Core Viewpoint - AudioCodes reported quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.18 per share, representing a -16.67% earnings surprise [1] - The company posted revenues of $60.37 million for the quarter, slightly surpassing the Zacks Consensus Estimate by 0.11% [2] Financial Performance - Earnings for the same quarter last year were $0.17 per share, indicating a year-over-year decline [1] - Over the last four quarters, AudioCodes has surpassed consensus EPS estimates only once [2] - The company has topped consensus revenue estimates three times over the last four quarters [2] Stock Performance - AudioCodes shares have declined approximately 4.7% since the beginning of the year, compared to a -3.9% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $62.47 million, and for the current fiscal year, it is $0.83 on revenues of $250 million [7] - The outlook for the Communication - Components industry is currently in the bottom 16% of Zacks industries, which may impact stock performance [8]

Core Insights - AudioCodes reported a slight increase in revenues for Q1 2025, reaching $60.4 million, up from $60.1 million in Q1 2024, indicating a year-over-year growth of 0.5% [2][7] - The company achieved a net income of $4.0 million, or $0.13 per diluted share, compared to $2.1 million, or $0.07 per diluted share in the same quarter last year [3][7] - Annual Recurring Revenues (ARR) grew by approximately 25% year-over-year, reaching $67 million, driven by strong performance in UCaaS and conversational AI markets [8] Financial Performance - EBITDA for Q1 2025 was reported at $4.6 million, an increase from $3.8 million in Q1 2024 [2][7] - On a Non-GAAP basis, EBITDA was $6.2 million, down from $6.7 million in Q1 2024 [3][7] - Net cash provided by operating activities was $13.5 million for the quarter, with total cash and cash equivalents amounting to $95.7 million as of March 31, 2025, compared to $93.9 million at the end of 2024 [5][7] Strategic Developments - The company is focusing on growth in Live managed services within the UCaaS and CX markets, with a 7% increase in Microsoft business during the quarter [6][8] - New product introductions in the Conversational AI space are generating significant customer interest, contributing to a robust sales pipeline [9] - The upcoming launch of a next-generation Live platform is expected to enhance growth in AI-powered value-added services in the second half of 2025 [10] Operational Challenges - AudioCodes faced lower gross profit from product sales due to new US tariffs on imports from China, prompting the company to implement measures to mitigate this impact [11][12] - The company continues to navigate macroeconomic uncertainties while progressing in its transformation into a cloud and software services provider [12] Shareholder Returns - During Q1 2025, AudioCodes repurchased 500,000 ordinary shares at a total cost of $5.2 million and declared a cash dividend of $0.18 per share, totaling approximately $5.5 million [14][13]

Core Insights - AudioCodes has launched Meeting Insights On-Prem, an AI-powered software solution aimed at organizations in regulated and security-sensitive industries, providing secure and efficient meeting documentation without cloud reliance [2][5][7] Product Features - Meeting Insights On-Prem offers enterprise-grade security and complies with stringent privacy and regulatory requirements, making it suitable for sectors like government, military, financial, and healthcare [2][3] - The solution utilizes advanced generative AI for accurate transcriptions, summaries, and actionable insights, with customizable terminology dictionaries and features like automatic speaker separation [3][7] - It includes real-time editing and proofreading tools, enhancing documentation quality and productivity, along with a flexible task management application for post-meeting activities [3][7] Integration and Deployment - The solution supports remote participants via telephony channels and integrates seamlessly with telephony systems and contact centers from leading vendors in the unified communications and customer experience markets [4][7] - Meeting Insights On-Prem has already been deployed at customer sites during Q1 2025, indicating early adoption and implementation [6] Company Background - AudioCodes has over 30 years of experience in providing reliable voice services, trusted by Fortune 100 companies, and aims to enhance productivity and decision-making through its innovative solutions [2][5][9]

Core Viewpoint - AudioCodes is set to release its financial results for the First Quarter of 2025 on May 6, 2025, before the market opens, reflecting the period ended March 31, 2025 [1] Financial Results Announcement - The financial results will be disseminated via news wires and posted on the corporate website [1] - A conference call to discuss the results will take place on May 6, 2025, 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 call will be available approximately two hours after the conference call concludes [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]

