260 shares issued and outstanding at June 30, 2020; and 111,046,085 shares issued and 111,033,405 shares outstanding at September 30, 2019
1

 
1

Additional paid-in capital
1,441

 
1,761

Accumulated deficit
(1,006
)
 
(289
)
Accumulated other comprehensive loss
(225
)
 
(173
)
TOTAL STOCKHOLDERS' EQUITY
211

 
1,300

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
6,268

 
$
6,950




Avaya Holdings Corp.
Condensed Statements of Cash Flows
(Unaudited; in millions)
 
 
Nine months ended
June 30,
 
 
2020
 
2019
Net cash provided by (used for):
 
 
 
 
Operating activities
 
77

 
$
175

Investing activities
 
340

 
(95
)
Financing activities
 
(425
)
 
(51
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
 
(2
)
 
1

Net (decrease) increase in cash, cash equivalents, and restricted cash
 
(10
)
 
30

Cash, cash equivalents, and restricted cash at beginning of period
 
756

 
704

Cash, cash equivalents, and restricted cash at end of period
 
$
746

 
$
734


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 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.
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, 2019).




In addition, we present the liquidity measure 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 commonly 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 next quarter non-GAAP revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin 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.

Supplemental Schedules

Avaya Holdings Corp.
Reconciliation of Non-GAAP Adjusted EBITDA
(Unaudited; in millions)
 
Three months ended
June 30,
 
Nine months ended
June 30,
 
2020
 
2019
 
2020
 
2019
Net Income (loss)
$
9

 
$
(633
)
 
$
(717
)
 
$
(637
)
Interest expense
51

 
59

 
162

 
177

Interest income
(1
)
 
(4
)
 
(6
)
 
(11
)
Provision for (benefit from) income taxes
20

 
(27
)
 
82

 
(30
)
Depreciation and amortization
107

 
110

 
319

 
335

EBITDA
186

 
(495
)
 
(160
)
 
(166
)
Impact of fresh start accounting adjustments
1

 
(2
)
 
—

 
7

Restructuring charges
14

 
1

 
18

 
12

Advisory fees
—

 
1

 
40

 
3

Acquisition-related costs
—

 
1

 
—

 
8

Share-based compensation
7

 
8

 
21

 
19

Impairment charges
—

 
659

 
624

 
659

Change in fair value of Emergence Date Warrants
3

 
(7
)
 
—

 
(28
)
Loss on foreign currency transactions
5

 
1

 
16

 
8

Gain on investments in equity and debt securities, net
(29
)
 
—

 
(49
)
 
—

Adjusted EBITDA
$
187

 
$
167

 
$
510

 
$
522


 











Avaya Holdings Corp.
Reconciliation of Non-GAAP Revenue
(Unaudited; in millions)
 
 
Three Months Ended
 
Change
 
Three Months Ended
 
 
June 30, 2020
 
Adj. for Fresh Start Accounting
 
Non-GAAP June 30, 2020
 
June 30, 2019 (4)
 
Amount
 
Pct.
 
Pct. in constant currency*
 
Mar. 31, 2020 (1)
 
Dec. 31, 2019 (2)
 
Sept. 30, 2019 (3)
Revenue by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Products & Solutions
 
262

 
$
—

 
$
262

 
298

 
$
(36
)
 
(12
)%
 
(12
)%
 
$
245

 
$
298

 
$
315

Services
 
460

 
—

 
460

 
422

 
38

 
9
 %
 
11
 %
 
438

 
419

 
411

Unallocated amounts
 
(1
)
 
1

 
—

 
—

 
—

 
n/a

 
n/a

 
—

 
—

 
—

Total revenue
 
721

 
$
1

 
$
722

 
720

 
$
2

 
—
 %
 
—
 %
 
$
683

 
$
717

 
$
726

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue by Geography
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 
415

 
$
—

 
$
415

 
394

 
$
21

 
5
 %
 
5
 %
 
$
385

 
$
395

 
$
393

International:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  EMEA
 
178

 
—

 
178

 
183

 
(5
)
 
