Avaya has delivered on its earnings forecasts for the past five quarters and is on course to exceed revenue expectations for the first half of the fiscal year 2024 (FY24).
Previous projections from the contact center stalwart have shown that it expects to reap $1.823BN in total revenues during FY24, rising to over $2BN in FY25.
If Avaya can stick to its script, then – fast forward to FY27 – and the vendor will surpass its pre-bankruptcy revenue levels – with a much healthier balance sheet to boot.
Of course, it must continue to execute this plan. Nevertheless, according to Alan Masarek, CEO of Avaya, the business has “upward momentum” and a positive outlook.
Masarek credits its “innovation without disruption” strategy, which seems to be gaining ground amid decelerating CCaaS growth.
That strategy focuses on meeting customers where they are and taking them on a journey to the cloud at their own pace. Think evolution, not revolution.
Diving deeper, Masarek said:
Avaya’s innovation without disruption strategy is adding tangible value for enterprises, giving these organizations the unmatched ability to add AI and other innovations on top of existing investments.
“[Meanwhile, customers are] keeping their business moving with speed and quality with Avaya’s solutions, services, and world-class ecosystem.”
That said, Avaya is not shining a bright light on the solutions it’s adding to that ecosystem. Indeed, it has refrained from chasing headlines regarding in-vogue CCaaS trends, like generative AI (GenAI).
While it has innovated with GenAI – the onus is on building customer relationships and bringing them trusted, proven solutions.
That’s critical, given Avaya’s deep enterprise customer base – which includes over 90 percent of the Fortune 100 organizations. Keeping those close is crucial to its long-term ambitions.
So far, the vendor is seemingly doing so, with a net logo retention rate among large enterprise customers of 97 percent.
Furthermore, its renewal rates across base subscription contracts also exceed expectations.
However, while all this seems rosy, it’s critical to note that Avaya is now a private company. As such, it may handpick the financial results it chooses to put in the public domain.
Consequently, its earnings no longer come under the same scrutiny as many of its contact center competitors – such as NICE, Cisco, and Five9.
Nevertheless, these figures will surprise many, especially those who loudly voiced Avaya doomsday prophecies less than 18 months ago.
Those prophecies came as Avaya filed for bankruptcy for the second time in six years.
Thankfully, that chapter now seems to be in the rearview mirror as Masarek’s plans stay on track and his team builds out its solutions ecosystem.
Moreover, Avaya has the funds free to keep that ecosystem evolving, exiting 2024 with approximately $650M of cash – and access to an additional “$128M in a revolving facility”.
Finally, it will continue strengthening its relationships with prominent CX vendors – after recently announcing new and improved partnerships with conversational AI giant Cognigy and enterprise communications rival Zoom.
The latter came to light during the recent Enterprise Connect 2024 event, where Avaya rebranded its three hallmark contact center offerings.
To dive deeper into that announcement, check out our article: Zoom and Avaya Have Teamed Up, and There Are Big Benefits for Both
