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

Or Yehuda, Israel – February 4, 2025 - AudioCodes (NASDAQ: AUDC) Press Release

AudioCodes, 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.

Share Buy Back Program

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 www.audiocodes.com/investors-lobby.