LOD, Israel, Aug. 1, 2023
/PRNewswire/ --
Second Quarter Highlights
- Quarterly revenues increased by 1.4% sequentially to
$60.0 million.
- Quarterly Service revenues of $28.5
million accounted for 47.4% of revenues.
- GAAP results:
- Quarterly GAAP gross margin was 64.1% compared to 61.7% in the
prior quarter;
- Quarterly GAAP operating margin was 3.8% compared to operating
margin loss of 1.4% in the prior quarter; and
- Quarterly GAAP net income was $1.1
million, or $0.03 per diluted
share compared to net loss of $0.2
million, or $0.01 per diluted
share in the prior quarter.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 64.5% compared to 62.1% in
the prior quarter;
- Quarterly Non-GAAP operating margin was 9.5% compared to 4.9% in
the prior quarter; and
- Quarterly Non-GAAP net income was $5.1
million, or $0.16 per diluted
share compared to net income of $2.7
million, or $0.08 per diluted
share in the prior quarter.
- Net cash provided by operating activities was $2.2 million for the quarter.
- AudioCodes repurchased 318,891 of its ordinary shares during
the quarter at an aggregate cost of $2.9
million.
Details
AudioCodes (NASDAQ: AUDC), a leading vendor of advanced
communications software, products and productivity solutions for
the digital workplace, today announced its financial results for
the second quarter ended June 30,
2023.
Revenues for the second quarter of 2023 were $60.0 million compared to $59.2 million for the first quarter of 2023 and
$68.4 million for the second quarter
of 2022.
Net income was $1.1 million, or
$0.03 per diluted share, for the
second quarter of 2023 compared to net loss of $0.2 million, or $0.01 per diluted share for the first quarter of
2023 and net income of $6.9 million,
or $0.21 per diluted share, for the
second quarter of 2022.
On a Non-GAAP basis, net income was $5.1
million, or $0.16 per diluted
share, for the second quarter of 2023 compared to $2.7 million, or $0.08 per diluted share, for the first quarter of
2023 and $11.3 million, or
$0.34 per diluted share, for the
second quarter of 2022.
Non-GAAP net income excludes: (i) share-based compensation
expenses; (ii) amortization expenses related to intangible
assets; (iii) expenses related to deferred payments in
connection with the acquisition of Callverso Ltd; (iv) other income
related to a payment made by the landlord to AudioCodes Inc., a
subsidiary of the Company, in connection with the termination of a
lease agreement for its offices in New
Jersey; (v) financial income related to exchange rate
differences in connection with revaluation of assets and
liabilities in non-dollar denominated currencies; and (vi) non-cash
deferred tax expenses (income). A reconciliation of net income on a
GAAP basis to a non-GAAP basis is provided in the tables that
accompany the condensed consolidated financial statements contained
in this press release.
Net cash provided by operating activities was $2.2 million for the second quarter of 2023.
Cash and cash equivalents, long and short-term bank deposits,
long and short-term marketable securities and long and short-term
financial investments were $118.5
million as of June 30, 2023
compared to $124.3 million as of
December 31, 2022. The decrease
in cash and cash equivalents, long and short-term bank deposits,
long and short-term marketable securities and long and short-term
financial investments was the result of the use of cash for the
continued repurchasing of the Company's ordinary shares pursuant to
its share repurchase program and the payment of a cash dividend
during the first quarter of 2023.
"I am pleased to report solid second quarter 2023 results with
meaningful business activity improvement relative to prior quarter
in key strategic areas," said Shabtai
Adlersberg, President and Chief Executive Officer of
AudioCodes.
We made good progress in our enterprise business, now reaching
88% of our company revenue. Microsoft-related business in the
quarter grew 12% year-over-year and 16% sequentially, with
Microsoft Teams business up 18% year over year. Strong
ongoing momentum of our AudioCodes Live managed services continued,
with ARR exiting the quarter at $40
million, growing over 60% year-over-year, and Live Total
Contract Value (TCV) generated in the second quarter expanding 75%
over the previous quarter. Strong Live performance to date
puts on track to achieve our target of $46-$50 million in
2023, representing approximately 50% year-over-year growth.
Zoom related business grew over 20% year over year.
We also executed well in our customer experience (CX) and
conversational AI businesses, delivering 7% year over year and over
25% sequentially. Voca Conversational Interactive Center
(CIC), our entry-level Microsoft Teams-native AI-first contact
center is garnering significant customer interest in 2023, as
enterprises are increasingly looking to leverage Teams for both
UC/CX environments. As announced yesterday, Voca CIC is now
officially certified by Microsoft as a Microsoft Teams Contact
Center solution. Enterprises that adopt Voca CIC can achieve
true consolidation of Unified Communications and Contact Center,
provided as a fully managed service by AudioCodes.
