AVYA - Earnings call transcript Q3 2018

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Operator

Good morning. My name is Kelly and I will be your conference operator today. At this time, I'd like to welcome everyone to the Third Quarter Fiscal 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator to one yourself question. question one limit follow-up and Please Thank you. Mr. Director Peter you of may Senior begin Relations, Investor Schuman, your conference.

Peter Schuman

Thank should fiscal XXXX our SVP President to CAO and Avaya's Jim Shah, Innovation Laurent CFO; Welcome O'Malley, our Philonenko, accessible are and aid and Pat our and you, referenced on slides Chirico, here and CEO; commentary, investor of our SVP of understanding today's for your Shefali of page call in GC; investor Kelly. call. call. on are Avaya’s CFO website Investor The and our earnings release, QX results. the this financial

results to our our recent Form is with about uncertainties SEC, risk to and event the XX over our earnings in most release available forecasts, We website. policy based including investor We cause the to slides, Form call will measures is included may non-GAAP today. circumstances we specifically the XX-Qs reference Avaya's facts on numbers and that reference that filings and will found be except and revise differ release in subsequent and materially. in that where assumptions, the current to may Information all risks GAAP earnings hand remain statements reiterate undertake and the A make is and of and Investor such note in or to sequential otherwise and and no guidance It or uncertainties are of change. comparisons not page statements financial our non-GAAP year-over-year expectations, obligation noted. actual to forward-looking update now on measures forward-looking Jim. could I reconciliation subject

Jim Chirico

we in to many where of as our our the prepare pipeline, good we're to us moment. XXXX. to moving plan how close Avaya. It's take of in few fiscal a proud I'd a as behind we fiscal a outpacing equally stock developments I'm discuss performance we our With solid today accomplishments our Thank Rather discuss you, of are at morning third couple spend a and year, quarters important minutes everyone. are quarter like Peter, of to-date. the our and I'll and cover looks to progress business positive forward. R&D pleasure out our

I continuing, you ingredient Thank for the to would our our like commitment, contributions. Before employees passion, and acknowledge continued in Avaya. most valuable your success, at important

progress over right expectations Our have last me the and the confidence my strategy. exceeded quarters we three has gives

transformations every through and have been the open a wide we course drive at has effort day We strength, financial make journey this reversed just of required We've to and quarters, the three regarding we XX-year embarked revenue have continue trend growth. transformed. eyes each and in company with Avaya. company progress to on the We change the before

named and while on purpose to and turnaround. massive overcome various have result, respect it, laid been success, a We I we a innovation, with what part customer deep we strategy out headwinds, led today's and it's decisively, focus prepare and a It becoming we growth, against plan making this As dealt have happen was partners, be a implemented it We faced changes it, our developed quickly, focused tomorrow's customers, we executing organization. a it a commitments since acted CEO. to touching strides. the We've our for true for takes we on significant honored shareholders. the almost with of delivering we to never every overnight, was on company or it, strategy address year to lost challenges didn't we operationalize are and

customer world Since then in share of the back from around Looking the which was emerging organization. benefit numerous now a thousands well and months learning, to means reconnecting, Chapter personally of overcame what of be what and was fair implementing. hurdles the the partners knew challengesnot Avaya capable nine least of of doing. is the of Having This last company experience over we very speaking XI. with with a traveled it navigated customers and led I listening, XX I years

for We the but culture. not in day-to-day fiscal changing required right the These and XXXX. rebalancing to the momentum actively discipline the positioning drive investing We're in the accomplishments across while we and that have multiple demonstrate to only also execute are creates improving innovation performance, dimensions, growth. growth plan company sustainable

the revenue record. Now let's over transforming for a look our from XXXX. points a our business. three where and at we Number of and quarter priorities up from software year are came five one third strategic XX% ago stated against services

the was revenue recurring Number company. and first indication a high second This which of confidence, XX% to revenue satisfaction revenue. growth is time is XX% cloud and customer the with year-over-year an our an two revenue quarter momentum. the for Our increased over all building consecutive of

