AudioCodes Reports Third Quarter 2020 Results

AudioCodes Reports Third Quarter 2020 Results

Oct 27, 2020

Third Quarter Highlights

  • Quarterly revenues increased by 10% year-over-year to $56.6 million;
  • Quarterly service revenues increased by 19.9% year-over-year to $19.6 million; and
  • Quarterly UC-SIP revenues increased by about 20% year-over-year.
  • GAAP results:
    • Quarterly GAAP gross margin percentage was 67.1%;
    • Quarterly GAAP operating margin percentage was 19.8%; and
    • Quarterly GAAP net income was $7.0 million, or $0.20 per diluted share.
  • Non-GAAP results:
  • Quarterly Non-GAAP gross margin percentage was 67.4%;
  • Quarterly Non-GAAP operating margin percentage was 23.7%; and
  • Quarterly Non-GAAP net income was $13.3 million, or $0.38 per diluted share.
  • Net cash provided by operating activities was $10.9 million for the quarter.
  • AudioCodes declared a cash dividend of 14 cents per share. The dividend, in the aggregate amount of $4.6 million, was paid on September 1, 2020.

Details

Lod, Israel – October 27, 2020 - AudioCodes (NASDAQ: AUDC) Press Release

AudioCodes, a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced financial results for the third quarter ended September 30, 2020.

Revenues for the third quarter of 2020 were $56.6 million compared to $53.5 million for the second quarter of 2020 and $51.4 million for the third quarter of 2019.

Net income was $7.0 million, or $0.20 per diluted share, for the third quarter of 2020, compared to $4.4 million, or $0.14 per diluted share, for the third quarter of 2019.

On a Non-GAAP basis, net income was $13.3 million, or $0.38 per diluted share, for the third quarter of 2020 compared to $7.4 million, or $0.24 per diluted share, for the third quarter of 2019.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses or income related to revaluation of an earn-out liability in connection with the acquisition of Active Communications Europe; (iv) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (v) 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 $10.9 million for the third quarter of 2020. Cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities were $176.4 million as of September 30, 2020 compared to $71.9 million as of December 31, 2019. The increase in cash and cash equivalents, long- and short-term bank deposits and long- and short-term marketable securities was the result of the receipt of the net proceeds of the Company’s public offering in June 2020, as well as due to cash provided by operating activities offset, in part, by the payment of cash dividends during 2020.

“We are pleased to report record financial results for the third quarter of 2020,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “With work-from-home (WFH) becoming the new normal in today’s world, we see Collaboration taking center stage in enabling the agenda and implementation plans of many organizations in order to enhance their productivity and competitiveness in the markets they serve. This trend has driven the accelerated transition to a digital workplace by many enterprises, and presents us with an opportunity to take part in this accelerated digital transformation trend and increased reliance on digital collaboration tools.”

Mr. Adlersberg continued, “As a result, we experienced strong demand and business momentum across the key segments we serve such as the UCaaS and Contact Center markets. Coupling this favorable business momentum with our continued improved efficiency and productivity, we improved our financial performance year-over-year to record levels. Underscoring our financial success were improved gross margin and operating margin, increase of net income above 75% compared to the year-ago-quarter, and strong cash flow from operations.

“We continued to experience increased demand and activity related to the Microsoft Teams collaboration solution. As in previous quarters, we continued to make progress in our Voice.ai business, including with our Meeting Insights which targets meetings recap applications, the Voice.ai Gateway, which facilitates voice interaction with virtual agents, and in our Voca business where we saw increased demand for conversational AI. Looking forward, we expect that Collaboration and WFH will continue to drive success in our business and remain a mainstream industry trend for coming years. We plan to continue our investment in future solutions and product offerings in the UCaaS market and focus on the return on investment to our shareholders," concluded Mr. Adlersberg.

Cash Dividend 

On August 5, 2020, the Company declared a cash dividend of $0.14 per share. The dividend, in the aggregate amount of $4.6 million, was paid on September 1, 2020 to all of the Company’s shareholders of record on August 17, 2020.

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 2020 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 www.audiocodes.com/investors-lobby

 

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