LOD, Israel, May 9, 2023
/PRNewswire/ --
First Quarter Highlights
- Quarterly revenues decreased by 10.8% year-over-year to
$59.2 million;
- Quarterly service revenues increased by 10.8% year-over-year to
$30.5 million;
- GAAP results:
- Quarterly GAAP gross margin was 61.7%;
- Quarterly GAAP operating loss percentage was 1.4%;
- Quarterly GAAP net loss was $0.2
million, or $0.01 per diluted
share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 62.1%;
- Quarterly Non-GAAP operating margin was 4.9%;
- Quarterly Non-GAAP net income was $2.7
million, or $0.08 per diluted
share.
- Net cash provided by operating activities was $3.2 million for the quarter.
- AudioCodes declared a cash dividend of 18 cents per share. The dividend, in the
aggregate amount of $5.7 million, was
paid on March 7, 2023 to shareholders
of record on February 21, 2023.
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 first quarter ended March 31,
2023.
Revenues for the first quarter of 2023 were $59.2 million compared to $66.4 million for the first quarter of 2022.
Net loss was $0.2 million, or
$0.01 per diluted share, for the
first quarter of 2023 compared to net income of $8.6 million, or $0.26 per diluted share, for the first quarter of
2022.
On a Non-GAAP basis, net income was $2.7
million, or $0.08 per diluted
share, for the first quarter of 2023 compared to $11.2 million, or $0.33 per diluted share, for the first 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 expenses 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. 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 $3.2 million for the first 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 $121.5
million as of March 31, 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 payment of a cash
dividend during the first quarter of 2023.
"Our first quarter financial results were impacted by the
slowing global economy and rising uncertainties worldwide, which
manifested in enterprise customers and partners slowing decision
cycle on product purchases primarily in EMEA, coupled with
North America service providers
managing their inventory more tightly," said Shabtai Adlersberg, President and Chief
Executive Officer of AudioCodes. "On a brighter side, we saw
continued business momentum in the UCaaS and CCaaS markets.
Leading growth in these areas were services, which have
demonstrated growth of 10.8% year-over-year, with professional and
managed services growing 11.8% year-over-year. Services
business now represents 51.5% of our quarterly sales. With
increased focus on moving to recurring business sales, our managed
services business, Live and LiveCloud, ended the quarter at
$35 million ARR, up over 60%
year-over-year, with total contract value now over $110 million. We now expect Live to continue at
above 50% growth rate throughout 2023, and we target ARR to reach
between $46M to $50 by the end of the year.
Given customer spending remains pressured by macro-economic
uncertainty near term, we are taking decisive actions to adjust our
cost structure and reduce our headcount by approximately 8% to 10%
over the next 6-12 months, with approximately 6% effective
immediately. We thus plan to provide opex relief starting in
the beginning of the third quarter.
In the customer experience (CX) market, we saw healthy customer
activity during the quarter. Our entry-level Microsoft
Teams-native AI-first contact center application for the CX market
has generated growing interest over the 2022 activity and we plan
to step up our efforts in this area. Additionally, we have
seen growing acceptance and use of our new AI-based products in
1Q23. Leading the Voice.AI growth was our VoiceAI Connect
connectivity solution, Meeting Insights and our intelligent virtual
agent solutions. On the GPT front, we have already taken
steps to adopt ChatGPT and LLM models in our solutions to enable
advanced AI summarization and speech interaction analytics.
We expect Voice.AI to accelerate growth in 2023 and beyond
and to further expand our success in the UCaaS and the CX markets,"
concluded Mr. Adlersberg.
Share Buy Back Program and Cash Dividend
In January 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 out of any
part of this amount. The approval is valid through
July 4, 2023.
On February 7, 2023, the Company
declared a cash dividend of 18 cents
per share. The dividend, in the aggregate amount of
approximately $5.7 million, was paid
on March 7, 2023 to all of the
Company's shareholders of record on February
21, 2023.
