Avaya has reported a revenue dip after a series of deals were delayed in its Q3.

The vendor reported sales of $713m during the quarter ending 31 December, down four percent year on year.

Avaya’s figures were below analyst expectations, sending its share price plummeting by over 20 percent.

But CEO Jim Chirico was optimistic on an earnings call with investors, saying that a number of deals – including one large deal – were delayed in the quarter and will be realised down the line.

“The mix of content and the final deal terms of some contracts did result in a delay of revenue recognition,” he said.

“With respect to the environment, there is no doubt it caused a pause. The fact is that many of our customers, especially in the US and Western Europe were in lockdown, and commercial activity simply slowed at the end of the quarter.

“What’s important to note is that these deals were not lost, and projects have not been cancelled, but we did see a number of deals slip by a few weeks, many of which have since been closed”

“While it is not unusual to see deals push and pull at any given quarter, the magnitude in Q1 was amplified.”

He revealed that one delayed project is one of the biggest the company has ever secured, coming in the form of a $400m contact centre deployment with a large financial services company.

The deal is built around Avaya’s OneCloud CCaaS offering and will see the vendor deploy to 20,000 agents to start with, rising to more than 40,000 over the seven year duration of the contract.

“It is significant, not just because of the size of the deal, one of the largest in the history of the company, but also because it leverages a significant number of our latest innovations, including AI, biometric security and advanced analytics and represents a displacement of several incumbent competitors,” Chirico added.

Chirico said that demand for Avaya’s offering is shown in the fact it signed up 1,400 new customers in the quarter.

Avaya also revealed that annualised recurring revenue for its OneCloud portfolio climbed 137 percent year on year to $620m during the quarter.

Recurring revenue accounted for 66 percent of all revenue, up from 65 percent one year ago.

Avaya said that it signed two contracts each worth more than $25m.

The vendor also reported growth in Avaya Cloud Office, with seat growth and user growth 14 percent and 16 percent respectively compared to the previous quarter.

From a channel perspective, Avaya said that more than 700 customers have sold Cloud Office globally, while the OneCloud platform has a network of channel partners and distributors “in the thousands”.

 

 



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