OR YEHUDA, Israel, July 30,
2024 /PRNewswire/ --
Second Quarter Highlights
- Quarterly revenues increased by 0.5% year-over-year to
$60.3 million;
- Quarterly service revenues increased by 12.3% year-over-year to
$32 million;
- GAAP results:
- Quarterly GAAP gross margin was 65.5%;
- Quarterly GAAP operating margin was 8.2%;
- Quarterly GAAP EBITDA was $6.2
million;
- Quarterly GAAP net income was $3.8
million, or $0.12 per diluted
share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 65.8%;
- Quarterly Non-GAAP operating margin was 11.9%;
- Quarterly Non-GAAP EBITDA was $8.3
million;
- Quarterly Non-GAAP net income was $5.5
million, or $0.18 per diluted
share.
- Net cash used by operating activities was $2.9 million for the quarter.
- AudioCodes repurchased 116,453 of its ordinary shares during
the quarter at an aggregate cost of $1.2
million.
Details
AudioCodes (NASDAQ: AUDC), a leading vendor of advanced
communications software, products and productivity solutions for
the digital workplace, today announced its financial results for
the second quarter ended June 30,
2024.
Revenues for the second quarter of 2024 were $60.3 million compared to $60.0 million for the second quarter of 2023.
EBITDA for the second quarter of 2024 was $6.2 million compared to $2.9 million for the second quarter of 2023.
On a Non-GAAP basis, EBITDA for the second quarter of 2024 was
$8.3 million compared to $6.2 million for the second quarter of 2023.
Net income was $3.8 million, or
$0.12 per diluted share, for the
second quarter of 2024 compared to net income of $1.1 million, or $0.03 per diluted share, for the second quarter
of 2023.
On a Non-GAAP basis, net income was $5.5
million, or $0.18 per diluted
share, for the second quarter of 2024 compared to $5.1 million, or $0.16 per diluted share, for the second quarter
of 2023.
Non-GAAP net income excludes: (i) share-based compensation
expenses; (ii) amortization expenses related to intangible assets;
(iii) expenses related to deferred payments in connection with the
acquisition of Callverso Ltd; (iv) financial income (expenses)
related to exchange rate differences in connection with revaluation
of assets and liabilities in non-dollar denominated currencies; (v)
tax impact which relates to our Non-GAAP adjustments; and (vi) 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 used by operating activities was $2.9 million for the second quarter of
2024. Cash and cash equivalents, short-term bank deposits,
long and short-term marketable securities and long financial
investments were $93.7 million as of
June 30, 2024 compared to
$106.7 million as of December 31, 2023. The decrease in cash and
cash equivalents, short-term bank deposits, long and short-term
marketable securities and long financial investments was the result
of the use of cash for the continued repurchasing of the Company's
ordinary shares pursuant to its share repurchase program and the
payment of a cash dividend during the first quarter of 2024 and
purchase of property and equipment related to leasehold
improvements of our new corporate headquarter in Israel, offset, in part, by cash from
operating activities.
"I am pleased to report solid second quarter 2024 results,
marked by the second consecutive quarter of positive top-line
growth and ongoing momentum in our Microsoft and conversational AI
businesses with sequential uptick in our legacy gateway business,"
said Shabtai Adlersberg, President
and Chief Executive Officer of AudioCodes.
In terms of our strategic business lines, Microsoft Teams
business in the second quarter grew 3.3% year-over-year, with
steady increase in the Live managed services, which grew about 35%
year-over-year and reached ARR of $56
million exiting second quarter 2024. Second quarter Live
business growth puts us on track to land within our full year 2024
ARR target range of $64-$70 million, representing an average approximate
annual growth rate of 40% compared to 2023.
In the CX business, our healthy pipeline continues to support a
positive outlook for second half and full year 2024.