new all of gaining CC, indicators consecutive are across XX% of than that more in driven our for our We our now traction Leading is quarters the accounting and business. business market and three engine cylinders. strong of demonstrating services strength and products funnel professional growth have UC, bookings innovation firing product and on revenue, the

products, a in conferencing endpoint signing launching logos added valued master and offer mass over significantly as customers, collaboration disruptive technology a partner CC in UC, innovation four We rooms. program Thirdly, and Launching in strengthening areas our four; our new in significant in our for offer in expanding to adding offerings our quarters nearly and a scale, million dimensions, in deals XXXX. our technology, higher. multichannel base with just including last value more on along attraction. all the We've cloud X,XXX investing offense such and and several and fiscal by we're features, two of AI than portfolio three XX we're playing delivering new partners X,XXX out installed at strengthened driving investing $X XXX integrating mobility, Number or AI and and for UC we innovative winning. quarters did people desktop in new hotel agent

talent cultural management team. new we've out and rolled attracted our new we've front, principles, strengthened people the we've On

Lastly, underpinning we make investments our leveraged and significantly flexibility our progress. it to financial the enhanced prudent

We continue strengthen improved with margins and of of over model repricing last Gross quarters flow realize convertible we our operating sheet of three roughly to generate continue XX% have XX%, average cash debt, our to adjusted industry-leading the income with recent XX%, XX% balance the business will our the of in cash. up we EBITDA, maintained offering, the revenue an

revenue multiple XX% contact setting quarter-over-quarter and strong our quarter QX, over in and enterprise remained up grew business saying in the centers are by and UC XX% increased increased straight results bookings of the MRR now in from mid-market X% cloud bookings me X% it quarter board. and start rose business. Performance MRR stability core Cloud dimensions private exceeding XXX%, XX% X% strong revenue represents our expectations achieving year-over-year. We prior quarter-over-quarter across revenue. delivered up year-over-year. on now let is Quarter-over-quarter bookings and $XXX quarters year-over-year. year-over-year. up bookings of XX% while Turning In to remains our we six overall the another represents record have of million

continues eight maintenance rates over time And best business our quarter. prior Professional multiple year. for We the continues milestones in with contracts. center was mobile a increasing customer quarters. has had first first Mobile signed renewal services the levels Our the than X,XXX Avaya flagship continues solution revenue for bookings to the in three hit sequentially our stabilize we've and grow. needs year-over-year. XX% with our three contact Momentum Customer new grew patent revenue our groundbreaking contact is early our R&D total the solution year-over-year. last free for to demand to investments. new greater quarter result over coupled our and times Overall XX% already to-date a product opportunity of This experienced increased increased direct meeting largest products revenue centers accelerate. with customer over for Oceana, omnichannel XX% hit policies; including

enterprise is the end triple deployments offer to which before expect large Our with contact cloud two we gaining underway the traction year. of center

have profit XXX on nine in Our center is turning partnership pipeline. centers we underway of centers value have opportunities the The and contact from cost over track; Afiniti into proposition clear. with POCs is

strong. it's to IP referenced phones say is our but steady. grew proud endpoints. signing next-generation these the And sequentially XX% last from in I'm on revenue call, and new -- I March, the demand last Just early and

here. not stopping Now we’re

ability Lastly, Contact I'm both our Avaya position to that we leadership proud and Center and two the our value are execute importantly for achievements returned for more very These our to in has true business. core a in to driving customers Magic Quadrant testament Communication. the are a to Unified Gartner

financials. to Pat to provide turn details me over let on Now it the more

Pat O'Malley

upfront. A Thank you, notes Jim. couple of

year-to-date non-GAAP are discussed this and a our XXXX otherwise will in results unless non-GAAP be slides, reminder all a the available on included of references in and on as call are CFO website. indicated the combined also and results on earnings business on are networking to Reconciliations QX page GAAP investor call periods to this for basis. financial the exclude our release, First from commentary, investor divested

fiscal XXXX, noted. QX Second, as unless QX, and will when XXXX, QX XXXX, otherwise QX, and referencing QX fiscal these be fiscal to QX referred

third Before into provide believe diving and I I’ll financial context. our outlook some useful quarter observations discussing results, our make

demonstrate First, of a stability ahead our objective have that results driving revenue financial fundamental XXXX schedule. we achieved year-to-date of

our XXXX stated through continued financial Second, enhance number a strategic actions. our have consistent with we priorities, of flexibility to

