- Avaya Holdings is a large unified communications and contact center as a service provider undergoing a business model transformation to the cloud and an Annual Recurring Revenue (“ARR”) model.
- ARR has scaled dramatically since it was first offered in early 2020 and is on pace to end the calendar year 2022 at $1 billion or more.
- The transition from one-time perpetual sales impacted near-term revenue and cash flow but yielded stickier revenue and more predictable cash flow over time while also ostensibly stressing the balance sheet.
- Avaya shares sold off dramatically in May as a result of bankruptcy fears regarding a June 2023 $350 million bond maturity. The company launched a $500 million offering which should close soon and cause liquidity fears to subside, yielding upside to the stock.
For further details see:
Avaya: Near-Term Balance Sheet Catalyst Could Send Shares Higher