AudioCodes Reports First Quarter 2025 Results
First Quarter Highlights
- Quarterly revenues increase by 0.5% year-over-year to
$60.4 million ; - Quarterly service revenues increased by 3.4% year-over-year to
$32.6 million ; - GAAP results:
- Quarterly GAAP gross margin was 64.8%;
- Quarterly GAAP operating margin was 6.0%;
- Quarterly GAAP EBITDA was
$4.6 million ; - Quarterly GAAP net income was
$4.0 million , or$0.13 per diluted share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 65.2%;
- Quarterly Non-GAAP operating margin was 8.9%;
- Quarterly Non-GAAP EBITDA was
$6.2 million ; - Quarterly Non-GAAP net income was
$4.7 million , or$0.15 per diluted share.
- Net cash provided by operating activities was
$13.5 million for the quarter. -
AudioCodes $5.2 million .
Details
Revenues for the first quarter of 2025 were
EBITDA for the first quarter of 2025 was
On a Non-GAAP basis, EBITDA for the first quarter of 2025 was
Net income was
On a Non-GAAP basis, net income was
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies; (iv) tax impact which relates to our Non-GAAP adjustments; and (v) in Q1 2024 non-cash lease expense which is required to be recorded during the quarter even though this is a free rent period under the lease for the Company's new headquarters. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities was
"I am pleased to report solid first quarter performance amidst successful execution of our strategic priorities. We continued to drive growth of our Live managed services in the UCaaS and CX markets, coupled with cross-selling our AI-powered value-added services" said
Overall, we experienced positive momentum across our UC, CX, and conversational AI practices, propelled by strength in UCaaS, within which Microsoft business was up 7% in the quarter. Our CX business increased 2% year-over-year, supported by a solid pipeline that indicates a positive outlook for the remainder of 2025. Our conversational AI business grew over 10% year-over-year. The strength in these strategic areas has fueled the ongoing growth of our Live managed services, leading to Annual Recurring Revenues (ARR) reaching
Our investments have led to a spate of new products in the Conversational AI space that our sales teams are successfully evangelizing to end customers and partners. As a case in point, we recently introduced Meeting Insights On-Prem, extending the Gen AI-enabled meeting productivity benefits to regulated and security-sensitive environments and industries. This industry's first solution has already garnered important customer interest, as evidenced by a robust pipeline.
We expect the number of proof-of-concept opportunities to further scale over the rest of the year. We further expect growth of AI-powered value-added services to be enhanced in the second half of 2025 by the impending launch of our unique next-generation Live platform, which integrates connectivity solutions supporting the leading UCaaS vendor solutions with our leading business applications.
On the operations side, we witnessed lower gross profit from product sales in the first quarter resulting from the impact of the new US tariffs on imports from
Despite the fluidity of the tariff situation and associated macroeconomic uncertainty, we continue to make solid progress in our long-term transformation into a cloud and software services company, and in investing and developing the potential for future success in the emerging conversational AI applications and markets" concluded
Share Buy Back Program and Cash Dividend
In
On
During the quarter ended
As of
Conference Call & Web Cast Information
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International Participants: +1 (973) 528-0011
The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the
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Statements concerning
©2025
Summary financial data follows
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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2025 |
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2024 |
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(Unaudited) |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
|
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|
|
Short-term bank deposits |
209 |
|
210 |
|
Short-term marketable securities |
3,194 |
|
3,426 |
|
Trade receivables, net |
56,062 |
|
56,016 |
|
Other receivables and prepaid expenses |
10,629 |
|
13,012 |
|
Inventories |
28,566 |
|
31,364 |
|
Total current assets |
161,793 |
|
162,876 |
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LONG-TERM ASSETS: |
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|
Long-term Trade receivables |
|
|
|
|
Long-term marketable securities |
25,760 |
|
28,518 |
|
Long-term financial investments |
3,386 |
|
3,008 |
|
Deferred tax assets |
9,113 |
|
9,838 |
|
Operating lease right-of-use assets |
32,009 |
|
32,534 |
|
Severance pay funds |
17,329 |
|
18,004 |
|
Total long-term assets |
102,518 |
|
107,655 |
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PROPERTY AND EQUIPMENT, NET |
28,248 |
|
27,321 |
|
|
|
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|
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|
37,916 |
|
38,049 |
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Total assets |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Trade payables |
6,570 |
|
7,543 |
|
Other payables and accrued expenses |
24,689 |
|
25,823 |
|
Deferred revenues |
43,257 |
|
38,438 |
|
Short-term operating lease liabilities |
5,845 |
|
5,954 |
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Total current liabilities |
80,361 |
|
77,758 |
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LONG-TERM LIABILITIES: |
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Accrued severance pay |
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Deferred revenues and other liabilities |
19,070 |
|
19,434 |
|
Long-term operating lease liabilities |
29,295 |
|
30,508 |
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Total long-term liabilities |
64,210 |
|
66,329 |
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Total shareholders' equity |
185,904 |
|
191,814 |
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Total liabilities and shareholders' equity |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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Three months ended |
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2025 |
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2024 |
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(Unaudited) |
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Revenues: |
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Products |
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Services |
|
32,599 |
|
31,526 |
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Total Revenues |
|
60,374 |
|
60,076 |
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Cost of revenues: |
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|
|
|
|
Products |
|
11,017 |
|
11,825 |
|
Services |
|
10,223 |
|
9,584 |
|
Total Cost of revenues |
|
21,240 |
|
21,409 |
|
Gross profit |
|
39,134 |
|
38,667 |
|
Operating expenses: |
|
|
|
|
|
Research and development, net |
|
13,026 |
|
13,933 |
|
Selling and marketing |
|
18,561 |
|
17,367 |
|
