Greetings. Welcome to Avaya's Fiscal 2022 quarter 2 investor call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to Ralph Wynn. Thank you, sir. You may begin. Thank you, operator. Welcome to Avaya's fiscal 2022 second quarter investor call. Jim Chirico, our President and CEO, and Kieran McGrath, our Executive Vice President and CFO, will lead this morning's call and share with you some prepared remarks before taking your questions. Joining them this morning will be Stephen Spears, Chief Revenue Officer. The earnings release and investor slides, which include highlights of our ESG initiatives and performance referenced on this morning's call, are accessible on the Investor page of our website, as well as in the 8-K filed today with the SEC. These should aid in your understanding of Avaya's financial results. All financial metrics referenced on this call are non-GAAP, with the exception of revenue. We have included a reconciliation of such non-GAAP metrics to GAAP in the earnings release and investor slides. We may 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. In particular, the global economy and our business are being impacted by the Russia-Ukraine conflict and related sanctions and export controls recently imposed by the U.S., U.K., and the EU on certain industries and Russian parties as a result of the conflict, as well as responses by the governments of Russia or other jurisdictions. In addition, COVID-19 continues to impact the global economy, and the extent of its continued impact on our business will depend on a number of factors, all of which are outside of our control. All these factors continue to evolve and remain uncertain at this time. Information about risks and uncertainties may be found in our most recent filings with the SEC, including our Form 10-K and our quarterly reports on Form 10-Q. It is Avaya's policy not to reiterate guidance, and we undertake no obligation 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. Thanks, Ralph. Hello, everyone, and thank you for joining today's call. I'm pleased to report Avaya's second quarter results this morning. Let me begin by thanking our global team as they continue to exceed expectations in implementing and driving the strategy we've laid out. We are delivering Avaya OneCloud solutions to our customers at an accelerated rate and continue to make significant headway on our multi-year transformational journey to a cloud and SaaS business model. It's important to highlight a number of key indicators of the progress of our transformation. First is Avaya OneCloud ARR. We drove record growth for this key industry KPI with a $130 million quarter-over-quarter increase and over $400 million year-over-year increase to $750 million. The path to hit $1 billion ARR mark by the end of calendar year 2022 is well paved. Second, recurring revenue reached a record for us, growing from 66% a year ago to 69% in Q2. This is a strong indicator that our focus, investment, and actions are paying off. Third, software and services as a percent of revenue came in at 89%. Fourth, 75% of new bookings came from Avaya OneCloud, the first time we reached that threshold, and we had record private cloud bookings as well. Finally, our CAPS metric ended the quarter at 54%, up from 40% a year ago. These metrics serve as proof positive that we are successfully repositioning the company from our historic one-time revenue model to a recurring one. Our strategy is taking hold faster than we had anticipated, leading to a significant shift in our fundamental business model. To summarize, enterprise digital transformation initiatives continue to push forward as companies look to Avaya to help them transform their worker and their customer experiences. The strength of our success with enterprise customers continues to fuel growth in our key cloud and recurring metrics. 95% of ARR comes from enterprise contracts greater than $100,000. 60% of those greater than $1 million ARR, and 20% comes from those greater than $5 million segment. As further proof of our enterprise leadership, we once again signed approximately 100 deals with over $1 million in TCV, 18 greater than $5 million, eight greater than $10 million, and we had two deals worth over $25 million TCV, including one that was greater than $70 million. We haven't discussed seats in some time, but it's noteworthy that we booked over 3 million seats to Avaya OneCloud this quarter, which underscores our success migrating customers at a faster rate than we predicted. I cannot be more delighted with how far we've come in such a short time. While the underlying momentum of our business remains very strong, revenue and profitability did not meet our expectations for the quarter, primarily due to two dynamics. Our record ARR is a reflection of the shift away from one time and point-in-time revenue to recurring revenues. This rapid adoption by our customers, now