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Audiocodes (AUDC)
NASDAQ:AUDC
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Audiocodes
(NASDAQ:AUDC)
67Neutral
Positive Factors
Backlog
Driven by strong subscriptions bookings, backlog exiting 4Q was a record.
Revenue Growth
Live ARR subscription was up +35% y/y to $65MM while MSFT business grew +13% y/y, best in over a year.
Negative Factors
Financial Estimates
With lower revenue growth and operating profit and higher tax rate, analysts meaningfully reduce F25 estimates and reduce the price target to $11.
Audiocodes (AUDC) vs. S&P 500 (SPY)
Market Cap
$279.58M
Dividend Yield3.82%
Average Volume (3M)80.21K
Price to Earnings (P/E)18.8
Beta (1Y)1.58
Revenue Growth-0.90%
EPS Growth80.24%
CountryUS
Employees946
SectorTechnology
Sector Strength43
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.50
Shares Outstanding29,679,754
10 Day Avg. Volume72,628
30 Day Avg. Volume80,212
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)N/A
Price to Sales (P/S)4.75
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.17Price Target Upside18.20% Upside
Rating ConsensusHold
Number of Analyst Covering3
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 hardware products, such as session border controllers, media gateways, and IP phones, as well as software solutions related to voice networks and unified communications. The company also offers professional services, including consulting, support, and maintenance, which provide a recurring revenue stream. Key partnerships with major technology providers and network operators enhance AudioCodes' market reach and contribute significantly to its earnings. Additionally, AudioCodes capitalizes on the growing demand for cloud-based solutions and digital transformation in enterprises, which drives further adoption of its products and services.
Audiocodes Financial Statement Overview
Summary
Audiocodes demonstrates solid financial health with a strong balance sheet and effective cash flow management. The company faces challenges in revenue growth and operational efficiency, but maintains a low debt profile and stable profitability margins. Continued focus on improving revenue and operational efficiency could enhance overall financial performance.Income Statement
Audiocodes shows a relatively stable gross profit margin, with a slight decline in total revenue over the last couple of years. Gross Profit Margin for 2024 is approximately 65.3%. The company experienced a decline in revenue from 2023 to 2024 by about 0.9%, and a significant drop from 2022. Net Profit Margin improved from 3.6% in 2023 to 6.3% in 2024, indicating better profitability control. However, EBIT and EBITDA margins also reflect a decrease over the years, indicating operational efficiency challenges.65
Positive
Balance Sheet
Audiocodes maintains a solid equity position with an Equity Ratio of about 57.1% in 2024, indicating a strong capital structure. The Debt-to-Equity Ratio is 0.19, reflecting a low level of debt relative to equity, which reduces financial risk. However, Return on Equity (ROE) is moderate at 8%, reflecting room for improvement in generating income from equity.70
Positive
Cash Flow
Audiocodes has shown robust cash flow management with a strong Free Cash Flow to Net Income Ratio of 0.72, indicating effective cash generation from operations. Operating Cash Flow to Net Income is 2.3, highlighting efficient conversion of net income into cash flow. Free Cash Flow increased from the previous year, showcasing improvement in cash generation despite revenue challenges.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 242.18M | 244.38M | 275.09M | 248.92M | 220.77M | Gross Profit |
| 158.16M | 158.35M | 178.78M | 170.89M | 149.82M | EBIT |
| 17.19M | 14.42M | 31.32M | 39.52M | 38.35M | EBITDA |
| 21.07M | 18.53M | 34.30M | 41.96M | 40.62M | Net Income Common Stockholders |
| 15.31M | 8.78M | 28.47M | 33.75M | 27.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 62.38M | 38.20M | 41.91M | 80.09M | 41.38M | Total Assets |
| 335.90M | 337.52M | 323.83M | 349.27M | 358.12M | Total Debt |
| 36.46M | 39.28M | 13.72M | 19.53M | 29.81M | Net Debt |
| -22.29M | 8.74M | -10.81M | -59.89M | -11.12M | Total Liabilities |
| 144.09M | 149.41M | 134.07M | 143.77M | 148.27M | Stockholders Equity |
| 191.81M | 188.11M | 189.76M | 205.50M | 209.85M |
| Cash Flow | Free Cash Flow | |||
| 10.97M | 8.93M | 6.79M | 46.17M | 36.95M | Operating Cash Flow |
