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Audiocodes (AUDC)
:AUDC
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Audiocodes
(NASDAQ:AUDC)
Rating:67Neutral
Price Target:
$10.00
▲(3.73%Upside)
Positive Factors
Recurring Revenue
The company's transition to recurring revenue is seen as a strong potential growth area.
Revenue 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.
Strategic Positioning
AudioCodes remains uniquely positioned to capitalize on the Microsoft Teams Voice ecosystem through a strong competitive position in SBCs for these customers.
Negative Factors
Market Expansion
An increasing mix of PSTN users is expected to continue growing as customers migrate from legacy phone systems to Teams Voice + PSTN add-on.
User Growth
Teams total user growth has slowed at 320 million global users.
Audiocodes (AUDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$286.11M
Dividend Yield3.73%
Average Volume (3M)45.46K
Price to Earnings (P/E)17.1
Beta (1Y)1.30
Revenue Growth-1.13%
EPS Growth61.49%
CountryUS
Employees946
SectorTechnology
Sector Strength87
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.15
Shares Outstanding29,679,754
10 Day Avg. Volume46,150
30 Day Avg. Volume45,461
Financial Highlights & Ratios
PEG Ratio-1.47
Price to Book (P/B)3.00
Price to Sales (P/S)0.00
P/FCF Ratio83.87
Enterprise Value/Market Cap1.95
Enterprise Value/Revenue0.57
Enterprise Value/Gross Profit3.52
Enterprise Value/Ebitda6.32
Forecast
1Y Price Target
$10.75Price Target Upside11.51% 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 primarily through the sale of its VoIP networking and media processing products and services. Key revenue streams include the sale of hardware solutions such as SBCs and IP phones, as well as software solutions that enhance voice communication quality and security. The company also offers professional services, including maintenance, support, and managed services, which provide recurring revenue. Significant partnerships with major technology companies like Microsoft for integration with platforms like Microsoft Teams contribute to AudioCodes' earnings by expanding its market reach and customer base.
Audiocodes Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 3.88%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted steady revenue growth, increased interest in AI and cloud services, and robust cash flow. However, significant challenges include the impact of tariffs, pressures on margins, and delays in realizing revenue from conversational AI. While there are positive developments, the uncertainties and challenges balance out the achievements.Q1-2025 Updates
Positive Updates
Steady Revenue Growth
Revenues for Q1 2025 were $60.4 million, marking an increase of 0.5% from $60.1 million in Q1 2024.
Services Revenue Growth
Services revenues for the quarter were $32.6 million, up 3.4% over the previous year.
Increase in Net Income
Net income for Q1 2025 was $4 million, up from $2.1 million in Q1 2024.
Expansion in AI and Cloud Services
The company reported success in gaining interest from several large global system integrators for its conversational AI business.
Robust Cash Flow
Net cash provided by operating activities was $13.5 million for the first quarter of 2025.
Microsoft Teams Business Growth
The Microsoft Teams business grew 7% year-over-year.
Cisco WebEx Calling Expansion
Progress was made in certifying solutions for Cisco WebEx Calling Cloud Connect, expanding the potential for connectivity business.
Voice AI Business Growth
Voice AI business grew above 10% year-over-year, with a growing pipeline and increasing customer interest.
Negative Updates
Tariff Impact and Uncertainty
The company faced an estimated additional cost burden of $3 million to $4 million for the full year 2025 due to tariffs, leading to the withdrawal of annual guidance.
Decline in Non-GAAP Operating Income
Non-GAAP operating income for Q1 2025 was $5.4 million, down from $6.3 million in Q1 2024.
Gross Margin Pressure
Gross margin and profitability came lower than planned due to tariffs, increased R&D investment, and less favorable product mix.
Challenges in Conversational AI Revenue Realization
While there is strong customer interest in conversational AI, it takes time for opportunities to translate into actual growing recurring revenue.
Company Guidance
During the AudioCodes First Quarter 2025 Earnings Conference Call, the company reported revenues of $60.4 million, marking a 0.5% increase from the previous year. Service revenues grew by 3.4% to $32.6 million, accounting for 54% of the total revenues. Geographically, North America contributed 48% of the revenue, with EMEA, Asia Pacific, and Central and Latin America accounting for 34%, 14%, and 4%, respectively. The gross margin was 64.8%, and operating income reached $3.6 million, or 6% of revenues. Non-GAAP net income was $4.7 million, with non-GAAP operating income at $5.4 million, or 8.9% of revenues. The company highlighted a strategic pivot towards AI-powered voice services, noting a 25% year-over-year growth in Live managed services, which now represent $67 million in annual recurring revenue. Despite challenges such as new tariffs, which imposed a $350,000 cost burden, AudioCodes remains optimistic about its connectivity business and conversational AI initiatives, which are expected to drive future growth. The company did, however, withdraw its annual guidance due to ongoing tariff and macroeconomic uncertainties.Audiocodes Financial Statement Overview
Summary
Audiocodes shows moderate financial performance with stable gross profit margins and a solid balance sheet. However, net profit margins and revenue growth have declined, indicating pressure on profitability. Strong cash flow generation is a positive, but cash flow volatility remains a risk.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 | 20.61M | 21.07M | 18.53M | 34.30M | 41.96M | 40.62M |
| 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 | 41.91M | 80.09M | 41.38M |
| 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 | 14.76M | 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
9.64
Price Trends
9.26
Positive
9.71
Negative
9.56
Positive
Market Momentum
0.13
Negative
54.71
Neutral
75.01
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 9.64 is above the 20-day moving average (MA) of 9.47, above the 50-day MA of 9.26, and above the 200-day MA of 9.56, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 54.71 is Neutral, neither overbought nor oversold. The STOCH value of 75.01 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $464.43M | 20.10 | 21.69% | ― | -14.48% | 46.79% | |
67 Neutral | $286.11M | 17.10 | 9.33% | 3.73% | -1.13% | 61.49% | |
66 Neutral | $230.98M | 10.14 | 15.02% | ― | 11.94% | 377.86% | |
66 Neutral | $230.98M | 10.14 | 15.02% | ― | 11.94% | 377.86% | |
63 Neutral | $34.07B | 6.13 | -11.73% | 1.80% | 5.33% | -18.31% | |
59 Neutral | $308.20M | ― | -7.01% | ― | 4.52% | -20.60% | |
59 Neutral | $308.20M | ― | -7.01% | ― | 4.52% | -20.60% | |
50 Neutral | $281.70M | 50.30 | -24.43% | ― | -45.80% | -13.09% | |
47 Neutral | $216.77M | ― | -90.43% | ― | 65.68% | 50.28% |
* Technology Sector Average
Performance Comparison
AUDC
Audiocodes
9.64
-1.12
-10.41%
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ASUR
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11.35
3.18
38.92%
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3.18
38.92%
CRNT
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2.60
0.16
6.56%
CRNT
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2.60
0.16
6.56%
CAN
Canaan
0.70
-0.34
-32.69%
OCFT
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7.21
5.44
307.34%
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.