Avaya ( NYSE: AVYA ) shares have plunged around -20% post-market close after reporting preliminary Q3 revenues between $575M-$580M, way below its guidance of $685M-$700M and consensus revenue estimates of $688.39M.
Preliminary adjusted EBITDA is also set to be in the range of $50M-$55M, missing its previously stated guidance of $140M-$150M by a large margin. The firm is finalizing testing of its goodwill and intangible assets, leading to significant non-cash impairment charges.
Avaya has started cost-cutting measures to reduce overall selling, general and administrative expenses and discretionary spending by around $225M-$250M annually, starting from Q1 FY23.
The digital communications company warned that its prior financial guidance "should no longer be relied upon". Management will provide more information when the final Q3 results are announced on August 9, before market open.
Seeking Alpha's quant system rates the stock as sell.
Avaya has also named Alan Masarek as its new President and CEO, effective August 1. Masarek will take over from Jim Chirico, who will leave the company after 15 years of service.
Chirico will remain with Avaya until August 16 as part of the leadership transition. Masarek comes from Vonage, where he was CEO and led the company in its transformation from a VoIP-based residential phone provider to an enterprise cloud communications company.
Masarek has over 30 years of industry experience, including tenure as Director, Chrome & Apps at Google and co-founder and CEO of Quickoffice.
For further details see:
Avaya stock drops 20% on disappointing Q3 prelim results