(3
)%
 
(2
)%
 
172

 
187

 
184

  APAC - Asia Pacific
 
75

 
1

 
76

 
85

 
(9
)
 
(11
)%
 
(9
)%
 
70

 
77

 
86

  Americas International
 
53

 
—

 
53

 
58

 
(5
)
 
(9
)%
 
(3
)%
 
56

 
58

 
63

Total International
 
306

 
1

 
307

 
326

 
(19
)
 
(6
)%
 
(4
)%
 
298

 
322

 
333

Total revenue
 
721

 
$
1

 
$
722

 
720

 
$
2

 
—
 %
 
1
 %
 
$
683

 
$
717

 
$
726

* Constant Currency is a non-GAAP financial measure, as noted in "Use of non-GAAP (Adjusted) Financial Measures" above.
(1) - (4) Reconciliation of Non-GAAP measures above:
 
 
(1) Q220 Non-GAAP Results
 
(2) Q120 Non-GAAP Results
 
 
Three Months Ended
 
Three Months Ended
 
 
Mar. 31, 2020
 
Adj. for Fresh Start Accounting
 
Non-GAAP
Mar. 31, 2020
 
Dec. 31, 2019
 
Adj. for Fresh Start Accounting
 
Non-GAAP
Dec. 31, 2019
Revenue by Segment
 
 
 
 
 
 
 
 
 
 
 
 
Products & Solutions
 
$
245

 
$
—

 
$
245

 
$
298

 
—

 
$
298

Services
 
438

 
—

 
438

 
419

 
—

 
419

Unallocated amounts
 
(1
)
 
1

 
—

 
(2
)
 
2

 
—

Total revenue
 
$
682

 
$
1

 
$
683

 
$
715

 
$
2

 
$
717

 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue by Geography
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 
$
384

 
$
1

 
$
385

 
$
394

 
$
1

 
$
395

International:
 
 
 
 
 
 
 
 
 
 
 
 
  EMEA
 
172

 
—

 
172

 
186

 
1

 
187

  APAC - Asia Pacific
 
70

 
—

 
70

 
77

 
—

 
77

  Americas International
 
56

 
—

 
56

 
58

 
—

 
58

Total International
 
298

 
—

 
298

 
321

 
1

 
322

Total revenue
 
$
682

 
$
1

 
$
683

 
$
715

 
$
2

 
$
717

 
 
(3) Q419 Non-GAAP Results
 
(4) Q319 Non-GAAP Results
 
 
Three Months Ended
 
Three Months Ended
 
 
Sept. 30, 2019
 
Adj. for Fresh Start Accounting
 
Non-GAAP
Sept. 30, 2019
 
June 30, 2019
 
Adj. for Fresh Start Accounting
 
Non-GAAP
June 30, 2019
Revenue by Segment
 
 
 
 
 
 
 
 
 
 
 
 
Products & Solutions
 
$
315

 
$
—

 
$
315

 
$
298

 
$
—

 
$
298

Services
 
411

 
—

 
411

 
422

 
—

 
422

Unallocated amounts
 
(3
)
 
3

 
—

 
(3
)
 
3

 
—

Total revenue
 
$
723

 
$
3

 
$
726

 
$
717

 
$
3

 
$
720

 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue by Geography
 
 
 
 
 
 
 
 
 
 
 
 
U.S.
 
$
392

 
$
1

 
$
393

 
$
392

 
$
2

 
$
394

International:
 
 
 
 
 
 
 
 
 
 
 
 
  EMEA
 
183

 
1

 
184

 
183

 
—

 
183

  APAC - Asia Pacific
 
85

 
1

 
86

 
85

 
—

 
85

  Americas International
 
63

 
—

 
63

 
57

 
1

 
58

Total International
 
331

 
2

 
333

 
325

 
1

 
326

Total revenue
 
$
723

 
$
3

 
$
726

 
$
717

 
$
3

 
$
720





Avaya Holdings Corp.
Reconciliation of Non-GAAP Gross Margin and Operating Income
(Unaudited; in millions)
 
