Avaya reported a drop in results for its fiscal third quarter to June, hurt by negative currency effects and the sale of its networking business. Revenues declined 13.8 percent to USD 692 million, below the company's guidance, and the gross margin dropped to 50.9 percent from 61.4 a year ago. Adjusted EBITDA was down to USD 175 million from USD 204 million, in line with the outlook, while the net loss reduced slightly, to USD 88 million from USD 98 million.
CEO Jim Chirico said the results show "continued stability" in the business and create a "solid foundation for a strong finish to the fiscal year". Excluding the sold networking activities, adjusted revenue was up 1 percent year-on-year, and bookings grew 3 percent, the company said. The share of revenues from software and services also improved to 82 percent from 79 percent in the same period of 2017.
Operating cash flow improved to USD 83 million from USD 72 million a year ago, and Avaya ended the period with cash and equivalents of USD 685 million, up from USD 311 million three months earlier after an issue of convertible notes.
For the final quarter of the fiscal year, Avaya forecast revenues of USD 705-735 million, down from USD 790 million last year, as well as an operating result between a loss of USD 24 million and profit of USD 13 million, and adjusted EBITDA of USD 175-195 million. That means full-year revenues of USD 2.82-2.85 billion, an operating loss of USD 87-124 million and adjusted EBITDA USD 743-763 million.
