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AudioCodes Reports Third Quarter 2021 Results

Okt 26, 2021

Third Quarter Highlights

  • Quarterly revenues increased by 12.1% year-over-year to $63.4 million; Quarterly service revenues increased by 26.7% year-over-year to $24.8 million.
  • GAAP results:
    • Quarterly GAAP gross margin was 69.6%;
    • Quarterly GAAP operating margin was 15.8%; and
    • Quarterly GAAP net income was $8.3 million, or $0.24 per diluted share.
  • Non-GAAP results:
    • Quarterly Non-GAAP gross margin was 69.9%;
    • Quarterly Non-GAAP operating margin was 21.4%; and
    • Quarterly Non-GAAP net income was $12.9 million, or $0.38 per diluted share.
  • Net cash provided by operating activities was $13.0 million for the quarter.
  • AudioCodes repurchased 424,307 of its ordinary shares during the quarter at an aggregate cost of $13.8
    million.

Details

Lod, Israel – October 26, 2021 - AudioCodes (NASDAQ: AUDC) Press Release

AudioCodes, a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced its financial results for the third quarter ended September 30, 2021.

Revenues for the third quarter of 2021 were $63.4 million compared to $60.6 million for the second quarter of 2021 and $56.6 million for the third quarter of 2020.

Net income was $8.3 million, or $0.24 per diluted share, for the third quarter of 2021, compared to a net income of $7.0 million, or $0.20 per diluted share, for the third quarter of 2020.

On a Non-GAAP basis, net income was $12.9 million, or $0.38 per diluted share, for the third quarter of 2021 compared to $13.3 million, or $0.38 per diluted share, for the third quarter of 2020.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to the acquisition of Active Communications Europe assets; (iii) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (iv) non-cash deferred tax expenses. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.

Net cash provided by operating activities was $13.0 million for the third quarter of 2021. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $184.9 million as of September 30, 2021 compared to $186.3 million as of December 31, 2020. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were about the same as of the end of both periods as the use of cash for the repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the payment of cash dividends during 2021 was basically offset by cash generated from operating activities.

“We are pleased to report strong financial results for the third quarter of 2021,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

“In the third quarter of 2021 we saw continued momentum in our enterprise operations related to the UCaaS and Contact Center/customer experience (CX) markets. Contributing close to 85% of our revenues in the third quarter, and generating growth of above 20% year-over-year, the enterprise business provides a solid base for continued growth. At the core of this success was our UCaaS business which grew about 18% year-over-year and our contact center business which grew more than 20% year-over-year.”

“We experienced continued expansion in our services operations as revenues from services grew more than 25% year-over-year, representing close to 40% of our revenue in the third quarter of 2021 and becoming key to our continued business expansion. Growth in our services business was substantially related to the shift towards use of cloud communications and our focus on becoming a leading provider of Teams Voice as a Service. The increase in Services revenue was driven primarily by strength in our professional and managed services offerings.  Key to this growth is our continued progress in generating recurring revenues with strong execution in our AudioCodes Live offering operations.”

“We continue to enjoy success in expanding our Voice.ai operations where bookings grew more than 100% year-over-year for both the three and nine month periods ended September 30, 2021. We now forecast Voice.ai bookings for 2021 to reach a level of $5M for the full year. We continue to invest heavily in this growth engine and believe that it will grow to become a meaningful line of business for us in coming years. Voice.ai which is part of our AudioCodes Live  offering provides strong foundation for growth in recurring revenues over time,” concluded Mr. Adlersberg.

Share Buy Back Program

In July 2021, the Company received court approval in Israel to purchase up to an aggregate amount of $35 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend of any part of this amount. The approval is valid through January 03, 2022.

During the quarter ended September 30, 2021, the Company acquired 424,307 of its ordinary shares under its share repurchase program for a total consideration of $13.8 million.

Cash Dividend

On July 27, 2021, the Company declared a cash dividend of $0.17 per share. The dividend, in the aggregate amount of approximately $5.6 million, was paid on August 26, 2021 to all of the Company's shareholders of record on August 11, 2021.

In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 25% of the dividend amount payable to each shareholder of record, subject to applicable exemptions. If the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital, the withholding rate is 30%.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's third quarter of 2021 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:

  • United States Participants: 888-506-0062
  • International Participants: +1 (973) 528-0011

The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at www.audiocodes.com/investors-lobby

 

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