Conversational AI business grew over 50% year-over-year,
benefiting from customers' inexorable demand to drive innovation
and deliver productivity improvements on projects in both the UC
and CX space. We have witnessed progress made in several new
Conversational AI activities. These include among others, Voca CIC,
our AI first CX solution for Microsoft Teams, SaaS Recording
solutions such as Meeting Insights and interaction recording, and
in the MS Teams meeting room space.
Underlying business momentum remains strong, as we had several
notable wins with marquee accounts in the quarter, from a
combination of new customer additions as well as cross-sell of
products and services to existing ones. Key to such cross
sales success is our Live Platform for UCaaS and CCaaS, which
encompasses a comprehensive stack of voice related services to the
Microsoft Teams ecosystem.
Overall, we delivered on our business priorities in the quarter,
fostering momentum in strategic areas of our business and
successfully executing on the cost rationalization
initiatives. We believe this lays the foundation to drive
healthy top-line growth long-term while driving significant margin
expansion in 2024 and beyond," concluded Mr. Adlersberg.
Share Buy Back Program
During the quarter ended June 30,
2024, the Company acquired 116,453 of its ordinary shares
under its share repurchase program for a total consideration of
$1.2 million.
In July 2024, the Company received
court approval in Israel to
purchase up to an aggregate amount of $20
million of additional ordinary shares. The court approval
also permits AudioCodes to declare a dividend out of any part of
this amount. The approval is valid through January 1, 2025.
Cash Dividend
AudioCodes also announced today that the Company's Board of
Directors has declared a cash dividend in the amount of
18 cents per share. The aggregate
amount of the dividend is approximately $5.5
million. The dividend is payable on August 29, 2024, to all of the Company's
shareholders of record at the close of trading on the NASDAQ Global
Select Market on August 15,
2024.
In accordance with Israeli tax law, the dividend is subject to
withholding tax at source at the rate of 25% of the dividend amount
payable to each shareholder of record, subject to applicable
exemptions. If the recipient of the dividend is at the time of
distribution or was at any time during the preceding 12-month
period the holder of 10% or more of the Company's share capital,
the withholding rate is 30%.
The dividend will be paid in U.S. dollars on the ordinary shares
of AudioCodes Ltd. that are traded on the Nasdaq Global Select
Market or the Tel-Aviv Stock Exchange. The amount and timing of any
other dividends will be determined by the Board.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's second quarter of 2024 operating performance, financial
results and outlook. Interested parties may participate in
the conference call by dialing one the following numbers:
United States Participants: 888-506-0062
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 AudioCodes investor website at
http://www.audiocodes.com/investors-lobby.
Follow AudioCodes' social media channels:
AudioCodes invites you to join our online community and follow
us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook,
and YouTube.
About AudioCodes
AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of
advanced communications software, products and productivity
solutions for the digital workplace. AudioCodes enables enterprises
and service providers to build and operate all-IP voice networks
for unified communications, contact centers, and hosted business
services. AudioCodes offers a broad range of innovative
products, solutions and services that are used by large
multi-national enterprises and leading tier-1 operators around the
world.
For more information on AudioCodes, visit
http://www.audiocodes.com.
Statements concerning AudioCodes' business outlook or future
economic performance; product introductions and plans and
objectives related thereto; and statements concerning assumptions
made or expectations as to any future events, conditions,
performance or other matters, are "forward-looking statements'' as
that term is defined under U.S. Federal securities laws.
