Core Insights - RADCOM Ltd. has launched its High-Capacity User Analytics solution, enabling telecom operators to process network traffic at up to 400 Gbps on a single server, significantly reducing costs while providing real-time customer insights [1][2]. Technology and Performance - The solution utilizes NVIDIA BlueField-3 DPU to enhance performance by offloading intensive network functions from the CPU, allowing for real-time visibility into increasing data flows [2]. - Field trials indicate that operational costs can be reduced by up to 75% compared to traditional network probes, with savings attributed to licensing, data processing, storage, and energy costs [2]. Applications and Benefits - The solution supports various network and business applications, enabling closed-loop automation and advanced AI-driven analytics for personalized service and improved quality [3]. - It allows operators to capture 100% of traffic with minimal effort and investment, leading to significant storage reductions and enhanced network monitoring capabilities [5][6]. Company Overview - RADCOM specializes in 5G-ready cloud-native network intelligence solutions, offering a suite that includes network visibility, service assurance, and network insights [4].

Core Insights - RADCOM Ltd. will release its financial results for the third quarter ended September 30, 2025, on November 12, 2025, before the market opens [1] - A conference call and live webinar will be hosted by RADCOM's CEO Benny Eppstein and CFO Hadar Rahav on the same day at 8:00 AM Eastern Time to discuss the financial results [2] Company Overview - RADCOM is a leading provider of advanced intelligent assurance solutions with integrated AI Operations (AIOps) capabilities [3] - The company's flagship platform, RADCOM ACE, utilizes AI-driven analytics and generative AI to enhance customer experiences [3] - RADCOM's solutions are designed to be open, vendor-neutral, and cloud-agnostic, focusing on next-generation network automation and efficiency [3] - The company aims to empower telecom operators by providing a complete, real-time view of mobile and fixed networks, ensuring exceptional service quality and enhancing user experiences [3]

Core Insights - Radcom's stock surged by 5.9% to $14.62, contrasting with a 0.4% loss over the past four weeks, indicating strong investor interest and trading volume [1][2] Company Performance - In Q2 2025, Radcom reported total revenues of $17.7 million, a 19.3% year-over-year increase, driven by strong momentum in key accounts and the adoption of AI-powered network assurance solutions [4] - The company anticipates full-year revenue growth of 15%–18%, projecting a midpoint revenue of $71.1 million [4] - The upcoming quarterly earnings are expected to be $0.22 per share, reflecting a year-over-year decline of 4.4%, with revenues projected at $17.9 million, a 13.2% increase from the previous year [5] Market Position and Strategy - Radcom's growth is supported by strong relationships with Tier 1 customers like AT&T and Rakuten, and collaborations with technology leaders such as NVIDIA and ServiceNow [3] - The company's focus on Agentic AI innovation and real-time network visibility aligns with industry trends, as telecom operators seek to optimize performance and enhance customer experience [2][3] Industry Context - Radcom operates within the Zacks Computer - Networking industry, where it holds a Zacks Rank of 2 (Buy), indicating positive market sentiment [6] - In comparison, NetScout Systems, another player in the same industry, has a Zacks Rank of 3 (Hold) and reported a 0.3% increase in its stock price [6][7]

