RDCM - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Limited Results Conference Call for the Third Quarter of 2024. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay on the company's website at www.radcom.com later today.

On the call are Hilik Itman, RADCOM's Interim CEO; and Hadar Rahav, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call.

downloaded in you RADCOM's the www.radcom.com/investor-relations. not through do website have link the Investors you it may yet, so at If section of

we the to conference Before will would provision. call statements. harbor This review forward-looking contain I begin, safe like

value. Its in shareholder headcount call conference expectations the position, respect potential company's including opportunities, as the and expectations non-GAAP expenses, several the financial risks about provide will the that certain with and expected multiple sales trends, performance Rakuten, sales deployment company's sales could information the its environments the filings. In for and are cash to the user's financial XG SEC risks its are cycles the noncash Israel excluding expenses intangible expenses, to but profitability refer amortization actual in the financial including of and be a with its research which marketing well the and the its acquisitions company's and company's of statements income release use operations management and outlined limited and of and core software corresponding with and development information from to pipeline, to the non-GAAP helpful in Authority, period. The AT&T, solutions, of earnings are update not The ability and the to stock-based presentation in potential for with its conference of evaluating from undertake provisions, the harbor to prepared growth, on additional consistently press clients and market forward-looking quarter's to to reconciliations included acquisitions, the solutions call, related expectation operating margins guidance. The by cloud to this this release considered measures, compensation accordance measures market solutions statements the Innovation RADCOM's and assets to position, accepted involve to today's Forward-looking XG respect overall safe does period mergers understanding cause industry as to and accounting to, intelligence statements potential and results grants website. DISH certain substitute not uncertainties, performance meant and enhancing continue results non-GAAP its demand full needs market and differ increase available encouraged benefits financial and of enhance in and of in from our results in meet of its these company's comparing statements. company review products, financial expenses, to its its artificial acquisition-related assessing share, generally measures revenue and forward-looking market GAAP not the of relationships principles. Investors provided gross is

like the Hilik. to Now, to ahead. turn call over I Please go would

Hilik Itman

Thanks, operator. third for call. us for earnings Good morning, everyone, our joining quarter and thank you XXXX

X. the Before board results, on the excited Benny welcome new to discussing quarter CEO December on I'm third as

as right the him, earlier As you excel confident for in announcement, leader seen gotten he his having to and is have that our know probably our RADCOM in CEO. I'm role will

North participating his contribute continue and Officer, Japanese substantial XXXX to the product Chief as role success and development, his I like I'm significantly its more As organizations future his CEO, with C-level the are in selling and combined in success, located, lead address partner align customers' ensuring drive focusing that of the culture relationship seasoned to will experience role ensure my key goal North as and and him innovations invaluable in Benny with Sprint, with with understanding will Operating market leading company's on Mobile, residency company's top-tier the sales U.S., operators a sales industry starting expertise previous years into large positions customers and sales sales our be customer strong R&D, beyond. His markets processes well Benny managing resume to T-Mobile needs while XX successfully key on SoftBank many great and of America our operators company of toward a continued will satisfaction. My strategy. With his is trends, record the where and veteran the experience focus to and over telecom Japan, RADCOM's our across American we with drive success. Many growth. to product sure in growth will

me and for We the team grateful record results. execution let to new products meet unwavering that million, $XX.X we to the customer I'm company requirements the turn innovative as highest and Now, to dedication exceptional their of RADCOM by and needs. achieved quarterly propel revenues delivering

quarter, the American last a this X-figure process, competitive North secured mobility RADCOM contract multiyear various with multi-vendor we our capabilities. for advanced the vendors operator experience During contract run assessed which a tender operator a secured after during analytics.

