Avaya Holdings Corp (NYSE:AVYA) Q1 2020 Earnings Conference Call - Final Transcript
Feb 10, 2020 • 08:30 am ET
Greetings, welcome to the Avaya First Quarter Fiscal 2020 Conference Call. [Operator Instructions]
At this time, I'll turn the conference over to Michael McCarthy, Vice President of Investor Relations. Mr. McCarthy, you may now begin.
Thank you, and welcome to Avaya's Q1 fiscal year 2020 investor call. Jim Chirico, our President and CEO; and Kieran McGrath, our EVP and CFO will lead this morning's call and share with you some prepared remarks before taking your questions. Also joining us this morning are Anthony Bartolo, EVP and Chief Product Officer; and Shefali Shah, EVP and General Counsel.
The earnings release and investor slides referenced on this morning's call are accessible on the Investor page of our website as well as the 8-K being filed later today with the SEC, which should aid in your understanding of Avaya's financial results.
We will reference non-GAAP financial measures and specifically note that all sequential and year-over-year comparisons reference non-GAAP numbers, except where otherwise noted. We have included a reconciliation of such measures to GAAP in the earnings release and in our investor slides, which are available on our Investor Relations page. We make forward-looking statements that are based on current expectations, forecasts and assumptions, which remain subject to risks and uncertainties that could cause actual results to differ materially. Information about risks and uncertainties may be found in our most recent filings with the SEC, including our Form 10-K and subsequent Form 10-Q reports. It is Avaya's policy not to reiterate guidance and we undertake no obligations to update or revise forward-looking statements in the event, facts or circumstances change except as otherwise required by law.
I will now turn the call over to Jim. Jim?
Thanks, Mike. Good morning, everyone and thank you for joining us. This morning, I'll provide you with highlights of our Q1 performance along with an update on the progress we've made on our strategic priorities. Kieran will then walk you through the details of the quarter and our outlook for the fiscal year, and then we'll open it up for questions. We got off to a strong start for the fiscal year. Our Q1 non-GAAP revenue was $717 million, above the midpoint of our guidance range, a positive reflection on our sales and operational execution. The composition of our revenue continues to reflect our deliberate and successful shift to a software and cloud-based business model. Notably, Software and Services as a percent of revenue increased to 86% up from 83% the prior quarter and prior year. Also significant, our Cloud, Alliance Partner & Subscription revenue or CAPS grew to 18% from 15% in the prior year.
The programs we've initiated to activate our base and to provide a seamless transition path for enterprise customers to consumption-based subscription and cloud models are beginning to gain traction underscoring the successful execution of our strategic shift. Consistent with our customer-led strategy, subscription provides customers with an accelerated return on their investment, the ability to flex license usage up and down and allows