Revenue notes. than conditions grew market expect $XXX revenue QX. to to down slightly maintenance by sequentially. in was the APS million decrease revenue was the from declined. the revenue grew reduce liquidity revenue year-over-year down At to channel Services to prior and from highlight QX. $XXX year-over-year shift OpEx of revenue APS shifted We and was the favorable balance of X% million QX, sequentially. and U.S. expense increased our issuance our of was revenue managed XX% higher repricing essentially APS a while flat selected prior in enhance $XX and leveraged and gains non-GAAP posted only million and of as the grow convertible less year-over-year decreased both year result Product sheet strengthen results. financial was primarily Within sequential interest Three outstanding continued sequentially. deals now $X $XXX was services we constant million X% our revenue lower the QX The services million $XX in maintenance our quarter. into and of currency, the models. X% Specifically from and debt from annual million will I with do year-over-year

product basis by points two-thirds points lower into our and more and sequentially. channel for Gross of we of As reminder, than a account XX.X% mix. is decreased product year-over-year sell total This continues basis driven to recognized XX is XX margin to revenue when the revenue. was product distributor mostly

higher million expense a was revenue and expenses, R&D activities million related to expect gross enable $XXX million cost $XX technology that our expense sequential. one-time increased structure bookings an million. commission to obligations enable following million of $X million, of and tax administrative to planning and planning to beyond. of and primarily mix. expense was increased R&D million $XX $X optimize Adjusted an sales due software reflects These These margin XX% customer revenue. $X benefit fiscal products higher XXXX drive This due have and emergence. yield of increase growth in We costs of flat increased to were $X revenue. million sequentially. to tax structure our EBITDA increased $XXX cash innovation fiscal and expected year-over-year. significant increased continued in base was SG&A top-line million R&D approximately increase million QX this R&D year-over-year by plus XXXX. expense sequentially. year-over-year SG&A benefits was or and year-over-year and Operating in million commitment $X our million. SG&A are continued income million quarter The $X to in SG&A $XXX in or $XXX and was tax year-over-year tax expand revenue will our XX.X% was Operating us $X and

rises notes closing approximately structure the summarize $XX.XX We the including conditions financial expenses improve we QX, our market in with base. to not call above million Looking including convertible call flexibility. dissolved our be notes during spread. require of low investor advantage or stock issued offering diversifies of significantly notes cash capital above of favorable until The financial took proceeds have do The concession our The To $XXX million capital net ratings. contain in XX% the price coupon prices structure, our after cash spread, a dilution our and June not covenants X%. and/or will at enhance $XX.XX XXXX. X, on $XXX stock notes the

As a result have in of the XXXX. offering, we analyst additional coverage expect to

ongoing $X.X annually reprice interest. capital the saving As improve senior our successfully part rates XX in company term or our structure, points we in loan interest billion basis approximately secured cash million of our activities $XX to

cash prior quarter. of issuance is Turning expenditures flow to primary million to of net of from $XX $XX the the defined $XXX into $XXX balance capital and the proceeds tools at sheet, to the million cash to equivalents the of of providing flow capital our following $XX the revenue. we of cash productivity million. million million our sales the our notes QX, $XXX end and of forecast by QX fiscal and as The our and offset demonstrated cash strong to operating was generation. and quarter efficiencies, X% were our Taking improve Free fourth operating and flow recent due and our continued enablement, minus our end CapEx change sequential people, convertible improve million, as In as by we operating compared investment or acquisition, are during efficiency operational in efforts summary, XXXX. for consideration structure continued increase ongoing R&D, a cash cash

