Shares of Avaya Holdings (AVYA) - Get Report were soaring 26.3% to $13.22 Monday after the digital communications products company reported a surge in use of its cloud-based video conferencing and meeting app.
The Santa Clara, California-based company reported a fiscal second-quarter loss of $672 million, or $7.24 a share, compared with a year-earlier loss of $13 million, or 12 cents a share. The latest quarter's results include a non-cash goodwill impairment charge of $624 million.
Revenue for the quarter declined to $682 million from $709 million in the prior-year quarter.
The charge resulted from a sustained decline in the company’s stock price during the period, which Avaya said was consistent with the way the broader market was affected by Covid-19's impact on the global economy.
The company withdrew its prior annual guidance due to uncertainties caused by the coronavirus pandemic.
CEO Jim Chirico said in a statement that the company "delivered a strong second quarter on multiple fronts," adding that "demand for video collaboration, with our Spaces solution, contact center upgrades to include remote work from anywhere capabilities, and the need for flexible consumption models like our cloud and subscription offers has accelerated."
Software and services reached an all-time high 88% of revenue, the company said, while recurring revenue was over 64%, up more than 5 points quarter over quarter and year over year, also a record.
The company said it deployed more than 2 million work from home licenses in two months.
The company said it signed 79 deals with a total contract value or TCV of more than $1 million in the quarter. Avaya's spaces video and collaboration usage grew 2,100% as it delivered nearly 400,000 new licenses in the quarter. Subscription revenue grew about 200% quarter over quarter.
For the third quarter, Avaya forecast reported revenue of $674 million to $704 million, and adjusted revenue of $675 million to $705 million.
"Our strong balance sheet and liquidity position not only allows us to weather the current COVID-19 storm, but provides us with flexibility on how we grow shareholder value and allows us to continue to make key technology investments," Chirico said in a statement.