Industry Overview - The Zacks Computer - Networking industry is poised for growth driven by advancements in cloud computing, network security, big data, and next-gen connectivity, particularly due to the increasing applications of AI technology [1] - The demand for AI workloads and hyperscale data centers is leading to significant investments in high-speed interconnects, optical networking, and Ethernet switches, with companies aiming to leverage the multi-billion-dollar AI infrastructure opportunity [1] - The rapid deployment of 5G technology is enhancing the Internet of Things (IoT), Advanced Driver Assistance Systems, AR/VR devices, and 5G smartphones, thereby increasing the need for robust networking infrastructure [1] Trends Influencing the Industry - The Wi-Fi 7 upgrade cycle is expected to stimulate demand for innovative networking products, benefiting major players like Cisco Systems, Extreme Networks, and RADCOM [2] - The industry is experiencing heightened uncertainty due to global macroeconomic conditions and volatile supply-chain dynamics, with some telecom operators reducing or delaying capital expenditures [2][7] - The growing popularity of smart home products and IoT devices is driving innovation in networking technologies, including network virtualization and Software-Defined Networking [4] Performance Metrics - The Zacks Computer - Networking industry has outperformed the S&P 500 Composite and the broader Zacks Computer and Technology sector, gaining 31.3% over the past year compared to the sector's 18.3% and the S&P 500's 13.9% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.27X, which is lower than the S&P 500's 22.52X and the sector's 27.18X [14] Company Highlights - **Extreme Networks**: The company reported a 20% year-over-year revenue growth in the last quarter, driven by strong demand for its AI-driven cloud networking solutions. Its SaaS annual recurring revenues rose 24.4% year-over-year to $207.6 million [18][19] - **Cisco Systems**: Cisco is enhancing its AI capabilities across its security and collaboration platforms, with notable developments including the launch of AI-driven solutions and partnerships with NVIDIA to create AI-ready data center networks [23][24] - **RADCOM**: The company focuses on cloud-native, automated service assurance for 5G networks and aims for a revenue growth target of 15%-18% for the full year, translating to a midpoint projection of $71.1 million [28][31]

Core Insights - RADCOM Ltd. reported second-quarter 2025 non-GAAP earnings per share (EPS) of 25 cents, exceeding the Zacks Consensus Estimate by 13.6% and improving from 20 cents in the prior-year quarter [1][10] - Total revenues reached $17.7 million, reflecting a 19.3% year-over-year increase, driven by strong momentum in key accounts and the adoption of AI-powered network assurance solutions [2][10] - The company reaffirmed its full-year revenue growth target of 15%–18%, translating to a midpoint projection of $71.1 million [7][10] Financial Performance - Non-GAAP gross margin was reported at 76.2%, an increase from 75% in the year-ago quarter [3] - Non-GAAP operating income reached a record $3.4 million, representing 19.5% of quarterly revenues, compared to $2.3 million or 15.4% of revenues in the previous-year quarter [4] - Non-GAAP gross R&D expenses rose 10.7% year over year to $4.5 million, while sales and marketing expenses increased 13.5% year over year to $4.3 million [5] Cash Flow and Liquidity - As of June 30, 2025, the company had $101.6 million in cash, cash equivalents, and short-term bank deposits, with no debt [6] - The company exited the second quarter with a cash flow of $2.6 million [6] Strategic Focus - RADCOM is focused on prudent expense management while making targeted strategic investments to drive growth and sustain its competitive edge [4] - The company is enhancing global sales and partnerships to support its next growth phase with advanced solutions powered by accelerated computing and Agentic AI [2]

Company Performance - Radcom (RDCM) reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.20 per share a year ago, representing an earnings surprise of +13.64% [1] - The company achieved revenues of $17.66 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.87%, and up from $14.8 million year-over-year [2] - Over the last four quarters, Radcom has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - Radcom shares have increased approximately 10.4% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $18.1 million, and for the current fiscal year, it is $0.91 on revenues of $70.3 million [7] Industry Outlook - The Computer - Networking industry, to which Radcom belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Radcom's stock performance [5][6]