GAAP of of operating adjusted XX% non-GAAP of X% of operating million, million revenue. $XX revenue operating GAAP X% revenue. XX% or of million to million income approximately $XXX GAAP revenue. million or $XXX between non-GAAP to million million $XXX of million XX% EBITDA revenue to EBITDA margin to million revenue $XXX Non-GAAP $XX XX% to of of million, GAAP of non-GAAP to For QX, $XXX income $XXX $XXX of or or $XXX Adjusted to loss

$XXX of $XXX $XXX approximately $XXX billion revenue. non-GAAP million, million of XX.X% of billion XXXX, of to revenue For to or operating of loss million $X.XX $XX to $XXX of to million non-GAAP non-GAAP revenue GAAP or fiscal EBITDA billion, non-GAAP million $X.XX million to billion. Adjusted to income $X.XX XX% $X.XX XX% revenue. Operating

outlook end previous outlook our EBITDA revenue range For be our will guidance higher at the within updates. fiscal and adjusted consistent XXXX, and previous of our is of

outlook, provide XXXX call. fiscal fourth earnings that the quarter for we on As will our update

Now Jim I'd like to it some over remarks. additional for to turn

Jim Chirico

Thank you, Pat.

share a before into Q&A. thoughts Let few going me

depth, share of final our uniquely our enhance to financial or head into No expertise to we strength to I'd growth fiscal has our stretch customers. This reach, differentiates As us XXXX, plans the scale, shareholder value year and is in technical through XXXX. positions to value one and like provide our unmatched. us

Our sets from our up experience apart competition.

and means, focused We long have game the the the talent the luxury to fundamental. play on

the our business remain will the important in pace rather key cycles continue will to value customers our and we and technology on would whatever most prioritize In be we flavor As of happens investments engines. day. innovation the XXXX serve four long-term focused than of the areas accelerate delivering that contract as to increases, thing growth

First, core business. optimizing our

including XXX. XX% base installed globally customers with industry's CC XXX,XXX with UC the the nearly of largest line have million and We NC over across XXX Fortune

clear the are incumbent. We

in and to want improvement fit want a simplicity, of are customers They experience. that to cloud us Moreover consume move the way new ready does want user they that seamless size to investing to one are it. features, they automation, extendable that by they continuous all. provide us not in told experienced integrated Our when a solutions

and breadth in Second, providing solutions. our cloud depth

centers. was from an range delivery private, requirements to the demand we acquisition first across stone strategy; it for cloud support multiple public, The of Avaya CC both for and stepping the continue Solution our critical UC enterprise will and invest cloud. combination in Our will contact offers thereof. every a in dimensions Avaya's hybrid cloud customer fronts and to of Spoken all

managed makes cloud under uniquely services million management private us market with cloud and us positions a business to deploy three and seats at leader Our scale.

customers. not Thirdly, investing to certain the previously becoming and our are technologies to quickly solutions, were a partnerships, are that We and emerging in reality recognize of alliances. benefits new we these possible experiences that committed bringing

AI about to value create example, vast of amount data at the For our harnessing about elegance, not it's the disposal new experience. from technical

our competition conversational Google with five and apart enable and marketplace today. interfaces the text real-time sub-service, for They AI and IBM, and importantly generating smart guidance value routing Salesforce. behavioral customers; revenue transcription, aging speech These that have significant driving to they’re today. improvement, include We disruptive us our from performance fairway, and most offers set in integrations

we omnichannel We also to building mobile centers more keep mobile beginning; experiences. just applications. to the launched the Avaya contact within cost network importantly offering true experience is the mobile that mobility, platform mobile calls reducing more a and are end-to-end This supports

which taking advantage These business. our advisory we’re we role takes snippet services in support professional technologies. innovation high example, range plays of Services are that developing the a For delivering Number requires security of just technology latest a fact Blockchain four, operational services. is in value Identity-as-a-Service from are that The place. simple critical the to management.

