AudioCodes (AUDC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached $60.3 million, up 0.5% year-over-year, with service revenues rising 12.3% to $32 million and strong performance in Microsoft Teams and conversational AI business lines.

• Enterprise business accounted for about 90% of revenue, with UCaaS and managed services showing robust momentum.

• Conversational AI revenue grew over 50% year-over-year, with bookings up more than 50% and a strong pipeline for 2024.

• Live ARR rose 35% year-over-year to $56 million, targeting $64–$70 million for 2024.

• Signed major contracts in consumer goods, financial, and technology sectors, expanding enterprise reach.

Financial highlights

• Non-GAAP gross margin was 65.8% (vs. 64.5% in Q2 2023); GAAP gross margin was 65.5%.

• Non-GAAP operating margin was 11.9% (vs. 9.5%); GAAP operating income was $4.9 million (8.2% margin), up from $2.3 million.

• Non-GAAP EBITDA was $8.3 million (13.8% margin), up from $6.2 million; GAAP EBITDA was $6.2 million.

• Non-GAAP net income was $5.5 million ($0.18/share), up from $5.1 million ($0.16); GAAP net income was $3.8 million ($0.12/share), up from $1.1 million ($0.03/share).

• Cash, equivalents, and investments totaled $93.7 million at quarter end.

Outlook and guidance

• 2024 revenue guidance is $240–$250 million; non-GAAP EBITDA expected between $33–$39 million.

• Expects CapEx to remain elevated in Q3 due to headquarters investment, then return to historical levels.

• Anticipates return to revenue and profit growth starting in Q1 or Q2 2025 as recurring business overtakes legacy declines.

• Long-term targets: revenue growth 6–12%, non-GAAP gross margin 65–68%, operating margin 15–20%, EBITDA margin 17–22%.