Avaya Delivers Strong Third-Quarter Results and Guidance

The hike in revenue, driven by cloud adoption, Avaya reports

3
Sponsored Post
Avaya Delivers Strong Third-Quarter Results and Guidance
Unified Communications

Published: August 28, 2020

Ian Taylor Editor

Ian Taylor

Editor

Enterprise communications provider Avaya recently delivered solid third-quarter results, announcing its GAAP revenue reached $721 million and that the company experienced continued year-over-year growth. On a conference call with investors, Jim Chirico, President, and CEO, Avaya, said: “We delivered strong quarterly results exceeding our guidance across all metrics.” Avaya reported its software and services model’s catching on, up 89 percent, which beat the record Avaya set in March when its recurring revenue reached 64 percent. That’s a five-point year-over-year increase. Cloud, Alliance Partner, and Subscription revenue increased from 23 percent to 30 percent. One of the biggest wins for Avaya – it booked more or less $130 million in Avaya OneCloud Subscriptions Total Contract Value.

Avaya CEO Jim Chirico
Jim Chirico

It’s net income reached $9 million in the fiscal third quarter. “Response to our Subscription offering continues to grow, we’re now at over $200 million of TCV booked since we launched the offering in Q1,” Chirico shared with investors and stakeholders. Avaya’s subscription model gives customers access to the latest software and devices by replacing hefty up-front costs with smaller monthly or annual payments.

In a statement, an Avaya spokesperson told me, the company scored some significant business during the last quarter, signing up a ‘large US-based retailer’ in a three-year Avaya OneCloud Subscription agreement. Avaya also renewed some major contracts with long-time customers. Vodafone – a long withstanding Avaya customer, renewed ties with the company, signing a five-year agreement. IBM presented Avaya with the 2020 IBM Award for Hybrid Excellence for its Avaya OneClud ReadyNow solution which offers users an automated route to cloud migration.

Giving future guidance, Chirico said things are looking up for the fourth quarter of the 2020 fiscal year. Here’s what the company’s projects, GAAP revenue could reach between $719 million and $739 million, with non-GAAP revenues reaching between $720 million and $740 million. GAAP operating income could be between $51 million and $71 million, with a GAAP operating margin between roughly seven and 10 percent. Chirico added non-GAAP operating income could become as much as $166 million with a non-GAAP operating margin that could hit 22 percent.

For the entire fiscal year of 2020, Avaya’s outlook was presented on the call, and those numbers were impressive. The company expects

Steve Joyner, Avaya
Steve Joyner

GAAP revenue to reach between $2.84 billion and $2.86 billion, with non-GAAP revenue between $2.84 billion and $2.86 billion. Avaya does expect GAAP operating losses between $458 million and $478 million, with a GAAP operating margin of 16 percent to 17 percent. Its non-GAAP operating income might reach between $585 million and $605 million.

Commenting on the company’s recent results, Steve Joyner, Avaya’s UK Ireland Managing Director told UC Today News:

“Thanks to the team’s execution, in Q3 we were able to deliver outstanding results for our customers and partners. For the first time, Avaya achieved year-over-year and quarter-over-quarter revenue growth. And it’s these results that prove we’re on the right path. We have also seen continued momentum in the business”

Lots of moving parts in the Avaya saga, but it looks like they’re keeping busy and innovating during a time where continuity is sought after on every front. Companies that enable work from home (WFH) via the cloud and hybrid forms of deployment, should also do just fine even though they’re facing such a pivotal paradigm shift in the workforce.

ChannelCustomer ExperienceFuture of WorkHybrid Work
Featured

Share This Post