and by technology into advanced analytics from fueled between which integrated technology. our synergy acquisition, seamlessly the Continual have innovative was success core we Our the assurance the our capabilities

and particularly skills invest our and telecom customers, new XG to deployments, their advancing the that across their sales for within operators RADCOM I among XG challenges, ACE enhanced XG including lacking regions, stand-alone in sales for and platform migration. activity and see has customers interactions wide the presented installed for multiple existing is necessary interest operators transition and are networks processes our to from knowledge Turning base. The customer stand-alone. There both cloud market, with a continuing to

cloud-based strong multiyear our automated additional sales positive and increased revenue. Demand is various provider as build-in capabilities assurance to assurance for more We in our feedback positive engage witnessing our are lead sales for see North a XG continue especially returns. and towards However, can leading we confident that maturity contract will to increased generate cloud-based multiple pipeline.Â Customer that healthy as XG prospects operators, solutions. I'm reflected best-in-class opportunities moving with cycle Europe, are we and AI across in with of and America stages. position stand-alone

that we operators' are needs, with network aligned growth. operators seek business with are customers, I with in address reduce processes conversation helping I drive landscape, can see While our these critical setting for costs, and efficiencies to and value leaner unique With requirements. By sales delivering operate be to telecom well time-consuming customers' the teams. challenges, future unpredictable, believe them solutions tackling that today's allow and we stage

to for automated, We AI manual these more have leveraging invested driven intelligent AI answering in network that operator rapidly we cost creating market goals, to by our and enable solution to and efficiency with monetize for enables more intervention. are asking technology. issues requirements achieve us investments. By key AI Operators operators less identify capabilities, opportunities

mobile extension its X underscore with to and we of milestone efficient remain full-scale these network customers, strategic believe a we X.X of strong. we Mobile to customer extension announced our DISH how key service will second to We operations. Recently, assist in launch Japan. the we remain statement just quality are software announced our operator. provide Mobile a close in subscribers Rakuten our partnership our with and is and the the we and to maintaining driving business new quarter, their to offer had AT&T requirements continue manage This since and it the releases Turning help base. them a their needs, million attuned and operators installed network. In operator years as innovative know in reached solutions network that Rakuten

needs helping manage services. We are committed with requirements of remain to focus ensuring network offering understand ensuring and recurring high revenue. We to in base excited needs. continuously years DNA and pleased approach innovation We This and to customers. drives coupled them our our contribute many by success growth of The milestone within our this and their enhancing and their service to satisfaction the the has and expertise, and Apptel area evolve about experience deliver can address support satisfaction approach on into KPIs. We to customer that to efficiently telecom with used our our evolving ingrained achieved and delivering customer customer innovative intent. are of level products know RADCOM's platform installed technology by high-quality benefit impact. meet and to pain and our insight revenue technology is how offering increasingly we and and we provide to them, the this ACE customers. Gen how in help continued value to for improve continues critical AI customer operators which real network's understand by how customer RADCOM experience operators leverage RADCOM profitability is telecom and AI growth this our point us operator's to enabled

its operator XG provide has leading needs. During insights to precise performance. engineers deliver empower solution. This selected key into our the American analysis to providing quarter, superior experience analysis that aligned radio that access we voice released several real-time technology network product announcements hundreds includes by address RADCOM a trends help of XG RAN sophisticated the network North the We announced with that customers'

to reducing and we more increase business customer leveraging our operator's confident the the companies and and with have our award are outstanding that integrates healthy connectivity showcases their the and cutting expanding workload, growth system our help enhancing category costs in within pipeline. were issues telecom recognized also our management significant sector. To and sales innovation in summarize, by solution made significantly innovations resolve journey continue quarter, the prioritize global to progress for for we AI/ML in market achievements ability a Our best service share teams efficiently, satisfaction. In

consecutive We our to of best-in-class AI remain us evolving XG in raise to well the $XX to platform a $XX XXXX million. to capabilities guidance customers growth us fifth meet advanced positions profitability. This increased year revenue of XG and confidence revenue needs assurance integrated with market. the achieving confident Our in enabled million

of revenue forward profitability product shareholders' enhance appointment focus to the will accelerate Eppstein, who Benny over I him and the turn value call company's in discuss success, the CFO, growth, partnering with our the will driving would financial that like look on I be With customer aligning our XXXX. My with requirements. With into innovations new results and to trends CEO, that, the to market detail. Hadar, to increase fuel