including government as well, had an impact on our top line. While this shift is consistent with our strategy and business model, it is also occurring faster than we projected. As we look at total bookings, 72% this quarter came from Avaya OneCloud solutions, compared to 58% last quarter and 37% a year ago. We estimate this shift had a $40 million impact on revenue for the quarter. As a result of the increase in recurring contracts, there are a couple important points to make. First, revenue isn't lost. It is one business and will materialize over the life of these long-term contracts. Our cloud business is obviously healthy and growing, and this is consistent with our strategy and indicative of the accelerated shift in our business. Second, Avaya has a significant customer base in Russia. The war in Ukraine, including the sanctions on Russia and the overhang on the rest of Europe, is beginning to create top-line pressure. The impact on operations reduced revenue by roughly $5 million for the quarter. Kieran McGrath will provide additional detail on both dynamics and their impact on the second half outlook in a few moments. Now I'd like to emphasize some key performance highlights that will further demonstrate the underlying strength of our business. Avaya OneCloud ARR is our most important performance metric. It holistically measures the overall strength of our cloud portfolio, whether delivered in a hybrid, private or public model. Our OneCloud ARR grew 21% sequentially and is up 118% year-over-year. In addition, we yet again signed over 1,400 new logos this quarter. There is no better proof that Avaya is well positioned to be the brand of choice for digital communication solutions. This impressive growth underscores the strength of our solutions and the commitment of our customers as we move them to cloud-based solutions. Let me share with you a couple of key customer wins. Watson Clinic, based in Florida, serves almost 1 million patients every year. They chose Avaya Cloud Office to replace an aging Siemens platform for their 3,600 users across 15 locations. This new customer selected Avaya because of the ease of centralized management, integration between sites and expansion of channels to include voice, video, chat, and conferencing. Another win was Finanz Informatik, the central service provider for savings banks in Germany. They chose a private UC cloud platform powered by Avaya technology to support 313 banks representing 230,000 seats with 2 million calls per day. Moving to Avaya OneCloud CCaaS. Our deliberate approach to building out CCaaS capabilities with geographic expansion and partner enablement continues to yield the results we expect. We set out to deliver differentiated CCaaS solutions with the flexibility of public, private or hybrid deployments in order to monetize and activate our massive contact center installed base and we're doing exactly that. The deal we signed with Life Insurance Company of Alabama is a perfect example of Avaya CCaaS capabilities winning new business. They chose to move to a public cloud CCaaS solution to solve for their numerous legacy technology challenges. The solution allows flexibility for employees to work remotely while having access to all the same tools they would have if they were in the office. We also saw continued momentum for private CCaaS. In Q2, we had one of our strongest booking quarters to date. One example is a top insurer in the U.K. that is moving to our private cloud to accelerate their business transformation. They also needed to effectively support at-home work requirements, along with having the capability to flex to 5,500 agents during peak business periods. You've heard me talk about the importance of Avaya's partner ecosystem to our growth plans and the importance of gaining additional market reach through such relationships. I am excited to announce that just in the past two months, we have signed two new global strategic partnerships. Both will be real needle movers for our business, in particular our CCaaS offerings. First, I'd like to touch on Alcatel-Lucent Enterprise. Through this partnership, ALE will offer Avaya OneCloud CCaaS, including our AI, identity management, security, and workforce engagement management capabilities to their global base of nearly 1 million customers in over 50 countries. The teams are making great progress on enablement, and we expect this to result in new revenue streams for us as early as the start of our fiscal Q4. The second is with Microsoft. As you may have read in the press release, we announced a significant expansion of our partnership, which goes well beyond just a go-to-market effort focused on CCaaS. There are three key pillars to this agreement, including working directly with Microsoft to more rapidly move private cloud customers to the Azure platform. Second, joint co-selling efforts to move current premises-based customers to