GICS Sector : Technology
AudioCodes Ltd.provides advanced communications software, products, and productivity solutions for the digital workplace.The company offers solutions, products, and services for unified communications, contact centers, VoiceAI business line, and service provider business.
The company reported a solid third quarter 2025, with revenues reaching $61.5 million, a 2.2% increase from the same period last year. Gross margin for the quarter was 65.5%, slightly up from 65.2% in Q3 2024. Non-GAAP results showed a non-GAAP gross margin of 65.8%, non-GAAP operating income of $5.8 million, and non-GAAP net income of $4.9 million. Earnings per share (EPS) came in at $0.17, beating analyst estimates of $0.09705. The company's financial performance was characterized by a stable top line, with a slight increase in revenue, and an improvement in profitability metrics.
Publication Date: Nov -12
The company's dual growth engines, Live family of Unified Communication and Collaboration and customer experience connectivity services and conversational AI business line, drove annual recurring revenue growth of 25% year-over-year. Shabtai Adlersberg highlighted the execution of strategic objectives, including a strategic agreement with a global Tier 1 system integrator, expanding its market reach and scaling its go-to-market execution in the enterprise space. The company also secured a significant follow-on order from one of the largest credit unions in the U.S., demonstrating its ability to attract and retain large customers.
The company's Microsoft connectivity business grew 4% year-over-year, driven by a strong attach rate of sales of devices and conversational business application services. The Teams Phone business is supported by the Microsoft Operator Connect program, showing healthy growth. The contact center or customer experience market, CX, grew by 13% year-over-year, benefiting from growth in connectivity for CCaaS and connectivity services. The conversational AI business grew 50% in the quarter, driven by the growth of Voice AI Connect and Live Hub. The company expects a noticeable shift in top-line performance in 2026 and beyond, with the UCaaS and CX connectivity business stabilizing and the conversational business experiencing strong growth exceeding 40% annually.
Analysts estimate next year's revenue growth at 3.0%. The company's current valuation metrics, including a P/E Ratio of 19.79, P/S Ratio of 1.13, and EV/EBITDA of 13.0, suggest that the market is pricing in moderate growth expectations. With a strong growth outlook for the conversational AI business, expected to grow 40-50% annually in the coming years, the company's dominant connectivity franchise, and a fortress balance sheet, the stock may be positioned for further upside. The Dividend Yield of 4.03% and Free Cash Flow Yield of 11.65% also provide a relatively attractive return profile.
AudioCodes Ltd. (AUDC) Q3 2025 Earnings Call Transcript
Nov -04
AudioCodes Reports Third Quarter 2025 Results
Nov -04
AudioCodes Announces Third Quarter 2025 Reporting Date
Oct -13
AudioCodes Unveils AI Agents for Improved Customer Engagement
Oct -01
AudioCodes Expands Voice CPaaS Offering with AI Agents
Sep -17
Voca CIC Achieves Microsoft Teams Unify Integration Certification and Wins 2025 UC Today Best Teams Contact Center Award
Aug -26
New Strong Sell Stocks for August 5th
Aug -05
AudioCodes Ltd. (AUDC) Q2 2025 Earnings Call Transcript
Jul -29
AudioCodes' 3.5% growth is driven by increasing demand for advanced communication solutions, particularly in the Microsoft Teams and Zoom ecosystems. The company's software and products, such as session border controllers and voice network solutions, are experiencing strong adoption. Additionally, the growing need for productivity solutions and the shift to cloud-based communications are contributing to the company's growth.
AudioCodes' 2.5% growth driven by increasing demand for cloud-based unified communication solutions, expansion in 5G networks, and growing adoption of Microsoft Teams and Zoom. Additionally, the company's focus on innovation, strategic partnerships, and geographic expansion contribute to its growth momentum.
AudioCodes' SBCs provide secure, scalable, and highly available VoIP connectivity for service providers, enterprises, and contact centers.
AudioCodes' media gateways enable the integration of TDM and IP networks, providing a smooth transition to IP-based communications.
AudioCodes' IP phones offer high-quality voice and video communications, with advanced features and intuitive user interfaces.
AudioCodes' WebRTC solutions enable real-time communication and collaboration over the web, with advanced features and scalability.
AudioCodes' DSCs provide scalable and secure Diameter signaling for LTE and IMS networks, ensuring high-quality voice and data services.
AudioCodes' VoIP network management solutions provide real-time monitoring, troubleshooting, and optimization of VoIP networks.
AudioCodes Ltd. faces moderate threat from substitutes, as customers have limited alternatives for its voice and data networking products.
AudioCodes Ltd. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.
AudioCodes Ltd. relies on a few key suppliers for components, giving them some bargaining power, but the company's size and diversification mitigate this risk.
The telecommunications industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with AudioCodes Ltd.
The telecommunications industry is highly competitive, with many established players, leading to intense rivalry and pricing pressure on AudioCodes Ltd.
| Value | |
|---|---|
| Debt Weight | 17.27% |
| Debt Cost | 6.52% |
| Equity Weight | 82.73% |
| Equity Cost | 8.18% |
| WACC | 7.89% |
| Leverage | 20.88% |
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