LOD, Israel, May 7, 2024
/PRNewswire/ --
First Quarter Highlights
- Quarterly revenues increased by 1.5% year-over-year to
$60.1 million;
- Quarterly service revenues increased by 3.3% year-over-year to
$31.5 million;
- GAAP results:
- Quarterly GAAP gross margin was 64.4%;
- Quarterly GAAP operating margin was 5.5%;
- Quarterly GAAP net income was $2.1
million, or $0.07 per diluted
share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 65.2%;
- Quarterly Non-GAAP operating margin was 10.5%;
- Quarterly Non-GAAP net income was $5.2
million, or $0.17 per diluted
share.
- Net cash provided by operating activities was $15.0 million for the quarter.
- AudioCodes declared a cash dividend of 18 cents per share. The dividend, in the
aggregate amount of $5.5 million, was
paid on March 6, 2024 to shareholders
of record on February 20, 2024.
- AudioCodes repurchased 301,937 of its ordinary shares during
the quarter at an aggregate cost of $3.6
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 first quarter ended March 31,
2024.
Revenues for the first quarter of 2024 were $60.1 million compared to $59.2 million for the first quarter of 2023.
Net income was $2.1 million, or
$0.07 per diluted share, for the
first quarter of 2024 compared to net loss of $0.2 million, or $0.01 per diluted share, for the first quarter of
2023.
On a Non-GAAP basis, net income was $5.2
million, or $0.17 per diluted
share, for the first quarter of 2024 compared to $2.7 million, or $0.08 per diluted share, for the first 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 related to
exchange rate differences in connection with revaluation of assets
and liabilities in non-dollar denominated currencies; (v) non-cash
deferred tax expenses (income); and (vi) 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 $15.0 million for the first quarter of
2024. Cash and cash equivalents, long and short-term bank
deposits, long and short-term marketable securities and long and
short-term financial investments were $106.0
million as of March 31, 2024
compared to $106.7 million as of
December 31, 2023. The decrease
in cash and cash equivalents, long and short-term bank deposits,
long and short-term marketable securities and long and short-term
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, , offset, in part, by cash from
operating activities.
"Our first quarter 2024 results were highlighted by healthy
revenue growth of 1.5% year-over-year and progress made in
strategic areas for our business", said Shabtai Adlersberg, President and Chief
Executive Officer of AudioCodes. "In parallel with the nice growth
in key business lines such as Microsoft Teams, voice services for
CX, and conversational AI applications, we saw continued decline in
our legacy gateway networking business, similar to trends seen in
2023. The continued transition from capex to recurring revenue
model also posed revenue headwinds in the quarter.
Growth in key business lines for our future continued as
planned. Microsoft business grew 8% year-over-year, with steady
increase in the Live managed services, which grew 45%
year-over-year, and have reached ARR of $53M exiting 1Q24. We are thus confident that we
are on track to achieve our Live ARR plan of $64-$70 million for
2024. Live managed services represent now nearly 45% of our
Microsoft business compared to 25% in the year ago quarter, and
thus we believe the impact of our shift to recurring revenue model
should ease in coming quarters. We also enjoyed growth in total
contract value of Live services which grew above 45%
year-over-year. Additionally, we have seen strong performance in
customer experience (CX) and conversational AI (CAI), up 15% and 50% year over year,
respectively. The strength has been driven by sales of our
voice connectivity solutions in the CX market, and cross-selling of
our Voca CIC AI first, Azure-native contact center for Teams. We
are heartened by the market's growing recognition of Voca CIC,
which has recently been awarded by CX Today as the best Microsoft
Teams Contact Center solution. We expect Voca CIC to be a
major growth pillar of our CX and of the Company over the
long-term. We believe we are the de facto leader for complete
calling and contact center solutions for Microsoft Teams.
On the financial front, we enjoyed strong positive cash flow
from operations in the quarter. To support further margin
expansion, we have recently initiated the second phase of cost
rationalization plans discussed previously.
Overall, while we had a slower than expected start of revenue
growth to the year due to the decline in gateways and muted
business spending as a result of the elevated interest rate
environment in 2024, we remain confident in our ability to sustain
healthy top-line growth long-term while driving significant margin
expansion in 2024 and beyond," concluded Mr. Adlersberg.
Share Buy Back Program and Cash Dividend
In December 2023, 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
June 18, 2024.
On February 6, 2024, the Company
declared a cash dividend of 18 cents
per share. The dividend, in the aggregate amount of
approximately $5.5 million, was paid
on March 6, 2024 to all of the
Company's shareholders of record on February
20, 2024.
