First Quarter Highlights
- Quarterly revenues increased by 12.8% year-over-year to $66.4 million.
- Quarterly service revenues increased by 26.2% year-over-year to $27.5 million.
- GAAP results:
- Quarterly GAAP gross margin was 66.9%;
- Quarterly GAAP operating margin was 12.1%; and
- Quarterly GAAP net income was $8.6 million, or $0.26 per diluted share.
- Non-GAAP results:
- Quarterly Non-GAAP gross margin was 67.2%;
- Quarterly Non-GAAP operating margin was 18.0%; and
- Quarterly Non-GAAP net income was $11.2 million, or $0.33 per diluted share.
- Net cash provided by operating activities was $938,000 for the quarter.
- AudioCodes declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of $5.8 million, was paid on March 1, 2022 to shareholders of record on February 15, 2022.
- AudioCodes repurchased 720,124 of its ordinary shares during the quarter at an aggregate cost of $20.9 million.
Lod, Israel – May 2, 2022 – AudioCodes (NASDAQ: AUDC) Press Release
AudioCodes (NASDAQ: AUDC), a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced its financial results for the first quarter ended March 31, 2022.
Revenues for the first quarter of 2022 were $66.4 million compared to $58.8 million for the first quarter of 2021.
Net income was $8.6 million, or $0.26 per diluted share, for the first quarter of 2022 compared to $10.0 million, or $0.29 per diluted share, for the first quarter of 2021.
On a Non-GAAP basis, net income was $11.2 million, or $0.33 per diluted share, for the first quarter of 2022 compared to $12.7 million, or $0.37 per diluted share, for the first quarter of 2021.
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Callverso Ltd; (iv) other income related to a payment made by the landlord to AudioCodes Inc., a subsidiary of the Company, in connection with the termination of a lease agreement for its offices in New Jersey; (v) financial income related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies; and (vi) non-cash deferred tax expenses (income). 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 $938,000 for the first quarter of 2022. Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long-term financial investments were $144.1 million as of March 31, 2022 compared to $174.8 million as of December 31, 2021. The decrease in cash and cash equivalents, long and short-term bank deposits long and short-term marketable securities and long-term financial investments was the result of the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the payment of a cash dividends during the first quarter of 2022.
“We are pleased to report solid top-line financial results for the first quarter of 2022, growing 12.8% year-over-year,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
“Strong sales in the Unified Communications and Collaboration (UCC) business were the key driver for our continued growth in the first quarter of 2022. Revenue growth acceleration was reflected mainly in enterprise sales in the Microsoft Teams Voice and the Zoom Phone environments which grew each above 50% year-over-year. Microsoft business as a whole grew above 25% year over year. AudioCodes Live for Microsoft Teams managed services continue to grow at a nice clip. We now forecast Live for Teams ARR to double in 2022 and reach a level of above $30 million. The second important driver of growth is attributed to service revenues which grew above 25% year-over-year. The services business growth was driven primarily by professional services and AudioCodes Live managed services. Exiting the first quarter of 2022, services revenue reached a level of 41.5% of total company revenue. We regard this momentum as an important indicator of our ongoing successful transformation to cloud services and recurring revenue model.
In our customer experience market business (CX), we continue to see great progress with our conversational AI business where total contract value (TCV) signed during the quarter grew 40% year-over-year. We are now confident that we are well on track to grow our conversational AI business more than 50% in 2022. We are glad to report that the acquisition of Callverso at the end of 2021 started to bear fruit with a growing number of new opportunities for intelligent virtual agent (IVA) solutions for the CX market. Following our success in the Israeli market with IVA applications, we have plans to start addressing the global market in the second half of 2022. Finally, our Voice.ai Connect platform which powers voice interactions for the growing market of chatbots, our conversational IVR for contact centers, and AI-powered call recording in enterprise applications, performed well above our expectations. As such, we strongly believe in our ability to develop a new meaningful growth engine to fuel further success in our core markets,” continued Mr. Adlersberg.
“On the operational front, first quarter 2022 non-GAAP operating margin came in at 18%, 240 basis points below last quarter’s, nearly all of which was attributable to $1.4 million higher components costs affecting our gross margins. The higher non-GAAP operating expenses and change in non-GAAP operating margin on an annual basis was the result of increase of 17% in headcount and related budget to support our business expansion and higher components costs, both of which are expected to continue throughout this year but subside in 2023 and beyond,” concluded Mr. Adlersberg.
Share Buy Back Program and Cash Dividend
In December 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 June 19, 2022.
On February 1, 2022, the Company declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of approximately $5.8 million, was paid on March 1, 2022 to all of the Company's shareholders of record on February 15, 2022.
During the quarter ended March 31, 2022, the Company acquired 720,124 of its ordinary shares under its share repurchase program for a total consideration of $20.9 million.
As of March 31, 2022, the Company had $8.3 million available under this approval for the repurchase of shares and/or declaration of cash dividends.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's first quarter of 2022 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
First quarter of 2022 earnings call supplementary slides are available at AudioCodes investor website at www.audiocodes.com/investors-lobby