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Audiocodes (AUDC)
NASDAQ:AUDC
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Audiocodes
(NASDAQ:AUDC)
Rating:64Neutral
Price Target:
$10.50
▲(7.14% Upside)
Positive Factors
Business Strategy
The company continues to migrate customers to a subscription model, which is expected to result in lower revenue volatility over time and higher margins.
Market Positioning
AudioCodes remains uniquely positioned to capitalize on the Microsoft Teams Voice ecosystem through a strong competitive position in SBCs for these customers.
Product Innovation
The launch of 'Meeting Insights On Premise' is expected to be sold into highly regulated industries.
Negative Factors
Financial Performance
Revenue and EBITDA were modestly below estimates due to a modestly higher than expected tariff headwind cost.
Product Revenue
There are modest ongoing declines in product revenue as customers migrate solutions to the managed service offered by AUDC.
User Growth
Teams total user growth has slowed at 320 million global users.
Audiocodes (AUDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$292.95M
Dividend Yield3.88%
Average Volume (3M)177.92K
Price to Earnings (P/E)21.7
Beta (1Y)1.44
Revenue Growth-0.93%
EPS Growth3.10%
CountryUS
Employees946
SectorTechnology
Sector Strength89
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.14
Shares Outstanding29,892,962
10 Day Avg. Volume136,456
30 Day Avg. Volume177,921
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue1.02
Enterprise Value/Gross Profit1.55
Enterprise Value/Ebitda11.26
Forecast
1Y Price Target
$11.50Price Target Upside17.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Audiocodes Business Overview & Revenue Model
Company DescriptionAudioCodes 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. Its products include session border controllers, life cycle management solutions, VoIP network routing solutions, media gateways and servers, multi-service business routers, IP phones solutions, and value-added applications, as well as professional services. The company also offers One Voice Operations Center, a voice network management solution; Device Manager for administering business phones and meeting room solutions; AudioCodes Routing Manager for handling call routing in VoIP networks; and User Management Pack 365 simplifies user lifecycle and identity management across Microsoft Teams and Skype for Business deployments. In addition, it provides AudioCodes Live for Microsoft Teams, a portfolio of managed services for simplifying Teams adoption; appliances for Microsoft Skype/Teams for Business such as survivable branch appliances, CCE, and CloudBond 365; and a range of value-added voice applications comprising SmartTAP, Voca, VoiceAI Connect, and Meeting Insights. Further, the company offers managed services; and AudioCodes Live Cloud, a Microsoft Teams software as a service solution that enables service providers to offer their business customers a seamless migration to Microsoft Teams. It primarily markets and sells its products through a direct sales force and sales representatives to original equipment manufacturers, network equipment providers, and systems integrators and distributors in the telecommunications and networking industries. The company primarily operates in the Americas, Europe, the Far East, and Israel. AudioCodes Ltd. was incorporated in 1992 and is headquartered in Lod, Israel.
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: -4.76%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment with notable growth in the Microsoft Teams business and conversational AI segment. However, the overall financial performance was impacted by increased tariff-related costs and declining operating income.Q2-2025 Updates
Positive Updates
Microsoft Teams Business Growth
The Microsoft Teams business grew 6.5% year-over-year, supported by the launch of Cisco WebEx Cloud Connect enablement and increased attach rate of Voca CIC. The Live Managed Services annual recurring revenues reached $70 million, growing 25% year-over-year.
Conversational AI Segment Demand
The conversational AI segment is expected to grow 40% to 50% in 2025, with robust demand for AI-powered business applications and voice services. Meeting Insights On-Prem service has shown significant interest, particularly in regulated industries.
Cash Flow and Financial Position
Net cash provided by operating activities was $7.7 million for the quarter, with a total cash, cash equivalents, and financial investments of $95.3 million. A cash dividend of $0.20 per share was declared.
Negative Updates
Tariff-Related Cost Increase
Increased expenses due to new tariffs on U.S. imports accounted for approximately $1 million in additional costs, impacting both GAAP and non-GAAP results. Full-year 2025 cost burden is expected to be $3 million to $4 million.
Decline in Operating Income
GAAP operating income for the quarter was $2.6 million or 4.3% of revenues compared to $4.9 million or 8.2% of revenues in Q2 2024, highlighting a decrease in profitability. Similarly, non-GAAP operating income fell from $7.2 million to $4.4 million.
