Second Quarter Highlights
- Quarterly revenues increased by 3.1% year-over-year to
$63 million ; - Quarterly services revenues increased by 6.2% year-over-year to
$34.6 million ; - GAAP results:
- Quarterly GAAP gross margin was 65.7%;
- Quarterly GAAP operating margin was 5.1%;
- Quarterly GAAP net income was$0.5 million , or$0.02 per diluted share. - Non-GAAP results:
- Quarterly Non-GAAP gross margin was 65.8%;
- Quarterly Non-GAAP operating margin was 7.4%;
- Quarterly Non-GAAP net income was$3.9 million , or$0.15 per diluted share; - Net cash provided by operating activities was
$6.1 million for the quarter. AudioCodes repurchased 950,133 of its ordinary shares during the quarter at an aggregate cost of$8.9 million .
Details
Revenues for the second quarter of 2026 were
Net income was
On a Non-GAAP basis, net income was
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income and non-GAAP operating margin exclude: (i) share-based compensation expenses and (ii) amortization expenses related to intangible assets. Reconciliations of the non-GAAP measures to their most directly comparable GAAP measures are provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities was
"I am pleased to announce strong financial results for the second quarter of 2026, reflecting well on the execution of our strategic initiative to transform
Second-quarter results were propelled again by sustained momentum across our two principal growth pillars: the Live suite of managed services for UCaaS and CX, alongside our Conversational AI business. Collectively, these segments advanced Annual Recurring Revenue (ARR) to
Consistent with the first quarter of this year, our Conversational AI business grew by more than 50% year over year in the second quarter, reflecting strong and broad-based demand across our Voice AI portfolio. The growing adoption of voice as the most natural and preferred medium for business communication and collaboration is becoming the experience of many and strengthens our confidence in the long-term growth potential of the business. During the quarter, Voice AI Connect and Live Hub delivered record bookings, driven by an accelerating pipeline, consistent new logo acquisition, and significant expansion within our existing customer base. These solutions support both virtual agent and agent-assist capabilities across the growing contact center market, in both cloud and on-premises deployments. Voca CIC, our Microsoft Teams-certified contact center solution has also generated good business progress. In addition, Meeting Insights, our enterprise-grade meeting intelligence solution for cloud and on-premises environments, continues to gain traction as customer interest grows and the opportunity pipeline steadily expands.
"Overall, we achieved our operational and financial targets through maintaining budgetary and managerial discipline. The ongoing investments in Live services and Voice AI have significantly contributed to our current success and position us favorably for continued healthy top-line growth throughout the remainder of 2026," concluded
Share Buy Back Program
In
During the quarter ended
As of
As of
Cash Dividend
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
Conference Call & Web Cast Information
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
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About AudioCodes
AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a global leader in enterprise voice and VoiceAI business solutions. We help organizations unlock the full value of voice, transforming every conversation, whether human or AI, into a strategic asset that drives better business outcomes. Our portfolio spans voice connectivity, unified communications and contact center integration, and next-generation voice AI applications that enhance collaboration, automate workflows and deliver real-time insights. With over 30 years of global experience and trusted by 65 of the Fortune 100, AudioCodes powers the intelligent enterprise, connecting people, platforms and data to move business forward.
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 the 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 following: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular, including governmental undertakings to address such conditions; 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, the advent of artificial intelligence, and the ability to manage changes in market conditions and evolving regulatory regimes, as applicable; possible need for additional financing; the ability to satisfy covenants in AudioCodes' financing agreements; possible impacts and disruptions from AudioCodes' acquisitions, including the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business; possible adverse impacts attributable to any pandemic or other public health crisis on our business and results of operations; the effects of the current and any future hostilities involving Israel, including in the regions in which we or our counterparties operate, which may affect our operations and may limit our ability to produce and sell our solutions; any disruption in our operations by the obligations of our personnel to perform military service as a result of current or future military actions involving Israel; and any other factors described in AudioCodes' filings made with the U.S. Securities and Exchange Commission from time to time. AudioCodes assumes no obligation to update the information in this release.
©2026 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, AudioCodes One Voice, AudioCodes Meeting Insights, and AudioCodes Room Experience 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.
