AudioCodes Reports Fourth Quarter and Full Year 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

Fourth Quarter and Full Year 2024 Highlights

— Quarterly revenues decreased by 3.2% year-over-year to $61.6 million; full year 2024 revenues decreased by 0.9% to $242.2 million.

— Quarterly service revenues increased by10.9% year-over-year to $34.2 million; full year 2024 service revenues increased by 8.2% to $130.2 million.

— GAAP results: – Quarterly GAAP gross margin was 66.2%; – Quarterly GAAP operating margin was 6.7%; – Quarterly GAAP EBITDA was $5.2 million; – Quarterly GAAP net income was $6.8 million, or $0.22 per diluted share; and – Full year 2024 GAAP net income was $15.3 million, or $0.50 per diluted share.

— Non-GAAP results: – Quarterly Non-GAAP gross margin was 66.5%; – Quarterly Non-GAAP operating margin was 12.2%; – Quarterly Non-GAAP EBITDA was $8.5 million; – Quarterly Non-GAAP net income was $11.6 million, or $0.37 per diluted share; and – Full year 2024 Non-GAAP net income was $27.3 million, or $0.87 per diluted share.

— Net cash provided by operating activities was $15.3 million for the quarter and $35.3 million for the full year 2024.

— AudioCodes repurchased 634,533 of its ordinary shares during the quarterly period ended December 31, 2024 at an aggregate cost of $6.0 million.

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Details

AudioCodes (NASDAQ: AUDC), a leading provider of unified communications voice, contact center and conversational AI applications and services for enterprises, today announced its financial results for the fourth quarter and full year period ended December 31, 2024.

Revenues for the fourth quarter of 2024 were $61.6 million compared to $60.2 million for the third quarter of 2024 and compared to $63.6 million for the fourth quarter of 2023. Revenues were $242.2 million in 2024 compared to $244.4 million in 2023.

EBITDA for the fourth quarter of 2024 was $5.2 million compared to $7.9 million for the fourth quarter of 2023. EBITDA was $21.1 million in 2024 compared to $17.0 million in 2023.

On a Non-GAAP basis, EBITDA for the fourth quarter of 2024 was $8.5 million compared to $11.2 million for the fourth quarter of 2023. EBITDA was $31.4 million in 2024 compared to $31.0 million in 2023.

Net income was $6.8 million, or $0.22 per diluted share, for the fourth quarter of 2024 compared to net income of $3.7 million, or $0.12 per diluted share, for the fourth quarter of 2023. Net income was $15.3 million, or $0.50 per diluted share in 2024, compared to $8.8 million, or $0.28 per diluted share in 2023.

On a Non-GAAP basis, net income was $11.6 million, or $0.37 per diluted share, for the fourth quarter of 2024 compared to $8.9 million, or $0.28 per diluted share, for the fourth quarter of 2023. Non-GAAP net income was $27.3 million, or $0.87 per diluted share in 2024 compared to $25.0 million, or $0.77 per diluted share in 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; (vi) with respect to 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; and (vii) a one-time, non-recurring settlement expense attributable to the Settlement Agreement (as defined below). 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.

On December 25, 2024, we entered into a settlement (the “Settlement Agreement”) with the landlord of our prior headquarters in connection with the termination of the related lease agreement. Pursuant to the Settlement Agreement, we incurred a one-time, non-recurring settlement expense of approximately $1.4 million during the quarterly period in the form of a cash payment made to the landlord.

Net cash provided by operating activities was $15.3 million for the fourth quarter of 2024 and $35.3 million for 2024.

Cash and cash equivalents, short-term bank deposits, long and short-term marketable securities and long-term financial investments were $93.9 million as of December 31, 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-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, payment of a cash dividend during each of the first and third quarters of 2024, and the purchase of property and equipment related to leasehold improvements of our new corporate headquarters in Israel, offset, in part, by cash generated from operating activities.

“I am pleased to report solid fourth quarter performance, with healthy growth in key business lines, taking us further on our transformative evolution to a cloud software and services company,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

Enterprise UCaaS and CX business accounted for 92% of revenues in the fourth quarter, within which our UCaaS business performed well, highlighted by Microsoft business up 13% in the quarter, representing the highest quarterly growth rate this year. Full year Microsoft business increased 6%, driven mainly by the ongoing transition of our revenue model from perpetual sales to recurrent revenue sales. Live managed services mix within Microsoft business increased 30% year-over-year, and reached a level of 47% of business, compared to 40% in the year ago quarter. This growth, coupled with 30% growth in Voice.ai business for the full year 2024, contributed to us ending 2024 with ARR at $65 million, representing 35% year-over-year growth. We expect the recurring revenue business momentum to continue driving our sales for the UCaaS and CX markets in 2025 and beyond. With the shift in focus for end customers towards Value-Added Services, we expect to see a rise in demand for our Voice.ai application solutions, and an increased interest in our Live Platform, which consolidates connectivity, management, and Value-Added Services through one integrated AudioCodes' platform.