Gross Margin Contraction
Non-GAAP gross margin for the quarter was 64.5%, down from 65.8% in Q2 2024, impacted by tariff-related cost headwinds and currency fluctuations.
Company Guidance
During the second quarter of 2025, AudioCodes reported revenues of $61.1 million, marking a 1.3% increase from $60.3 million in the same quarter of the previous year. Services revenues rose by 1.9% to $32.6 million, accounting for 53.3% of total revenues. The company faced increased expenses due to new tariffs on U.S. imports, adding approximately $1 million to costs. GAAP gross margin was reported at 64.1%, with a net income of $0.3 million or $0.01 per diluted share, compared to $3.8 million or $0.12 per diluted share in Q2 2024. Non-GAAP net income was $4.1 million or $0.14 per diluted share. The company’s cash and financial assets totaled $95.3 million, with net cash provided by operating activities at $7.7 million. AudioCodes observed a robust demand in its conversational AI segment, supporting a 40% to 50% growth outlook for 2025. The Microsoft Teams business grew by 6.5% year-over-year, fueled by strong connectivity services and the launch of new AI-driven business applications. Additionally, AudioCodes declared a cash dividend of $0.20 per share, totaling approximately $5.7 million, to be paid on August 28, 2025.Audiocodes Financial Statement Overview
Summary
Audiocodes maintains a stable financial position with strong cash generation capacity and a solid balance sheet. However, there is moderate profitability pressure due to declining net profit margins and revenue growth, necessitating focus on improving net profitability.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 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 242.18M | 244.38M | 275.09M | 248.92M | 220.77M |
| Gross Profit | 158.16M | 158.35M | 178.78M | 170.89M | 149.82M |
| EBITDA | 21.07M | 18.53M | 39.36M | 44.34M | 39.91M |
| Net Income | 15.31M | 8.78M | 28.47M | 33.75M | 27.25M |
Balance Sheet | |||||
| Total Assets | 335.90M | 337.52M | 323.83M | 349.27M | 358.12M |
| Cash, Cash Equivalents and Short-Term Investments | 62.38M | 38.20M | 47.12M | 80.09M | 131.30M |
| Total Debt | 36.46M | 39.28M | 13.72M | 19.53M | 29.81M |
| Total Liabilities | 144.09M | 149.41M | 134.07M | 143.77M | 148.27M |
| Stockholders Equity | 191.81M | 188.11M | 189.76M | 205.50M | 209.85M |
Cash Flow | |||||
| Free Cash Flow | 10.97M | 8.93M | 6.79M | 46.17M | 36.95M |
| Operating Cash Flow | 35.25M | 14.89M | 8.28M | 47.34M | 38.48M |
| Investing Cash Flow | 17.81M | 19.98M | -19.67M | 42.62M | -139.31M |
| Financing Cash Flow | -24.86M | -28.86M | -48.60M | -51.48M | 77.09M |
Audiocodes Technical Analysis
Positive
9.80
Price Trends
9.56
Positive
9.25
Positive
9.47
Positive
Market Momentum
0.02
Positive
51.50
Neutral
36.53
Neutral
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 9.8 is below the 20-day moving average (MA) of 9.91, above the 50-day MA of 9.56, and above the 200-day MA of 9.47, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 51.50 is Neutral, neither overbought nor oversold. The STOCH value of 36.53 is Neutral, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $243.73M | 21.30 | 39.51% | ― | 4.63% | 328.61% | |
74 Outperform | $502.18M | 22.44 | 7.49% | ― | 19.67% | 12.32% | |
64 Neutral | $292.95M | 21.72 | 7.32% | 3.88% | -0.93% | 3.10% | |
63 Neutral | $170.57M | 12.53 | 8.61% | ― | 5.06% | 29.66% | |
62 Neutral | £505.62M | 27.06 | 0.85% | 2.82% | 3.88% | -21.08% | |
61 Neutral | $1.02B | ― | -81.20% | ― | 75.16% | 28.13% | |
54 Neutral | $274.45M | ― | -1.32% | ― | 12.39% | -123.62% |
* Technology Sector Average
Performance Comparison
AUDC
Audiocodes
9.82
-0.51
-4.94%
AVNW
Aviat Networks
21.85
-6.01
-21.57%
CRNT
Ceragon Networks
1.92
-0.99
-34.02%
GILT
Gilat
8.70
4.06
87.50%
BKTI
BK Technologies
65.28
45.63
232.21%
ONDS
Ondas Holdings
3.86
3.12
421.62%
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.