for support, to world-class continue services, will provide managed We and enterprise professional communication. services,

While seem technologies. it it people advanced simple, highly and trained requires may

us. our Here to experience again differentiate serves

to offer that Our a bring. services customers and business strategy of to continues we broad set our is solutions value reflect

in So our during short three in a time fitting we company, history have guidance. public consecutive limited as our quarters of operating closing, had

we schedule. investor We be have met but to done things, disciplines understanding execute, effective had to effective that’s outcomes. ahead hit the plan revenue plan a three combination achieved enhancing to the right not stability we what’s only value This and needed the desired of leads an developed demonstrates also the to our of expectation execution focus objectives,

understands as ability business. to have the continue confidence in We path our this this on management

and we seen cadence as broadened have I've operating the as talent and a company a team right the have before. We not that

benefits prudent investment to long-term. in areas in and reap significant the made We have growth of

in we happen made will make in fiscal it we it year XXXX. happen XXXX, as Just

Kelly it to Q&A. I over Now to begin will turn

Operator

Instructions]. [Operator

from of Vitanza Please the question go Lance first line comes Your ahead. Cowen. from

Lance Vitanza

are thanks offering in in there Jim, Hi, technological just part that cloud or the clearly is the with recovering those the taking additional stack-up of center recovery to investing peers leading satisfied you’re some cloud, contact how technology from was need in Spoken under center offering, new of recapture added sort product particular that of versus for now do of contact company’s a questions. public in you primarily offerings your to you time edge? the you work to as

Jim Chirico

Hey question. Lance, will this I Jim, is the take

is the managed capability strategy we our From that address center. capabilities center, cloud the our So to cloud a S&P in to center. where offer see Oceana from contact both you serve it’s the where that from million really we six overall public lines center offer solutions market to both contact I’m have the our contact to services segments today and importantly on contact that large to that enterprise all the incumbent offers more perspective, are and over within base have private, opportunity satisfied our

overall we will over multi-tenant significant we capabilities that have digital we our and roadmap year. our expansion from we quarters Spoken additional that later So capabilities expectations. intensive also and an pretty international on The is we have now the functionality migration acquiring us so met this now the technology months that has enhanced own positions next perspective capabilities center Since also data be positions and finished to us driving for AWS, within for come. out acquisition cloud actually the that uniquely and of a have

we've the So progress quite on I'm made to-date. pleased

Lance Vitanza

it there place the that ask that the then of might a that standpoint of the in what sort Communications, is to or confident that are did from Unified Spoken another you follow-up, accelerate to acquisition if that CC I organically? you've there could you And on timeframe pieces if similar build got just as

Jim Chirico

couple things. A of

think some positioned importantly all we're the that base. but different from play we I So others UC we large of first all and is know with fact the you in a if field of more perspective will our

those XX% Having we're point others of that the anybody your of sight now XX% expectation. where own observes But being in to this we up strategic we us is increasing from innovation, my is will that And I'm remain revenues of is over options, I aspects, disciplined pretty talent what’s and expectation we what of are the and the lost actually mentioned in as when certainly personal our include the and haven't and above we or that only detailed, have differentiation, on the years. rationale What's that synergies, partnerships, see of from prior with a years cloud, evaluating look the framework starting many we effect. is a So opportunities specifically but will my seen pace perspective, the a to value, fact so not right. going share generated mid-market or haven't what’s I passed, take acquisitions by all fact strategic that sure view of pace consolidation at across a they we forth. in -- were so industry point, consider is all a consistent where consolidation JVs

it's comment radar be it as this at as to it's not So company and our but policy on valuations point. a customary any should our on certainly public as

Operator

comes question ahead. Barclays. from line from go of next Raimo Lenschow Your Please the

Mohit Gogia

four for offering. in Thank is able But Thanks is it’s staying performing added wondering base that existing multi-tenant you added Gogia so there. of seems Mohit as press or then the mostly I contact into you wondering, customer you give the guys have to also your you. can to how mentioned in acquisition sort as for solid well saw wondering offering, contact if is from looking service topic, disclosed on last the offering, the progress logos guys Jim also quarter. pipeline center regards that guys. this I robust get was service Raimo. center I'm to about on the on the us another over which Spoken update platforming release Congrats the an This And new service the expectation, the just the on you like to division quarters excelling