The significant investments we have in our Voice.ai and conversational AI portfolio over the last several years are paying off. Individual business units have emerged as leaders in their respective categories. Additionally, with growing customer demand for AI and Gen AI driven business voice applications and Value-added Services, we have seen a surge in our pipeline of created opportunities in Voice.ai connect, Voca CIC and Meeting Insights applications. The growth in AI business applications is solid and we expect this segment to grow 40% to 50% in 2025.

Overall, we exited 2024 with good operational momentum, particularly with the continued strong growth in our two primary engines, namely our Live family of managed services and Voice.ai. With the progress we are making in increasing our recurring revenues and the robust pipeline of opportunities, we expect to see improved top-line growth in 2025 and beyond,” concluded Mr. Adlersberg.

Share Buy Back Program

During the quarter ended December 31, 2024, the Company acquired 634,533 of its ordinary shares under its share repurchase program for a total consideration of $6.0 million.

In December 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 June 14, 2025.

As of December 31, 2024, the Company had $19 million available under this approval for the repurchase of shares and/or declaration of cash dividends.

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 $5.3 million. The dividend is payable on March 6, 2025, to all of the Company's shareholders of record at the close of trading on the NASDAQ Global Select Market on February 20, 2025.

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 Company's Board of Directors.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2024 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one of 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.

About AudioCodes

AudioCodes (NASDAQ, TASE: AUDC) is a leading innovator of intelligent cloud communications solutions. AudioCodes empowers enterprises and service providers to build and operate state-of-the-art voice networks, unified communications platforms, and AI-driven productivity tools. The cutting-edge portfolio includes cloud-native applications, advanced Voice.ai technologies, and comprehensive communication solutions tailored for the modern digital workplace. Trusted by global Fortune 500 companies and tier-1 operators worldwide, AudioCodes drives digital transformation through seamless integration, enhanced collaboration, and unparalleled communication experiences.

For more information, visit http://www.audiocodes.com.

Follow AudioCodes' social media channels:

AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, andYouTube.

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.

