Radcom's Q3 Earnings & Revenues Beat on AI-Driven Growth, Stock Gains

Core Insights - RADCOM reported third-quarter 2025 non-GAAP earnings per share (EPS) of 29 cents, exceeding the Zacks Consensus Estimate of 12 cents and up from 23 cents in the prior-year quarter [1][9] - Revenues for the quarter reached $18.4 million, surpassing the Zacks Consensus Estimate by 2.7% and reflecting a year-over-year increase of 16.2%, driven by demand for AI and automation solutions [2][9] Financial Performance - The company achieved a strong gross margin of just over 77%, attributed to an improved revenue mix with fewer third-party costs, and expects to maintain this level in the fourth quarter [5] - Non-GAAP R&D expenses increased by 11.6% year over year to $4.7 million, indicating a commitment to innovation and portfolio expansion [6] - Non-GAAP operating income rose to $3.8 million from $2.6 million, marking the highest level since 2017, supported by strong scalability and disciplined execution [6] Strategic Developments - RADCOM partnered with 1Global to deploy its AI-driven assurance platform, RADCOM ACE, across Europe, North America, and Asia, covering over 43 million connections [3] - The company launched its High-Capacity User Analytics solution, the first in the industry to capture data at 400Gbps on a single server, showcasing its focus on next-generation network observability [3] Cash Flow & Liquidity - As of September 30, 2025, RADCOM had $106.7 million in cash and equivalents with no debt, exiting the third quarter with a cash flow of $5.1 million [7] Future Guidance - RADCOM reaffirmed its full-year 2025 guidance of 15%-18% year-over-year revenue growth, implying approximately $71.1 million in revenue at the midpoint [8]