AudioCodes recently reported results for Q3 2007, with revenues and earnings growing quarter over quarter. We continue to see excitement and growth in the VoIP market. Indeed, one of the market segments with the most momentum for VoIP is the Unified Communications market and with our best-of-breed enterprise products, AudioCodes is well positioned within this market segment in 2008. Our carrier products also continue to find niche markets and secure wins with Tier 2&3 service providers in emerging markets. Our OEMs and service providers are deploying AudioCodes’ Media Gateways and Session Border Controllers (SBCs) into their core networks and into large call centers, large enterprises and Government institutions. In addition, with our media server products, we continue to find opportunities to provide media processing for voice and video applications. We have also seen progress in providing our security and media gateway products for FMC and wireless markets.

In terms of Unified Communications opportunities, we are designed in or partnered with the market leaders. We have close partnerships with 3 of the top 5 IP PBX vendors in market share and are selling products to four of the top five IP PBX vendors. In terms of hosted offerings we have close partnerships with Broadsoft, Sylantro, NetCentrex, Nortel, amongst others.

We have also strengthened our strategic relationship with Microsoft by introducing a “Basic Hybrid” Media Gateway which enables the integration of AudioCodes Media Gateways with Microsoft unified communications technologies: Microsoft Exchange Server 2007 and Microsoft Office Communications Server 2007.

The UC channels have been cross-trained and will be an important driver for the growth of this market. Indeed, having our media gateway and SBCs coupled with our OEMs, partners and channels products and services, enables us to be well positioned within the UC market.

In order to expand our differentiators in the marketplace we are beginning to work with our Network Equipment Providers, partners and channels in specific verticals. In the past year, our NEP customers have accomplished the delivery of mid density media gateways into financial services and government institutions. This has driven us to enhance our security functionality within our products. We believe that AudioCodes has one of the strongest security feature sets in VoIP. This builds on our many other best-of-breed advantages including voice quality, transcoding, rich SIP & MEGACO call control implementations, interoperability, PSTN signaling and others.

VoIP is still in its very early stages of being implemented into FMC and mobile networks, but we see tangible progress. In June, T-Mobile successfully launched their HotSpot@Home. Via our relationship with our NEP customers, AudioCodes was involved in this project.

Together with our technology, CPE, media gateway, media server, SBCs and security gateway products, we are progressing with our customers and pursuing key design wins in emerging market segments.