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Audiocodes (AUDC)
NASDAQ:AUDC
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Audiocodes
(NASDAQ:AUDC)
Rating:59Neutral
Price Target:
$10.00
▲(2.77% Upside)
Positive Factors
Conversational AI
AudioCodes remains uniquely positioned to capitalize on the Microsoft Teams Voice ecosystem through a strong competitive position in SBCs for these customers.
Product Revenue
Demand for physical SBCs and other hardware products is generally stable, leading to a modest increase in product revenue estimates.
Subscription Model
The company continues to migrate customers to a subscription model, which is expected to result in lower revenue volatility over time and higher margins.
Negative Factors
Product Revenue Decline
There are modest ongoing declines in product revenue as customers migrate solutions to the managed service offered by AUDC.
Revenue and EBITDA
Revenue and EBITDA were modestly below estimates due to a modestly higher than expected tariff headwind cost.
Teams User Growth
Teams total user growth has slowed at 320 million global users.
Audiocodes (AUDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$289.06M
Dividend Yield3.91%
Average Volume (3M)117.29K
Price to Earnings (P/E)21.4
Beta (1Y)1.46
Revenue Growth-0.93%
EPS Growth3.10%
CountryUS
Employees946
SectorTechnology
Sector Strength84
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.14
Shares Outstanding29,892,962
10 Day Avg. Volume64,801
30 Day Avg. Volume117,291
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue1.02
Enterprise Value/Gross Profit1.55
Enterprise Value/Ebitda11.26
Forecast
1Y Price Target
$12.50Price Target Upside28.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Audiocodes Business Overview & Revenue Model
Company DescriptionAudioCodes Ltd. is a leading provider of advanced voice networking and media processing solutions for the digital workplace. The company operates primarily in the telecommunications sector, offering a wide range of products and services that include VoIP (Voice over Internet Protocol) solutions, session border controllers (SBCs), and unified communications (UC) solutions. AudioCodes serves various markets, including enterprises, service providers, and contact centers, enabling them to enhance their communication systems and improve operational efficiency.
How the Company Makes MoneyAudioCodes generates revenue through multiple key streams, primarily from the sale of hardware and software solutions that facilitate voice communications over IP networks. Their core revenue model is based on the direct sale of products such as SBCs, media gateways, and session management solutions, as well as licensing software for enterprise communications. Additionally, the company earns recurring revenue from maintenance and support services, which provide ongoing assistance and updates for their products. Significant partnerships with major cloud service providers and telecommunications companies further enhance their revenue potential, as these collaborations often lead to joint solutions and integrations that expand AudioCodes’ market reach. The growing demand for cloud-based communication solutions and digital transformation initiatives among businesses also contribute positively to their earnings, as more organizations seek to modernize their communication infrastructures.
Audiocodes Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted modest revenue growth and strong performance in Microsoft Teams and conversational AI, but was offset by increased expenses and decreased net income due to external tariffs and reduced profitability metrics.Q2-2025 Updates
Positive Updates
Revenue Growth
Revenues for the second quarter were $61.1 million, an increase of 1.3% over the $60.3 million reported in the second quarter of last year.
Microsoft Teams Business Growth
Ongoing strength in Microsoft Teams business, which grew 6.5% year-over-year, highlighting the company's dominance in the Teams Phone Managed Services space.
Conversational AI Growth Outlook
Conversational AI practice is seeing robust demand, with a plan for 40% to 50% growth outlook for the segment in 2025.
Live Managed Services Revenue
Live managed services experienced robust growth, up 25% year-over-year to end the quarter at $70 million annual recurring revenues.
Dividend Declaration
Declared a cash dividend of $0.20 per share, with an aggregate amount of approximately $5.7 million.
Negative Updates
Increased Expenses Due to Tariffs
Increased expenses due to the implementation of new tariffs on the U.S. imports accounting to approximately $1 million additional costs.
Decline in Profitability Metrics
GAAP operating income for the second quarter was $2.6 million or 4.3% of revenues compared to $4.9 million or 8.2% of revenues in Q2 2024.
Decreased Net Income
Net income for the quarter was $0.3 million or $0.01 per diluted share compared to net income of $3.8 million or $0.12 per diluted share for Q2 2024.
Impact of Tariffs on Gross Margin
Non-GAAP gross margin for the quarter was 64.5% compared to 65.8% in Q2 2024, absorbing $1 million of tariff-related cost headwinds.