| 35.25M | 14.89M | 8.28M | 47.34M | 38.48M | Investing Cash Flow |
| 17.81M | 19.98M | -19.67M | 42.62M | -139.31M | Financing Cash Flow |
| -24.86M | -28.86M | -48.60M | -51.48M | 77.09M |
Audiocodes Technical Analysis
Negative
9.45
Price Trends
10.67
Negative
9.92
Negative
9.91
Negative
Market Momentum
-0.32
Positive
29.35
Positive
15.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AUDC, the sentiment is Negative. The current price of 9.45 is below the 20-day moving average (MA) of 10.10, below the 50-day MA of 10.67, and below the 200-day MA of 9.91, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 29.35 is Positive, neither overbought nor oversold. The STOCH value of 15.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $234.13M | 9.76 | 20.94% | ― | -37.77% | 3.20% | |
67 Neutral | $279.58M | 18.85 | 8.06% | 3.82% | -0.90% | 80.24% | |
64 Neutral | $208.77M | 8.67 | 16.02% | ― | 13.54% | 278.70% | |
57 Neutral | $20.89B | 10.40 | -13.99% | 2.52% | 4.47% | -23.34% | |
53 Neutral | $255.63M | 50.30 | -24.21% | ― | -39.77% | -27.77% | |
48 Neutral | $257.65M | ― | -6.05% | ― | 0.60% | -10.27% | |
44 Neutral | $253.06M | ― | -81.29% | ― | 5.59% | 32.06% |
* Technology Sector Average
Performance Comparison
AUDC
Audiocodes
9.45
-2.76
-22.60%
AEHR
Aehr Test Systems
7.85
-3.75
-32.33%
ASUR
Asure
9.57
2.13
28.63%
CRNT
Ceragon Networks
2.36
-0.72
-23.38%
CAN
Canaan
0.87
-0.43
-33.08%
OCFT
OneConnect Financial Technology
6.75
4.51
201.34%
Audiocodes Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -5.12% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a mix of achievements and challenges. There was notable growth in key business segments such as services, Microsoft business, and Voice AI, indicating positive momentum. However, overall revenue declined slightly for the year, and there were increased expenses impacting profitability. The company is optimistic about future growth, especially in the AI-driven value-added services sector.Highlights
Increase in Q4 2024 Revenue
Revenues for the fourth quarter were $61.6 million, an increase of 2.2% over the $60.2 million reported in the third quarter.
Growth in Services Revenue
Services revenues for the fourth quarter were $34.2 million, an increase of 5.4% over the $32.5 million reported in the third quarter, accounting for 55.6% of total revenues.
Strong Microsoft Business Performance
Microsoft business grew by 13% in Q4, marking the highest quarterly growth rate of the year, with full-year growth at 6%.
Increase in Annual Recurring Revenue
Ended 2024 with an annual recurring revenue of $65 million, representing 35% year-over-year growth.
Voice AI Business Growth
Voice AI business grew 30% in 2024, contributing 5% to total revenue and is expected to grow by 40% to 50% in 2025.
Cash Dividend Announcement
Declared a cash dividend of $0.18 per share, with an aggregate amount of approximately $5.3 million.
Lowlights
Full Year Revenue Decline
Full year 2024 revenues were $242.2 million, a decrease of 0.9% from $244.4 million reported in 2023.
Reduction in Operating Income
Operating income for the fourth quarter was $4.1 million, down from $4.9 million in Q3 2024.
Increased Operating Expenses
Non-GAAP operating expenses rose to $33.4 million in Q4 from $32.5 million in the third quarter, attributed to increased investment in marketing, travel, and cloud services.
Slower Transition in Legacy Business
Connectivity business still makes up about 95% of revenue, highlighting a slower transition to newer technologies.
Company Guidance
During the fourth quarter 2024 earnings call, AudioCodes provided guidance for the full year 2025, projecting revenues in the range of $246 million to $254 million and non-GAAP EBITDA between $34 million and $38 million. The company reported fourth-quarter revenues of $61.6 million, a 2.2% increase over the previous quarter, with full-year 2024 revenues totaling $242.2 million, a slight decrease of 0.9% from 2023. Services revenues grew significantly, reaching $34.2 million in the fourth quarter, marking a 5.4% increase from the third quarter, and accounted for 55.6% of total revenues. Gross margins for the quarter were 66.2%, and the operating income was $4.1 million. The non-GAAP net income for the fourth quarter was $11.6 million, translating to $0.37 per diluted share. The company also emphasized its strategic shift towards AI-driven value-added services, expecting growth in its Voice AI segment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.