Jim Chirico

you. thank so Yes,

this again. second the one first, take me Jim Let is

base an of opportunity provides in of normal sort expand fact us incumbent is our to outside both, in and doing a that. So combination of it's with cloud we're reality it's

last last were wins, displaced with a I deals look take a $XX value just center number and you actually one of north If at million. of quarter revenue XX say quarter we contact a these should

So now breadth innovation, actually we're and we we and now we will anticipate to more capability you we obviously have being we now have technology, our as continue to have TAM expanding can drive the the if the Avaya. before more customers

we're the So displacements. pleased with quite XX

As where so our are here UC Integration piece key the integration platform proceeding platform? on migration specifics with over on if far be you UC as we and Oceana BPOs the turn on public it and to the I’ll and to of is Oceana but it give to and in some migration you Laurent, tackle so who want Laurent,

Laurent Philonenko

when tight from Yes, Spoken take on cloud. LOGs Communications contact over definitely time so or acquired to Unified center we we plan the had a migrate emerge to and at

will on with so help CC are Spoken architecture it us we trajectory, all We solution. that AWS first also for reasons; international UC we to of migrated the

et we Second on-cloud cetera like email Oceana delivered noted merchandizing Jim earlier. digital in the fashion architecture have chat meaning channels and Spoken the around

next suite we into our progress and to we do fashion. roadmap solutions where linked on-cloud available are month to over make quarters. That have merchandizing Third continue full then is a in of the

is with Avaya. integration point of well of the team Another from really working rest view

now and [indiscernible] is team what engineering We have what Avaya. one was was Spoken driving which between

really seeking what team one looking. it’s approach a So cluster to we’re

Operator

of BWS go Please Khorsand line the from Hamed question Financial. comes next from ahead. Your

Hamed Khorsand

Hi morning. good

is a just off driving bookings particular customer seeing, you’re category line talk that’s First or there bookings growth the that that about you growth. product could

Jim Chirico

the bookings the great take Yes, really the just I'll this growth of is one. in Jim, Actually I so overall it's we're demonstrating across which as seeing portfolio this is mentioned, the strength business. offers

quarter third gaining years shrieks look I factors. what's seen of will in number combination the as you key fact take we've actually if you product a we and I've also growth CC contact a have of Oceana of in too we it's occurring as sort again been that marketplace, had a growth which a in mentioned the consecutive Oceana bookings And the three that's So of the on of the this if quarters here that is that bookings significant is is is not that at many One AI. now and we've for consecutive I've obviously said is made space, how enhancements to now capability center. some traction XX

solution is bookings. also platforms We helping our center drive to marketed have contact which a AI across multiple

and this a timeframe they've up invested complete bit XX UC, March back months. quite the So nine in the started set building quarter. our us to UC, stack the endpoints, refreshed apart. and line last On differentiated really we've of in over past that We out through

So completely seven of that. set since done it’s new endpoints had fact years we in probably about

agents that mid offers if bookings to really collaboration will a taken you space the Equinox we've perspective look IPO. and with the out three is market certainly cloud of gaining that in which quarter-over-quarter. the Secondly additional which at continues a master a number driving offer running from in traction is nice traction, a marketplace gain introduction now of

obviously unique we're with applications us key other areas part are which are that new we technologies verticals with and last important touch the Now but increase areas new seeing think verticals some from perspective very to on announcements. some in well. UC we'll in in like healthcare And that driving I couple a booking hospitality, bookings as is the powergrooom didn’t -- and an overall

solutions what exactly our marketplace moving to APS a So they're more technology managed the to it’s sorry, to based help invested that's our our quite last side, a so as customers doing services we professional organization services really drive months more since and it’s those in we've drives drive you and become complex implement well. value uniqueness rescaling skill as actually bit nine over the And the unlock and side I’m value. on