 
Three Months Ended
 
 
June 30, 2020
 
Mar. 31, 2020
 
Dec. 31, 2019
 
Sept. 30, 2019
 
June 30, 2019
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin
 
 
 
 
 
 
 
 
 
 
Gross Profit
 
$
397

 
$
371

 
$
394

 
$
392

 
$
390

Items excluded:
 
 
 
 
 
 
 
 
 
 
Amortization of technology intangible assets
 
43

 
44

 
43

 
44

 
43

Adj. for fresh start accounting
 
1

 
2

 
3

 
4

 
5

Non-GAAP Gross Profit
 
$
441

 
$
417

 
$
440

 
$
440

 
$
438

GAAP Gross Margin
 
55.1
%
 
54.4
 %
 
55.1
%
 
54.2
%
 
54.4
 %
Non-GAAP Gross Margin
 
61.1
%
 
61.1
 %
 
61.4
%
 
60.6
%
 
60.8
 %
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Operating Income
 
 
 
 
 
 
 
 
 
 
Operating Income (Loss)
 
$
53

 
$
(597
)
 
$
15

 
$
52

 
$
(613
)
Items excluded:
 
 
 
 
 
 
 
 
 
 
Adj. for fresh start accounting
 
1

 
—

 
4

 
4

 
4

Amortization of intangible assets
 
83

 
85

 
84

 
84

 
84

Restructuring charges, net
 
20

 
4

 
3

 
10

 
1

Advisory fees
 
—

 
1

 
39

 
8

 
1

Acquisition-related costs
 
—

 
—

 
—

 
1

 
1

Share-based compensation
 
7

 
8

 
6

 
6

 
8

Impairment charges
 
—

 
624

 
—

 
—

 
659

Non-GAAP Operating Income
 
$
164

 
$
125

 
$
151

 
$
165

 
$
145

GAAP Operating Margin
 
7.4
%
 
(87.5
)%
 
2.1
%
 
7.2
%
 
(85.5
)%
Non-GAAP Operating Margin
 
22.7
%
 
18.3
 %
 
21.1
%
 
22.7
%
 
20.1
 %



Avaya Holdings Corp.
Reconciliation of Non-GAAP Gross Profit and Gross Margin by Portfolio
(Unaudited; in millions)

 
 
Three Months Ended
 
 
June 30, 2020
 
Mar. 31, 2020
 
Dec. 31, 2019
 
Sept. 30, 2019
 
June 30, 2019
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Products
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
261

 
$
245

 
$
298

 
$
314

 
$
297

Costs
 
103

 
92

 
104

 
113

 
109

Amortization of technology intangible assets
 
43

 
44

 
43

 
44

 
43

GAAP Gross Profit
 
115

 
109

 
151

 
157

 
145

Items excluded:
 
 
 
 
 
 
 
 
 
 
Amortization of technology intangible assets
 
43

 
44

 
43

 
44

 
43

Adj. for fresh start accounting
 
1

 
1

 
—

 
2

 
2

Non-GAAP Gross Profit
 
$
159

 
$
154

 
$
194

 
$
203

 
$
190

GAAP Gross Margin
 
44.1
%
 
44.5
%
 
50.7
%
 
50.0
%
 
48.8
%
Non-GAAP Gross Margin
 
60.7
%
 
62.9
%
 
65.1
%
 
64.4
%
 
63.8
%
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Services
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
460

 
$
437

 
$
417

 
$
409

 
$
420

Costs
 
178

 
175

 
174

 
174

 
175

GAAP Gross Profit
 
282

 
262

 
243

 
235

 
245

Items excluded:
 
 
 
 
 
 
 
 
 
 
Adj. for fresh start accounting
 
—

 
1

 
3

 
2

 
3

Non-GAAP Gross Profit
 
$
282

 
$
263

 
$
246

 
$
237

 
$
248

GAAP Gross Margin
 
61.3
%
 
60.0
%
 
58.3
%
 
57.5
%
 
58.3
%
Non-GAAP Gross Margin
 
61.3
%
 
60.0
%
 
58.7
%
 
57.7
%
 
58.8
%


Avaya Holdings Corp.
Free Cash Flow
(Unaudited; in millions)
 