During the quarter ended March 31,
2024, the Company acquired 301,937 of its ordinary shares
under its share repurchase program for a total consideration of
$3.6 million.
As of March 31, 2024, the Company
had $10.2 million available under
this approval for the repurchase of shares and/or declaration of
cash dividends.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's first 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
|
|
|
March
31,
|
|
December
31,
|
|
2024
|
|
2023
|
|
(Unaudited)
|
|
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$ 30,410
|
|
$ 30,546
|
|
Short-term and
restricted bank deposits
|
208
|
|
212
|
|
Short-term marketable
securities
|
15,322
|
|
7,438
|
|
Trade receivables,
net
|
48,977
|
|
51,125
|
|
Other receivables and
prepaid expenses
|
8,841
|
|
9,381
|
|
Inventories
|
40,658
|
|
43,959
|
|
Total current
assets
|
144,416
|
|
142,661
|
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
|
Long-term Trade
receivables
|
$16,630
|
|
$ 16,798
|
|
Long-term marketable
securities
|
57,532
|
|
65,732
|
|
Long-term financial
investments
|
2,543
|
|
2,730
|
|
Deferred tax
assets
|
6,890
|
|
6,208
|
|
Operating lease
right-of-use assets
|
35,061
|
|
36,712
|
|
Severance pay
funds
|
17,219
|
|
17,202
|
|
Total long-term
assets
|
135,875
|
|
145,382
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
17,394
|
|
10,893
|
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
38,448
|
|
38,581
|
|
|
|
|
|
Total assets
|
$ 336,133
|
|
$ 337,517
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Trade
payables
|
7,322
|
|
7,556
|
|
Other payables and
accrued expenses
|
28,460
|
|
29,943
|
|
Deferred
revenues
|
44,312
|
|
38,820
|
|
Short-term operating
lease liabilities
|
6,474
|
|
7,878
|
|
Total current
liabilities
|
86,568
|
|
84,197
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
Accrued severance
pay
|
$ 16,569
|
|
$ 16,662
|
|
Deferred revenues and
other liabilities
|
17,929
|
|
17,142
|
|
Long-term operating
lease liabilities
|
31,435
|
|
31,404
|
|
Total long-term
liabilities
|
65,933
|
|
65,208
|
|
|
|
|
|
Total shareholders'
equity
|
183,632
|
|
188,112
|
|
Total liabilities and
shareholders' equity
|
$ 336,133
|
|
$ 337,517
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
U.S. dollars in
thousands, except per share data
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2024
|
|
2023
|
|
|
(Unaudited)
|
|
Revenues:
|
|
|
|
|
|
Products
|
|
$ 28,550
|
|
$ 28,693
|
|
Services
|
|
31,526
|
|
30,520
|
|
Total
Revenues
|
|
60,076
|
|
59,213
|
|
Cost of
revenues:
|
|
|
|
|
|
Products
|
|
11,825
|
|
13,044
|
|
Services
|
|
9,584
|
|
9,626
|
|
Total Cost of
revenues
|
|
21,409
|
|
22,670
|
|
Gross profit
|
|
38,667
|
|
36,543
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development, net
|
|
13,933
|
|
15,009
|
|
Selling and
marketing
|
|
17,367
|
|
17,847
|
|
General and
administrative
|
|
4,086
|
|
4,531
|
|
Total operating
expenses
|
|
35,386
|
|
37,387
|
|
Operating income
(loss)
|
|
3,281
|
|
(844)
|
|
Financial income,
net
|
|
23
|
|
949
|
|
Income before taxes on
income
|
|
3,304
|
|
105
|
|
Taxes on income,
net
|
|
(1,221)
|
|
(287)
|
|
Net income
(loss)
|
|
$ 2,083
|
|
$ (182)
|
|
Basic net earnings
(loss) per share
|
|
$ 0.07
|
|
$ (0.01)
|
|
Diluted net earnings
(loss) per share
|
|
$ 0.07
|
|
$ (0.01)
|
|
Weighted average number
of shares used in computing basic net
earnings per share (in thousands)
|
|
30,333
|
|
31,750
|
|
Weighted average number
of shares used in computing diluted net
earnings per share (in thousands)
|
|
30,793
|
|
32,148
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
|
U.S. dollars in
thousands, except per share data
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2024
|
|
2023
|
|
|
(Unaudited)
|
|
GAAP net income
(loss)
|
|
$ 2,083
|
|
$ (182)
|
|
GAAP net earnings
(loss) per share
|
|
$ 0.07
|
|
$ (0.01)
|
|
Cost of
revenues:
|