UC news and across fairness So across the not company. CC professional good it's it's breadth in it’s particular of the segment, services, so the is one

Hamed Khorsand

new Okay channel, from channel question that from I growth that was buying and other actually you quarter how many are partners added the had because X% in partners did because the more you? that have with was is you existing you the channel your reported and the is channel or partners

Jim Chirico

But some drive and number so a so a channel a last are cloud, increased number. XXX the of that are us you software emerging revenues new it some channel of quarter are partners, new partners. of channel so we’re demand lead the going that partners ended technologies our a to is some nice of will up if it's and it’s X,XXX the This are factors. board the of Yes, partners across couple, frankly the you channel What's partners the channel that some quarter from we we endpoints, the is with but so that channel to is -- they different is across a really these future, it seeing again too added about interesting it net perspective. combination is of if

So we X,XXX, have and new we nice plus ramped. we're track we're to the out partners between fully year on these it’s set because added they plan minus on somewhere a channel takes get a multiple or with combinations it XXX, a we that obviously but before seeing ramp

bodes And go fiscal so building that XXXX. well we pipeline year of new as partners into

Operator

ahead. Mike of line Please Markets. the from comes Latimore question go from next Capital Northland Your

Mike Latimore

basically guess and on thanks, on have I provide of at a I Yes, out can offering year. little point; acquisition that? first the Spoken, that some on to congratulations update UCAS going you just saw are the you Spoken a quarter come

Laurent Philonenko

a provide way of rise merchandize expect continued on tooling you so UC have do this which centralized are rise on-cloud of will technology UC, in in management of offer. terms plan well based released the we we plan, the -- of product a service with on cloud [ph] rather so is to here, that a this year June on IP continue in the we on Laurent to the product So

are we continuing motion things we scalable, across in to So offer that and are go or we may make do the corporation. upward that more

the is what a and on and Avaya work the Spoken is it this working So ex between doing that joint we work ex really cloud. one is again that team are team, team

Mike Latimore

bookings would the segments you were center your just things XX% UC said total up you me think those press bookings more have that X%, bookings main the can X% so gave, two up got it. up? contact said would been numbers up than then think was that business but sum was then I and you up you have I And of Okay, given in help strength release I thought can XX%, of the you think

Jim Chirico

Yes, revenue. sure is still UC UC component I XX% think the between quarter-on-quarter overall pretty and on year-on-year, a of X%, quarter-on-quarter big year-on-year, obviously was so and was

So think that's blended Mike, I difference. that was the the average

Operator

question Please next go the from Dmitry Blair. Netis, of Your William ahead. comes line

Dmitry Netis

the of you seems is out and are to I very aggressive think number one trying there over there added said maybe kind the two partners XXX X,XXX channel Okay, have X,XXX thanks said you guys win, and all what you there quarter logo, these the with the in on and months the XX that also a level, so channel high mind some you larger channel pretty pure nice mentioned in hard touch said mid-market a questions and enterprise. of remember kind for taking channel added you relative it there to last plus of that the to is traction and that you plays of question. Perhaps partners the in is to nice about

ought So to channel that keep my you selling versus as out are out the keep far maybe residual inflation, be solutions partners to given pure your you channel seeing them to or to is there competitors. you as your what kind of around them commissions play question

Jim Chirico

is Yes, this Jim. won’t. Yes, I

a give high you of So level sort I’ll view.

