Avaya has reported a revenue dip for the second consecutive quarter, despite a significant spike in its OneCloud offering.
While sanctions on Russia played their part, the most significant factor was seemingly several delayed deals, including its impressive $400m CCaaS win with a global financial institution.
Sharing more details on a recent earnings call, Jim Chirico, Chief Executive at Avaya, said:
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.
“Because of the nature of the CCaaS deal, we were unable to recognize revenue we had assumed would be realized in Q1, which will now materialize beginning in the second half of FY ’22.”
The impact of these delays equates to a three percent dip in sales from the same quarter last year, with Q1 revenues reaching $716m.
Much of this is a result of the lasting effects of the pandemic, as deal approvals and contract activities stuttered due to continued lockdowns and restrictions.
Thankfully, these measures are calming across the Western World, and Avaya hopes to set these agreements into motion next quarter.
In addition, the vendor will also kickstart the additional business it won last quarter after securing more than 100 deals with a total contract value of $1m in Q1. It is the seventh quarter in a row that Avaya hit this landmark target.
The fundamental driver for this success seems to be its OneCloud portfolio, with three million seats moving to Avaya OneCloud last quarter. As such, the SaaS suite accounted for 75% of new bookings.
Commenting on the success of Avaya Onecloud CCaaS – a central technology within the portfolio – Chirico said:
We set up 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.
Such a proposition is critical as Avaya seeks to maintain its stalwart status in the contact center technology space, which is bustling with significant new disruptors – including Microsoft, Google, and Zoom.
To do so, Avaya has recently made several exciting announcements, which include extending their Microsoft partnership and launching a “ready to deploy” virtual agent.
