Avaya reported a fall in results for its fiscal fourth quarter on an annual basis, but said figures showed improvement compared to Q3 and it expects to return to growth in the new fiscal year. Total revenues for the three months to September fell 7 percent year-on-year to USD 735 million and increased 6 percent on a quarterly basis. Avaya said bookings were also up 6 percent compared to Q3.
The revenues were at the top of Avaya's forecast range, and the company also posted better-than-expected operating profit of USD 11 million for the quarter. Adjusted EBITDA dropped to USD 178 million from USD 225 million a year ago, but was in line with guidance. The company also improved its cash position on a quarterly basis, to USD 700 million from USD 685 million, thanks to positive operating cash flow and asset sales.
Over the full year, underlying results were still down across the board, due mainly to lower service revenues and various costs following the company's debt restructuring. The adoption of the new revenue recognition standard ASC 606 from October will have a positive impact on revenues going forward, while leading to a decrease in EBITDA compared to the previous rules. In Avaya's updated forecast for fiscal 2019, the group expects a small increase in revenues to USD 3.01-3.12 billion from a pro forma USD 2.85 billion last year, and adjusted EBITDA is expected to reach USD 763-819 million, compared to USD 746 million last year.
For fiscal Q1, Avaya forecast a continued sequential improvement, with revenues of USD 740-765 million, adjusted EBITDA of USD 185-197 million and an operating profit of USD 30-50 million.