Revenue Performance - Quarterly revenues decreased by 3.2% year-over-year to $61.6 million; full year 2024 revenues decreased by 0.9% to $242.2 million[1] - Quarterly service revenues increased by 10.9% year-over-year to $34.2 million; full year 2024 service revenues increased by 8.2% to $130.2 million[1] - Total revenues for the year ended December 31, 2024, were $242.176 million, a slight decrease of 0.9% compared to $244.383 million in 2023[30] - Product revenues decreased to $111.966 million in 2024 from $123.991 million in 2023, representing a decline of 9.7%[30] - Service revenues increased to $130.210 million in 2024, up 8.1% from $120.392 million in 2023[30] Profitability - Quarterly GAAP net income was $6.8 million, or $0.22 per diluted share; full year 2024 GAAP net income was $15.3 million, or $0.50 per diluted share[3] - Non-GAAP net income for the fourth quarter was $11.6 million, or $0.37 per diluted share; full year 2024 Non-GAAP net income was $27.3 million, or $0.87 per diluted share[7] - Gross profit for the year was $158.161 million, nearly unchanged from $158.349 million in 2023[30] - Operating income rose to $17.191 million in 2024, an increase of 19.5% compared to $14.424 million in 2023[30] - Net income for the year was $15.311 million, significantly higher than $8.780 million in 2023, marking a 74.5% increase[30] - Basic net earnings per share improved to $0.51 in 2024 from $0.28 in 2023[30] Cash Flow and Assets - Cash and cash equivalents decreased to $93.9 million as of December 31, 2024, from $106.7 million a year earlier[12] - Total current assets increased to $162.876 million in 2024 from $142.661 million in 2023, reflecting a growth of 14.1%[29] - Net cash provided by operating activities for the year ended December 31, 2024, was $35,253,000, up from $14,891,000 in 2023, indicating a 136.5% increase[35] - The company reported a net increase in cash, cash equivalents, and restricted cash of $28,203,000 for the year ended December 31, 2024, compared to $6,011,000 in 2023[36] - The total cash, cash equivalents, and restricted cash at the end of the period was $58,749,000, up from $30,546,000 at the beginning of the period[36] Shareholder Returns - A semi-annual dividend of 18 cents per share was declared, amounting to approximately $5.3 million, payable on March 6, 2025[19] - The company declared a semi-annual dividend of $0.18 per share[30] - Cash dividends paid to shareholders decreased slightly to $10,896,000 in 2024 from $11,399,000 in 2023[36] Share Repurchase and Equity - The company repurchased 634,533 ordinary shares for a total cost of $6.0 million during the quarter[17] - The company purchased treasury shares amounting to $14,328,000 in 2024, compared to $18,259,000 in 2023, indicating a 21.3% reduction[36] - Total shareholders' equity rose to $191.814 million in 2024, up from $188.112 million in 2023, indicating a growth of 2.9%[29] Future Outlook - The company ended 2024 with an Annual Recurring Revenue (ARR) of $65 million, representing 35% year-over-year growth[14] - Microsoft business grew by 13% in the fourth quarter and 6% for the full year 2024, driven by a shift to recurrent revenue sales[14] - The Voice.ai business is expected to grow by 40% to 50% in 2025 due to increasing customer demand for AI-driven applications[15]

Core Viewpoint - AudioCodes Ltd. has filed its Annual Report on Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission, which includes audited financial statements [1] Company Overview - AudioCodes Ltd. is a global leader in unified communications, voice, contact center, and conversational AI services and solutions for enterprises, enhancing customer experience (CX) and employee experience (EX) [3] - The company provides a comprehensive range of products, applications, and SaaS services that ensure seamless interoperability with leading UCaaS and CCaaS platforms, including Microsoft Teams, Webex, Zoom, and Genesys [3] - AudioCodes serves enterprises worldwide, including 65 Fortune 100 companies, to improve productivity, collaboration, business process automation, compliance, and customer interaction [3] Investor Relations - The 2024 Annual Report can be accessed on AudioCodes' website under the "Investor Relations" section, and shareholders can request a hard copy free of charge [1]