Forward-looking statements are subject to various risks,
uncertainties and other factors that could cause actual results to
differ materially from those stated in such statements. These
risks, uncertainties and factors include, but are not limited to:
the effect of global economic conditions in general and conditions
in AudioCodes' industry and target markets in particular; shifts in
supply and demand; market acceptance of new products and the demand
for existing products; the impact of competitive products and
pricing on AudioCodes' and its customers' products and markets;
timely product and technology development, upgrades and the ability
to manage changes in market conditions as needed; possible need for
additional financing; the ability to satisfy covenants in the
Company's loan agreements; possible disruptions from acquisitions;
the ability of AudioCodes to successfully integrate the products
and operations of acquired companies into AudioCodes' business;
possible adverse impact of the COVID-19 pandemic on our business
and results of operations; the effects of the current terrorist
attacks by Hamas in Israel, and
the war and hostilities between Israel and Hamas, and Israel and Hezbollah as well as the
possibility that this could develop into a broader regional
conflict involving Israel with
other parties, may affect our operations and may limit our ability
to produce and sell our solutions; any disruption in our operations
by the obligations of our personnel to perform military service as
a result of current or future military actions involving
Israel; and other factors detailed
in AudioCodes' filings with the U.S. Securities and Exchange
Commission. AudioCodes assumes no obligation to update the
information in this release.
©2024 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD
VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's
Inside Matters, OSN, SmartTAP, User Management Pack, VMAS,
VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom,
AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room
Experience are trademarks or registered trademarks of AudioCodes
Limited. All other products or trademarks are property of their
respective owners. Product specifications are subject to change
without notice.
Summary financial data follows
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
U.S. dollars in
thousands
|
|
June
30,
|
December
31,
|
|
2024
|
2023
|
|
(Unaudited)
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 20,849
|
$ 30,546
|
|
Short-term and
restricted bank deposits
|
206
|
212
|
|
Short-term marketable
securities
|
21,113
|
7,438
|
|
Trade receivables,
net
|
55,010
|
51,125
|
|
Other receivables and
prepaid expenses
|
9,146
|
9,381
|
|
Inventories
|
37,893
|
43,959
|
|
Total current
assets
|
144,217
|
142,661
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term Trade
receivables
|
$ 16,680
|
$ 16,798
|
|
Long-term marketable
securities
|
48,944
|
65,732
|
|
Long-term financial
investments
|
2,557
|
2,730
|
|
Deferred tax
assets
|
5,966
|
6,208
|
|
Operating lease
right-of-use assets
|
34,263
|
36,712
|
|
Severance pay
funds
|
16,975
|
17,202
|
|
Total long-term
assets
|
125,385
|
145,382
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
21,846
|
10,893
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
38,315
|
38,581
|
|
|
|
|
Total assets
|
$ 329,763
|
$ 337,517
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Trade
payables
|
5,102
|
7,556
|
|
Other payables and
accrued expenses
|
26,369
|
29,943
|
|
Deferred
revenues
|
39,988
|
38,820
|
|
Short-term operating
lease liabilities
|
5,931
|
7,878
|
|
Total current
liabilities
|
77,390
|
84,197
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
$ 15,956
|
$ 16,662
|
|
Deferred revenues and
other liabilities
|
17,277
|
17,142
|
|
Long-term operating
lease liabilities
|
31,024
|
31,404
|
|
Total long-term
liabilities
|
64,257
|
65,208
|
|
|
|
|
Total shareholders'
