Audiocodes AUDC

NAS: AUDC | ISIN: IL0010829658   16/07/2024
11,25 USD (+0,81%)
(+0,81%)   16/07/2024

AudioCodes Reports Second Quarter 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

LOD, Israel, Aug. 1, 2023 /PRNewswire/ --

Second Quarter Highlights

  • Quarterly revenues increased by 1.4% sequentially to $60.0 million.
  • Quarterly Service revenues of $28.5 million accounted for 47.4% of revenues.
  • GAAP results:
    - Quarterly GAAP gross margin was 64.1% compared to 61.7% in the prior quarter;
    - Quarterly GAAP operating margin was 3.8% compared to operating margin loss of 1.4% in the prior quarter; and
    - Quarterly GAAP net income was $1.1 million, or $0.03 per diluted share compared to net loss of $0.2 million, or $0.01 per diluted share in the prior quarter.
  • Non-GAAP results:
    - Quarterly Non-GAAP gross margin was 64.5% compared to 62.1% in the prior quarter;
    - Quarterly Non-GAAP operating margin was 9.5% compared to 4.9% in the prior quarter; and
    - Quarterly Non-GAAP net income was $5.1 million, or $0.16 per diluted share compared to net income of $2.7 million, or $0.08 per diluted share in the prior quarter.
  • Net cash provided by operating activities was $2.2 million for the quarter.
  • AudioCodes repurchased 318,891 of its ordinary shares during the quarter at an aggregate cost of $2.9 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 second quarter ended June 30, 2023.

Revenues for the second quarter of 2023 were $60.0 million compared to $59.2 million for the first quarter of 2023 and $68.4 million for the second quarter of 2022.

Net income was $1.1 million, or $0.03 per diluted share, for the second quarter of 2023 compared to net loss of $0.2 million, or $0.01 per diluted share for the first quarter of 2023 and net income of $6.9 million, or $0.21 per diluted share, for the second quarter of 2022.

On a Non-GAAP basis, net income was $5.1 million, or $0.16 per diluted share, for the second quarter of 2023 compared to $2.7 million, or $0.08 per diluted share, for the first quarter of 2023 and $11.3 million, or $0.34 per diluted share, for the second quarter of 2022.

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 $2.2 million for the second quarter of 2023.  Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long and short-term financial investments were $118.5 million as of June 30, 2023 compared to $124.3 million as of December 31, 2022.  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 2023.

"I am pleased to report solid second quarter 2023 results with meaningful business activity improvement relative to prior quarter in key strategic areas," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

We made good progress in our enterprise business, now reaching 88% of our company revenue.  Microsoft-related business in the quarter grew 12% year-over-year and 16% sequentially, with Microsoft Teams business up 18% year over year.  Strong ongoing momentum of our AudioCodes Live managed services continued, with ARR exiting the quarter at $40 million, growing over 60% year-over-year, and Live Total Contract Value (TCV) generated in the second quarter expanding 75% over the previous quarter.  Strong Live performance to date puts on track to achieve our target of $46-$50 million in 2023, representing approximately 50% year-over-year growth.  Zoom related business grew over 20% year over year.

We also executed well in our customer experience (CX) and conversational AI businesses, delivering 7% year over year and over 25% sequentially.  Voca Conversational Interactive Center (CIC), our entry-level Microsoft Teams-native AI-first contact center is garnering significant customer interest in 2023, as enterprises are increasingly looking to leverage Teams for both UC/CX environments.  As announced yesterday, Voca CIC is now officially certified by Microsoft as a Microsoft Teams Contact Center solution.  Enterprises that adopt Voca CIC can achieve true consolidation of Unified Communications and Contact Center, provided as a fully managed service by AudioCodes.

We also made significant progress in other conversational AI (CAI) lines.  Voice ai Connect made good progress in the quarter, and Meeting Insights for Teams solution has recently integrated with GPT-4 generative AI, making available advanced AI summarization and smart recap features to our customers.  Importantly, we are increasingly confident in our growth prospects for both CX and conversational AI, as the strong pipeline built over the past several quarters is starting to materialize into meaningful bookings and contract wins.  

Overall, we executed well this quarter and our burgeoning success particularly in Live puts us on an accelerated path in our long-term transformation to software and services.  This factor coupled with incremental opex relief from previously announced cost savings actions should position us to deliver on our commitment to drive meaningful profitability improvements in second half of 2023 and beyond," concluded Mr. Adlersberg. 