As of March 31, 2023, the Company
had $19.3 million available under
this approval for the repurchase of shares and/or declaration of
cash dividends.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the
Company's first quarter of 2023 operating performance, financial
results and outlook. Interested parties may participate in
the conference call by dialing one 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
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, 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
|
|
|
March
31,
|
|
December
31,
|
|
2023
|
|
2022
|
|
(Unaudited)
|
|
(Audited)
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$ 29,578
|
|
$ 24,535
|
Short-term and
restricted bank deposits
|
206
|
|
5,210
|
Short-term marketable
securities
|
3,450
|
|
2,120
|
Short-term
financial investments
|
12,792
|
|
15,258
|
Trade receivables,
net
|
48,244
|
|
56,424
|
Other receivables and
prepaid expenses
|
9,822
|
|
10,006
|
Inventories
|
42,082
|
|
36,377
|
Total current
assets
|
146,174
|
|
149,930
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
Long-term Trade
receivables
|
$14,768
|
|
$13,099
|
Long-term marketable
securities
|
74,231
|
|
75,946
|
Long-term financial
investments
|
1,252
|
|
1,242
|
Deferred tax
assets
|
9,379
|
|
9,073
|
Operating lease
right-of-use assets
|
11,755
|
|
13,517
|
Severance pay
funds
|
17,557
|
|
17,933
|
Total long-term
assets
|
128,942
|
|
130,810
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
4,837
|
|
3,965
|
|
|
|
|
GOODWILL, INTANGIBLE
ASSETS AND OTHER, NET
|
38,980
|
|
39,126
|
|
|
|
|
Total assets
|
$ 318,933
|
|
$ 323,831
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Trade
payables
|
10,582
|
|
11,338
|
Other payables and
accrued expenses
|
35,793
|
|
38,316
|
Deferred
revenues
|
40,660
|
|
36,634
|
Short-term operating
lease liabilities
|
6,289
|
|
8,169
|
Total current
liabilities
|
93,324
|
|
94,457
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Accrued severance
pay
|
$ 17,395
|
|
$ 17,755
|
Deferred revenues and
other liabilities
|
17,311
|
|
16,308
|
Long-term operating
lease liabilities
|
4,282
|
|
5,551
|
Total long-term
liabilities
|
38,988
|
|
39,614
|
|
|
|
|
Total shareholders'
equity
|
186,621
|
|
189,760
|
Total liabilities and
shareholders' equity
|
$ 318,933
|
|
$ 323,831
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
U.S. dollars in
thousands, except per share data
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
Products
|
|
$ 28,693
|
|
$ 38,820
|
Services
|
|
30,520
|
|
27,537
|
Total
Revenues
|
|
59,213
|
|
66,357
|
Cost of
revenues:
|
|
|
|
|
Products
|
|
13,044
|
|
14,275
|
Services
|
|
9,626
|
|
7,722
|
Total Cost of
revenues
|
|
22,670
|
|
21,997
|
Gross profit
|
|
36,543
|
|
44,360
|
Operating
expenses:
|
|
|
|
|
Research and
development, net
|
|
15,009
|
|
14,982
|
Selling and
marketing
|
|
17,847
|
|
17,288
|
General and
administrative
|
|
4,531
|
|
4,038
|
Total operating
expenses
|
|
37,387
|
|
36,308
|
Operating income
(loss)
|
|
(844)
|
|
8,052
|
Financial income,
net
|
|
949
|
|
1,010
|
Income (loss) before
taxes on income
|
|
105
|
|
9,062
|
Taxes on income,
net
|
|
(287)
|
|
(454)
|
Net income
(loss)
|
|
$ (182)
|
|
$ 8,608
|
Basic net earnings
(loss) per share
|
|
$ (0.01)
|
|
$ 0.27
|
Diluted net earnings
(loss) per share
|
|
$ (0.01)
|
|
$ 0.26
|
Weighted average number
of shares used in computing basic net
earnings per share (in thousands)
|
|
31,750
|
|
32,230
|
Weighted average number
of shares used in computing diluted net
earnings per share (in thousands)
|
|
32,148
|
|
33,082
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
RECONCILIATION OF
GAAP NET INCOME TO NON-GAAP NET INCOME
|
U.S. dollars in
thousands, except per share data
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
GAAP net income
(loss)
|
|
$ (182)
|
|
$ 8,608
|
GAAP net earnings