either a hybrid or pure cloud model. Thirdly, CCaaS is available in the Microsoft Azure marketplace and collaboratively sold by Avaya and Microsoft sales teams. Although in the early innings, it's relationships like these that show the global strength of Avaya OneCloud portfolio and reinforce my confidence in our ability to successfully execute on our overall cloud strategy. While CCaaS solutions are indispensable to organizations, customer experience strategies, we believe Avaya OneCloud CPaaS represents the leading edge of collaboration for digital communications. In addition to helping customers simplify speed deployment of highly differentiated capabilities, CPaaS provides the flexibility for customers to customize and build their own applications and integrate them to our platform. In our most significant CPaaS deal to date, the University of Iowa Hospitals and Clinics chose Avaya's CPaaS capabilities to enable 25,000 UCaaS and 750 CCaaS users. Our CPaaS is helping them to provide superior patient service, a robust resiliency strategy for their sites, and improve experiences for their students and employees. A second example underscores the flexibility CPaaS brings with Carter Machinery. Carter is the third-largest Caterpillar dealership network in North America. They selected Avaya Cloud Office integrated with our OneCloud CCaaS device as a service and CPaaS virtual agent in a five-year deal that will reach more than 2,000 users across 34 sites. This was a competitive win for Avaya, displacing Cisco. Avaya's full suite of solutions are vital to our global install base. The capabilities we bring to the table, the differentiation we unlock, along with the value we provide to customers, are keys to our continued success. Add to these the strength of our brand, our partner ecosystem, and our global reach, and it's fair to say we have a unique ability to service the world's leading and most complex enterprises at scale, and it explains why customers are choosing Avaya. We have increased confidence in the momentum of our business. We are committed to delivering business-impacting innovation, maintaining our competitive edge, and we continue to focus on the long game, investing in growth drivers and doing so profitably. Now, let me turn it over to Kieran to take you through the details along with an update of our guidance for the year. Thank you, Jim. Good morning, everyone. As a reminder, all figures mentioned on this call are as reported unless otherwise indicated in constant currency. Our second quarter marked a significant inflection point in the overall acceleration of our transformation. For the first time ever, Avaya's total contract value for OneCloud bookings represented over 70% of Avaya's total solution bookings. This is further evidence that our customers are rapidly migrating to a Cloud OpEx model. One very positive outcome from this performance is that the second quarter marks a milestone in the expansion rate of our recurring revenue base, represented by our OneCloud ARR KPI. As Jim noted in his remarks, we generated $130 million of new ARR, ending the quarter with a balance of $750 million, and we are well positioned to achieve our calendar year-end target of $1 billion of ARR. The $750 million of OneCloud ARR represents 21% sequential growth and 118% growth year over year. This was primarily driven off of a record subscription TCV bookings of $328 million. Of those subscription deals that came from a maintenance migration, we continue to realize a very healthy 20% uplift on those contracts as clients continue to gain value from our robust OneCloud subscription offerings. Additionally, for the second quarter in a row, we added over 200 new logo subscription customers. Equally significant, our OneCloud Public and OneCloud Private new bookings was especially strong in the quarter, reflecting growth of over 60% sequentially and up over 80% year-over-year. Shifting to revenue. Q2 revenue of $716 million was below our guidance due to two primary reasons. First, in spite of our record OneCloud subscription bookings, the percentage of revenue recognized in quarter from those subscription bookings was lower again this quarter. It's important to note that this revenue is not lost. Instead, it will be recognized in future periods. Let me provide a little more color. In Q2, we processed 680 OneCloud subscription deals. The overwhelming majority of these deals were standard deals, which generated the expected point-in-time revenue contribution, which is roughly 60% of the total contract value taken as point-in-time revenue in the current quarter. However, a handful of deals impacted our in-quarter revenue recognition by approximately $40 million versus our model and versus Q2 guidance. For example, there were two large deals within the U.S. federal government, which included annual fiscal funding appropriation clauses. This limited the