 
Three Months Ended
 
 
June 30, 2020
 
Mar. 31, 2020
 
Dec. 31, 2019
 
Sept. 30, 2019
 
June 30, 2019
Net cash provided by operating activities
 
$
45

 
$
20

 
$
12

 
$
66

 
$
52

Less:
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
24

 
22

 
26

 
29

 
37

Free cash flow
 
$
21

 
$
(2
)
 
$
(14
)
 
$
37

 
$
15


Source: Avaya Newsroom


Follow Avaya twittera08.jpgfacebooka08.jpgyoutubea08.jpglinkedina08.jpgflickra08.jpgavayablogsa09.jpg


ex992avayaq3fy20erpresen
Investor Presentation 3Q FY20 August 10, 2020 © 2020 Avaya Inc. All rights reserved Exhibit 99.2

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 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, 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 presentation 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. These slides, as well as current and historical financial data, are available on our website at investors.avaya.com. None of the information included on the Company's website is incorporated by reference in this presentation. © 2020 Avaya Inc. All rights reserved 2

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 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 (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 in the Appendix hereto. 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 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 in the Appendix to this presentation that resulted from matters that we consider not to be indicative of our ongoing operations. In addition, we present the liquidity measure 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. The Appendix to this presentation includes tables that reconcile historical GAAP measures to non-GAAP measures. © 2020 Avaya Inc. All rights reserved 3

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Avaya at a Glance... 30% Cloud, Alliance $200m+ Partner & Subscription Subscription Total TCV(2) Revenue(1) 5m+ 100m+ 175+ Contact Center UC Lines(1) Countries(1) Seats(1) (1) As of June 30, 2020. © 2020 Avaya Inc. All rights reserved (2)TCV is defined as the value of all active ratable contracts that have not been recognized as revenue, 4 including both billed and unbilled backlog. As of June 30, 2020.

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Avaya's Four Strategic Pillars © 2020 Avaya Inc. All rights reserved 5

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 © 2020 Avaya Inc. All rights reserved 6

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Avaya Cloud Office Differentiation © 2020 Avaya Inc. All rights reserved 7

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Why Avaya Wins ▪ Deep and wide ecosystem ▪ Trusted and scalable ▪ Global service – reliable, secure and compliant ▪ Single, integrated multi-cloud platform ▪ UCaaS – CCaaS – CPaaS ▪ Flexibility through cloud & consumption models ▪ Public – Private – Hybrid – Managed Service – Subscription  ▪ Enterprise features ▪ Attribute Routing – Spaces Collaboration – Digital  ▪ Full application suite © 2020 Avaya Inc. All rights reserved 8

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Financial Overview 3Q FY20 © 2020 Avaya Inc. All rights reserved 9

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 3Q FY20 Financial Highlights $722M $2.2B 61% Total Non-GAAP Total Contract Gross Revenue Value(2) Margin(1) Revenue (1) 89% 64% 68% 30% Software Recurring High-margin  Cloud, Alliance and Services Software  Partner & Subscription Revenue (1) Represents non-GAAP revenue; percentages are based on non-GAAP Revenue.* (2) TCV is defined as the value of all active ratable contracts that have not been recognized as revenue, including both billed and unbilled backlog. © 2020 Avaya Inc. All rights reserved * For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this 10 presentation.

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Financial Strength & Flexibility $187M $45M 25.9% of 6% of Revenue Revenue Cash Flow from Adj. EBITDA(1)(2) Liquidity Operations(1)(2) Strong Balance Sheet $742M 3.2x Resources to Invest Cash Net-debt / Highly Profitable Balance(2) Adj. EBITDA(1)(3) (1) Adjusted EBITDA, Adjusted EBITDA Margin, and CFFO Margin are based on non-GAAP Revenue.* (2) For and as of 3Q ending June 30, 2020. (3)Net-debt as of June 30, 2020, defined as ST debt and LT debt less cash, and Trailing Twelve Months © 2020 Avaya Inc. All rights reserved (TTM) Adjusted EBITDA were used for this calculation, ending June 30, 2020.* 11 * For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation.