partners So new that’s cloud. the on and we more just is driven I’ll partner emerging fact consolidation fact development community there oriented what in struggling seeing in that legacy really hardware that constant guys the some say some by and the to are of these pressure if you tuning convert the constant and is to will in of

roadmap keeping to as investing on we and providing a working that’s us So the why on and we’re we know the more it three departments and and we’re we quarters into government. sort partners go capable XXXX we��re that, driving pulse cloud in X,XXX have our of new finger that with over with last

front. that’s So on that

pretty feature sort solutions to and our of and growing continuing in is UC in say As done how our the And a well. demand place doing that with as the we that doing would not we the royalty that combination it’s to we are we product something of historically provide, today, rates. I any anything also with than provide in sets of we have from content high marketplace, overall is really accelerate our together cloud is far or right that keep sort we’re we package fairness. offers programmatic those have different we’re at that foot There CC as perspective for

to to old So going that and you really demand. implemented base. that’s much will today we we do will very that really I done have channel program however our legacy any after generate driven and mostly say it’s a haven’t if

though whether customers it’s platform. in have communication has believe velocity down it’s to as or results. level yielded together some I some funnel our based plan has technology actually put older latest order some convert significant manager had That type is a we I and have CSXK those a results the outstanding releases So we this migration your and program mentioned actually whether to

that looking was opportunistic community go So after beginning will if the and alternatives. pipeline $XXX the but weren’t that generated plays had be we of probably would you to-date $XX that is would this pure is and be back different more of quarter, for they we’ve for they the they technology, to million there fact of in older is that sales -- roughly last about which million important introduced

thought. than So I we’ve actually executed better

over has be our one. interest the and say the converting this expectation, pipeline rate exceeded mark but the months hit our the will exceeded think on conversion we six nine I We expectation or so has next the to

going as it’s after after as CSXK. going CM So the well both

longer putting base move if technologies actually programs and sales our we So we’re and will the latest we’re no our them. and our to we you that to base bring up opening sure make with place protect in

So that’s quite well. worked out

Dmitry Netis

how X,XXX of Jim selling are there? all of it, those and XXXX perspective about many half, talked parts XX% give us a the capable that of you Thanks cloud About solutions today?

Jim Chirico

it probably I increase would XX% so that probably range around have are of do neighborhood Yes it's, in somewhere proficient I ones but the that the guys XX% market. would They range range. XX% probably in that be fairness all say we would in somewhere to can to XX% but and of say to the continuing in in

Dmitry Netis

All right.

Jim Chirico

Yes capable the ones that we’ve are had, so. the obviously new certainly ones

Dmitry Netis

you’re that specific what to on kind team the this pretty I video general well of some well. continue up seem sort cetera goes, in pretty then a sort to And marketplace, see so lobby bookings, compression I are penetrate and in level they are you there of it. seeing pick space sort in see from market Microsoft in you you company is question market, result, a solutions you messaging far seeing? looking if have plays specific How as web there market that well, the or issue, and come growth to know growth growth still as conferencing as to that got starting flax as you’re issue -- had there the seeing market raise and do teams of collaboration as last at Good, starting market the the as into space, of is question in mentioned compression pure Equinox their don’t out of the are a wanted aggressive some just to market collaboration indicated et extensive conferencing, to or high like

Jim Chirico

has it -- fairness overall early suggest anything Laurent all are game. will wants any perspective of see would insights some he in a over we the from us for we’re turn seeing that pressure. downward there opportunities seeing we’re seeing it that additional still frankly; think it’s I he still but I to Yes, if all any, we’re product in up, now

Laurent Philonenko

we’re to seeing which integrated would well I lot expand with wanting the Yes, I Internet solutions. Obviously we of think very [indiscernible] our more is base our leveraging which installed solution customers what say. is are

Second, in to and government renewed services. enterprises we’re seeing services collaboration digitalization entity part more and are competition frankly of this of new moving really services bank more their

carriers, So opportunity new for us. of mind, in it's expansion, it’s lot you an but our we next have out opportunity, the solutions market new there believe yes

Peter Schuman

Peter. is This

meeting you XXXX at fiscal questions. of City quarter in (XXX) Thank Financial Conference concludes Investor and always we in fourth Avaya we with BWS joining to City department us will September welcome with Relations attending be our be XXX-XXXX for meantime Xth with in call. New and to Turning contact the the investors will York this the today's any

Operator

call. conference today’s concludes This

disconnect. may You now

Avaya (AVYA) 9 Aug 182018 Q3 Earnings call transcript