contract value eligible for point-in-time recognition to only the current year as opposed to the multi-year value. The impact of these two contracts was almost half of the $40 million impact we experienced in the quarter. Please note that in these two cases, the deferred revenue for the right to use license in future years will be recognized annually upon reaching each contract anniversary. The second revenue impact versus our guidance was related to the crisis and conflict in Ukraine, which impacted our Q2 revenue in Eastern Europe by approximately $5 million. This is expected to have a much more significant second half impact to Avaya's business due to the announced sanctions and the adverse economic conditions created in Eastern Europe. Getting deeper into the numbers. For the second quarter of our fiscal 2022, revenue was $716 million, down 3% as reported and 2% in constant currency against the $738 million as reported in the year ago period. Revenue contribution from CAPS or Cloud Alliance Partner and Subscription represented 54% of total revenue, up 10 percentage points sequentially and versus 40% in the year ago period. For our second fiscal quarter, recurring revenue accounted for 69% of total revenue. Meanwhile, software and service revenue represented 89% of total revenue. Subsequently, software revenue, our newest KPI as a percent of total revenue, came in at 67%. Turning to our gross profit metrics. Non-GAAP gross margin was 56.7% in the second quarter compared to 61.8% in the year ago period, and down almost 1 point sequentially. Product margins of 46.6% were impacted by the fact that we saw a much larger portion of our software revenue generated through subscription hybrid agreements, which sit in our services segment. Hardware margins within product, while slightly improved over last quarter, continue to be pressured by industry-wide supply chain impacts. Services margin came in at 61.3%, up almost a point quarter-over-quarter due to increasing subscription revenue contribution. Turning to total profitability margin and cash flow metrics for the quarter. Second quarter non-GAAP operating income was $115 million, representing a non-GAAP operating margin of 16%, down 400 basis points year-on-year. Adjusted EBITDA was $145 million, representing an Adjusted EBITDA margin of 20%, down 370 basis points year-on-year, primarily due to the previously mentioned point-in-time revenue dynamics and lower product gross margins. Non-GAAP EPS was $0.53 in the quarter compared to $0.74 in the year ago period and $0.42 sequentially. Cash flow from operations was -$2 million, contributing to second-quarter ending cash balance of $324 million. As discussed at our investor date, cash flow continues to be impacted by our transition to subscription and the cloud, where customers pay cash over time versus primarily upfront in a CapEx licensing model. Consistent with the transition acceleration, contract assets, which largely reflect deferred billings, continues to grow rapidly from $664 million at the end of Q1 to $771 million at the end of Q2. The addition of $107 million is the largest quarterly contribution to date and represents a strong pool of future billings and cash collections for Avaya. In the quarter, cash flow from operations was aided by a restructuring of our interest rate swap contracts, which extended our interest rate protection for an additional three years, now extended to cover the periods from 2024 to 2027, and resulted in net cash proceeds of $52 million. This is the most recent in a series of actions taken by Avaya over the last 2.5 years to strengthen our capital structure and enhance our financial flexibility, including the measures taken to improve our weighted average debt maturity profile. We are also currently evaluating options to boost liquidity and to address the convertible notes which come due in June 2023. Now turning to guidance. Please note that all year-over-year revenue changes are expressed on a constant currency basis and all revenue amounts reflecting rates as of April 30, 2022. In terms of our forward-looking OneCloud ARR metric, we are increasing our guidance for the full year and now expect to end fiscal year 2022 between $940 million and $960 million. At the midpoint, this represents growth of 79% year-over-year. This expectation reaffirms the previously committed target of exiting the 2022 calendar year with OneCloud ARR at or above $1 billion. Turning to revenue. We expect full-year revenue to be between $2.815 billion and $2.855 billion. This has year-on-year revenue declining between -5% and -4% on an as-reported basis, and down -4% to -3% on a constant currency basis. At the midpoint, this represents a reduction of $165 million in annual revenue from our prior guidance. Roughly two-thirds of this change can be attributed to an accelerating shift to the OneCloud portfolio, a more recurring revenue model, and