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
2026 | 2025 | ||
(Unaudited) | (Unaudited) | ||
ASSETS | |||
CURRENT ASSETS: | |||
Cash and cash equivalents | |||
Short-term bank deposits | 255 | 239 | |
Short-term marketable securities | 10,001 | 27,350 | |
Trade receivables, net | 62,877 | 67,358 | |
Other receivables and prepaid expenses | 18,581 | 19,064 | |
Inventories | 23,764 | 22,032 | |
Total current assets | 166,892 | 181,325 | |
LONG-TERM ASSETS: | |||
Long-term Trade receivables | |||
Long-term financial investments | 2,492 | 2,790 | |
Deferred tax assets | 7,026 | 7,773 | |
Operating lease right-of-use assets | 31,573 | 30,077 | |
Severance pay funds | 23,057 | 21,163 | |
Total long-term assets | 74,933 | 74,868 | |
PROPERTY AND EQUIPMENT, NET | 29,636 | 29,248 | |
37,560 | 37,579 | ||
Total assets | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES: | |||
Trade payables | 9,439 | 6,416 | |
Other payables and accrued expenses | 29,640 | 30,284 | |
Deferred revenues | 41,466 | 38,243 | |
Short-term operating lease liabilities | 7,430 | 6,635 | |
Total current liabilities | 87,975 | 81,578 | |
LONG-TERM LIABILITIES: | |||
Accrued severance pay | |||
Deferred revenues and other liabilities | 22,230 | 20,517 | |
Long-term operating lease liabilities | 33,938 | 31,348 | |
Total long-term liabilities | 75,265 | 70,143 | |
Total shareholders' equity | 145,781 | 171,299 | |
Total liabilities and shareholders' equity | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
Six months ended | Three months ended | ||||||
June 30, | |||||||
2026 | 2025 | 2026 | 2025 | ||||
(Unaudited) | (Unaudited) | ||||||
Revenues: | |||||||
Products | |||||||
Services | 68,593 | 65,162 | 34,580 | 32,563 | |||
Total Revenues | 125,101 | 121,452 | 62,958 | 61,078 | |||
Cost of revenues: | |||||||
Products | 20,160 | 21,936 | 10,249 | 10,919 | |||
Services | 22,455 | 21,258 | 11,348 | 11,035 | |||
Total Cost of revenues | 42,615 | 43,194 | 21,597 | 21,954 | |||
Gross profit | 82,486 | 78,258 | 41,361 | 39,124 | |||
Operating expenses: | |||||||
Research and development, net | 27,354 | 25,899 | 13,296 | 12,873 | |||
Selling and marketing | 40,664 | 38,376 | 20,984 | 19,815 | |||
General and administrative | 7,906 | 7,738 | 3,883 | 3,836 | |||
Total operating expenses | 75,924 | 72,013 | 38,163 | 36,524 | |||
Operating income | 6,562 | 6,245 | 3,198 | 2,600 | |||
Financial income (expenses), net | (2,141) | 522 | (1,759) | (1,194) | |||
Income before taxes on income | 4,421 | 6,767 | 1,439 | 1,406 | |||
Taxes on income, net | (1,991) | (2,445) | (962) | (1,100) | |||
Net income | |||||||
Basic net earnings per share | |||||||
Diluted net earnings per share | |||||||
Weighted average number of shares used in computing | 25,826 | 29,202 | 25,185 | 28,877 | |||
Weighted average number of shares used in computing | 26,322 | 29,699 | 25,753 | 29,353 | |||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||||
Six months ended | Three months ended | |||||||
2026 | 2025 | 2026 | 2025 | |||||
(Unaudited) | (Unaudited) | |||||||
Gross profit | ||||||||
Gross margin | 65.9 % | 64.4 % | 65.7 % | 64.1 % | ||||
Share-based compensation (1) | 153 | 225 | 75 | 130 | ||||
Amortization expenses (2) | - | 244 | - | 122 | ||||
Non-GAAP gross profit | 82,639 | 78,727 | 41,436 | 39,376 | ||||
Non-GAAP gross margin | 66.1 % | 64.8 % | 65.8 % | 64.5 % | ||||
Operating income | ||||||||
Operating margin | 5.2 % | 5.1 % | 5.1 % | 4.3 % | ||||
Share-based compensation (1) | 2,811 | 3,276 | 1,422 | 1,688 | ||||
Amortization expenses (2) | 19 | 266 | 8 | 133 | ||||
Non-GAAP operating income | 9,392 | 9,787 | 4,628 | 4,421 | ||||
Non-GAAP operating margin | 7.5 % | 8.1 % | 7.4 % | 7.2 % | ||||
