AudioCodes (AUDC) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue rose 2.2% year-over-year to $61.5 million, with services accounting for 50.3% of total revenue at $30.9 million.

• Conversational AI business grew 50% year-over-year, with annual recurring revenue (ARR) reaching $75 million, up 25% year-over-year and a full-year target of $78–$82 million.

• Non-GAAP EPS was $0.17, up from $0.16 in Q3 2024; GAAP net income was $2.7 million, flat year-over-year.

• Record bookings in Live and conversational AI segments, driven by new customer wins and expansions.

• The company serves 65 of the Fortune 100 and operates in 120 countries.

Financial highlights

• Non-GAAP gross margin was 65.8%; GAAP gross margin was 65.5%.

• Non-GAAP operating margin was 9.5%, down from 11.7% in Q3 2024.

• Non-GAAP EBITDA margin was 11.2%, down from 13.1% in Q3 2024; non-GAAP EBITDA was $6.9 million.

• Net cash from operating activities was $4.1 million for the quarter.

• Cash, equivalents, and investments totaled $79.7 million at quarter-end.

Outlook and guidance

• 2025 revenue expected at $244–$246 million; non-GAAP EPS guidance of $0.60–$0.64.

• ARR target for full-year 2025 set at $78–$82 million, with continued strong momentum projected into 2026.

• Conversational AI business expected to grow 40%–50% annually in coming years.

• Continued investment in high-growth areas like Live platform and CAI to drive medium-term top-line growth.