We also made significant progress in other conversational
AI (CAI) lines. Voice ai
Connect made good progress in the quarter, and Meeting Insights for
Teams solution has recently integrated with GPT-4 generative AI,
making available advanced AI summarization and smart recap features
to our customers. Importantly, we are increasingly confident
in our growth prospects for both CX and conversational AI, as the
strong pipeline built over the past several quarters is starting to
materialize into meaningful bookings and contract wins.
Overall, we executed well this quarter and our burgeoning
success particularly in Live puts us on an accelerated path in our
long-term transformation to software and services. This
factor coupled with incremental opex relief from previously
announced cost savings actions should position us to deliver on our
commitment to drive meaningful profitability improvements in second
half of 2023 and beyond," concluded Mr. Adlersberg.
Share Buy Back Program
During the quarter ended June 30,
2023, the Company acquired 318,891 of its ordinary shares
under its share repurchase program for a total consideration of
$2.9 million.
In June 2023, the Company received
court approval in Israel to
purchase up to an aggregate amount of $25
million of additional ordinary shares. The court approval
also permits AudioCodes to declare a dividend of any part of this
amount. The approval is valid through December 27, 2023.
As of June 30, 2023, the Company
had $24.7 million available under
this approval for the repurchase of shares and/or declaration of
cash dividends.
Cash Dividend
AudioCodes also announced today that the Company's Board of
Directors has declared a cash dividend in the amount of
18 cents per share. The aggregate
amount of the dividend is approximately $5.7
million. The dividend is payable on August 31, 2023, to all of the Company's
shareholders of record at the close of trading on the NASDAQ Global
Select Market on August 17,
2023.
In accordance with Israeli tax law, the dividend is subject to
withholding tax at the 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 U.S. dollars on the ordinary shares
of AudioCodes Ltd. that are traded on the Nasdaq Global Select
Market or the Tel-Aviv Stock Exchange. The amount and timing
of any other dividends will be determined by the Board.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's second quarter of 2023 operating performance, financial
results and outlook. Interested parties may participate in
the conference call by dialing one of the following numbers:
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 AudioCodes investor website at
http://www.audiocodes.com/investors-lobby
Second quarter of 2023 earnings call supplementary slides are
available at AudioCodes investor website at
http://www.audiocodes.com/investors-lobby
Follow AudioCodes' social media channels:
AudioCodes invites you to join our online community and follow
us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook,
and YouTube.
About AudioCodes
AudioCodes Ltd. (NASDAQ: AUDC) (TASE: AUDC) is a leading vendor
of advanced communications software, products and productivity
solutions for the digital workplace. AudioCodes enables
enterprises and service providers to build and operate all-IP voice
networks for unified communications, contact centers, and hosted
business services. AudioCodes offers a broad range of
innovative products, solutions and services that are used by large
multi-national enterprises and leading tier-1 operators around the
world.
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
that 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 effect of global economic conditions in general and conditions
in AudioCodes' industry and target markets in particular; 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 and the ability
to manage changes in market conditions as needed; possible need for
additional financing; the ability to satisfy covenants in the
Company's loan agreements; possible disruptions from acquisitions;
the ability of AudioCodes to successfully integrate the products
and operations of acquired companies into AudioCodes' business;
possible adverse impact of the COVID-19 pandemic on our business
and results of operations; and other factors detailed in
AudioCodes' filings with the U.S. Securities and Exchange
Commission. AudioCodes assumes no obligation to update the
information in this release.
©2023 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, VocaNom,
AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room
Experience and CloudBond 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.