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Capital Allocation © 2020 Avaya Inc. All rights reserved * Debt pay down occurred November 2019. 12

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 3Q FY20 Update Non-GAAP* 3Q FY20 2Q FY20 3Q FY19 $M, as reported Revenue $ 722 $ 683 $ 720 Gross Margin 61.1% 61.1% 60.8% Operating Expense (% of revenue) 38.4% 42.8% 40.7% Operating Margin 22.7% 18.3% 20.1% Adjusted EBITDA $ 187 $ 149 $ 167 Adjusted EBITDA Margin 25.9% 21.8% 23.2% 3Q Financial Highlights • Continued large deal activity with 104 deals over $1 million, 14 over $5 million, and 7 over $10 million • Total Contract Value (TCV)(1) of $2.2 billion • Added approximately 900 new logos • Generated $45 million in cash flow from operations (1) TCV is defined as the value of all active ratable contracts that have not been recognized as revenue, © 2020 Avaya Inc. All rights reserved including both billed and unbilled backlog. 13 * For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation.

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 3Q FY20 Update Business Highlights ▪ A large US-based retailer signed a new three-year Avaya OneCloud Subscription agreement, modernizing their Avaya infrastructure which supports 75k UC users and 25k CC agents ▪ A leading European financial services company is utilizing our Avaya OneCloud Subscription offering to replace their UC and CC systems in an enterprise wide systems transformation, benefiting from the opex model's flexibility, innovation and integration ▪ Closed the first seven-figure TCV deal for Avaya Cloud Office with a government customer based in the United Kingdom ▪ Cincinnati Bell is implementing a new Avaya OneCloud CCaaS solution to support nearly 300 agents working remotely, upgrading their existing Avaya Contact Center ▪ CTIntegrations adopted Avaya OneCloud CPaaS technology for their flagship product, CT Suite, a user-friendly agent desktop and multimodal contact center ▪ IBM presented Avaya with the 2020 IBM Award for Hybrid Cloud Excellence ▪ Aragon Research included Avaya in their Aragon Research Globe for Intelligent Contact Center for 2020 ▪ Avaya received a 2020 Internet Telephony Product of the Year Award © 2020 Avaya Inc. All rights reserved 14

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Business Model Transformation (Calculated based on non-GAAP Revenue)* FY15 FY18 FY19 3Q FY20 Revenue from Software and Services 71% 83% 83% 89% Recurring Revenue 48% 56% 58% 64% Product Revenue from Software 42% 58% 60% 68% Revenue from CAPS n/a 14% 15% 30% Non-GAAP Gross Margin 61% 63% 61% 61% Adjusted EBITDA Margin 22% 24% 24% 26% © 2020 Avaya Inc. All rights reserved * For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation. 15

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Uses of Cash 1,000 855 881 51 56 800 119 140 122 611 592 600 90 33 29 83 90 148 161 483 471 77 56 77 108 400 63 127 126 100 47 33 59 200 421 428 42 ▪ All values in $M 355 270 ▪ Net Cash Interest Payments includes 194 188 interest payments on long-term debt 0 and payments classified as adequate FY15A FY16A FY17A FY18A FY19A FY20E protection payments in connection with Chapter 11 proceedings, net of interest Net Cash Interest Payments Pension & Post Retirement income ▪ Pension settlement payments to PBGC Restructuring Capex & Capital Lease not included within Pension & Post (<3% of revenue) Retirement payments Cash Taxes © 2020 Avaya Inc. All rights reserved 16

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Quarterly Income Statement (Amounts are GAAP and dollars in millions) GAAP Revenue: 3Q FY20 2Q FY20 3Q FY19 Product $ 261 $ 245 $ 297 Services 460 437 420 GAAP Total Revenue $ 721 $ 682 $ 717 GAAP Gross Margin: Product 44.1% 44.5 % 48.8 % Services 61.3% 60.0 % 58.3 % GAAP Total Gross Margin 55.1% 54.4 % 54.4 % GAAP Operating Margin 7.4% (87.5)% (85.5)% © 2020 Avaya Inc. All rights reserved 17

