AVYA - Avaya Is A Cheap Tech Deleveraging Opportunity
- Similar to companies like Avid Technology, Avaya is making a business model change by shifting its clients, and acquiring new ones, on a subscription rather than with perpetual licenses.
- This subscription product is a communication and collaboration suite offered on the cloud, with many customers needing them for contact/call centers.
- An important dynamic that investors should wonder about is if the growth is actually there, as customers are basically becoming rebilled as they become subscribers rather than license owners.
- However, new logos is the metric to look at and it is growing, so the topline stagnation should come to an end once critical mass is reached beyond 44% in the mix.
- Incremental sales are coming from subscription revenue which is lower ticket, and with decent economics and strong WFH markets, deleveraging could be on the horizon.
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Avaya Is A Cheap Tech Deleveraging Opportunity