Avaya reported revenue for its fiscal first quarter to Decemner of USD 958 million, down by USD 50 million compared to the prior quarter and USD 121 million less year-over-year. This was below the company’s expected range. Adjusted EBITDA fell to USD 228 million from USD 239 million for the first quarter of fiscal 2015, and adjusted operating profit dropped to USD 185 million from USD 193 million a year ago.
Avaya said its margins improved in the quarter as it continues the shift to a software-based model, while it also posted positive free cash flow and executed its cost reduction initiatives. The gross margin for the period rose to 60.4 percent from 59.1 percent for the first quarter of fiscal 2015, and the adjusted EBITDA margin rose to 23.8 percent from 22.2. In the course of fiscal 2016, Avaya expects further improvements to the cost structure.
In the latest quarter, its estimated total contract value reached USD 3.1 billion, up 5 percent year-on-year at constant currency rates. This amount includes over USD 900 million for private cloud and managed services, a 16 percent organic increase from a year earlier.