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 19.3% year over year, reaching a record of $17,700,000, supported by demand for the Intelligent Service Assurance platform [6][10][24] - Operating income rose by more than 50% compared to Q2 last year, with non-GAAP operating margin expanding to nearly 20% of revenue [10][24] - Non-GAAP net income was $4,200,000, or $0.25 per diluted share, compared to $3,100,000, or $0.20 per diluted share last year [29] - The company ended Q2 with over $100,000,000 in cash, the highest in its history, and remains debt-free [10][29] Business Line Data and Key Metrics Changes - The company reported solid profitability and cash generation, with positive cash flow of $2,600,000 during the quarter [10][29] - Non-GAAP gross margin for Q2 2025 was 76.2%, reflecting effective expense management while investing in growth [24] Market Data and Key Metrics Changes - The telecom industry is experiencing transformation driven by the convergence of 5G and AI, with significant challenges for operators due to data volume growth and IoT adoption [17][18] - In Q1 alone, operators added 145,000,000 new 5G subscriptions globally, bringing the total to 2,400,000,000 [19] Company Strategy and Development Direction - The company is focused on becoming a key vendor in the intelligent, agentic AI-powered ecosystem, addressing operators' pain points and future market drivers [9][11] - Strategic partnerships, including collaboration with NVIDIA, are expected to drive incremental value and expand the addressable market [12][21] - The company aims to deliver advanced service assurance frameworks to support operators' AI-driven customer-centric vision [11][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue growth guidance of 15% to 18%, supported by healthy customer engagement and market shifts towards intelligent, automated assurance [21][22] - The company is actively engaged in field trials with Tier 1 operators in key markets such as North America, Japan, and EMEA [13][19] Other Important Information - The company did not receive a grant from the Israel Innovation Authority this quarter, compared to $180,000 received in the same quarter last year, but anticipates securing grants in Q3 and Q4 [27] - Non-GAAP operating income for Q2 was $3,400,000, representing 19.5% of quarterly revenues, an increase of $1,200,000 from the previous year [28] Q&A Session Summary Question: How is the partnership with service management system vendors like ServiceNow and AWS going? - The partnership is progressing well, with co-development and interconnecting platforms already in place [34] Question: How should we think about the capital allocation with $100,000,000 in cash? - The company is considering potential M&A as a priority and is progressing with a few candidates [35] Question: What percentage of the pipeline is coming from existing customer expansion versus new logo wins? - Approximately two-thirds of growth is expected from existing customers and one-third from new customers [39] Question: What percentage of current revenue is coming from 5G versus legacy network revenue? - A significant portion of LTE networks is still operational, and while 5G is growing, it will take time for full transformation [40] Question: Any updates on the RFP process for new Tier 1 opportunities? - The company is participating in several RFPs globally and expects decisions on a few within the next half of the year [41] Question: Is there an opportunity in the direct-to-device satellite space? - There are active opportunities, but clarity on capital allocation from certain customers is still pending [43] Question: Any changes in the competitive environment relative to peers? - The competitive landscape remains stable, with competitors shifting focus while the company continues to invest in innovation [44]

Financial Performance - RADCOM achieved a new quarterly revenue record of $17.7 million, representing a 19.3% year-over-year increase[15, 38, 42] - The company's non-GAAP operating margin was 19.5%, reflecting improved profitability[15, 38] - RADCOM ended Q2 2025 with a record-high cash and bank deposits of $101.6 million and generated $2.6 million in positive cash flow[15, 47] - The company reaffirms its full-year 2025 revenue guidance, projecting year-over-year growth of 15% to 18%, with a midpoint of $71.1 million[32, 51] - Q2 2025 GAAP diluted EPS was $0.15, while the non-GAAP diluted EPS was $0.25[38] Strategic Focus - RADCOM is continuing its investment in R&D, particularly in agentic AI (agent-to-agent and multi-model workflows)[17] - The company is involved in several Proof of Concepts (POCs) in the lab for its high-capacity user plane analytics and is engaged in field trials with Tier 1 operators[17] - RADCOM is focused on key markets, including North America, Japan, and EMEA[17] Market Trends - Telecom industry trends indicate that 84% of telco executives agree that AI agents will reinvent how their organizations are building and operating their digital infrastructures[25] - A 6% growth in the mobile core market is projected through to 2029, with operators adding 145 million new 5G subscriptions globally in Q1, bringing the total to 2.4 billion[26]