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Quarterly Non-GAAP Income Statement Information (Amounts are non-GAAP and dollars in millions)* Non-GAAP Revenue: 3Q FY20 2Q FY20 3Q FY19 Product $ 262 $ 245 $ 298 Services 460 438 422 Non-GAAP Total Revenue $ 722 $ 683 $ 720 Non-GAAP Gross Margin: Product 60.7% 62.9% 63.8% Services 61.3% 60.0% 58.8% Non-GAAP Total Gross Margin 61.1% 61.1% 60.8% Non-GAAP Operating Margin 22.7% 18.3% 20.1% Adjusted EBITDA $ 187 $ 149 $ 167 Adjusted EBITDA % (1) 25.9% 21.8% 23.2% (1) Adjusted EBITDA % is based on non-GAAP Revenue © 2020 Avaya Inc. All rights reserved *For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation. 18

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Quarterly Non-GAAP Revenue by Region (All dollars amounts are non-GAAP in millions)* Revenue 3Q FY20 2Q FY20 3Q FY19 U.S. 415 $ 385 $ 394 EMEA 178 172 183 APAC 76 70 85 AI 53 56 58 Total $ 722 683 $ 720 % of Total Revenue U.S. 58% 56% 55% EMEA 25% 26% 25% APAC 10% 10% 12% AI 7% 8% 8% Total 100% 100% 100% © 2020 Avaya Inc. All rights reserved *For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation. 19

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Balance Sheet and Operating Metrics (Dollars in millions, Balance sheet items as of the end of the period indicated) 3Q FY20 2Q FY20 3Q FY19 Total Cash and Cash Equivalents $ 742 $ 553 $ 729 Cash Flow from Operations $ 45 $ 20 $ 52 Capital Expenditures and Capitalized Software $ 24 $ 22 $ 37 Days Sales Outstanding (DSO)(1) 53 55 56 Inventory Turns 12.8 11.6 15.9 Headcount (as of the end of the period indicated) 8,255 7,873 7,994 Trailing Twelve Month Revenue ($K) / Employee(2)* (Headcount as of the end of the period indicated) $ 345 $ 361 $ 369 (1)3Q FY20, 2Q FY20 and 3Q FY19 include $100M, $154M and $111M AR/contract liability netting impact when calculating DSOs. (2) © 2020 Avaya Inc. All rights reserved TTM Revenue ($K) / Employee based on non-GAAP Revenue. 20 *For a reconciliation of non-GAAP to GAAP financial information, please see the Appendix of this presentation.

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Appendix © 2020 Avaya Inc. All rights reserved 21

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Adjusted EBITDA Three Months Ended June 30, Mar. 31, Dec. 31, Sept. 30, June 30, 2020 2020 2019 2019 2019 Net income (loss) $ 9 $ (672) $ (54) $ (34) $ (633) Interest expense 51 53 58 60 59 Interest income (1) (2) (3) (3) (4) Provision for (benefit from) income taxes 20 37 25 32 (27) Depreciation and amortization 107 105 107 108 110 EBITDA 186 (479) 133 163 (495) Impact of fresh start accounting adjustments 1 (1) — (2) (2) Restructuring charges, net of sublease income 14 3 1 10 1 Advisory fees — 1 39 8 1 Acquisition-related costs — — — 1 1 Share-based compensation 7 8 6 6 8 Impairment charges — 624 — — 659 Change in fair value of Emergence Date Warrants 3 (6) 3 (1) (7) Loss on foreign currency transactions 5 7 4 — 1 Gain on investments in equity and debt securities, net (29) (8) (12) (1) — Adjusted EBITDA $ 187 $ 149 $ 174 $ 184 $ 167 © 2020 Avaya Inc. All rights reserved 22