Geopolitical and Economic Risks - The ongoing war in Israel, which began on October 7, 2023, could have a material adverse effect on the company's business, financial position, operating results, and cash flow [19]. - The company has not experienced significant damage to its facilities or supply chains since the onset of the conflict, but future impacts remain unpredictable [22]. - Political and military conditions in Israel directly affect the company's operations, with ongoing hostilities potentially impacting production and sales capabilities [111]. - The conflict in Ukraine has resulted in significant sanctions against Russia, which could have material adverse effects on global macroeconomic conditions [106]. - Macroeconomic changes, including geopolitical instability and trade wars, may adversely impact the company's ability to manufacture and sell products, affecting operational results and share prices [107]. - The ongoing trade war between the United States and China has resulted in significant tariffs, including a 25% tariff on $34 billion worth of Chinese goods [95]. - The United States has increased tariffs on imports from China to 60% as of March 2025, which may disrupt supply chains and increase operational costs [96]. - Uncertain economic conditions could lead to reduced consumer spending, adversely affecting sales and liquidity [93]. - The Federal Reserve increased the federal funds rate target range to 5.25% to 5.50% in July 2023, impacting the overall economic environment [82]. Competition and Market Dynamics - The company faces increased competition and reliance on intermediaries, which may affect profitability and control over product selection by end-users [18]. - Intense competition in the industry is expected to increase, with significant merger and acquisition activity leading to greater market concentration among competitors [43]. - The company faces competition from various established players in different product areas, including Oracle, Cisco, and Twilio, which may impact market share [44][46][48]. - OEM customers may prefer to develop their own solutions or use third-party technologies, which could reduce demand for the company's products and negatively impact revenues [41]. - The communications equipment market is characterized by rapid technological innovation and intense competition, requiring frequent updates to products to avoid obsolescence [37]. - The transition to all-IP networks is ongoing, leading to a decline in revenues from media gateway products, which may adversely affect overall operational results [38]. - The shift towards cloud-based software creates challenges, as the company primarily generates revenue from on-premises deployments, potentially impacting short-term revenue recognition [39]. Supply Chain and Component Shortages - There is a significant global shortage of critical components, which may hinder the company's ability to manufacture sufficient quantities to meet market demand [20]. - The reliance on third-party suppliers for key components without long-term agreements poses risks, including potential delays and increased costs if supply is disrupted [61][65]. - Increased demand for telecommunications equipment may lead to component shortages, resulting in longer lead times and reduced margins, adversely affecting operational results [66]. - The semiconductor industry continues to face significant shortages, which could lead to reduced revenues and increased costs for the company if the situation persists [110]. Regulatory and Compliance Challenges - The company is subject to ongoing costs and risks associated with compliance with rapidly changing laws and regulations across multiple jurisdictions [20]. - The company faces potential regulatory risks that could slow the growth of the VoIP telephony market and reduce demand for its products [127]. - Compliance with FCC regulations and similar international regulations may increase operational costs, potentially impacting profitability [127]. - The company is subject to stringent privacy laws, including the GDPR, which can impose fines of up to EUR 20 million or 4% of total worldwide annual turnover for non-compliance [145]. - The company may incur significant costs related to compliance with environmental regulations, which could adversely affect its business operations [138]. - The evolving regulatory environment surrounding AI technologies may impose new obligations that could affect the company's operations and financial results [148]. - The SEC's newly adopted climate-related disclosure rules may require significant additional costs for compliance, including enhanced internal controls and greenhouse gas emissions reporting [160]. Financial Performance and Market Position - The company has a limited order backlog, making quarterly revenues highly dependent on orders received and delivered within that quarter [90]. - The company's gross margin may be negatively impacted by increased manufacturing costs and amortization expenses related to acquisitions [91]. - The company wrote off inventory totaling approximately $4.8 million in 2024 and $1.1 million in 2023 due to excess and obsolete inventory [87]. - The trading price of the company's ordinary shares on Nasdaq has fluctuated from a low of $6.62 to a high of $44.94 between January 1, 2018, and March 11, 2025 [161]. - The market price of the company's ordinary shares may be influenced by factors unrelated to operating results, leading to volatility [163]. - The company has experienced significant fluctuations in quarterly results, which may continue and affect investor expectations and share price [164]. Human Resources and Talent Management - The company’s wage-related expenses in Israel have increased significantly due to a shortage of skilled research and development employees, leading to heightened competition for talent [20]. - In 2023, Israel faced a shortage of qualified technical personnel, which could impact the company's ability to deliver products and services on time [179]. - Rising wages in the technology sector in Israel are expected to continue, potentially increasing labor-related costs for the company [180]. - The company relies heavily on key personnel, including the President and CEO, and any loss of these individuals could materially affect operations [178]. Product Development and Innovation - The company has invested heavily in developing products compatible with Microsoft Teams and other partners, and any changes in these partnerships could adversely affect operations [32]. - The company has invested heavily in product offerings compatible with Microsoft Teams and Skype for Business, adapting to shifts from on-premises to cloud-based solutions [78]. - The growth in the product portfolio necessitates increased support and servicing, potentially raising expenses and affecting operational results [74]. - The company is expanding its AI-related capabilities, including the development of software-based voice productivity solutions through its Voice.AI business line [76]. - The introduction of products with reliability or compatibility issues could lead to reduced revenues and increased product returns [72]. - The company continues to enhance its product portfolio with innovative solutions aimed at improving customer and employee experiences [194]. Strategic Initiatives and Future Outlook - The company plans to continue expanding its international operations, which exposes it to various risks that could affect future growth [20]. - The company may pursue acquisitions to expand its business, but such activities could divert resources and disrupt operations [188]. - The company does not provide quarterly forecasts, which may affect analyst coverage and investor interest in its shares [168]. - AudioCodes has expanded its AudioCodes Live for Microsoft Teams portfolio, offering managed services on a monthly subscription basis to reduce upfront costs for customers [200]. - The Voice.AI business line focuses on content gathering and providing insights using AI and machine learning technologies [204]. - Meeting Insights, an AI-powered solution, automatically generates meeting minutes and integrates with Azure Open AI GPT for enhanced analysis of meeting recordings [206]. - SmartTAP 360° Live is a secure compliance recording solution that captures all types of organizational interactions, including voice and video, and integrates with Microsoft Teams [209]. - Interaction Insights, launched in early 2025, is a new SaaS application designed for data privacy and security, ensuring compliance with GDPR [211]. - AudioCodes offers a managed service for service providers to simplify the creation of multi-tenant Teams offerings, reducing time-to-market for hosted services [203]. - The company has developed a unique service delivery platform, Live Platform, which combines certified solutions for unified communications and contact center environments [196]. - AudioCodes has seen increased demand for recording video content due to the shift to Teams and the Work-from-Home model, driven by compliance requirements [212].