Financial Performance - Total revenues for Q2 2025 were $17.7 million, representing a 19.3% year-over-year growth from $14.8 million in Q2 2024[5] - GAAP operating income for Q2 2025 was $1.7 million, or 9.9% of revenue, compared to $0.9 million, or 5.9% of revenue in Q2 2024[5] - Non-GAAP net income for Q2 2025 was $4.2 million, or $0.25 per diluted share, up from $3.1 million, or $0.20 per diluted share in Q2 2024[5] - For the first six months of 2025, total revenues were $34.2 million, an 18.4% increase from $28.9 million in the same period of 2024[9] - GAAP net income for the first six months of 2025 was $4.9 million, or $0.29 per diluted share, compared to $2.5 million, or $0.16 per diluted share in the first six months of 2024[9] - GAAP net income for the three months ended June 30, 2025, was $2,438,000, compared to $1,707,000 for the same period in 2024, representing an increase of 42.8%[20] - Non-GAAP net income for the six months ended June 30, 2025, reached $8,285,000, up from $5,985,000 in 2024, reflecting a growth of 38.5%[20] - Non-GAAP income before taxes on income for the three months ended June 30, 2025, was $4,250,000, up from $3,164,000 in 2024, representing a growth of 34.3%[20] - GAAP net income per diluted share for the six months ended June 30, 2025, was $0.29, compared to $0.16 in 2024, reflecting an increase of 81.3%[20] Cash and Assets - The company ended Q2 2025 with over $100 million in cash and no debt, achieving its highest cash levels ever[3] - The company reported a positive cash flow of $2.6 million in Q2 2025[5] - Total current assets as of June 30, 2025, amounted to $123,446,000, an increase from $117,196,000 as of December 31, 2024, indicating a growth of 5.4%[22] - Cash and cash equivalents increased to $21,910,000 as of June 30, 2025, compared to $19,243,000 as of December 31, 2024, marking an increase of 13.9%[22] Liabilities and Equity - Total liabilities decreased to $32,305,000 as of June 30, 2025, from $34,898,000 as of December 31, 2024, showing a reduction of 7.4%[22] - Total shareholders' equity increased to $104,080,000 as of June 30, 2025, from $95,676,000 as of December 31, 2024, indicating a growth of 8.8%[22] - Trade payables rose to $3,689,000 as of June 30, 2025, compared to $2,457,000 as of December 31, 2024, representing an increase of 50.1%[22] Strategic Focus - RADCOM reaffirms its full-year 2025 revenue guidance, expecting growth of 15% to 18%, with a midpoint of $71.1 million[7] - RADCOM's strategic focus includes enhancing its AI capabilities and expanding partnerships to meet growing market demand for automated network assurance solutions[3] Operating Income - Non-GAAP operating income for Q2 2025 was $3.4 million, or 19.5% of revenue, compared to $2.3 million, or 15.4% of revenue in Q2 2024[5] - The weighted average number of shares used to compute diluted net income per share increased to 16,711,789 for the three months ended June 30, 2025, from 15,978,799 in 2024, an increase of 4.6%[20]

Core Insights - RADCOM Ltd reported a strong financial performance with a 19.3% year-over-year revenue growth in Q2 2025, reaching total revenues of $17.7 million compared to $14.8 million in Q2 2024 [2][7] - The company ended the quarter with over $100 million in cash and no debt, indicating solid profitability and cash generation [2][7] - RADCOM reaffirms its full-year revenue growth guidance of 15% to 18%, supported by healthy customer engagement and market demand for intelligent, automated network assurance solutions [3][5] Second Quarter 2025 Financial Highlights - GAAP operating income for Q2 2025 was $1.7 million, or 9.9% of revenue, compared to $0.9 million, or 5.9% of revenue in Q2 2024 [7] - Non-GAAP operating income for Q2 2025 was $3.4 million, or 19.5% of revenue, up from $2.3 million, or 15.4% of revenue in Q2 2024 [7] - GAAP net income for Q2 2025 was $2.4 million, or $0.15 per diluted share, compared to $1.7 million, or $0.11 per diluted share in Q2 2024 [7] First Six Months 2025 Financial Highlights - Total revenues for the first six months of 2025 were $34.2 million, an 18.4% increase from $28.9 million in the same period of 2024 [7] - GAAP operating income for the first six months of 2025 was $3.2 million, or 9.4% of revenue, compared to $0.6 million, or 2.0% of revenue in the first half of 2024 [7] - Non-GAAP net income for the first six months of 2025 was $8.3 million, or $0.50 per diluted share, compared to $6.0 million, or $0.38 per diluted share in the first half of 2024 [7] Company Overview - RADCOM is a leading provider of advanced, intelligent assurance solutions with integrated AI Operations (AIOps) capabilities [8] - The company's flagship platform, RADCOM ACE, utilizes AI-driven analytics and generative AI to enhance customer experiences [8] - RADCOM's solutions are designed to be open, vendor-neutral, and cloud-agnostic, driving next-generation network automation and efficiency [9]