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.
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Details
Or Yehuda, Israel – July 30, 2024 – AudioCodes (NASDAQ: AUDC) Press Release
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 www.audiocodes.com/investors-lobby.
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