Avaya has released details of its projected Q4 earnings, with its quarterly GAAP revenue set to fall to $480MN at best.
At worst, this figure could sink to $460MN.
In Q4 of 2021, Avaya’s revenues reached $760MN. As such, these figures represent a 36.8 percent revenue slump – in the best-case scenario.
Such a decline is much steeper than the 13 percent the vendor recorded in Q3.
Unfortunately, Avaya has yet to hold an earnings call with more precise figures, despite NASDAQ estimating that the vendor would do so on December 12.
The vendor also failed to announce an upcoming earnings call date.
Instead, Avaya released a 108-page business update, with a financial overview and earnings estimates, from which these figures stem.
Other Standout Insights Within the Update
Interestingly, the business update includes more insight into how new CEO, Alan Masarek, is right-sizing Avaya down to its current revenues.
In doing so, the vendor aims to achieve $524M in Targeted Run Rate Savings by Q1 of 2024.
Such savings stem from its new “Software & Support” Offering Structure. This comes with three sales motions: Premise Software, Cloud Software, and a Customer Cloud Journey that sits in between. The latter is the result of Masarek’s "innovation without disruption" vision.
The Customer Cloud Journey provides on-premise customers – which wish to harness elements of the cloud – this capability through CCaaS OTT (a la carte) and/or version upgrades.
The offering comes as a managed service and/or on an enterprise cloud infrastructure, which harnesses Aura and Elite on Azure.
Planning around this structure, Avaya seems set to remove several products from its portfolio, which it has yet to disclose publicly.
Indeed, the vendor blurred out a bullet point list of products it is set to cull. In total, the list was 34 bullet points long – as highlighted below - so it seems ready for a significant transformation.
[caption id="attachment_46823" align="alignnone" width="430"]
The screenshot suggests that Avaya is set to cull elements of its portfolio. CX Today has now reached out to its PR team for more insight into what these products are.[/caption]
By eliminating these offerings and their associated costs, the vendor plans to optimize its overall development spend.
Such R&D spending will drop by 16.7 percent in 2023, from $238M to $204M. Yet, notably, the percentage of this budget spent on contact center innovation will increase from 54 to 64 percent.