Core Viewpoint - AudioCodes Ltd. is a significant player in the enterprise voice and VoiceAI business solutions sector, providing advanced communication software and products to enhance business communication efficiency globally [1] Financial Performance - On February 3, 2026, AudioCodes reported an earnings per share (EPS) of $0.16, aligning with estimates, and achieved revenue of approximately $62.6 million, surpassing the estimated $62 million, marking a 1.7% year-over-year increase [2] - Despite revenue growth, the company faced challenges with EBITDA, which decreased to $4.9 million in Q4 from $5.2 million in the same period of 2024, indicating increased operational costs or financial pressures [3][5] - On a Non-GAAP basis, Q4 EBITDA was $6.5 million, down from $8.5 million the previous year, further highlighting financial pressures [3] Shareholder Value - AudioCodes declared a semi-annual dividend of 20 cents per share, reflecting its commitment to returning value to shareholders despite a net income drop [3][5] Valuation Metrics - The company maintains a price-to-earnings (P/E) ratio of approximately 15.28, indicating market valuation of its earnings [4] - The price-to-sales ratio stands at about 0.88, suggesting investor willingness to pay per dollar of sales [4] - With a debt-to-equity ratio of around 0.22, AudioCodes shows a relatively low level of debt compared to equity, indicating financial stability [4]

Core Insights - AudioCodes reported modest revenue growth in Q4 and full year 2025, with a strategic shift towards becoming an "AI-driven hybrid cloud software and services company" [4][6][13] Financial Performance - Q4 gross margin was 65.6%, down from 66.2% year-over-year; operating income decreased to $3.7 million (6% of revenue) from $4.1 million (6.7%) [1] - Q4 revenue was $62.6 million, a 1.7% increase from $61.6 million a year earlier; full-year 2025 revenue reached $245.6 million, up 1.4% from $242.2 million in 2024 [3][7] - GAAP net income for Q4 fell to $1.9 million ($0.07 per diluted share) from $6.8 million ($0.22) in the same quarter last year; full-year GAAP net income was $9.0 million ($0.31 per diluted share), down from $15.3 million in 2024 [1][7] Revenue Breakdown - Services revenue in Q4 was $34.6 million, representing 55.3% of total revenue, and increased 1% year-over-year; full-year services revenue totaled $130.7 million, slightly up from $130.2 million in 2024 [3] - Revenue by geography in Q4: 47% North America, 35% EMEA, 13% Asia Pacific, and 5% Central and Latin America; top 15 customers accounted for 58% of revenue [2] Strategic Initiatives - The company is focusing on VoiceAI and managed services, with annual recurring revenue (ARR) from these segments reaching $79 million, a 22% year-over-year growth; VoiceAI revenue grew approximately 35% to around $17 million in 2025 [6][14] - AudioCodes aims for VoiceAI to achieve $50 million in revenue by 2028, targeting 40% to 50% annual growth [6][14] Operational Metrics - The company ended 2025 with $75.7 million in cash and a $75 million backlog for Live services, up from $69 million a year earlier [5][22] - Non-GAAP gross margin was 65.9%, within the long-term target range of 65% to 68% [15] Customer Engagement - The Microsoft business increased 7% sequentially in Q4, driven by connectivity strength; total contract value signed grew 5% year-over-year [18] - A significant contract was signed with AT&T for a public university migration to Teams Voice, alongside a deal with a European equipment manufacturer [19] Workforce and Investments - The company employed 981 individuals at the end of 2025, with a notable increase in R&D personnel focused on VoiceAI [17] - Non-GAAP operating expenses rose 6.2% year-over-year, attributed to investments in sales and marketing for the VoiceAI business [16]

Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $62.6 million, a 1.7% increase from $61.6 million in Q4 2024. Full year 2025 revenues were $245.6 million, up 1.4% from $242.2 million in 2024 [8][10] - Services revenues for Q4 2025 were $34.6 million, accounting for 55.3% of total revenues, with a 1% increase year-over-year. Annual services revenues reached $130.7 million, a 0.4% increase from $130.2 million in 2024 [8][10] - GAAP gross margin for Q4 2025 was 65.6%, down from 66.2% in Q4 2024. Operating income for Q4 was $3.7 million, or 6% of revenues, compared to $4.1 million, or 6.7% of revenues in Q4 2024 [9][10] - Full year 2025 net income was $9 million, or $0.31 per diluted share, down from $15.3 million, or $0.15 per diluted share in 2024 [10][11] Business Line Data and Key Metrics Changes - The connectivity business accounted for approximately 93% of total revenue, maintaining a stable operating margin above 14% in 2025, with a long-term target of 16%-18% [18][19] - The Voice AI business generated about 7% of total revenue, growing from over $12 million in 2024 to nearly $17 million in 2025, representing a 35% year-over-year increase [19][30] - Annual recurring revenue from the combined live managed services and Voice AI business reached $79 million at the end of 2025, reflecting a 22% growth year-over-year [15][16] Market Data and Key Metrics Changes - Revenue by geographical region for Q4 2025: North America (47%), EMEA (35%), Asia Pacific (13%), and Central and Latin America (5%) [9] - The backlog for live services reached $75 million at the end of 2025, compared to $69 million at the end of 2024 [17] Company Strategy and Development Direction - The company aims to transition from a focus on connectivity solutions to an AI-first, Voice AI-led business application model, targeting significant growth in the Voice AI sector [15][19] - Continued investment in sales and marketing for Voice AI is expected to drive further growth, with a goal of reaching $50 million in revenue by 2028 [19][30] - The company plans to maintain revenue growth and margin expansion while strengthening its leadership in Voice AI-driven applications for UCaaS and CX markets [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the connectivity business and the growth trajectory of the Voice AI segment, with expectations of continued strong annual recurring revenue momentum [14][15] - The company anticipates revenues for 2026 to be in the range of $247 million to $255 million, with non-GAAP diluted earnings per share projected at $0.60 to $0.75 [13][24] Other Important Information - The company declared a cash dividend of $0.20 per share, totaling approximately $5.4 million, to be paid on March 6, 2026 [12] - The company ended 2025 with 981 employees, an increase from 946 at the end of 2024 [22] Q&A Session Summary Question: Is the 40%-50% annual growth for conversational AI intended to be a CAGR through 2028? - Management expects growth to come from both new customer acquisition and increased spending per customer, with significant investments in R&D for Voice AI [42][44] Question: How has the shift in market expectations around AI impacted pipeline visibility? - Management noted improved visibility and size of the pipeline as customers move from testing to broader adoption of voice AI products [46] Question: What impact from tariffs should be considered for 2026 financials? - Tariff impacts are expected to decrease from $2.7 million in 2025 to approximately $2.3 million in 2026, with gross margins anticipated to improve due to a shift towards software and services [47][49]

Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $62.6 million, a 1.7% increase from $61.6 million in Q4 2024. Full year 2025 revenues were $245.6 million, up 1.4% from $242.2 million in 2024 [8][10] - Net income for Q4 2025 was $1.9 million, or $0.07 per diluted share, compared to $6.8 million or $0.22 per diluted share in Q4 2024. Full year 2025 net income was $9 million, or $0.31 per diluted share, down from $15.3 million or $0.15 per diluted share in 2024 [10][11] - Non-GAAP gross margin for Q4 2025 was 65.9%, slightly down from 66.5% in Q4 2024. Non-GAAP operating income for Q4 was $5.4 million, or 8.6% of revenues, compared to $7.5 million or 12.2% in Q4 2024 [11][20] Business Line Data and Key Metrics Changes - Services revenues for Q4 2025 were $34.6 million, accounting for 55.3% of total revenues, with a 1% increase year-over-year. Annual service revenues were $130.7 million, up 0.4% from $130.2 million in 2024 [8][10] - The VoiceAI business grew revenues by 35% year-over-year, reaching nearly $17 million in 2025, which accounted for 7% of total revenues [16][19] - The connectivity business, which provides about 93% of total revenue, maintained an operating margin of above 14% in 2025, with a long-term target of 16%-18% [18][19] Market Data and Key Metrics Changes - Revenue by geographical region for Q4 2025: North America 47%, EMEA 35%, Asia Pacific 13%, and Central and Latin America 5% [9] - The backlog for live services reached $75 million at the end of 2025, compared to $69 million at the end of 2024, indicating strong demand for managed services [17] Company Strategy and Development Direction - The company aims to transition from a focus on connectivity solutions to an AI-first, VoiceAI-led business application model, targeting significant growth in the UCaaS and CX markets [15][18] - The strategy includes reallocating product development investments to high-potential areas and enhancing sales and marketing efforts to build market awareness [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the connectivity business and the growth trajectory of the VoiceAI segment, expecting continued momentum in 2026 [14][40] - The company anticipates revenues in the range of $247 million to $255 million for 2026, with non-GAAP diluted earnings per share projected at $0.60 to $0.75 [13][24] Other Important Information - The company declared a cash dividend of $0.20 per share, totaling approximately $5.4 million, to be paid on March 6, 2026 [12] - The company ended 2025 with 981 employees, an increase from 946 at the end of 2024, reflecting growth in operations [22] Q&A Session Summary Question: Is the 40%-50% annual growth intended to be a CAGR growth rate through 2028? - Management expects growth from both new customer acquisition and increased spending per customer, with significant investments in R&D for VoiceAI [42][44] Question: How has the shift in market expectations around AI impacted pipeline visibility? - Management noted improved visibility and size of the pipeline due to easier-to-use SaaS applications and compelling capabilities [46] Question: What impact from tariffs should be considered for 2026 financials? - Tariff impact is expected to decrease to approximately $2.3 million in 2026, with gross margins anticipated to remain in the range of 65%-68% [49][50]

Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $62.6 million, a 1.7% increase from $61.6 million in Q4 2024. Full year 2025 revenues were $245.6 million, up 1.4% from $242.2 million in 2024 [8] - Services revenues for Q4 2025 were $34.6 million, a 1% increase year-over-year, accounting for 55.3% of total revenues. Annual service revenues were $130.7 million, a 0.4% increase from $130.2 million in 2024 [8] - GAAP gross margin for Q4 2025 was 65.6%, down from 66.2% in Q4 2024. Operating income for Q4 was $3.7 million, or 6% of revenues, compared to $4.1 million, or 6.7% of revenues in Q4 2024 [9][10] - Full year 2025 net income was $9 million, or $0.31 per diluted share, down from $15.3 million, or $0.15 per diluted share in 2024 [10][11] Business Line Data and Key Metrics Changes - The connectivity business accounted for approximately 93% of total revenue, maintaining an operating margin above 14% in 2025, with a long-term target of 16%-18% [20] - The Voice AI business grew revenues by 35% year-over-year, reaching nearly $17 million in 2025, which accounted for 7% of total revenues [21][18] - The combined annual recurring revenue from live managed services and Voice AI was $79 million at the end of 2025, representing a 22% year-over-year growth [15] Market Data and Key Metrics Changes - Revenue by geographical region for Q4 2025: North America (47%), EMEA (35%), Asia Pacific (13%), and Central and Latin America (5%) [9] - The Microsoft Teams voice ecosystem saw a significant increase in PSTN users, reaching 26 million, up from 20 million in April 2024, indicating a 16%-17% annual growth rate [27] Company Strategy and Development Direction - The company is transitioning to an AI-driven hybrid cloud software and services model, focusing on Voice AI and managed services as primary growth engines [15] - The strategy includes reallocating product development investments to high-potential areas and enhancing sales and marketing efforts to build market awareness [15] - The company aims to maintain revenue growth and margin expansion while strengthening its leadership in Voice AI-driven business applications for UCaaS and CX markets [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the connectivity business and the growth trajectory of the Voice AI segment, expecting continued momentum in 2026 [42] - The company anticipates revenues for 2026 to be in the range of $247 million to $255 million, with non-GAAP diluted earnings per share projected at $0.60 to $0.75 [13][25] - Management noted that the impact of tariffs is expected to decrease from $2.7 million in 2025 to approximately $2.3 million in 2026 [50] Other Important Information - The company declared a cash dividend of $0.20 per share, totaling approximately $5.4 million, to be paid on March 6, 2026 [12] - The company ended 2025 with 981 employees, an increase from 946 at the end of 2024 [24] Q&A Session Summary Question: Is the 40%-50% annual growth intended to be a CAGR growth rate through 2028? - Management expects growth from both new customer acquisition and increased spending per customer, with a significant increase in the number of potential customers anticipated [44][46] Question: How has the shift in market expectations around AI impacted pipeline visibility? - Management noted improved visibility and size of the pipeline due to easier-to-use SaaS applications and compelling capabilities being introduced [48] Question: What impact should be expected from tariffs on 2026 financials? - Management expects gross margins to improve as the product mix shifts more towards software and services, with a lower tariff impact anticipated in 2026 [50]

This presentation also includes certain guidance on non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performanc ...