one-third to the crisis in Eastern Europe, which also includes the impact of the strengthening US dollar. For the third quarter of fiscal year 2022, we anticipate revenues of $685 million to $700 million, which at the midpoint represents constant currency decline of about 4% or down 5% on an as-reported basis. We expect full year adjusted EBITDA to be between $500 million and $600 million. The reduction from our prior full year adjusted EBITDA guidance of $680 million to $700 million primarily reflects the impact from the lower fiscal 2022 revenue. Please note that given the increasing velocity of the transition to OneCloud and the macroeconomic conditions in Eastern Europe, we are taking immediate actions to adjust and align our operating structure. This is evidenced by our guidance reflecting an approximate 3 percentage point improvement in second half fiscal 2022 non-GAAP operating profit and adjusted EBITDA margins compared to the first half levels. At the midpoint, this implies a 21% adjusted EBITDA margin for fiscal year 2022. We expect non-GAAP operating margin for the fiscal year to be approximately 17%. For the third quarter, non-GAAP operating margin is expected to be between approximately 16%-17% and our adjusted EBITDA to be between $140 million and $150 million or between 20%-21% of revenue. We expect non-GAAP EPS for the full year to be between $2.09 and $2.25. This compares to $3.16 in the prior year. For the third quarter, we expect non-GAAP EPS to be between $0.48 and $0.56. This compares to non-GAAP EPS of $0.75 in the year ago period. Due to the combination of the full year reduction in revenue and the rapidly accelerating shift to OneCloud and away from traditional CapEx license sales, where cash is received over time versus primarily upfront, we are reducing our expectation for full year fiscal CFFO to be approximately negative 7% of total revenue. We expect to maintain quarter end cash balances in the $250million-$300 million range. With that, I would now like to turn the call back to Jim. Jim? Thank you, Kieran. I'll wrap by saying that the significant progress we saw this quarter signifies our strategy is taking hold, and this shift is reflected in our revised second-half guidance. Our transition is forging ahead, and we are showing solid, tangible results. We are taking action in this very difficult environment to serve our customers while continuing to invest in innovation. No one could have predicted the rate and pace at which we are moving to the cloud as we're moving quickly to fortify our position. I'm excited about Avaya's future and even more excited about our team's ability to deliver on the opportunity in front of us. Before we open it up for questions, let me end by saying that our thoughts and prayers go out to all those who are impacted by the Russia-Ukraine war. Avaya has customers, partners, and many team members throughout Europe, including Ukraine and Russia. The devastation is truly sobering. Operator, let's open it up for questions. Thank you, sir. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing any star keys. We ask that you limit yourself to one question and one follow-up. One moment please while we poll for any questions. Our first question comes from the line of Ryan MacWilliams with Barclays. Please proceed with your question. Thanks for taking the question. Kieran, on some of the conservatism you're baking into the full year guide in regards to potential EU headwinds, are you seeing longer sales cycles or weaker pipeline or any hesitancy in your customer conversations? Or was this guidance mostly based on impacted customers, in that region? Yeah. For starters, I mean, you'll see when we issue our Q tonight, we're seeing a big hit, obviously, with the sanctioned companies that are in Russia. First and foremost, of the $60 million that we're attributing to the impact to our full-year revenue guidance coming from the conflict in Ukraine, $45 million of it is coming out of Russia itself. Essentially, it's from customers, you know, some of which are like Sberbank that have been sanctioned, and we can no longer take revenue from those customers. We can't do business with them. There's about $15 million that we're seeing mostly in Eastern Europe, but actually in some Western European countries as well, where there is a reprioritization of investment and just the slowing of cycle in those areas. Of the $165 million worth of midpoint revenue change that we put out, $60-ish million of it is coming from the conflict in Ukraine, and $45 million of that is directly identifiable to Russia. Appreciate the color. Kieran, last earnings, you mentioned some deals that were pushed out of the first quarter. Did you see those deals close in the second quarter? I guess how did that impact results in this print? Thanks. Yeah, we had about $10 million that pushed last quarter, of which one was about $6 million