Net income | ||||||||
Net earnings per share | ||||||||
Share-based compensation (1) | 2,811 | 3,276 | 1,422 | 1,688 | ||||
Amortization expenses (2) | 19 | 266 | 8 | 133 | ||||
Exchange rate differences (3) | 2,388 | 918 | 1,980 | 1,953 | ||||
Non-GAAP net income | ||||||||
Non-GAAP diluted net earnings per share | ||||||||
Weighted average number of shares used in computing | 27,075 | 30,422 | 26,430 | 30,120 | ||||
(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) Financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. | ||||||||
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. The non-GAAP measures used by the Company may not be comparable to similarly titled non-GAAP measures used by other companies. | ||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
Six months ended | Three months ended | |||||||
2026 | 2025 | 2026 | 2025 | |||||
(Unaudited) | (Unaudited) | |||||||
Cash flows from operating activities: | ||||||||
Net income | ||||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 2,212 | 1,913 | 1,131 | 959 | ||||
Amortization of marketable securities premiums and accretion of discounts, net | 122 | 197 | 44 | 93 | ||||
Decrease (increase) in accrued severance pay, net | (1,075) | 76 | (823) | (57) | ||||
Share-based compensation expenses | 2,811 | 3,276 | 1,422 | 1,688 | ||||
Decrease in deferred tax assets, net | 690 | 307 | 165 | (312) | ||||
Cash financial loss (income), net | 407 | 22 | 168 | (31) | ||||
Decrease in operating lease right-of-use assets | 2,263 | 2,199 | 1,057 | 1,453 | ||||
Decrease (increase) in operating lease liabilities | (374) | 422 | 786 | 1,965 | ||||
Decrease (increase) in trade receivables, net | 6,761 | (3,136) | (2,905) | (3,922) | ||||
Decrease (increase) in other receivables and prepaid expenses | 483 | (4,444) | 850 | (6,827) | ||||
Decrease (increase) in inventories | (1,866) | 4,976 | (911) | 2,121 | ||||
Increase in trade payables | 2,883 | 87 | 1,269 | 1,376 | ||||
Decrease in other payables and accrued expenses | (4,150) | 6,750 | 2,009 | 9,345 | ||||
Increase in deferred revenues | 5,320 | 4,215 | 1,357 | (432) | ||||
Net cash provided by operating activities | 18,917 | 21,182 | 6,096 | 7,725 | ||||
Cash flows from investing activities: | ||||||||
Proceeds from short-term deposits | (16) | (18) | (13) | (19) | ||||
Proceeds from financial investment | 122 | 178 | 88 | 65 | ||||
Proceeds from maturity of marketable securities | 17,377 | 3,200 | 14,377 | - | ||||
Purchase of financial investments | (135) | (442) | (135) | - | ||||
Purchase of property and equipment | (2,296) | (3,259) | (1,051) | (1,785) | ||||
Net cash provided by (used in) investing activities | 15,052 | (341) | 13,266 | (1,739) | ||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
Six months ended | Three months ended | |||||||
2026 | 2025 | 2026 | 2025 | |||||
(Unaudited) | (Unaudited) | |||||||
Cash flows from financing activities: | ||||||||
Purchase of treasury shares | (22,548) | (11,818) | (8,876) | (6,610) | ||||
Cash dividends paid to shareholders | (5,289) | (5,326) | - | - | ||||
Proceeds from issuance of shares upon exercise of options | - | 173 | - | 110 | ||||
Net cash used in financing activities | (27,837) | (16,971) | (8,876) | (6,500) | ||||
Net increase (decrease) in cash and cash equivalents | 6,132 | 3,870 | 10,486 | (514) | ||||
Cash and cash equivalents at beginning of period | 45,282 | 58,749 | 40,928 | 63,133 | ||||
Cash and cash equivalents at end of period | ||||||||
Company Contacts | ||
Chief Financial Officer Tel: +972-3-976-4000 | VP, Investor Relations Tel: +1-732-764-2552 | |
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