Company Guidance
During the AudioCodes Second Quarter 2025 Earnings Conference Call, the company reported several key financial metrics and strategic insights. Revenues for the second quarter were $61.1 million, reflecting a 1.3% increase compared to the same quarter last year. Services revenues contributed $32.6 million, accounting for 53.3% of total revenues, and saw a year-over-year increase of 1.9%. Deferred revenues rose to $82.7 million, while geographical revenue distribution was led by North America at 48%, followed by EMEA at 34%. The company faced $1 million in additional costs due to new U.S. tariffs, impacting both GAAP and non-GAAP results. GAAP operating income was $2.6 million, with non-GAAP operating income at $4.4 million. On a non-GAAP basis, net income was $4.1 million, translating to $0.14 per diluted share. AudioCodes also declared a cash dividend of $0.20 per share. The company continues to focus on its transformation into an AI-driven hybrid cloud software and services company, with significant growth in its Microsoft Teams business and a robust pipeline for its conversational AI segment, which is expected to grow by 40% to 50% in 2025.Audiocodes Financial Statement Overview
Summary
Audiocodes maintains a stable financial position with moderate profitability and strong cash generation capacity. Despite some pressure on net margins and revenue growth, the company's low leverage and healthy equity ratio provide financial stability.Income Statement
Audiocodes has shown stable gross profit margins around 65.4% in recent periods, with a slight decline in revenue growth compared to previous years. The EBIT margin stands at approximately 7.2%, indicating moderate operational efficiency. However, net profit margins have decreased from 12.1% in 2021 to 7.1% TTM, suggesting pressure on net profitability.55
Neutral
Balance Sheet
The company maintains a solid equity ratio of around 56.2% TTM, reflecting a strong balance sheet position. The debt-to-equity ratio is relatively low at 0.19 TTM, indicating low leverage risk. Return on equity is modest at approximately 9.3% TTM, showing moderate efficiency in using shareholders' equity to generate profits.62
Positive
Cash Flow
Audiocodes has demonstrated strong operating cash flow relative to net income, with a ratio of 1.95 TTM, indicating good cash generation efficiency. Free cash flow has grown by 34.6% TTM, reflecting improved cash management. However, fluctuations in investing and financing cash flows present some volatility risks.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 242.47M | 242.18M | 244.38M | 275.09M | 248.92M | 220.77M |
| Gross Profit | 158.62M | 158.16M | 158.35M | 178.78M | 170.89M | 149.82M |
| EBITDA | 21.87M | 21.07M | 18.53M | 39.36M | 44.34M | 39.91M |
| Net Income | 17.24M | 15.31M | 8.78M | 28.47M | 33.75M | 27.25M |
Balance Sheet | ||||||
| Total Assets | 330.48M | 335.90M | 337.52M | 323.83M | 349.27M | 358.12M |
| Cash, Cash Equivalents and Short-Term Investments | 66.54M | 62.38M | 38.20M | 47.12M | 80.09M | 131.30M |
| Total Debt | 35.14M | 36.46M | 39.28M | 13.72M | 19.53M | 29.81M |
| Total Liabilities | 144.57M | 144.09M | 149.41M | 134.07M | 143.77M | 148.27M |
| Stockholders Equity | 185.90M | 191.81M | 188.11M | 189.76M | 205.50M | 209.85M |
Cash Flow | ||||||
| Free Cash Flow | 14.79M | 10.97M | 8.93M | 6.79M | 46.17M | 36.95M |
| Operating Cash Flow | 33.63M | 35.25M | 14.89M | 8.28M | 47.34M | 38.48M |
| Investing Cash Flow | 25.56M | 17.81M | 19.98M | -19.67M | 42.62M | -139.31M |
| Financing Cash Flow | -26.39M | -24.86M | -28.86M | -48.60M | -51.48M | 77.09M |
Audiocodes Technical Analysis
Positive
9.73
Price Trends
9.64
Positive
9.33
Positive
9.55
Positive
Market Momentum
0.02
Negative
57.08
Neutral
87.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AUDC, the sentiment is Positive. The current price of 9.73 is above the 20-day moving average (MA) of 9.51, above the 50-day MA of 9.64, and above the 200-day MA of 9.55, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 57.08 is Neutral, neither overbought nor oversold. The STOCH value of 87.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AUDC.
Audiocodes Risk Analysis
Audiocodes disclosed 69 risk factors in its most recent earnings report. Audiocodes reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Audiocodes Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $247.88M | 22.53 | 39.51% | ― | 4.63% | 328.61% | |
69 Neutral | $568.95M | 26.95 | 7.49% | ― | 19.67% | 12.32% | |
66 Neutral | $177.68M | 13.05 | 8.61% | ― | 5.06% | 29.66% | |
63 Neutral | $1.53B | ― | -81.20% | ― | 75.16% | 28.13% | |
61 Neutral | $35.56B | 8.99 | -10.49% | 1.86% | 8.45% | -8.32% | |
59 Neutral | $289.06M | 21.43 | 7.32% | 3.91% | -0.93% | 3.10% | |
54 Neutral | $284.63M | ― | -1.32% | ― | 12.39% | -123.62% |
* Technology Sector Average
Performance Comparison
AUDC
Audiocodes
9.73
0.30
3.18%
AVNW
Aviat Networks
22.39
-1.69
-7.02%
CRNT
Ceragon Networks
2.02
-0.64
-24.06%
GILT
Gilat
10.57
6.20
141.88%
BKTI
BK Technologies
69.90
50.27
256.09%
ONDS
Ondas Holdings
6.06
5.12
544.68%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.