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]