AudioCodes (AUDC) Q1 2025 Earnings Call May 06, 2025 08:30 AM ET Company Participants Roger Chuchen - VP - Investor RelationsShabtai Adlersberg - Co-Founder, President, CEO & DirectorNiran Baruch - CFO & VP of Finance Conference Call Participants Joshua Reilly - Senior Analyst Operator Please note this conference is being recorded. I will now turn the conference over to your host, Roger Chuchen, Investor Relations. Roger, the floor is yours. Roger Chuchen Thank you, operator. Hosting the call today are Shab ...

AudioCodes (AUDC) Q1 2025 Earnings Call May 06, 2025 08:30 AM ET Speaker0 Please note this conference is being recorded. I will now turn the conference over to your host, Roger Chuchen, Investor Relations. Roger, the floor is yours. Speaker1 Thank you, operator. Hosting the call today are Shabtai Allisberg, President and Chief Executive Officer and Niran Baruch, Vice President of Finance and Chief Financial Officer. Before we begin, I'd like to remind you that the information provided during this call may c ...

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]