AUDC · AudioCodes Ltd.

AudioCodes’ Q1 2026 results reflect continued strategic execution toward its AI-driven hybrid cloud software and services transformation, though profitability metrics softened year-over-year. Revenues rose 2.9% to $62.1 million, supported by robust growth in services (+4.3% YoY) and especially Conversational AI (+50% YoY), which contributed to an ARR of $80 million — up nearly 20% YoY. However, GAAP net income declined 51% to $2.0 million ($0.07 diluted EPS), primarily due to increased operating expenses (R&D +8%, S&M +6%), a $1.4 million non-cash share-based compensation charge, and a $0.4 million net foreign exchange loss — reversing a $1.7 million gain in Q1 2025. Gross margin improved modestly to 66.2% (from 64.8%), while operating margin contracted to 5.4% (from 6.0%), indicating margin pressure despite revenue growth. Management attributed performance to momentum in Live suite (UCaaS/CX managed services) and Voice AI products like Voca CIC, VAIC, and Meeting Insights — including growing demand for on-prem deployment driven by data sovereignty and edge computing needs. The company maintained disciplined capital allocation: repurchasing $13.7 million of shares and paying a $0.20/share dividend ($5.3 million), reducing total liquidity from $75.7 million to $68.1 million as of March 31, 2026. While no formal forward guidance is provided, management affirmed confidence in achieving full-year operational and financial targets and emphasized that ongoing investments in Voice AI and Live services are positioning AudioCodes for healthy top-line growth through 2026.