AudioCodes Reports Second Quarter 2023 Results and Declares Semi-Annual Dividend of 18 cents per share
LOD,
Second Quarter Highlights
- Quarterly revenues increased by
1.4% sequentially to .$60.0 million - Quarterly Service revenues of
accounted for$28.5 million 47.4% of revenues. - GAAP results:
- Quarterly GAAP gross margin was64.1% compared to61.7% in the prior quarter;
- Quarterly GAAP operating margin was3.8% compared to operating margin loss of1.4% in the prior quarter; and
- Quarterly GAAP net income was , or$1.1 million per diluted share compared to net loss of$0.03 , or$0.2 million per diluted share in the prior quarter.$0.01 - Non-GAAP results:
- Quarterly Non-GAAP gross margin was64.5% compared to62.1% in the prior quarter;
- Quarterly Non-GAAP operating margin was9.5% compared to4.9% in the prior quarter; and
- Quarterly Non-GAAP net income was , or$5.1 million per diluted share compared to net income of$0.16 , or$2.7 million per diluted share in the prior quarter.$0.08 - Net cash provided by operating activities was
for the quarter.$2.2 million - 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
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; (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
Net cash provided by operating activities was
"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
We also executed well in our customer experience (CX) and conversational AI businesses, delivering
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
In June 2023, the Company received court approval in
As of June 30, 2023, the Company had
Cash Dividend
AudioCodes also announced today that the Company's Board of Directors has declared a cash dividend in the amount of
In accordance with Israeli tax law, the dividend is subject to withholding tax at the source at the rate of
The dividend will be paid in
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
©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 | ||
| ||
June 30, | December 31, | |
2023 | 2022 | |
(Unaudited) | (Audited) | |
ASSETS | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | ||
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 | ||
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 | ||
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 | ||
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 |
AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Six months ended | Three months ended | |||
June 30, | June 30, | |||
2023 | 2022 | 2023 | 2022 | |
(Unaudited) | (Unaudited) | |||
Revenues: | ||||
Products | ||||
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 | ||||
Basic net earnings per share | ||||
Diluted net earnings per share | ||||
Weighted average number of shares used in computing basic net | 32,024 | 32,019 | 31,900 | 31,809 |
Weighted average number of shares used in computing diluted net | 33,017 | 32,800 | 32,977 | 32,518 |
AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | ||||
Six months ended | Three months ended | |||
June 30, | June 30, | |||
2023 | 2022 | 2023 | 2022 | |
(Unaudited) | (Unaudited) | |||
GAAP net income | ||||
GAAP net earnings per share | ||||
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 | ||||
Non-GAAP diluted net earnings per share | ||||
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 |
AUDIOCODES LTD. AND ITS SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||
Six months ended | Three months ended | |||
June 30, | June 30, | |||
2023 | 2022 | 2023 | 2022 | |
(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 | 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 | ||||
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 |
Company Contacts | ||
Niran Baruch, Chief Financial Officer AudioCodes Tel: +972-3-976-4000 | Roger L. Chuchen VP, Investor Relations AudioCodes Tel: 732-764-2552 Mobile: 347-752-0780 |
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SOURCE AudioCodes