Core Insights - AudioCodes reported a revenue increase of 1.7% year-over-year for Q4 2025, reaching $62.6 million, and a full-year revenue increase of 1.4% to $245.6 million [2][7] - The company experienced a decline in both GAAP and Non-GAAP net income for Q4 2025 compared to Q4 2024, with GAAP net income at $1.9 million ($0.07 per diluted share) and Non-GAAP net income at $4.5 million ($0.16 per diluted share) [4][5] - Annual Recurring Revenue (ARR) grew by 22% year-over-year to $79 million, driven by strong performance in managed services and conversational AI [10][11] Financial Performance - Q4 2025 EBITDA was $4.9 million, down from $5.2 million in Q4 2024, while full-year EBITDA decreased to $18.3 million from $21.1 million [3] - Non-GAAP EBITDA for Q4 2025 was $6.5 million, compared to $8.5 million in Q4 2024, with full-year Non-GAAP EBITDA at $24.8 million, down from $31.4 million [3] - The company reported a gross margin of 65.6% for Q4 2025 on a GAAP basis and 65.9% on a Non-GAAP basis [7] Shareholder Returns - AudioCodes repurchased 667,193 ordinary shares for $6.1 million during Q4 2025, with a total of $20.6 million available for further repurchases or dividends as of December 31, 2025 [12][13] - A cash dividend of $0.20 per share was declared, amounting to approximately $5.4 million, payable on March 6, 2026 [14] Strategic Focus - The company is transitioning towards becoming a Voice AI-focused hybrid cloud software and services provider, with significant growth in its conversational AI portfolio, which saw over 50% revenue growth in Q4 2025 [9][11] - Investments in Live services and conversational AI are expected to contribute to sustained growth in the coming years [11]

Core Viewpoint - AudioCodes has expanded its certified portfolio of voice solutions for Webex Calling, enhancing its offerings with new IP phones and analog gateways to facilitate seamless connectivity for users [2][6]. Group 1: Product Offerings - AudioCodes now offers certified solutions for Webex Calling, including PSTN connectivity via Cloud Connect and a range of certified IP phones and analog gateways [2][6]. - Three models from the AudioCodes 400HD business IP phone series (C450HD, 445HD, 425HD) are now certified for Webex Calling, providing a high-quality calling experience [6][7]. - The MediaPack analog gateways allow legacy devices such as desk phones and fax machines to connect to Webex Calling, facilitating a smoother transition for customers [4][6]. Group 2: Features and Benefits - The certified IP phones are designed for security and ease of use, featuring high-resolution screens, programmable keys, and centralized management through AudioCodes Device Manager and Webex Control Hub [3][6]. - The C450HD model is tailored for executives with a large 5" color touch screen and integrated Wi-Fi, while the 445HD and 425HD models cater to high-end and mid-range business needs respectively [7]. Group 3: Support and Services - AudioCodes provides a full suite of professional services and 24/7 global support to ensure successful implementations for partners and end customers [5].

Core Viewpoint - AudioCodes is set to release its financial results for the Fourth Quarter and Full Year 2025 on February 3, 2026, before the market opens on NASDAQ, covering the period ending December 31, 2025 [1] Financial Results Announcement - The financial results will be disseminated via news wires and made available on the corporate website [1] - A conference call to discuss these results will take place on February 3, 2026, at 8:30 a.m. Eastern Time, hosted by the President and CEO, Shabtai Adlersberg, and CFO, Niran Baruch [2] Conference Call Details - Investors can participate in the call by dialing 888-506-0062 in the USA or +1 973-528-0011 internationally, or via webcast on the AudioCodes investor website [3] - A replay of the conference call will be accessible on the investor website approximately two hours after the call concludes [3] Company Overview - AudioCodes is a global leader in enterprise voice solutions and voice AI innovation, helping organizations maximize the value of voice interactions [5] - The company has over 30 years of experience and is trusted by 65 of the Fortune 100 companies, focusing on voice connectivity, unified communications, and next-generation voice AI applications [5]

Core Insights - AudioCodes, in collaboration with Go2Uno and Atento, has successfully modernized a major healthcare organization's Voice Agent and Conversational IVR systems in record time, showcasing the effectiveness of their partnership [2][3][8] Group 1: Project Overview - The deployment of the new AI-powered Conversational IVR was completed in just a few weeks, setting a record for projects of this scale [3][8] - The solution supports over 500 concurrent voice agents, replacing legacy IVR systems and enhancing voice networking capabilities [3][8] Group 2: Partnership and Execution - The collaboration between AudioCodes, Go2Uno, and Atento demonstrated exceptional execution in modernizing complex call flows and integrating multiple carrier systems [4][5] - The project was completed in 30 days, significantly faster than the projected timeline of three to six months, highlighting the efficiency of the teams involved [5] Group 3: Technology and Benefits - The new system incorporates intelligent, AI-powered routing to improve customer experience, efficiency, and resiliency [4][6] - Advanced analytics and performance reporting provide real-time visibility into voice agent performance and customer interactions, enabling deeper insights [4][8] Group 4: Future Readiness - The deployment establishes a scalable, future-ready platform for Atento, positioning the company for continued growth and innovation in AI-driven customer experience [5][6] - The solution enhances call containment, reduces handling times, and lays a foundation for future AI enhancements [6]