equity
|
188,116
|
188,112
|
|
Total liabilities and
shareholders' equity
|
$ 329,763
|
$ 337,517
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
U.S. dollars in
thousands, except per share data
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
(Unaudited)
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
Products
|
$ 56,897
|
$ 60,260
|
$ 28,347
|
$ 31,567
|
|
Services
|
63,482
|
58,973
|
31,956
|
28,453
|
|
Total Revenues
|
120,379
|
119,233
|
60,303
|
60,020
|
|
Cost of
revenues:
|
|
|
|
|
|
Products
|
22,743
|
25,221
|
10,918
|
12,177
|
|
Services
|
19,494
|
18,992
|
9,910
|
9,366
|
|
Total Cost of
revenues
|
42,237
|
44,213
|
20,828
|
21,543
|
|
Gross profit
|
78,142
|
75,020
|
39,475
|
38,477
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
27,114
|
29,403
|
13,181
|
14,394
|
|
Selling and
marketing
|
34,820
|
35,526
|
17,453
|
17,679
|
|
General and
administrative
|
7,991
|
8,680
|
3,905
|
4,149
|
|
Total operating
expenses
|
69,925
|
73,609
|
34,539
|
36,222
|
|
Operating
income
|
8,217
|
1,411
|
4,936
|
2,255
|
|
Financial income
(expenses), net
|
419
|
1,196
|
396
|
247
|
|
Income before taxes on
income
|
8,636
|
2,607
|
5,332
|
2,502
|
|
Taxes on income,
net
|
(2,779)
|
(1,734)
|
(1,558)
|
(1,447)
|
|
Net income
|
$ 5,857
|
$ 873
|
$ 3,774
|
$ 1,055
|
|
Basic net earnings per
share
|
$ 0.19
|
$ 0.03
|
$ 0.12
|
$ 0.03
|
|
Diluted net earnings
per share
|
$ 0.19
|
$ 0.03
|
$ 0.12
|
$ 0.03
|
|
Weighted average number
of shares used in
computing basic net earnings per share (in
thousands)
|
30,337
|
32,024
|
30,341
|
31,900
|
|
Weighted average number
of shares used in
computing diluted net earnings per share (in
thousands)
|
30,764
|
33,017
|
30,735
|
32,977
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
|
U.S. dollars in
thousands, except per share data
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
(Unaudited)
|
(Unaudited)
|
|
GAAP net
income
|
$ 5,857
|
$ 873
|
$ 3,774
|
$ 1,055
|
|
GAAP net earnings per
share
|
$ 0.19
|
$ 0.03
|
$ 0.12
|
$ 0.03
|
|
Cost of
revenues:
|
|
|
|
|
|
Share-based
compensation (1)
|
175
|
210
|
96
|
103
|
|
Amortization expenses
(2)
|
244
|
257
|
122
|
122
|
|
Lease expenses
(6)
|
304
|
-
|
-
|
-
|
|
723
|
467
|
218
|
225
|
|
Research and
development, net:
|
|
|
|
|
|
Share-based
compensation (1)
|
1,171
|
1,441
|
579
|
698
|
|
Deferred payments
expenses (3)
|
-
|
250
|
-
|
125
|
|
Lease expenses
(6)
|
342
|
-
|
-
|
-
|
|
1,513
|
1,691
|
579
|
823
|
|
Selling and
marketing:
|
|
|
|
|
|
Share-based
compensation (1)
|
1,472
|
2,330
|
749
|
1,093
|
|
Amortization expenses
(2)
|
22
|
22
|
11
|
11
|
|
Deferred payments
expenses (3)
|
-
|
250
|
-
|
125
|
|
Lease expenses
(6)
|
38
|
-
|
-
|
-
|
|
1,532
|
2,602
|
760
|
1,229
|
|
General and
administrative:
|
|
|
|
|
|
Share-based
compensation (1)
|
1,434
|
2,428
|
692
|
1,169
|
|
Lease expenses
(6)
|
76
|
-
|
-
|
-
|
|
1,510
|
2,428
|
692
|
1,169
|
|
Financial expenses
(income):
|
|
|
|
|
|
Exchange rate
differences (4)
|
(809)
|
(470)
|
(445)
|
71
|
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
|
Taxes on income, net
(5)
|
422
|
224
|
(49)
|
562
|
|
Non-GAAP net
income
|
$ 10,748
|
$ 7,815
|
$ 5,529
|
$ 5,134
|
|
Non-GAAP diluted net
earnings per share
|
$ 0.34
|
$ 0.24
|
$ 0.18
|
$ 0.16
|
|
Weighted average number
of shares used in computing
Non-GAAP diluted net earnings per share (in thousands)
|
31,561
|
32,977
|
31,552
|
33,017
|
|
|
|
|
|
|
(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) Expenses
related to deferred payments in connection with the acquisition of
Callverso Ltd.
|
|
(4) Financial
income (expenses) related to exchange rate differences in
connection with revaluation of assets and liabilities in non-dollar
denominated currencies.
|
|
(5) Tax impact
which relates to our non-GAAP adjustments.
|
|
(6) 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.
|
|
|
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.
