Radcom Q4 Earnings Call Highlights

Financial Performance - Radcom reported record revenue of $71.5 million for 2025, representing a 17.2% year-over-year growth, exceeding the previous growth outlook of 15% to 18% [4][5] - Gross margin for the full year was 76.8%, up from 75.2% in 2024, while operating income rose 55% to a record $14.8 million, representing 20.6% of revenue [1][7] - Fourth-quarter revenue reached a record $18.9 million, up 16% year-over-year, with a gross margin of 77.6%, the highest since 2018 [3][5] Profitability Metrics - Full-year non-GAAP net income was a record $18.4 million, equal to 25.8% of revenue, or $1.09 per diluted share, compared to $13.5 million, or $0.83 per diluted share in 2024 [1] - On a GAAP basis, net income for 2025 was $12.0 million, or $0.71 per diluted share, compared to $7.0 million, or $0.43 per diluted share in 2024 [7] Cash Position - Radcom ended 2025 with $109.9 million in cash and short-term deposits, reflecting positive cash flow of $3.2 million in the fourth quarter and $15.2 million for the year [4][7] Strategic Focus and Growth Drivers - The company is focusing on AI and high-capacity data capture products as primary growth drivers, claiming potential total cost of ownership reductions of up to 75% [6][12] - Radcom expects revenue growth of 8% to 12% for 2026, which is considered significantly above the service assurance market growth [8][6] Customer Engagement and Partnerships - Radcom secured a new customer, 1GLOBAL, to deliver AI-powered assurance for 43 million subscribers, and expanded with a leading European operator [14] - Strategic partnerships with NVIDIA and ServiceNow are expected to enhance operational capabilities and drive initial wins in 2026 [18][15] Market Position and Opportunities - The company believes it is well-positioned in the second half of its sales cycle, with strategic opportunities for new business wins and expansions within existing customers [9][13] - A GSMA survey indicated that 71% of operators plan to implement agentic AI this year, presenting an opportunity for Radcom to assist in accessing reliable data for AI use cases [11]