Share Buy Back Program

During the quarter ended June 30, 2023, the Company acquired 318,891 of its ordinary shares under its share repurchase program for a total consideration of $2.9 million.

In June 2023, the Company received court approval in Israel to purchase up to an aggregate amount of $25 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 27, 2023.

As of June 30, 2023, the Company had $24.7 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, 2023, to all of the Company's shareholders of record at the close of trading on the NASDAQ Global Select Market on August 17, 2023. 

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 2023 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

Second quarter of 2023 earnings call supplementary slides are available at 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: AUDC) (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; 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.

©2023 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 and CloudBond 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 


June 30,

December 31,


2023

2022


(Unaudited)

(Audited)

ASSETS






CURRENT ASSETS:



Cash and cash equivalents

$ 36,225

$ 24,535

Short-term and restricted bank deposits

204

5,210

Short-term marketable securities

5,716

2,120

Short-term financial investments

3,028

15,258

Trade receivables, net

46,611

56,424

Other receivables and prepaid expenses

8,095

10,006

Inventories

45,778

36,377

Total current assets

145,657

149,930




LONG-TERM ASSETS:



Long-term Trade receivables

$15,973

$13,099

Long-term marketable securities

70,546

75,946

Long-term financial investments

2,783

1,242

Deferred tax assets

8,884

9,073

Operating lease right-of-use assets

11,440

13,517

Severance pay funds

17,315

17,933

Total long-term assets

126,941

130,810




PROPERTY AND EQUIPMENT, NET

6,298

3,965




GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,847

39,126




Total assets

$ 317,743

$ 323,831




LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:



Trade payables

7,120

11,338

Other payables and accrued expenses

35,651

38,316

Deferred revenues

41,694

36,634

Short-term operating lease liabilities

6,089

8,169

Total current liabilities

90,554

94,457




LONG-TERM LIABILITIES:



Accrued severance pay

$ 16,865

$ 17,755

Deferred revenues and other liabilities

17,629

16,308

Long-term operating lease liabilities

5,481

5,551

Total long-term liabilities

39,975

39,614




Total shareholders' equity

187,214

189,760

Total liabilities and shareholders' equity

$ 317,743

$ 323,831

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data


 Six months ended

Three months ended


 June 30,

June 30,


2023

2022

2023

2022


(Unaudited)

(Unaudited)

Revenues:





Products

$ 60,260

$ 79,406

$ 31,567

$ 40,586

Services

58,973

55,311

28,453

27,774

Total Revenues

119,233

134,717

60,020

68,360

Cost of revenues:





Products

25,221

30,118

12,177

15,843

Services

18,992

15,729

9,366

8,007

Total Cost of revenues

44,213

45,847

21,543

23,850

Gross profit

75,020

88,870

38,477

44,510

Operating expenses:





Research and development, net

29,403

29,941

14,394

14,959

Selling and marketing

35,526

34,372

17,679

17,084

General and administrative

8,680

8,583

4,149

4,545

Total operating expenses

73,609

72,896

36,222

36,588

Operating income

1,411

15,974

2,255

7,922

Financial income (expenses), net

1,196

1,851

247

841

Income before taxes on income

2,607

17,825

2,502

8,763

Taxes on income, net

(1,734)

(2,281)

(1,447)

(1,827)

Net income

$ 873

$ 15,544

$ 1,055

$ 6,936

Basic net earnings per share

$ 0.03

$ 0.49

$ 0.03

$ 0.22

Diluted net earnings per share

$ 0.03

$ 0.47

$ 0.03

$ 0.21

Weighted average number of shares used in computing basic net
earnings per share (in thousands)

32,024

32,019

31,900

31,809

Weighted average number of shares used in computing diluted net
earnings per share (in thousands)

33,017

32,800

32,977

32,518

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME 

U.S. dollars in thousands, except per share data


Six months ended

Three months ended


June 30,

June 30,


2023

2022

2023

2022


(Unaudited)

(Unaudited)

GAAP net income

$ 873

$ 15,544

$ 1,055

$ 6,936

GAAP net earnings per share

$ 0.03

$ 0.47

$ 0.03

$ 0.21

Cost of revenues:





Share-based compensation (1)

210

174

103

125

Amortization expenses (2)