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
U.S. dollars in
thousands
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
(Unaudited)
|
(Unaudited)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$ 5,857
|
$ 873
|
$ 3,774
|
$ 1,055
|
|
Adjustments required to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
1,784
|
1,320
|
1,261
|
669
|
|
Amortization of
marketable securities premiums and accretion of discounts,
net
|
615
|
712
|
301
|
340
|
|
Decrease in accrued
severance pay, net
|
(479)
|
(272)
|
(369)
|
(288)
|
|
Share-based
compensation expenses
|
4,252
|
6,409
|
2,116
|
3,063
|
|
Decrease in deferred
tax assets, net
|
64
|
168
|
850
|
534
|
|
Cash financial loss
(income), net
|
154
|
(332)
|
69
|
58
|
|
Decrease in operating
lease right-of-use assets
|
3,557
|
4,282
|
1,168
|
2,132
|
|
Decrease in operating
lease liabilities
|
(3,435)
|
(4,355)
|
(1,324)
|
(818)
|
|
Decrease (increase) in
trade receivables, net
|
(3,767)
|
6,939
|
(6,083)
|
428
|
|
Decrease (increase) in
other receivables and prepaid expenses
|
235
|
1,911
|
(305)
|
1,727
|
|
Decrease (increase) in
inventories
|
5,947
|
(9,512)
|
2,689
|
(3,746)
|
|
Decrease in trade
payables
|
(2,454)
|
(4,218)
|
(2,220)
|
(3,462)
|
|
Increase (decrease) in
other payables and accrued expenses
|
(1,605)
|
(4,934)
|
127
|
(869)
|
|
Increase (decrease) in
deferred revenues
|
1,365
|
6,443
|
(4,945)
|
1,383
|
|
Net cash provided by
operating activities
|
12,090
|
5,434
|
(2,891)
|
2,206
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Proceeds from
short-term deposits
|
6
|
5,006
|
2
|
2
|
|
Proceeds from financial
investment
|
47
|
-
|
26
|
-
|
|
Proceeds from
redemption of marketable securities
|
3,450
|
2,000
|
2,950
|
1,000
|
|
Proceeds from
redemption of financial investments
|
-
|
11,043
|
-
|
8,294
|
|
Purchase of property
and equipment
|
(15,263)
|
(3,263)
|
(8,478)
|
(1,947)
|
|
Net cash provided by
(used in) investing activities
|
(11,760)
|
14,786
|
(5,500)
|
7,349
|
|
|
|
|
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
U.S. dollars in thousands
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
(Unaudited)
|
(Unaudited)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Purchase of treasury
shares
|
(4,754)
|
(2,926)
|
(1,170)
|
(2,926)
|
|
Cash dividends paid to
shareholders
|
(5,453)
|
(5,718)
|
-
|
-
|
|
Proceeds from issuance
of shares upon exercise of options
|
180
|
114
|
-
|
18
|
|
Net cash used in
financing activities
|
(10,027)
|
(8,530)
|
(1,170)
|
(2,908)
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
(9,697)
|
11,690
|
(9,561)
|
6,647
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
30,546
|
24,535
|
30,410
|
29,578
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$ 20,849
|
$ 36,225
|
$ 20,849
|
$ 36,225
|
Company Contacts
Niran Baruch,
Chief Financial Officer
AudioCodes
Tel: +972-3-976-4000
niran.baruch@audiocodes.com
Roger L. Chuchen,
VP, Investor Relations
AudioCodes
Tel: 732-764-2552
roger.chuchen@audiocodes.com
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SOURCE AudioCodes