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Adjusted EBITDA, cont'd Non-GAAP Successor Predecessor Combined Predecessor Period from Period from December 16, October 1, 2017 Fiscal year ended 2017 through through Fiscal year September 30, September 30, December 15, Fiscal year ended ended September (In millions) 2019 2018 2017 September 30, 2018 30, 2015 Net (loss) income $ (671) $ 287 $ 2,977 $ 3,264 $ (144) Interest expense 237 169 14 183 452 Interest income (14) (5) (2) (7) (1) Provision for (benefit from) income taxes 2 (546) 459 (87) 70 Depreciation and amortization 443 384 31 415 371 EBITDA (3) 289 3,479 3,768 748 Impact of fresh start accounting adjustments 5 196 — 196 — Restructuring charges, net 22 81 14 95 62 Advisory fees 11 18 3 21 — Acquisition-related costs 9 15 — 15 4 Reorganization items, net — — (3,416) (3,416) — Non-cash share-based compensation 25 19 — 19 19 Impairment charges 659 — — — — Loss (gain) 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 (29) 17 — 17 — Loss (gain) on foreign currency transactions 8 (28) — (28) (14) Pension/OPEB/nonretirement postemployment benefits and long-term disability costs — — 17 17 69 Change in certain tax indemnifications — — — — (9) Loss on extinguishment of debt — — — — 6 Third party fees expensed in connection with debt modification — — — — 8 Sponsor's fees — — — — 7 Other (1) — — — — Adjusted EBITDA $ 706 $ 611 $ 135 $ 746 $ 900 Adjusted EBITDA Margin 24.3% 24.9% 22.4% 24.4% 22.1% © 2020 Avaya Inc. All rights reserved 23

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Revenue by Geography Three Months Ended Three Months Ended Three Months Ended Adj. for Non-GAAP Adj. for Non-GAAP Adj. for Non-GAAP June 30, Fresh Start June 30, Mar. 31, Fresh Start Mar. 31, June 30, Fresh Start June 30, (In millions) 2020 Accounting 2020 2020 Accounting 2020 2019 Accounting 2019 U.S. $ 415 $ — $ 415 $ 384 $ 1 $ 385 392 2 394 EMEA 178 — 178 172 — 172 183 — 183 APAC 75 1 76 70 — 70 85 — 85 AI 53 — 53 56 — 56 57 1 58 Total revenue $ 721 $ 1 $ 722 $ 682 $ 1 $ 683 $ 717 $ 3 $ 720 © 2020 Avaya Inc. All rights reserved 24

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Gross Margin and Operating Income Three Months Ended June 30, Mar. 31, Dec. 31, Sept. 30, June 30, (In millions) 2020 2020 2019 2019 2019 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin Gross Profit $ 397 $ 371 $ 394 $ 392 $ 390 Items excluded: Amortization of technology intangible assets 43 44 43 44 43 Adj. for fresh start accounting 1 2 3 4 5 Non-GAAP Gross Profit $ 441 $ 417 $ 440 $ 440 $ 438 GAAP Gross Margin 55.1% 54.4 % 55.1% 54.2% 54.4 % Non-GAAP Gross Margin 61.1% 61.1 % 61.4% 60.6% 60.8 % Reconciliation of Non-GAAP Operating Income Operating Income (Loss) $ 53 $ (597) $ 15 $ 52 $ (613) Items excluded: Adj. for fresh start accounting 1 — 4 4 4 Amortization of intangible assets 83 85 84 84 84 Restructuring charges, net 20 4 3 10 1 Advisory fees — 1 39 8 1 Acquisition-related costs — — — 1 1 Share-based compensation 7 8 6 6 8 Impairment charges — 624 — — 659 Non-GAAP Operating Income $ 164 $ 125 $ 151 $ 165 $ 145 GAAP Operating Margin 7.4% (87.5)% 2.1% 7.2% (85.5)% Non-GAAP Operating Margin 22.7% 18.3 % 21.1% 22.7% 20.1 % © 2020 Avaya Inc. All rights reserved 25