Summary financial data follows
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
U.S. dollars
in thousands
|
|
June
30,
|
December
31,
|
|
2023
|
2022
|
|
(Unaudited)
|
(Audited)
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$ 36,225
|
$ 24,535
|
Short-term and
restricted bank deposits
|
204
|
5,210
|
Short-term marketable
securities
|
5,716
|
2,120
|
Short-term
financial investments
|
3,028
|
15,258
|
Trade receivables,
net
|
46,611
|
56,424
|
Other receivables and
prepaid expenses
|
8,095
|
10,006
|
Inventories
|
45,778
|
36,377
|
Total current
assets
|
145,657
|
149,930
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
Long-term Trade
receivables
|
$15,973
|
$13,099
|
Long-term marketable
securities
|
70,546
|
75,946
|
Long-term financial
investments
|
2,783
|
1,242
|
Deferred tax
assets
|
8,884
|
9,073
|
Operating lease
right-of-use assets
|
11,440
|
13,517
|
Severance pay
funds
|
17,315
|
17,933
|
Total long-term
assets
|
126,941
|
130,810
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
6,298
|
3,965
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
38,847
|
39,126
|
|
|
|
Total assets
|
$ 317,743
|
$ 323,831
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Trade
payables
|
7,120
|
11,338
|
Other payables and
accrued expenses
|
35,651
|
38,316
|
Deferred
revenues
|
41,694
|
36,634
|
Short-term operating
lease liabilities
|
6,089
|
8,169
|
Total current
liabilities
|
90,554
|
94,457
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
Accrued severance
pay
|
$ 16,865
|
$ 17,755
|
Deferred revenues and
other liabilities
|
17,629
|
16,308
|
Long-term operating
lease liabilities
|
5,481
|
5,551
|
Total long-term
liabilities
|
39,975
|
39,614
|
|
|
|
Total shareholders'
equity
|
187,214
|
189,760
|
Total liabilities and
shareholders' equity
|
$ 317,743
|
$ 323,831
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands, except per share data
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
(Unaudited)
|
(Unaudited)
|
Revenues:
|
|
|
|
|
Products
|
$ 60,260
|
$ 79,406
|
$ 31,567
|
$ 40,586
|
Services
|
58,973
|
55,311
|
28,453
|
27,774
|
Total Revenues
|
119,233
|
134,717
|
60,020
|
68,360
|
Cost of
revenues:
|
|
|
|
|
Products
|
25,221
|
30,118
|
12,177
|
15,843
|
Services
|
18,992
|
15,729
|
9,366
|
8,007
|
Total Cost of
revenues
|
44,213
|
45,847
|
21,543
|
23,850
|
Gross profit
|
75,020
|
88,870
|
38,477
|
44,510
|
Operating
expenses:
|
|
|
|
|
Research and
development, net
|
29,403
|
29,941
|
14,394
|
14,959
|
Selling and
marketing
|
35,526
|
34,372
|
17,679
|
17,084
|
General and
administrative
|
8,680
|
8,583
|
4,149
|
4,545
|
Total operating
expenses
|
73,609
|
72,896
|
36,222
|
36,588
|
Operating
income
|
1,411
|
15,974
|
2,255
|
7,922
|
Financial income
(expenses), net
|
1,196
|
1,851
|
247
|
841
|
Income before taxes on
income
|
2,607
|
17,825
|
2,502
|
8,763
|
Taxes on income,
net
|
(1,734)
|
(2,281)
|
(1,447)
|
(1,827)
|
Net income
|
$ 873
|
$ 15,544
|
$ 1,055
|
$ 6,936
|
Basic net earnings per
share
|
$ 0.03
|
$ 0.49
|
$ 0.03
|
$ 0.22
|
Diluted net earnings
per share
|
$ 0.03
|
$ 0.47
|
$ 0.03
|
$ 0.21
|
Weighted average number
of shares used in computing basic net
earnings per share (in thousands)
|
32,024
|
32,019
|
31,900
|
31,809
|
Weighted average number
of shares used in computing diluted net
earnings per share (in thousands)
|
33,017
|
32,800
|
32,977
|
32,518
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
U.S. dollars in
thousands, except per share data
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
(Unaudited)
|
(Unaudited)
|
GAAP net
income
|
$ 873
|
$ 15,544
|
$ 1,055
|
$ 6,936
|
GAAP net earnings per
share
|
$ 0.03
|
$ 0.47
|
$ 0.03
|
$ 0.21
|
Cost of
revenues:
|
|
|
|
|
Share-based
compensation (1)
|
210
|
174
|
103
|
125
|
Amortization expenses
(2)
|
257
|
380
|
122
|
190
|
|
467
|
554
|
225
|
315
|
Research and
development, net:
|
|
|
|
|
Share-based
compensation (1)
|
1,441
|
1,887
|
698
|
728
|
Deferred payments
expenses (3)
|
250
|
250
|
125
|
125
|
|
1,691
|
2,137
|
823
|
853
|
Selling and
marketing:
|
|
|
|
|
Share-based
compensation (1)
|
2,330
|
3,151
|
1,093
|
1,712
|
Amortization expenses
(2)
|
22
|
22
|
11
|
11
|
Deferred payments
expenses (3)
|
250
|
250
|
125
|
125
|
|
2,602
|
3,423
|
1,229
|
1,848
|
General and
administrative:
|
|
|
|
|
Share-based
compensation (1)
|
2,428
|
2,522
|
1,169
|
1,354
|
Other Income
(4)
|
-
|
(810)
|
-
|
(405)
|
|
2,428
|
1,712
|
1,169
|
949
|
Financial expenses
(income):
|
|
|
|
|
Exchange rate
differences (5)
|
(470)
|
(1,215)
|
71
|
(495)
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
Deferred tax
(6)
|
224
|
353
|
562
|
940
|
Non-GAAP net
income
|
$ 7,815
|
$ 22,508
|
$ 5,134
|
$ 11,346
|
Non-GAAP diluted net
earnings per share
|
$ 0.24
|
$ 0.67
|
$ 0.16
|
$ 0.34
|
Weighted average number
of shares used in computing Non-GAAP diluted net earnings per
share (in thousands)
|
32,977
|
33,558
|
33,017
|
33,332
|
|
(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) Expenses
related to deferred payments in connection with the acquisition of
Callverso Ltd.
