Second Quarter Highlights
- Quarterly revenues increased by 12.9% year-over-year to $68.4 million.
- Quarterly service revenues increased by 21.9% year-over-year to $27.8
- GAAP results:
- Quarterly GAAP gross margin was 65.1%;
- Quarterly GAAP operating margin was 11.6%; and
- Quarterly GAAP net income was $6.9 million, or $0.21 per diluted share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 65.6%;
- Quarterly Non-GAAP operating margin was 17.4%; and
- Quarterly Non-GAAP net income was $11.3 million, or $0.34 per diluted share.
- Net cash provided by operating activities was $4.8 million for the quarter.
- AudioCodes repurchased 374,479 of its ordinary shares during the quarter at an aggregate cost of $8.3 million.
Details
Lod, Israel – August 2, 2022 - AudioCodes (NASDAQ: AUDC) Press Release
AudioCodes, 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, 2022.
Revenues for the second quarter of 2022 were $68.4 million compared to $60.6 million for the second quarter of 2021.
Net income was $6.9 million, or $0.21 per diluted share, for the second quarter of 2022 compared to $8.2 million, or $0.24 per diluted share, for the second quarter of 2021.
On a Non-GAAP basis, net income was $11.3 million, or $0.34 per diluted share, for the second quarter of 2022 compared to $12.7 million, or $0.37 per diluted share, for the second quarter of 2021.
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) other income related to a payment made by the landlord to AudioCodes Inc., a subsidiary of the Company, in connection with the termination of a lease agreement for its offices in New Jersey; (v) financial income related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies; and (vi) non-cash deferred tax expenses (income). 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 $4.8 million for the second quarter of 2022. Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long and short-term financial investments were $138.5 million as of June 30, 2022 compared to $174.8 million as of December 31, 2021. 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 2022.
“I am pleased to report solid financial results for the second quarter of 2022, growing top line revenue 12.9% year-over-year,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
Overall, we experienced strong market demand for our products and services as we continued to successfully execute on key strategic priorities in the UCC and Customer Experience (CX) markets and accelerated the transition to software products and recurring subscription services.
Microsoft business as a whole grew above 20% year over year and Zoom phone business grew more than 50%. AudioCodes Live for Microsoft Teams managed services continued to grow and reached a level of $24 million ARR, a 100% growth over the year ago quarter. We on-boarded a number of seven-figure Live projects in the second quarter, with the Total Contract Value (TCV) for our Live projects exceeding $60 million in total.
In CX, we saw a nice rebound this quarter with the business up more than 20%, propelled by the ongoing contact center digital transformation to the cloud and healthy spending environment. Services business continued to grow at a nice pace, up over 20% year-over-year, driven primarily by professional services and AudioCodes Live managed services, reaching a level of above 40% of total company revenue.
Despite an uncertain macro environment, we are executing according to plan and controlling our cost structure. As we see new growth opportunities emerging in our core markets and capitalize on our strong portfolio of technologies and solutions and our growing F500 enterprise customer base, we are determined to increase our investments in both R&D and our customer-facing talent. While we continue to be impacted by supply chain disruptions, we believe this is a short-term phenomenon that should alleviate in coming quarters. Lastly, upsell of new voice.ai-related applications continues to take shape, with attach rates improving, and we have a number of exciting products and partnerships launching in the second half of the year,” concluded Mr. Adlersberg.
Share Buy Back Program
During the quarter ended June 30, 2022, the Company acquired 374,479 of its ordinary shares under its share repurchase program for a total consideration of $8.3 million.
In June 2022, the Company received court approval in Israel to purchase up to an aggregate amount of $35 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend of any part of this amount. The approval is valid through December 12, 2022.
As of June 30, 2022, the Company had $35 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 $5.7 million. The dividend is payable on August 31, 2022, to all of the Company’s shareholders of record at the close of trading on the NASDAQ Global Select Market on August 17, 2022.
In accordance with Israeli tax law, the dividend is subject to withholding tax at the 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 2022 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
Second quarter of 2022 earnings call supplementary slides are available at AudioCodes investor website at www.audiocodes.com/investors-lobby
