AudioCodes Ltd (AUDC) Q1 2025 Earnings Call Highlights: Navigating Growth Amid Tariff Challenges

In This Article:

  • Revenue: $60.4 million, up 0.5% from $60.1 million in Q1 2024.

  • Services Revenue: $32.6 million, representing 54% of total revenues, up 3.4% year-over-year.

  • Gross Margin: 64.8%, compared to 64.4% in Q1 2024.

  • Operating Income: $3.6 million, or 6% of revenues, compared to $3.3 million, or 5.5% of revenues in Q1 2024.

  • Net Income: $4 million, or $0.13 per diluted share, compared to $2.1 million, or $0.07 per diluted share in Q1 2024.

  • Non-GAAP Gross Margin: 65.2%, unchanged from Q1 2024.

  • Non-GAAP Operating Income: $5.4 million, or 8.9% of revenues, compared to $6.3 million, or 10.5% of revenues in Q1 2024.

  • Non-GAAP Net Income: $4.7 million, or $0.15 per diluted share, compared to $5.2 million, or $0.17 per diluted share in Q1 2024.

  • Cash and Equivalents: $95.7 million as of March 30, 2025.

  • Net Cash from Operating Activities: $13.5 million for Q1 2025.

  • Dividend: $0.18 per share, totaling approximately $5.5 million, paid on March 6, 2025.

  • Tariff Impact: Estimated additional cost burden of $3 million to $4 million for the full year 2025.

  • Deferred Revenues: $81.3 million as of March 30, 2025, compared to $80.5 million as of March 31, 2024.

  • Employee Count: 962 employees at the end of Q1 2025.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • AudioCodes Ltd (NASDAQ:AUDC) reported a revenue increase of 0.5% year-over-year, reaching $60.4 million for the first quarter of 2025.

  • The company's services revenue grew by 3.4% year-over-year, accounting for 54% of total revenues.

  • AudioCodes Ltd (NASDAQ:AUDC) achieved a gross margin of 64.8%, slightly higher than the previous year's 64.4%.

  • The company is making significant progress in its transformation towards a cloud voice software and services company, with a focus on AI-powered voice services.

  • AudioCodes Ltd (NASDAQ:AUDC) has successfully attracted interest from large global system integrators for its conversational AI business voice services.

Negative Points

  • The company has withdrawn its annual guidance due to the uncertainty surrounding tariffs and macroeconomic conditions.

  • AudioCodes Ltd (NASDAQ:AUDC) faces an estimated additional cost burden of $3 million to $4 million annually due to tariffs.

  • Non-GAAP operating income for the first quarter decreased to $5.4 million from $6.3 million in Q1 2024.

  • The company's non-GAAP net income per diluted share decreased to $0.15 from $0.17 in Q1 2024.

  • The slow growth in services revenue this quarter is attributed to the timing of professional services project completion.