(loss) per share
|
|
$ (0.01)
|
|
$ 0.26
|
Cost of
revenues:
|
|
|
|
|
Share-based
compensation (1)
|
|
107
|
|
49
|
Amortization expenses
(2)
|
|
135
|
|
190
|
|
|
242
|
|
239
|
Research and
development, net:
|
|
|
|
|
Share-based
compensation (1)
|
|
743
|
|
1,159
|
Deferred payments
expenses (3)
|
|
125
|
|
125
|
|
|
868
|
|
1,284
|
Selling and
marketing:
|
|
|
|
|
Share-based
compensation (1)
|
|
1,237
|
|
1,439
|
Amortization expenses
(2)
|
|
11
|
|
11
|
Deferred payments
expenses (3)
|
|
125
|
|
125
|
|
|
1,373
|
|
1,575
|
General and
administrative:
|
|
|
|
|
Share-based
compensation (1)
|
|
1,259
|
|
1,168
|
Other Income
(4)
|
|
-
|
|
(405)
|
|
|
1,259
|
|
763
|
Financial
expenses:
|
|
|
|
|
Exchange rate
differences (5)
|
|
(541)
|
|
(720)
|
|
|
|
|
|
Income
taxes:
|
|
|
|
|
Deferred tax
(6)
|
|
(338)
|
|
(587)
|
Non-GAAP net
income
|
|
$ 2,681
|
|
$ 11,162
|
Non-GAAP diluted net
earnings per share
|
|
$ 0.08
|
|
$ 0.33
|
Weighted average number
of shares used in computing Non-GAAP
diluted net earnings per share (in thousands)
|
|
33,056
|
|
33,783
|
|
|
|
|
|
|
(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
expenses related to exchange rate differences in connection with
revaluation of assets and liabilities in non-dollar denominated
currencies.
|
(6) Non-cash
deferred tax expenses.
|
|
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
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
|
$ (182)
|
|
$ 8,608
|
Adjustments required to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
651
|
|
742
|
Amortization of
marketable securities premiums and accretion of discounts,
net
|
|
372
|
|
360
|
Increase (decrease) in
accrued severance pay, net
|
|
16
|
|
(688)
|
Share-based
compensation expenses
|
|
3,346
|
|
3,815
|
Increase in deferred
tax assets, net
|
|
(366)
|
|
(650)
|
Cash financial income,
net
|
|
(390)
|
|
(150)
|
Decrease in operating
lease right-of-use assets
|
|
2,150
|
|
1,350
|
Decrease in operating
lease liabilities
|
|
(3,537)
|
|
(4,206)
|
Decrease (increase) in
trade receivables, net
|
|
6,511
|
|
(1,174)
|
Decrease (increase) in
other receivables and prepaid expenses
|
|
184
|
|
(1,133)
|
Increase in
inventories
|
|
(5,766)
|
|
(1,413)
|
Decrease in trade
payables
|
|
(756)
|
|
(1,846)
|
Decrease
in other payables and accrued
expenses
|
|
(4,065)
|
|
(5,202)
|
Increase in deferred
revenues
|
|
5,060
|
|
2,525
|
Net cash provided by
operating activities
|
|
3,228
|
|
938
|
Cash flows from
investing activities:
|
|
|
|
|
Investment in
short-term deposits
|
|
-
|
|
(5,000)
|
Proceeds from
short-term deposits
|
|
5,004
|
|
3
|
Proceeds from
long-term deposits
|
|
-
|
|
-
|
Purchase of financial
investments
|
|
-
|
|
(15,400)
|
Proceeds from
redemption of marketable securities
|
|
1,000
|
|
-
|
Proceeds from
redemption of financial investments
|
|
2,749
|
|
-
|
Net cash paid in
acquisition of subsidiary
|
|
-
|
|
(100)
|
Purchase of property
and equipment
|
|
(1,316)
|
|
(290)
|
Net cash provided by
(used in) investing activities
|
|
7,437
|
|
(20,787)
|
AUDIOCODES LTD. AND
ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
U.S. dollars in
thousands
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Cash flows from
financing activities:
|
|
|
|
|
Purchase of treasury
shares
|
|
-
|
|
(20,869)
|
Cash dividends paid to
shareholders
|
|
(5,718)
|
|
(5,832)
|
Proceeds from issuance
of shares upon exercise of options
|
|
96
|
|
5
|
Net cash used in
financing activities
|
|
(5,622)
|
|
(26,696)
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents, and restricted cash
|
|
5,043
|
|
(46,545)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
24,535
|
|
84,523
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 29,578
|
|
$ 37,978
|
|
|
|
|
|
|
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
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SOURCE AudioCodes