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Revenue and Gross Margin Non-GAAP Successor Predecessor Combined Predecessor Period from December Period from October 1, Fiscal year ended 16, 2017 through 2017 through Fiscal year ended Fiscal year ended (In millions) September 30, 2019 September 30, 2018 December 15, 2017 September 30, 2018 September 30, 2015 Reconciliation of Non-GAAP Revenue Revenue $ 2,887 $ 2,247 $ 604 $ 2,851 $ 4,081 Adj. for fresh start accounting 21 206 — 206 — Non-GAAP Revenue $ 2,908 $ 2,453 $ 604 $ 3,057 $ 4,081 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin Gross Profit $ 1,575 $ 1,143 $ 362 $ 1,505 $ 2,430 Items excluded: Amortization of technology intangible assets 174 135 3 138 35 Adj. for fresh start accounting 37 264 — 264 — Loss on disposal of long-lived assets — 4 — 4 — Share-based compensation — 1 — 1 2 Non-GAAP Gross Profit $ 1,786 $ 1,547 $ 365 $ 1,912 $ 2,467 GAAP Gross Margin 54.6% 50.9% 59.9% 52.8% 59.5% Non-GAAP Gross Margin 61.4% 63.1% 60.4% 62.5% 60.5% © 2020 Avaya Inc. All rights reserved 26

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Product and Services Gross Margins Three Months Ended June 30, Mar. 31, Dec. 31, Sept. 30, June 30, (In millions) 2020 2020 2019 2019 2019 Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Products Revenue $ 261 $ 245 $ 298 $ 314 $ 297 Costs 103 92 104 113 109 Amortization of technology intangible assets 43 44 43 44 43 GAAP Gross Profit 115 109 151 157 145 Items excluded: Amortization of technology intangible assets 43 44 43 44 43 Adj. for fresh start accounting 1 1 — 2 2 Non-GAAP Gross Profit $ 159 $ 154 $ 194 $ 203 $ 190 GAAP Gross Margin 44.1% 44.5% 50.7% 50.0% 48.8% Non-GAAP Gross Margin 60.7% 62.9% 65.1% 64.4% 63.8% Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin - Services Revenue $ 460 $ 437 $ 417 $ 409 $ 420 Costs 178 175 174 174 175 GAAP Gross Profit 282 262 243 235 245 Items excluded: Adj. for fresh start accounting — 1 3 2 3 Non-GAAP Gross Profit $ 282 $ 263 $ 246 $ 237 $ 248 GAAP Gross Margin 61.3% 60.0% 58.3% 57.5% 58.3% Non-GAAP Gross Margin 61.3% 60.0% 58.7% 57.7% 58.8% © 2020 Avaya Inc. All rights reserved 27

 
TEXT 0 – 0 – 0 204-0-0 127-127-127 17-114-210 80-200-74 86-183-242 247-150-70 Non-GAAP Reconciliation Supplemental Schedules Free Cash Flow Three Months Ended June 30, Mar. 31, Dec. 31, Sept. 30, June 30, (In millions) 2020 2020 2019 2019 2019 Net-Debt / Adjusted EBITDA Net cash provided by operating activities $ 45 $ 20 $ 12 $ 66 $ 52 June 30, Less: (In millions) 2020 Capital expenditures 24 22 26 29 37 Debt maturing within one year $ 50 Free cash flow $ 21 $ (2) $ (14) $ 37 $ 15 Long-term debt, net of current portion 2,888 Less: Cash and cash equivalents 742 Non-GAAP Revenue Net-debt 2,196 Three Months Ended June 30, Mar. 31, Dec. 31, Sept. 30, June 30, Adjusted EBITDA (TTM) $ 694 (In millions) 2020 2020 2019 2019 2019 Net-debt / Adjusted EBITDA 3.2x GAAP Revenue $ 721 $ 682 $ 715 $ 723 $ 717 Adj. for fresh start accounting 1 1 2 3 3 Non-GAAP Revenue $ 722 $ 683 $ 717 $ 726 $ 720 © 2020 Avaya Inc. All rights reserved 28

 
avya-20200810.xsd
Attachment: XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

avya-20200810_cal.xml
Attachment: XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT

avya-20200810_def.xml
Attachment: XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

avya-20200810_lab.xml
Attachment: XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT

avya-20200810_pre.xml
Attachment: XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT