Shares of Avaya Holdings (NYSE:AVYA) surged on Monday after the communications software company reported its fiscal third-quarter results. Avaya beat analyst expectations for revenue and provided guidance that was ahead of estimates. The stock was up about 15.8% at 11:50 a.m. EDT today.
Avaya reported third-quarter revenue of $721 million, up 0.6% year over year and nearly $34 million higher than the average analyst estimate. Earnings per share came in at $0.08, up from a loss of $5.70 in the prior-year period. Avaya signed 104 deals during the quarter worth over $1 million, including 7 deals that were worth over $10 million.
Software and services now account for 89% of total revenue, while recurring revenue makes up 64% of total revenue. The company's subscription offering, which launched in the first quarter, has booked roughly $200 million of total contract value since launch.
For the fiscal fourth quarter, Avaya expects to generate adjusted revenue between $720 million and $740 million, along with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $170 million and $190 million. Analysts were expecting revenue guidance of around $694 million.
Avaya also beat expectations for its full-year guidance. The company predicted adjusted revenue between $2.84 billion and $2.86 billion, ahead of the $2.78 billion analysts were expecting. Avaya expects to generate adjusted EBITDA for the full year between $680 million and $700 million.
While Avaya's revenue growth was sluggish in the third quarter, the company's results easily beat expectations. Including Monday's rally, the stock is up nearly 17% since the start of the year.