Fourth Quarter and Full Year 2017 Highlights
- Quarterly revenues increased by 9.7% year-over-year to $41.4 million; full 2017 year revenues were $156.7 million compared to $145.6 million in 2016;
- Quarterly service revenues increased by 17.4% year-over-year to $13.4 million; full 2017 year service revenues were $49.3 million compared to $43.3 million in 2016;
- Quarterly UC-SIP revenues increased more than 15% year-over-year;
- Quarterly GAAP gross margin was 63.1%; quarterly Non-GAAP gross margin was 63.6%;
- Quarterly GAAP operating margin was 7.8%; quarterly Non-GAAP operating margin was 9.7%;
- Cash flow from operating activities was $8.4 million for the quarter and $17.8 million for the full year;
- Quarterly GAAP net income was $672,000, or $0.02 per diluted share, Quarterly Non-GAAP net income was $3.8 million, or $0.12 per diluted share;
- Full 2017 year GAAP net income was $4.0 million, or $0.13 per diluted share; full 2017 year Non-GAAP net income was $12.2 million, or $0.37 per diluted share;
- AudioCodes repurchased 1.3 million of its ordinary shares during the quarter at an aggregate cost of $9.0 million.
AudioCodes, a leading vendor of advanced voice networking and media processing solutions for the digital workplace, today announced financial results for the fourth quarter and full year periods ended December 31, 2017.
Revenues for the fourth quarter of 2017 were $41.4 million, compared to $39.2 million for the third quarter of 2017 and $37.8 million for the fourth quarter of 2016. Revenues were $156.7 million in 2017 compared to $145.6 million in 2016.
Net income was $672,000, or $0.02 per diluted share, for the fourth quarter of 2017, compared to $14.8 million or $0.44 per diluted share, for the fourth quarter of 2016. Net income in 2017 was $4.0 million or $0.13 per diluted share, compared to $16.2, or $0.45 per diluted share, in 2016.
In the fourth quarter and full year of 2016, net income per diluted share included $0.34 per share and $0.32 per share, respectively, as a result of the creation of a deferred tax asset. Non-GAAP net income excludes the effect of this non-cash deferred tax benefit.
On a Non-GAAP basis, net income was $3.8 million, or $0.12 per diluted share, for the fourth quarter of 2017 compared to $2.6 million, or $0.08 per diluted share, in the fourth quarter last year. Non-GAAP net income in 2017 was $12.2 million, or $0.37 per diluted share, compared to $9.4 million, or $0.26 per diluted share, in 2016.
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments and income due to revaluation of an earn-out liability, each in connection with the acquisition of Active Communications Europe; and (iv) non-cash deferred tax benefit or 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 $8.4 million for the fourth quarter of 2017 and $17.8 million for 2017. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $58.7 million as of December 31, 2017 compared to $69.5 million as of December 31, 2016. The decrease in cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities was the result of the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program.
"We are pleased to report strong financial results for the fourth quarter and full year 2017,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
"In 2017 we executed well on our strategic goal to lead the Enterprise Voice space with voice connectivity solutions and enhanced our leadership position for coming years. We achieved record financial results and new highs in our gross margin and operating income, an attestation to our efficient operations. Looking forward, we expect to continue our evolution and growth in 2018, continuing our strong cash flow for the fourth year in a row. We also expect to continue investment in future offerings as well as focus on the return on investment to our shareholders."
"We have decided to formulate a new Business Unit called Voice.AI to follow on the steps of success of our Networking Business Unit and UC-SIP operations. Leveraging our existing operations in voice recognition and call logging/recording, Voice.AI is intended to capitalize on the endless amount of business voice interactions and resources and the growing effectiveness of AI technologies such as NLP and NLU. The newly developed Voice.AI solutions will be used to process and distribute meaningful actionable business insights. Capitalizing on our leadership position in enterprise voice and large customer base, expertise in telephony and VoIP communications, as well as our extensive product portfolio of gateways, session border controllers and end point devices and appliances, we envision significant potential for future products and solutions.”
"Additionally, the ongoing trend of all-IP network transformation provides us with much to look forward to, while we work on new growth engines and new technological developments," concluded Mr. Adlersberg.
Share Buy Back Program
As of December 31, 2017, AudioCodes had acquired an aggregate of 15.8 million of its ordinary shares since August 2014 for an aggregate consideration of $79.7 million. During the quarter ended December 31, 2017, AudioCodes acquired 1.3 million of its ordinary shares under its share repurchase program for a total consideration of $9.0 million. During 2017, AudioCodes acquired 3.7 million of its ordinary shares for a total consideration of $25.6 million.
In November 2017, AudioCodes received court approval in Israel to purchase up to an aggregate of $20 million of additional ordinary shares pursuant to its share repurchase program. As of December 31, 2017, $16.8 million remained available to the Company for repurchasing shares under this court approval. The current court approval for share repurchases will expire on May 27, 2018.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:00 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2017 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:
- United States Participants: +1 (877) 407-0778
- International Participants: +1 (201) 689-8565
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 http://www.audiocodes.com/investors-lobby