257

380

122

190


467

554

225

315

Research and development, net:





Share-based compensation (1)

1,441

1,887

698

728

Deferred payments expenses (3)

250

250

125

125


1,691

2,137

823

853

Selling and marketing:





Share-based compensation (1)

2,330

3,151

1,093

1,712

Amortization expenses (2)

22

22

11

11

Deferred payments expenses (3)

250

250

125

125


2,602

3,423

1,229

1,848

General and administrative:





Share-based compensation (1)

2,428

2,522

1,169

1,354

Other Income (4)

-

(810)

-

(405)


2,428

1,712

1,169

949

Financial expenses (income):





Exchange rate differences (5)

(470)

(1,215)

71

(495)






Income taxes:





Deferred tax (6)

224

353

562

940

Non-GAAP net income

$ 7,815

$ 22,508

$ 5,134

$ 11,346

Non-GAAP diluted net earnings per share

$ 0.24

$ 0.67

$ 0.16

$ 0.34

Weighted average number of shares used in computing Non-GAAP diluted net earnings per share (in thousands)

32,977

33,558

33,017

33,332


(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)  Other income related to a payment made to AudioCodes Inc. in connection with the termination of a lease agreement for its offices in New Jersey. 

(5)  Financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(6)  Non-cash deferred tax expense.


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


Six months ended

Three months ended


June 30,

June 30,


2023

2022

2023

2022


(Unaudited)

(Unaudited)

Cash flows from operating activities:





Net income

$ 873

$ 15,544

$ 1,055

$ 6,936

Adjustments required to reconcile net income to net cash provided by operating activities:





Depreciation and amortization

1,320

1,464

669

722

Amortization of marketable securities premiums and accretion of discounts, net

712

793

340

433

Increase (decrease) in accrued severance pay, net

(272)

(597)

(288)

91

Share-based compensation expenses

6,409

7,734

3,063

3,919

Decrease in deferred tax assets, net

168

237

534

887

Cash financial loss (income), net

(332)

(328)

58

(178)

Decrease in operating lease right-of-use assets

4,282

3,142

2,132

1,792

Decrease in operating lease liabilities

(4,355)

(6,229)

(818)

(2,023)

Decrease (increase) in trade receivables, net

6,939

(7,373)

428

(6,199)

Decrease (increase) in other receivables and prepaid expenses

1,911

(1,220)

1,727

(87)

Increase in inventories

(9,512)

(3,850)

(3,746)

(2,437)

Increase (decrease) in trade payables

(4,218)

(425)

(3,462)

1,421

Increase (decrease) in other payables and accrued expenses

(4,934)

(4,799)

(869)

403

Increase (decrease) in deferred revenues

6,443

1,663

1,383

(862)

Net cash provided by operating activities

5,434

5,756

2,206

4,818

Cash flows from investing activities:





Investment in short-term deposits

-

(5,000)

-

-

Proceeds from short-term deposits

5,006

13

2

10

Proceeds from redemption of marketable securities

2,000

1,123

1,000

1,123

Proceeds from redemption of financial investments

11,043

-

8,294

-

Purchase of financial investments

-

(15,670)

-

(270)

Net cash paid in acquisition of subsidiary

-

(100)

-

-

Purchase of property and equipment

(3,263)

(579)

(1,947)

(289)

Net cash provided by (used in) investing activities

14,786

(20,213)

7,349

574

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 

U.S. dollars in thousands 


Six months ended

Three months ended


June 30,

June 30,


2023

2022

2023

2022


(Unaudited)

(Unaudited)

Cash flows from financing activities:





Purchase of treasury shares

(2,926)

(29,169)

(2,926)

(8,300)

Cash dividends paid to shareholders

(5,718)

(5,832)

-

-

Proceeds from issuance of shares upon exercise of options

114

181

18

176

Net cash used in financing activities

(8,530)

(34,820)

(2,908)

(8,124)






Net increase (decrease) in cash, cash equivalents, and restricted cash

11,690

(49,277)

6,647

(2,732)

Cash, cash equivalents and restricted cash at beginning of period

24,535

84,523

29,578

37,978

Cash, cash equivalents and restricted cash at end of period

$ 36,225

$ 35,246

$ 36,225

$ 35,246

 

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

Mobile: 347-752-0780

roger.chuchen@audiocodes.com

 

 

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