AudioCodes (NasdaqGS:AUDC) Q3 2025 Earnings Call November 04, 2025 08:30 AM ET Speaker2Greetings, and welcome to the AudioCodes Q3 2025 earnings conference call. At this time, all participants are on a listen-only mode, and the question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. ...

3Q 2025 Earnings Call Supplementary Slides Safe Harbor This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance for the third quarter 2025, attractiveness of our product offerings and platform and the value proposition of our products, are forward-looking statements. The words "anticipate," "believe," "continue," "estimate," "expect," "intend," "guid ...

Accessibility StatementSkip Navigation OR YEHUDA, Israel, Nov. 4, 2025 /PRNewswire/ --Â Highlights Details AudioCodes (NASDAQ: AUDC), a global leader in enterprise voice and VoiceAI business solutions, today announced its financial results for the third quarter ended September 30, 2025. Revenues for the third quarter of 2025 were $61.5 million compared to $60.2 million for the third quarter of 2024. EBITDA for the third quarter of 2025 was $5.2 million compared to $5.9 million for the third quarter of 2024. ...

We last wrote on AudioCodes Ltd . ( AUDC ) in February of 2024, when we doubled down on our cautious stance (Hold rating) in the voice AI software-related Israeli company. Shares at the time looked like they were undergoingIndividual investor with a keen interest in deriving income from investment setups. We do this by buying undervalued profitable stocks with strong balance sheets & minimal debt. Furthermore, when the opportunity arises, we like to write calls against our positions to bring in additional i ...

Core Points - AudioCodes will release its financial results for the Third Quarter 2025 on November 04, 2025, before the market opens on NASDAQ [1] - A conference call to discuss the results will take place on the same day at 8:30 a.m. Eastern Time, hosted by the President and CEO, Shabtai Adlersberg, and CFO, Niran Baruch [2] - Investors can access the call live via phone or webcast, with a replay available approximately two hours after the call [3] Company Overview - AudioCodes is a global leader in unified communications, voice, contact center, and conversational AI services, enhancing customer and employee experiences through improved communication and collaboration [5] - The company offers a wide range of products and SaaS services that ensure interoperability with major UCaaS and CCaaS platforms, including Microsoft Teams, Webex, and Zoom [5] - AudioCodes serves enterprises worldwide, including 65 Fortune 100 companies, focusing on productivity, collaboration, business process automation, compliance, and customer interaction [5]

Core Insights - AudioCodes Ltd. (AUDC) has launched the AI Agents module in Live Hub to improve customer satisfaction and time-to-resolution [1][7] - The AI Agents module allows enterprises to create, integrate, and operate large language model (LLM)-powered voice bots, enhancing customer engagement and reducing service costs [1][2] - Live Hub consolidates various functionalities such as Conversational IVR, Voice AI Agents, Live-Agent Assist, and real-time translation into a single cloud platform, facilitating seamless deployment of Voice AI [2][7] Company Overview - AudioCodes, established in 1992 and based in Lod, Israel, provides advanced communications software and productivity solutions for the digital workplace, including session border controllers and VoIP network routing solutions [3] - The company is positioned to benefit from the growing trend towards IP-based communications and aims to strengthen its market presence through a long-term partnership with Microsoft Corporation [4] Industry Context - The introduction of AI Agents is expected to enhance voice automation capabilities at scale, improving caller authentication and workflow efficiency [2][7] - Other key players in the communications space include Ooma, Inc. and Harmonic Inc., both of which are focusing on cloud-based solutions and innovative product offerings to drive growth [5][6]

Core Insights - AudioCodes has launched a new module called AI Agents for its Live Hub Voice CPaaS, enabling enterprises to create and manage LLM-powered voice bots, which can enhance customer engagement and reduce operational costs [2][6][8] Industry Context - The customer support industry is facing challenges such as rising costs, staffing constraints, and increasing customer expectations, prompting a shift towards Voice AI to automate routine calls and improve service efficiency [3] Product Features - The Live Hub platform integrates various applications including Conversational IVR, Voice AI Agents, Live-Agent Assist, and real-time translation, allowing enterprises to leverage existing telephony systems without needing extensive upgrades [4][8] - AI Agents facilitate natural conversations, secure API integration, and modular workflow orchestration, which can lead to improved customer satisfaction and faster resolution times [9] Business Impact - The introduction of AI Agents is expected to significantly enhance AudioCodes' Voice AI business, positioning the company for future growth by providing a unified platform for modernizing customer interactions [6][10]

