In tandem with its Chapter 11 announcement Avaya reported financial results for the fourth fiscal quarter and fiscal year ended September 30th 2016.
Total revenue for the fourth quarter was $958m, up $76m compared to the prior quarter as demand improved for products and services, and decreased $50m year-over-year due to lower demand for unified communications hardware.
GAAP gross margin was 60.9% for the fourth quarter. Non-GAAP gross margin was 61.8%, which compares to 62.4% for the prior quarter and 62.0% for the fourth quarter of 2015.
GAAP operating loss was $428 million, reflecting $542 million of impairment of goodwill and intangibles.
Non-GAAP operating income was $229m which compares to $180m for the prior quarter and $202m for the fourth quarter of fiscal 2015.
For the quarter, adjusted EBITDA was $284m or 29.6% of revenue, which compares to adjusted EBITDA of $223m or 25.3% for the prior quarter, and $246m or 24.4% for the fourth quarter of fiscal 2015.
For fiscal 2016 Avaya reported revenue of $3,702m, down 9% compared to fiscal 2015, or down 8% in constant currency.
GAAP gross margin for fiscal 2016 was 60.6%. Non-GAAP gross margin was a record 61.5%. GAAP operating loss was $262m, reflecting $542m of impairment of goodwill and intangibles.
Non-GAAP operating income was $756m in fiscal 2016 compared to $718m in fiscal 2015. Fiscal 2016 adjusted EBITDA of $940m represented a record 25.4% of revenue and was $40m higher compared to fiscal 2015.
"Avaya's fourth fiscal quarter results reflect the strength of our technology portfolio, with major competitive wins at government agencies and enterprise customers across networking, contact center and private cloud services underpinned by continued transformation of the company to a superior operating model," said Kevin Kennedy, president and CEO.
"Revenue and adjusted EBITDA exceeded the high end of our preliminary stated range. In constant currency, contact centre and networking revenue increased double digit percentages from both the prior quarter and year-over-year, while unified communications products declined year-over-year and grew sequentially.
"The decision to restructure through a chapter 11 process reflects the company's debt structure, as opposed to the strength of Avaya's operations and business model."