Unified communications and contact center software vendor Avaya reported its third quarter financial results before the bell on Monday. The Santa Clara, Calif.-based company delivered net income of $9 million, or 8 cents per share. Non-GAAP earnings were 61 cents a share on revenue of $721 million.
Wall Street was expecting the company to report earnings of 79 cents per share on revenue of $686.7 million.
Elsewhere on the balance sheet, Avaya said its software and services products accounted for 89% of revenue, with recurring revenue contributing 64%. The company also signed 104 deals with a total contract value (TCV) of over $1 million, and 7 deals with over $10 million TCV. Avaya is in the midst of a transition to a subscription-based revenue model.
"Response to our subscription offering continues to be strong, with just over $200 million of TCV having been booked since its launch back in Q1," said Avaya CEO Jim Chirico. "This offering differentiates Avaya within the enterprise segment and answers a very clear demand from our customers for flexibility, access to our latest innovations and to provide a seamless path to move to the cloud at a time and pace they choose. The strength in our business is a direct result of executing on the deliberate strategy we laid out over two years ago."
For the current quarter, Avaya expects revenue in the range of $720 million to $740 million. Analysts expect Avaya to report fourth quarter revenue of $694 million. Shares of Avaya were up over 16% in early trading.
Avaya -- which competes in the cloud communications space against Twilio, Cisco, Genesis and 8x8 -- restructured under Chapter 11 bankruptcy protection in January 2017, and later sold off its networking business to monetize some of its assets. Avaya was spun off of Lucent Technologies in 2000 and became a private company in 2007 following an $8.2 billion deal with Silver Lake and TPG Capital. Avaya expanded into networking in 2009 after it acquired Nortel Enterprise Solutions.
"This is a very different company from 2.5 years ago," Chirico said on the call with analysts. "Avaya has shown amazing resilience. We are outperforming expectations, and we are accelerating rapidly in key growth areas. The reimagine Avaya has never been more relevant to our growing base of customers and partners globally, and I'm especially proud of what the team accomplished during these unprecedented times."