AudioCodes (AUDC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $60.4 million, up 0.5% year-over-year, with service revenues growing 3.4% to $32.6 million and services accounting for 54% of total revenue.

• Net income increased to $4.0 million ($0.13 per diluted share) from $2.1 million ($0.07) year-over-year.

• Conversational AI business grew over 10% year-over-year, with a robust pipeline and new opportunities.

• Microsoft Teams business revenue increased 7% year-over-year, and Cisco Webex Calling partnership is expected to contribute in the second half of 2025.

• Live managed services annual recurring revenue grew 25% year-over-year, reaching $67 million.

Financial highlights

• GAAP gross margin was 64.8% (up from 64.4% in Q1 2024); non-GAAP gross margin was 65.2%, flat year-over-year.

• GAAP operating income was $3.6 million (6% of revenue), up from $3.3 million (5.5%); non-GAAP operating margin declined to 8.9% from 10.5%.

• EBITDA reached $4.6 million, up from $3.8 million year-over-year; non-GAAP EBITDA was $6.2 million, down from $6.7 million.

• Net cash from operating activities was $13.5 million; cash, equivalents, and investments totaled $95.7 million at quarter end.

• Non-GAAP EPS was $0.15, compared to $0.17 in Q1 2024.

Outlook and guidance

• Withdrew annual guidance due to tariff-related macroeconomic uncertainty; will resume once tariff rates are finalized.

• Targeting 50% bookings growth in 2025, with strong leading indicators and pipeline.

• Management expects continued growth in AI-powered value-added services, with further scaling of proof-of-concept opportunities and the launch of a next-generation Live platform in H2 2025.