General and administrative |
|
3,902 |
|
4,086 |
|
Total operating expenses |
|
35,489 |
|
35,386 |
|
Operating income |
|
3,645 |
|
3,281 |
|
Financial income (expenses), net |
|
1,716 |
|
23 |
|
Income before taxes on income |
|
5,361 |
|
3,304 |
|
Taxes on income, net |
|
(1,345) |
|
(1,221) |
|
Net income |
|
|
|
|
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Basic net earnings per share |
|
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Diluted net earnings per share |
|
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Weighted average number of shares used in computing basic net earnings |
|
29,528 |
|
30,333 |
|
Weighted average number of shares used in computing diluted net |
|
30,045 |
|
30,793 |
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RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME |
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Three months ended |
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2025 |
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2024 |
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(Unaudited) |
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GAAP net income |
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GAAP net earnings per share |
|
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Cost of revenues: |
|
|
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|
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|
|
Share-based compensation (1) |
|
|
95 |
|
79 |
|
|
Amortization expenses (2) |
|
|
122 |
|
122 |
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Lease expenses (5) |
|
|
- |
|
304 |
|
|
|
|
|
217 |
|
505 |
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Research and development, net: |
|
|
|
|
|
|
|
Share-based compensation (1) |
|
|
349 |
|
592 |
|
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Lease expenses (5) |
|
|
- |
|
342 |
|
|
|
|
|
349 |
|
934 |
|
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Selling and marketing: |
|
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|
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Share-based compensation (1) |
|
|
569 |
|
723 |
|
|
Amortization expenses (2) |
|
|
11 |
|
11 |
|
|
Lease expenses (5) |
|
|
- |
|
38 |
|
|
|
|
|
580 |
|
772 |
|
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General and administrative: |
|
|
|
|
|
|
|
Share-based compensation (1) |
|
|
575 |
|
742 |
|
|
Lease expenses (5) |
|
|
- |
|
76 |
|
|
|
|
|
575 |
|
818 |
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Financial expenses (income): |
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|
|
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|
Exchange rate differences (3) |
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|
(1,035) |
|
(364) |
|
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Income taxes: |
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Taxes on income, net (4) |
|
|
- |
|
471 |
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|
Non-GAAP net income |
|
|
|
|
|
|
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Non-GAAP diluted net earnings per share |
|
|
|
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Weighted average number of shares used in computing |
|
|
30,725 |
|
31,570 |
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(1) |
Share-based compensation expenses related to options and restricted share units granted to employees and others. |
|
(2) |
Amortization expenses related to intangible assets. |
|
(3) |
Financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. |
|
(4) |
Tax impact which relates to our non-GAAP adjustments. |
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(5) |
In Q1 2024, non-cash lease expense which is required to be recorded during the quarter even though this is a free rent period under the lease for the Company's new headquarters. |
|
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Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information. |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
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Three months ended |
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2025 |
|
2024 |
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(Unaudited) |
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Cash flows from operating activities: |
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Net income |
|
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Adjustments required to reconcile net income to net cash provided by |
|
|
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Depreciation and amortization |
|
|
954 |
|
523 |
|
Amortization of marketable securities premiums and accretion of |
|
|
104 |
|
314 |
|
Decrease (increase) in accrued severance pay, net |
|
|
133 |
|
(110) |
|
Share-based compensation expenses |
|
|
1,588 |
|
2,136 |
|
Decrease (increase) in deferred tax assets, net |
|
|
619 |
|
(786) |
|
Cash financial loss (income), net |
|
|
53 |
|
85 |
|
Decrease in operating lease right-of-use assets |
|
|
746 |
|
2,389 |
|
Decrease in operating lease liabilities |
|
|
(1,543) |
|
(2,111) |
|
Decrease in trade receivables, net |
|
|
786 |
|
2,316 |
|
Decrease in other receivables and prepaid expenses |
|
|
2,383 |
|
540 |
|
Decrease in inventories |
|
|
2,855 |
|
3,258 |
|
Decrease in trade payables |
|
|
(1,289) |
|
(234) |
|
Decrease in other payables and accrued expenses |
|
|
(2,595) |
|
(1,732) |
|
|
|
|
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|
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Increase in deferred revenues |
|
|
4,647 |
|
6,310 |
|
|
|
|
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Net cash provided by operating activities |
|
|
13,457 |
|
14,981 |
|
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Cash flows from investing activities: |
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Proceeds from short-term deposits |
|
|
1 |
|
4 |
|
Proceeds from financial investment |
|
|
113 |
|
21 |
|
Proceeds from redemption of marketable securities |
|
|
3,200 |
|
500 |
|
Purchase of financial investments |
|
|
(442) |
|
- |
|
Purchase of property and equipment |
|
|
(1,474) |
|
(6,785) |
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Net cash provided by (used in) investing activities |
|
|
1,398 |
|
(6,260) |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
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Three months ended |
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2025 |
|
2024 |
|
|
|
|
(Unaudited) |
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Cash flows from financing activities: |
|
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|
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Purchase of treasury shares |
|
|
(5,208) |
|
(3,584) |
|
Cash dividends paid to shareholders |
|
|
(5,326) |
|
(5,453) |
|
Proceeds from issuance of shares upon exercise of options |
|
|
63 |
|
180 |
|
Net cash used in financing activities |
|
|
(10,471) |
|
(8,857) |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents |
|
|
4,384 |
|
(136) |
|
Cash, cash equivalents at beginning of period |
|
|
58,749 |
|
30,546 |
|
Cash, cash equivalents at end of period |
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Company Contacts |
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