©2025 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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands December 31, December 31, 2024 2023 (Unaudited) (Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents $ 58,749 $ 30,546Short-term and restricted bank deposits 210 212Short-term marketable securities 3,426 7,438Trade receivables, net 56,016 51,125Other receivables and prepaid expenses 13,012 9,381Inventories 31,463 43,959Total current assets 162,876 142,661LONG-TERM ASSETS:Long-term Trade receivables $ 15,753 $ 16,798Long-term marketable securities 28,518 65,732Long-term financial investments 3,008 2,730Deferred tax assets 9,838 6,208Operating lease right-of-use assets 32,534 36,712Severance pay funds 18,004 17,202Total long-term assets 107,655 145,382PROPERTY AND EQUIPMENT, NET 27,321 10,893GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 38,049 38,581Total assets $ 335,901 $ 337,517LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Trade payables 7,543 7,556Other payables and accrued expenses 25,823 29,943Deferred revenues 38,438 38,820Short-term operating lease liabilities 5,954 7,878Total current liabilities 77,758 84,197LONG-TERM LIABILITIES:Accrued severance pay $ 16,387 $ 16,662Deferred revenues and other liabilities 19,434 17,142Long-term operating lease liabilities 30,508 31,404Total long-term liabilities 66,329 65,208Total shareholders' equity 191,814 188,112Total liabilities and shareholders' equity $ 335,901 $ 337,517AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars in thousands, except per share data Year ended Three months ended December 31, December 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited)Revenues:Products $ 111,966 $ 123,991 $ 27,319 $ 32,692Services 130,210 120,392 34,235 30,867TotalRevenues 242,176 244,383 61,554 63,559Cost of revenues:Products 44,448 47,964 10,325 11,396Services 39,567 38,070 10,510 9,771TotalCost of revenues 84,015 86,034 20,835 21,167Gross profit 158,161 158,349 40,719 42,392Operating expenses:Research and development, net 52,125 57,169 12,345 13,806Selling and marketing 71,167 70,243 18,740 17,496General and administrative 17,678 16,513 5,532 3,856Total operating expenses 140,970 143,925 36,617 35,158Operating income 17,191 14,424 4,102 7,234Financial income (expenses), net (2,095) (52) (1,900) (1,740)Income before taxes on income 15,096 14,372 2,202 5,494Taxes on income, net 215 (5,592) 4,573 (1,839)Net income $ 15,311 $ 8,780 $ 6,775 $ 3,655Basic net earnings per share $ 0.51 $ 0.28 $ 0.23 $ 0.12Diluted net earnings per share $ 0.50 $ 0.28 $ 0.22 $ 0.12Weighted average number of shares used in computing basic net earnings per share (in thousands) 30,162 31,401 29,932 30,678Weighted average number of shares used in computing diluted net earnings per share (in thousands) 30,642 31,579 30,260 30,893AUDIOCODES LTD. AND ITS SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOMEU.S. dollars in thousands, except per share data Year ended Three months ended December 31, December 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited)GAAP net income $ 15,311 $ 8,780 $ 6,775 $ 3,655GAAP net earnings per share $ 0.50 $ 0.28 $ 0.22 $ 0.12Cost of revenues:Share-based compensation (1) 369 388 95 84Amortization expenses (2) 488 501 122 122Lease expenses (6) 304 685 – 363 1,161 1,574 217 569Research and development, net:Share-based compensation (1) 2,108 2,685 466 595Deferred payments expenses (3) – 770 – 408Lease expenses (6) 342 430 – 55 2,450 3,885 466 1,058Selling and marketing:Share-based compensation (1) 2,959 4,297 704 917Amortization expenses (2) 44 44 11 11Deferred payments expenses (3) – 86 – 46Lease expenses (6) 38 430 – 55 3,041 4,857 715 1,029General and administrative:Share-based compensation (1) 2,792 4,010 679 768Settlement with former headquarter office landlord (7) 1,355 – 1,355 -Lease expenses (6) 76 171 – 91 4,223 4,181 2,034 859Financial expenses (income):Exchange rate differences (4) 507 205 1,261 1,442Income taxes:Taxes on income, net (5) 585 1,549 163 302Non-GAAP net income $ 27,278 $ 25,031 $ 11,631 $ 8,914Non-GAAP diluted net earnings per share $ 0.87 $ 0.77 $ 0.37 $ 0.28Weighted average number of shares used in computing 31,449 32,637 31,192 31,937Non-GAAP diluted net earnings per share (in thousands)(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) With respect to 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.(7) A one-time, non-recurring expense attributable to the Settlement Agreement.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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSU.S. dollars in thousands Year ended Three months ended December 31, December 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited)Cash flows from operating activities:Net income $ 15,311 $ 8,780 $ 6,775 $ 3,655Adjustments required to reconcile net income to netcash provided by operating activities:Depreciation and amortization 3,883 2,596 1,095 624Net loss from sale of marketable securities 882 218 608 -Amortization of marketable securities premiums and 1,120 1,130 509 321accretion of discounts, netDecrease (increase) in accrued severance pay, net (1,077) (362) (378) 131Share-based compensation expenses 8,228 11,380 1,944 2,364Decrease (increase) in deferred tax assets, net (4,548) 1,437 (5,374) 273Cash financial loss (income), net 313 (218) 176 179Decrease in operating lease right-of-use assets 6,009 9,281 1,254 2,593Decrease (increase) in operating lease liabilities (4,651) (6,914) (720) 1,497Decrease (increase) in trade receivables, net (3,846) 1,600 2,168 (3,045)Decrease (increase) in other receivables and prepaid (3,631) 625 (927) (947)expensesDecrease (increase) in inventories 12,283 (7,791) 2,164 814Increase (decrease in trade payables (13) (3,782) 2,064 918Increase (decrease) in other payables and accrued 3,223 (6,233) 3,817 181expensesIncrease (decrease) in deferred revenues 1,767 3,144 136 (279)Net cash provided by operating activities 35,253 14,891 15,311 9,279Cash flows from investing activities:Proceeds from short-term deposits 2 4,998 (8) (10)Proceeds from sale of marketable securities 35,177 3,846 25,186 -Proceeds from financial investment 132 – 56 -Proceeds from redemption of marketable securities 7,450 3,084 4,000 -Proceeds from redemption of financial investments – 14,094 – -Purchase of financial investments (675) (81) – -Purchase of property and equipment (24,280) (5,965) (3,512) (664)Net cash provided by (used in) investing activities 17,806 19,976 25,722 (674)AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSU.S. dollars in thousands Year ended Three months ended December 31, December 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited)Cash flows from financing activities:Purchase of treasury shares (14,328) (18,259) (5,988) (6,286)Cash dividends paid to shareholders (10,896) (11,399) – -Proceeds from issuance of shares upon exercise of options 368 802 182 548Net cash used in financing activities (24,856) (28,856) (5,806) (5,738)Net increase in cash, cash equivalents, and restricted 28,203 6,011 35,227 2,867cashCash, cash equivalents and restricted cash at beginning 30,546 24,535 23,522 27,679of periodCash, cash equivalents and restricted cash at end of $ 58,749 $ 30,546 $ 58,749 $ 30,546periodCompany ContactsNiran Baruch, Roger L. Chuchen,Chief Financial Officer VP, Investor RelationsAudioCodes AudioCodesTel: +972-3-976-4000 Tel: 732-764-2552niran.baruch@audiocodes.com roger.chuchen@audiocodes.com

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