|
(4) Other income
related to a payment made to AudioCodes Inc. in connection with the
termination of a lease agreement for its offices in New
Jersey.
|
(5) Financial
income or expenses related to exchange rate differences in
connection with revaluation of assets and liabilities in non-dollar
denominated currencies.
|
(6) Non-cash
deferred tax expense.
|
|
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.
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
(Unaudited)
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$ 873
|
$ 15,544
|
$ 1,055
|
$ 6,936
|
Adjustments required to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
1,320
|
1,464
|
669
|
722
|
Amortization of
marketable securities premiums and accretion of discounts,
net
|
712
|
793
|
340
|
433
|
Increase (decrease) in
accrued severance pay, net
|
(272)
|
(597)
|
(288)
|
91
|
Share-based
compensation expenses
|
6,409
|
7,734
|
3,063
|
3,919
|
Decrease in deferred
tax assets, net
|
168
|
237
|
534
|
887
|
Cash financial loss
(income), net
|
(332)
|
(328)
|
58
|
(178)
|
Decrease in operating
lease right-of-use assets
|
4,282
|
3,142
|
2,132
|
1,792
|
Decrease in operating
lease liabilities
|
(4,355)
|
(6,229)
|
(818)
|
(2,023)
|
Decrease (increase) in
trade receivables, net
|
6,939
|
(7,373)
|
428
|
(6,199)
|
Decrease (increase) in
other receivables and prepaid expenses
|
1,911
|
(1,220)
|
1,727
|
(87)
|
Increase in
inventories
|
(9,512)
|
(3,850)
|
(3,746)
|
(2,437)
|
Increase (decrease) in
trade payables
|
(4,218)
|
(425)
|
(3,462)
|
1,421
|
Increase (decrease) in
other payables and accrued expenses
|
(4,934)
|
(4,799)
|
(869)
|
403
|
Increase
(decrease) in deferred
revenues
|
6,443
|
1,663
|
1,383
|
(862)
|
Net cash provided by
operating activities
|
5,434
|
5,756
|
2,206
|
4,818
|
Cash flows from
investing activities:
|
|
|
|
|
Investment in
short-term deposits
|
-
|
(5,000)
|
-
|
-
|
Proceeds from
short-term deposits
|
5,006
|
13
|
2
|
10
|
Proceeds from
redemption of marketable securities
|
2,000
|
1,123
|
1,000
|
1,123
|
Proceeds from
redemption of financial investments
|
11,043
|
-
|
8,294
|
-
|
Purchase of financial
investments
|
-
|
(15,670)
|
-
|
(270)
|
Net cash paid in
acquisition of subsidiary
|
-
|
(100)
|
-
|
-
|
Purchase of property
and equipment
|
(3,263)
|
(579)
|
(1,947)
|
(289)
|
Net cash provided by
(used in) investing activities
|
14,786
|
(20,213)
|
7,349
|
574
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
Six months
ended
|
Three months
ended
|
|
June
30,
|
June
30,
|
|
2023
|
2022
|
2023
|
2022
|
|
(Unaudited)
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
Purchase of treasury
shares
|
(2,926)
|
(29,169)
|
(2,926)
|
(8,300)
|
Cash dividends paid to
shareholders
|
(5,718)
|
(5,832)
|
-
|
-
|
Proceeds from issuance
of shares upon exercise of options
|
114
|
181
|
18
|
176
|
Net cash used in
financing activities
|
(8,530)
|
(34,820)
|
(2,908)
|
(8,124)
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
11,690
|
(49,277)
|
6,647
|
(2,732)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
24,535
|
84,523
|
29,578
|
37,978
|
Cash, cash equivalents
and restricted cash at end of period
|
$ 36,225
|
$ 35,246
|
$ 36,225
|
$ 35,246
|
Company
Contacts
|
|
|
Niran
Baruch,
Chief Financial
Officer
AudioCodes
Tel:
+972-3-976-4000
niran.baruch@audiocodes.com
|
|
Roger L.
Chuchen
VP, Investor
Relations
AudioCodes
Tel:
732-764-2552
Mobile:
347-752-0780
roger.chuchen@audiocodes.com
|
View original
content:https://www.prnewswire.com/news-releases/audiocodes-reports-second-quarter-2023-results-and-declares-semi-annual-dividend-of-18-cents-per-share-301889987.html
SOURCE AudioCodes