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Avaya cops to three years of losses ahead of IPO

Alex Scroxton

Ahead of its imminent billion dollar IPO, Avaya has divulged crucial details regarding its financial health and revealed three straight years of net losses.

In a new filing with the SEC dated 24 August, the comms specialist copped to an $871m (£533m) net loss in its fiscal 2010, which closed on 30 September last year, but also said it had mislaid $835m in 2009 and $1.3bn the year before that.

Part of the loss stems from costs related to the acquisition and integration of Nortel's enterprise business, which topped $208m last year. Avaya also booked hefty restructuring charges in both 2009 and 2010.

When it came to revenues the picture was altogether rosier, with sales last year of $5.06bn up 22% year-on-year, split almost exactly 50/50 between product and services. Avaya added that to the end of June 2011 it has booked revenues of $4.1bn, although product sales have so far made up more of the mix this year.

In its statement, Avaya also spoke briefly to the channel, saying that it recognised the need to "monetise the Nortel installed base by increasing the services attach rate for the Nortel customers we acquired", echoing comments made by EMEA president Michael Bayer at last year's partner summit in Barcelona.

Avaya said it had approximately 10,200 channel partners worldwide, accounting for 71% of its business in fiscal 2010 and 77% this year, with the 6% increase largely driven by Nortel channel sales.


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