Core Insights - AudioCodes' Voca Conversational Interaction Center (CIC) has been certified for Microsoft Teams, enhancing its integration capabilities with Teams Phone [2][6] - The Voca CIC is built on Azure Communication Services, providing standardized access to Microsoft Azure AI Foundry and achieving a service availability target of 99.999% [3][4] - The solution has received multiple awards, including the Best Microsoft Teams Contact Center in the UC Today 2025 Awards, highlighting its commitment to customer experience [5][6] Company Overview - AudioCodes is a leader in unified communications, voice, contact center, and conversational AI services, enabling enterprises to enhance customer and employee experiences [9] - The company serves a global clientele, including 65 Fortune 100 companies, and offers a range of products that ensure interoperability with major UCaaS and CCaaS platforms [9] Product Features - Voca CIC allows for rapid customer onboarding and provides advanced conversational AI capabilities such as interaction summarization and sentiment analysis [4][6] - The solution is available for a 30-day free trial, allowing new customers to quickly build a conversational contact center with AI and omnichannel features [7]

Group 1 - BBB Foods Inc. operates grocery retail stores primarily in Mexico, with a current year earnings estimate revised downward by 33.3% over the last 60 days [1] - AudioCodes provides advanced voice networking and media processing solutions for the digital workplace, with its current year earnings estimate revised downward by almost 29.7% over the last 60 days [1] - AG Mortgage Investment Trust is a real estate investment trust that invests in and manages residential mortgage assets, with its current year earnings estimate revised downward by 7.5% over the last 60 days [2]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $61.1 million, an increase of 1.3% compared to $60.3 million in Q2 2024 [8] - GAAP gross margin for the quarter was 64.1%, down from 65.5% in Q2 2024 [10] - Non-GAAP net income for Q2 was $4.1 million or $0.14 per diluted share, compared to $5.5 million or $0.18 per diluted share in Q2 2024 [12] - Net cash provided by operating activities was $7.7 million for the quarter [12] Business Line Data and Key Metrics Changes - Services revenues for Q2 were $32.6 million, up 1.9% year over year, accounting for 53.3% of total revenues [9][17] - Life Managed Services grew 25% year over year, reaching $70 million in annual recurring revenues [18] - Non-GAAP operating income for Q2 was $4.4 million or 7.2% of revenues, down from $7.2 million or 11.9% of revenues in Q2 2024 [11] Market Data and Key Metrics Changes - Revenue by geographical region: North America 48%, EMEA 34%, Asia Pacific 14%, Central and Latin America 4% [9] - Microsoft Teams business grew 6.5% year over year, contributing significantly to enterprise UC and CX revenue [16][27] Company Strategy and Development Direction - The company is transitioning to an AI-driven hybrid cloud software and services model, focusing on connectivity and AI-powered business applications [15][41] - The launch of the next-generation live platform aims to enhance managed services and integrate AI capabilities [18][19] - The company plans to increase marketing and sales efforts in the Webex Calling space following recent certifications [32] Management's Comments on Operating Environment and Future Outlook - Management noted that despite tariff challenges, customer purchasing behavior remains stable, and the pipeline for opportunities is strong [25][26] - The company will postpone issuing a financial outlook until there is better clarity on tariff rates [25] - Management expressed confidence in the growth trajectory of the business, particularly in the UCaaS and CX markets [41] Other Important Information - The company declared a cash dividend of $0.20 per share, totaling approximately $5.7 million, to be paid on August 28, 2025 [13] - The company expects $3 to $4 million in tariff-related costs for the full year 2025 [23] Q&A Session Summary Question: What are you seeing in terms of customer demand for virtual SBCs versus physical hardware following the tariffs? - Management indicated that there has been no significant impact on business decisions regarding SBCs, and they have raised prices to protect margins [44][45] Question: Can you provide more color on the strength of the Microsoft business? - Management highlighted that the growth is driven by a dominant market share in Teams Phone and successful large contract signings [48][49] Question: What is the pipeline for WebEx opportunities? - Management stated that they are early in the process with several opportunities but do not expect significant revenue impact until 2026 [52][53] Question: Did you disclose the second quarter growth rate for conversational AI? - Management did not disclose specific growth rates but expects substantial growth in the second half of the year [57][58] Question: How does AudioCodes differentiate itself in the conversational AI market? - Management emphasized their focus on end-to-end applications and the ability to deploy solutions quickly due to their extensive infrastructure [60][62]