from one of our large defense contractors. We actually closed that deal early in our second quarter, so that had no impact on the quarter. Appreciate the color. Thanks, guys. Thank you. Our next question comes from George Sutton with Craig-Hallum. Please proceed with your question. Thank you. One of the things that I think sounds like a change quarter-over-quarter is that the government is getting more aggressive in moving to the cloud, and that does change some of the dynamics of your business. Can you just walk more specifically through that government dynamic? Yeah. Hey, George, this is Jim. Good morning. Yeah, you're spot on. We saw a pretty big uptick in Q2, and in fact, we expect to see continued strength as we go through the balance of this fiscal year. We had a number of new wins and frankly, as Kieran pointed out, pretty significant TCV. You know, obviously based upon the annual fiscal funding requirements, we're really only allowed to take, you know, one year of overall revenue. The other important thing to note is these are mostly five-year deals as well. Based upon the anniversary date, obviously, that revenue will come due, and, you know, obviously, 80% or so of that is ratable. Yeah, we're pretty excited with the uptick. The teams are doing a really nice job, and it's for both, by the way, it's subscription as well as private cloud deals. We're seeing this both in the Fed as well as in SLED as well. Right. Understand. Okay. Relative to your two global partnerships that you announced, I wondered if you could give us some picture of the significance that those might have in your next fiscal year. Yeah. Obviously, those are two key deals both with Microsoft and ALE, and as I pointed out, really sort of solidifies the work that we've been doing within our R&D organization in really bringing CCaaS to market at a very thoughtful pace. I believe we'll start to see some ALE revenue. In fairness, probably in fourth quarter of this fiscal year. As far as with Microsoft, it's a much more involved engagement, frankly. My expectation is you'll probably see that start to really take hold as we go into the fiscal year 2023. We have a lot of work going on with Microsoft, both their sales folks, you know, selling Avaya via CCaaS, as well as some partnerships around doing some work with those guys as far as hosting our private and public cloud solutions. We're pretty excited at where we are even though it's very early with Microsoft, but the engagement and the teaming has actually been outstanding. A real tribute to the Microsoft team and the Avaya team for really building out this partnership. Yeah. Just an aside, I mean, I think, George, we really feel very strongly that the capabilities that they have in terms of delivery will really help us accelerate, especially as we're launching a lot of these very large private cloud deals that we've seen. Leveraging all the expertise that they have combined with our own, you know, in-depth knowledge on the contact center side of the house, really, I really think this will help us as we go through time to really monetize a lot of these big deals that we've been signing. Yeah. Yeah. Perfect. Thanks, guys. Thank you. Our next question comes from Lance Vitanza with Cowen. Please proceed with your question. Hey, good morning. This is Jonathan on for Lance. The first one is on ARR. How much of the improvement comes from existing customers, meaning migrations and new wins? You know, the bulk of what we're seeing in terms of raw dollars is still coming from our existing customer base, so migrations, if you will. If you recall or you noted in my comments, we talked about having 680 subscription transactions in the quarter. Almost 240 of those actually came from new logos. Now, the difference is many of these new logos come at a relatively smaller landing size, and then you would, you know, you adapt, you upsell, and you renew the traditional layer model in that regard. While the dollars is being primarily driven and the quantity overall by migrations, we are seeing over the last several quarters an increasing, really, contribution coming from new logos as well. Understood. My last one. Just given that the converts are due within a year, can you walk us through what the company is thinking? Like, what is your plan to address it? Sure. I mean, obviously, we are well aware that in June of 2023, we have the $350 million convert coming due. You know, we are working with our banking colleagues to address the convert. We expect to actually act here in the reasonably near future on doing that. I should also just also point out that we also have the ABL of $100 million-$150 million that we also have on hand to leverage it. I think that we should be able to address the prepayment of the convert, if you will, or the pre-funding of the convert coming up in the next several months. Got it. Okay. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. Our next question comes from the line of Hamed Khorsand with BWS Financial. Please proceed with your question. Good morning. My first question is just on the ability to have clarity in this business model that you're going more and more into cloud. If you're going with a cloud-first sales approach, why is, you know, your projections always faltering especially when you report quarterly results? Why can't you have a stable outlook? This is Jim. Let me address that. First, as Kieran pointed out, you know, a couple of dynamics. First one about what's going on, obviously, in Ukraine has had a negative effect on second half. I think your question is more about what's going on and why haven't we done a better job in predicting, if you will, the acceleration to cloud and how is that affecting the overall revenue performance of the company. Let me address that second dynamic, and that's the migration of our customer base, as we pointed out, is accelerating faster. If you take a look at our bookings growth for the quarter, and you take a look at private cloud and subscription. In fairness, we had record growth in both of those areas for the company. When you dig into private cloud, as we pointed out, obviously the work that we're doing with Microsoft and others in bringing on the activations now at an accelerated rate because the bookings increased, we believe we're over that hurdle. There's some optimization work we need to do, and those revenues will hit in Q3 and Q4. Really, what's driving that $40 million in the second half is on subscription. The fact is that as you take a look at subscription, the point-in-time revenue that we recognize was lower. That's specifically related to the large deals and in fairness to strength that we have in enterprise. As you look at that, deals of this magnitude, more times than not, it's not unusual to have increased contract flexibility as part of the solution for the contract. We've learned this over the last couple quarters, in fairness, as we've been accelerating the move to cloud, and as I mentioned, you know, we had record bookings last quarter. We saw that hit us a bit, if you will, in the first quarter, and as we pointed out here, a rather significant point-in-time decrease, not an overall revenue decrease, just that revenue is now ratable over the life of the contract but not point in time. We had historically had roughly around 60% or so ability to recognize that revenue within quarter. Going forward, we've taken that percentage, and we've now aligned it more to the larger deals, and really what we're seeing as far as some of the flexibility we need in these larger contracts and have lowered that percentage down into the lower 50% range. That has had a result in lower revenue attainment. Again, reve nues that are not lost, but just a rebalancing of the portfolio and the profile moving further as we continue to increase our overall recurring revenues as a percentage of the Avaya revenue profile. Again, it's really more of a reflection of the flexibility we're building into these long-term contracts with our enterprise customers, but not a loss of demand. We've taken it, we've rebalanced it, we've repositioned it, and that's what the guidance update that Kieran provided to you all. Okay. Thank you. Listen, I think I just maybe could just add one other point of what Jim is saying. You know, if this migration for us had been done, you know, back pre-606, this would have been a much more predictable, much easier transition. Because you are not gonna have all of this point in time related to these, you know, longer term subscription and cloud deals that we're signing. It's a complication that, listen, I know, I understand we need to get our arms around that. I think we have now, you know, if you will, we've had two quarters in a row now where we've seen lower realization rates, and that's what we've built into our model going forward. I think the real point here is that we are signing significant deals both on these subscription hybrid contracts as well as in our public and private clouds. They will start to roll out as we go through time, and we'll see much more of our business become more ratable and less of these point-in-time fluctuations. You know, understand that we need to do a better job of getting insight into this, you know, and I do think this ASC 606 accounting has, you know, unnecessarily complicated things, but that's the rules we have to live by. Okay, great. Thank you. Thank you. We have reached the end of the question and answer session, and I would now like to turn the call back over to Ralph for any closing remarks. Okay. Well, thank you everyone for joining us this morning for our second fiscal quarter conference call. We look forward to speaking with you all again soon, and have a great week. Thank you, everyone. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.