AudioCodes (AUDC) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenues were $61.6 million, up 2.2% sequentially but down 3.2% year-over-year; full year revenues were $242.2 million, down 0.9% year-over-year.

• Service revenues grew 10.9% year-over-year in Q4 to $34.2 million, now representing over half of total revenues; full year service revenues rose 8.2% to $130.2 million.

• Net income for Q4 was $6.8 million ($0.22 per diluted share), up from $2.7 million in Q3 and $3.7 million in Q4 2023; full year net income was $15.3 million ($0.50 per share), up from $8.8 million in 2023.

• Non-GAAP net income for Q4 was $11.6 million ($0.37 per share), more than doubling sequentially; full year non-GAAP net income was $27.3 million ($0.87 per share).

• Company is shifting focus from connectivity to AI-powered value-added services, with VoiceAI and managed services as key growth drivers.

Financial highlights

• Q4 gross margin was 66.2% (GAAP) and 66.5% (non-GAAP), both improving sequentially.

• Q4 operating margin: 6.7% (GAAP), 12.2% (non-GAAP); Q4 EBITDA: $5.2 million (GAAP), $8.5 million (non-GAAP); non-GAAP EBITDA margin: 13.8%.

• Deferred revenues at year-end were $84.4 million, up from $78.6 million at the end of Q3.

• Cash and equivalents totaled $93.9 million at year-end; net cash from operations was $15.3 million in Q4 and $35.3 million for the year.

• Weighted average diluted shares: 30.26 million in Q4; non-GAAP EPS: $0.37 in Q4 2024.

Outlook and guidance

• 2025 revenue guidance: $246 million–$254 million; non-GAAP EBITDA guidance: $34 million–$38 million.

• Connectivity sector expected to grow 20%–26% with annual recurring revenue target of $78–$82 million.

• Value-added services bookings projected to increase over 40% year-over-year, exceeding $17 million.

• VoiceAI business expected to grow 40%–50% in 2025, supported by strong pipeline and customer demand.

• Recurring revenue momentum expected to drive UCaaS and CX sales in 2025 and beyond.