|
|
|
|
|
Share-based
compensation (1)
|
|
79
|
|
107
|
|
Amortization expenses
(2)
|
|
122
|
|
135
|
|
Lease expenses
(6)
|
|
304
|
|
-
|
|
|
505
|
|
242
|
|
Research and
development, net:
|
|
|
|
|
|
Share-based
compensation (1)
|
|
592
|
|
743
|
|
Deferred payments
expenses (3)
|
|
-
|
|
125
|
|
Lease expenses
(6)
|
|
342
|
|
-
|
|
|
934
|
|
868
|
|
Selling and
marketing:
|
|
|
|
|
|
Share-based
compensation (1)
|
|
723
|
|
1,237
|
|
Amortization expenses
(2)
|
|
11
|
|
11
|
|
Deferred payments
expenses (3)
|
|
-
|
|
125
|
|
Lease expenses
(6)
|
|
38
|
|
-
|
|
|
772
|
|
1,373
|
|
General and
administrative:
|
|
|
|
|
|
Share-based
compensation (1)
|
|
742
|
|
1,259
|
|
Lease expenses
(6)
|
|
76
|
|
|
|
|
818
|
|
1,259
|
|
Financial
expenses:
|
|
|
|
|
|
Exchange rate
differences (4)
|
|
(364)
|
|
(541)
|
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
|
Deferred tax
(5)
|
|
471
|
|
(338)
|
|
Non-GAAP net
income
|
|
$ 5,219
|
|
$ 2,681
|
|
Non-GAAP diluted net
earnings per share
|
|
$ 0.17
|
|
$ 0.08
|
|
Weighted average number
of shares used in computing Non-GAAP
diluted net earnings per share (in thousands)
|
|
31,570
|
|
33,056
|
|
|
|
|
|
|
|
(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
expenses related to exchange rate differences in connection with
revaluation of assets and liabilities in non-dollar denominated
currencies.
(5) Non-cash
deferred tax expenses.
(6) 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
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2024
|
|
2023
|
|
|
(Unaudited)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
(loss)
|
|
$ 2,083
|
|
$ (182)
|
|
Adjustments required to
reconcile net income to net cash provided
by operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
523
|
|
651
|
|
Amortization of
marketable securities premiums and accretion of
discounts, net
|
|
314
|
|
372
|
|
Increase (decrease) in
accrued severance pay, net
|
|
(110)
|
|
16
|
|
Share-based
compensation expenses
|
|
2,136
|
|
3,346
|
|
Increase in deferred
tax assets, net
|
|
(786)
|
|
(366)
|
|
Cash financial loss
(income), net
|
|
85
|
|
(390)
|
|
Decrease in operating
lease right-of-use assets
|
|
2,389
|
|
2,150
|
|
Decrease in operating
lease liabilities
|
|
(2,111)
|
|
(3,537)
|
|
Decrease in trade
receivables, net
|
|
2,316
|
|
6,511
|
|
Decrease in other
receivables and prepaid expenses
|
|
540
|
|
184
|
|
Decrease (increase) in
inventories
|
|
3,258
|
|
(5,766)
|
|
Decrease in trade
payables
|
|
(234)
|
|
(756)
|
|
Decrease
in other payables and accrued
expenses
|
|
(1,732)
|
|
(4,065)
|
|
Increase in deferred
revenues
|
|
6,310
|
|
5,060
|
|
Net cash provided by
operating activities
|
|
14,981
|
|
3,228
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Proceeds from
short-term deposits
|
|
4
|
|
5,004
|
|
Proceeds from
financial investment
|
|
21
|
|
-
|
|
Proceeds from
redemption of marketable securities
|
|
500
|
|
1,000
|
|
Proceeds from
redemption of financial investments
|
|
-
|
|
2,749
|
|
Purchase of property
and equipment
|
|
(6,785)
|
|
(1,316)
|
|
Net cash provided by
(used in) investing activities
|
|
(6,260)
|
|
7,437
|
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
U.S. dollars in
thousands
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2024
|
|
2023
|
|
|
(Unaudited)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Purchase of treasury
shares
|
|
(3,584)
|
|
-
|
|
Cash dividends paid to
shareholders
|
|
(5,453)
|
|
(5,718)
|
|
Proceeds from issuance
of shares upon exercise of options
|
|
180
|
|
96
|
|
Net cash used in
financing activities
|
|
(8,857)
|
|
(5,622)
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
|
(136)
|
|
5,043
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
30,546
|
|
24,535
|
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 30,410
|
|
$ 29,578
|
|
|
|
|
|
|
|
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
