Shares of communications software provider Avaya Holdings Corp. rose more than 10% today after the company reported stronger-than-expected sales of $743 million for its fiscal first quarter.

The company topped the Zacks consensus revenue estimate for the quarter ended Dec. 31 by more than 2.3%. Investors liked what they saw, boosting shares by more than 10% late in the regular trading session today.

Durham, North Carolina-based Avaya provides communications software that enterprises use to power their contact centers, support business collaboration and build communications features into their own applications. Avaya also provides related products, such as artificial intelligence tools for analyzing customer interactions.

The $743 million the company brought in during the fiscal first quarter represents a 4% improvement from a year ago. Over the last 12 months, Avaya moved closer to its goal of shifting to a business model centered on recurring revenue and cloud services. Recurring contracts’ share of total sales in the quarter rose 6% year-over-year, to 65%, while the company’s software and services segment as a whole accounted for 88% of sales.

That momentum was driven in part by Avaya’s OneCloud product portfolio. Rolled out late last year, OneCloud encompasses the cloud-based products at the center of the company’s recurring revenue push.  Sales from the product portfolio jumped 38% quarter-over-quarter, to $262 million, during the last three months of 2020.

Another contributor to Avaya’s growth during the quarter: the addition of more than 1,600 new logos to its customer base. The company detailed in the earnings report that 119 of the new deals it inked in the fiscal fourth quarter were worth more than $1 million. Overall, Avaya disclosed, the total value of the contracts it has on the books now stands at $2.2 billion.

In the net income department, Avaya recorded a $4 million net loss and a profit of $85 million before stock compensation and other costs. Adjusted earnings before interest, taxes and amortization, another important metric of profitability, stood at $190 million, or 25.6% of the company’s revenue during the quarter.

Avaya capped off its strong revenue figures today by boosting its guidance. The company estimates it will close the current quarter with revenues of $710 million to $725 million, and, for the full 2021 fiscal year, expects sales of between $2.9 billion and $2.94 billion.

Photo: Avaya