Core Insights - AudioCodes Ltd. has enhanced its Meeting Insights solution with improved capabilities, including integration with major CRM systems like Salesforce and Dynamics 365, and the launch of a new mobile application for capturing meeting information [1][6]. Product Enhancements - The Meeting Insights solution is an AI-powered tool that allows users to automatically or manually record meeting content in a centralized platform, featuring a voice assistant named Mia that transcribes and organizes meetings [2]. - The upgraded solution enables seamless transfer of meeting intelligence into CRM systems, enriching CRM data with detailed insights from meetings conducted on platforms like Microsoft Teams and Zoom [3][4]. - A new mobile application has been released, allowing users to record and summarize face-to-face meetings without needing a UCaaS connection, enhancing flexibility [5]. Market Impact - These upgrades are expected to generate incremental demand for AudioCodes' solutions, potentially leading to higher revenues and improved financial performance, which may positively influence the stock price [6][7]. - AudioCodes' stock has experienced a decline of 22.4% over the past year, contrasting with the industry's growth of 34.4% [8].

Core Insights - AudioCodes has announced that its Voca Conversational Interaction Center (Voca CIC) now supports Microsoft Teams Phone extensibility, enhancing integration between CCaaS and Teams [2][3][6] - The integration aims to provide a seamless experience for contact center operations, ensuring standardized provisioning and reliable connections between customers, agents, and Teams users [3][5][7] Company Overview - AudioCodes is a leading vendor of advanced communications software and products, focusing on digital workplace and customer experience solutions [12] - The company has a long-standing partnership with Microsoft, having supported various enterprise voice solutions over the past decade [4][8] Product Features - Voca CIC is an AI-first, Teams-certified omnichannel contact center built on Azure, designed to unify contact center solutions with Teams communications [3][5] - The new Teams Phone extensibility feature enhances reliability and efficiency, providing a fully Azure-native approach [4][7] - Key advantages include simplified provisioning and management, direct integration with Teams Phone, and access to Azure and AI services for intelligent routing and analytics [7][8] Industry Impact - The announcement of Teams Phone extensibility represents a significant milestone in the evolution of Teams contact center solutions, introduced at Enterprise Connect 2025 [9] - The integration is expected to simplify deployment for customers and enhance customer engagement capabilities using Teams Phone [8][9]

Core Insights - AudioCodes has announced significant enhancements to its Meeting Insights solution, including integration with leading CRM systems like Salesforce and Dynamics 365, and a new mobile app for summarizing meeting information [2][4][7] Group 1: Product Enhancements - The integration with CRM systems aims to capture and utilize customer interaction data more effectively, addressing challenges organizations face in this area [2][3] - The new mobile application allows for recording and summarizing face-to-face meetings without needing UCaaS connectivity, enhancing user flexibility [7] - Meeting Insights now supports automatic synchronization of meeting data from platforms like Microsoft Teams and Zoom, enriching CRM records with detailed meeting information [7] Group 2: Strategic Goals - The integration is designed to minimize manual errors and ensure that CRM updates are based on actual meeting content, thereby improving data accuracy [3] - By enhancing CRM data with rich meeting context, organizations can drive smarter, data-driven decisions and improve overall business productivity [3] - The initial rollout of these features will be available to selected customers, with general availability expected at the beginning of Q2 2025 [4]