Hadar Rahav

us Hilik, and everyone, you, joining for today. Thank

quarter Hilik Now let some highlights, a through financial third take you the few through me you has that details. taken of

to compensation, GAAP numbers, intangible will assets While refer to of review mainly and acquisition-related and stock-based expenses non-GAAP performance, to results slides contain the amortization financial I acquisition. our related non-GAAP excluding

This our team and successful as core acquisition the multiyear opportunities mentioned, helping to of we to XXXX integrated successful enhance into American generate Hilik secure been Continual's operator. the in RADCOM. a quarter contributing company, X-figure us simulated Continual and has our pipeline acquisition for revenues to May enabled this portfolio solution the a technology with North As contract

AI new RADCOM value of our and appreciate opens Just as subsequently into the initially are our done, the comprehensive our continuous provide. integrating is our offerings to Gen solutions sales drawn innovations for often opportunities technology incorporation platform. Customers

expand that ready of acquisitions, and enhance Looking reinforced returns Continual promising pursuing been seek open act transactions. We've additional mergers to our opportunities. executing disposal, deliver at further value we adequate are portfolio, has to in several solution and ahead continue our reserves and greater the to confidence future opportunities our on years, to for acquisition our we cash shareholders. With acquisitions to customer

a However, measured we value and strategic will ensure approach adapt alignment to creation. and

XX%, net X compared to million. from million $XX.X can mix. Now, of was record margin Slide loss of million, third slightly the million In please quarter third XX%, financial of turn on Note $X.X vary Non-GAAP gross net quarter quarter gross the our a the revenue non-GAAP for was $X.X XXXX. GAAP highlights.Â Third was from revenue which reaching third the to income grew to XXXX. quarter-to-quarter, non-GAAP was the $X.X margin compared a up new depending quarter XXXX, margin the and for net X% grew our our by income by quarter that XX%. third of of net

expect of with we from operators, solutions and satisfaction XXXX as we R&D non-GAAP we customers. a quarter, increase investing gross innovative of our of our the were continue our automation, for level. will a evolving increase the enhance the the expenses needs expect support XXXX.Â In quarter in quarter in fourth we million the third remain of no as address customer ensuring top-tier with our gradual offerings AI as revenue expenses a R&D On to similar that fourth significant the from change basis, We $X.X at third quarter

received increased XX% to by grant Innovation from a third which the During Israel XXXX. Authority, the of quarter, we the $XXX,XXX quarter compared of

of compared a support quarters, the an opportunities.Â G&A were expect of the marketing sales the million In for third XXXX, expect million quarter XXXX expenses quarter to increase and the increase of from increase quarter XXXX. to the of increasing gradual $X.X marketing third pipeline we XX% third approximately and $XXX,XXX a following quarter $X grant be in basis, XXXX. in of expenses an reached of an fourth non-GAAP of We the on basis, $XXX,XXX a expenses sales non-GAAP on to third quarter. In the

careful a the quarter to by Thanks management, higher basis growing Turning to or profit from XX% $X.X and million operating million, of the company's reached $X.X third non-GAAP on expense XXXX. revenues profitability.

was compared $X.XX $X.X margin X% was third a by XXXX. Diluted XXXX. million basis Net growing third XXXX. more than quarter the by was Our growing from third of non-GAAP quarter growing non-GAAP on EPS million income $X.X for compared by the $X.XX, of quarter operating XX%, to the to the approximately quarter of XX%

the shown X, loss As income for was of EPS in compared of $X.XX quarter of to net Slide XXXX. third GAAP $X.X quarter the $X.XX our million.Â Diluted a from third XXXX was

to balance the Turning sheet.

$XX.X short-term second Slide As ended bank we and shown cash XX, quarter in the with deposits. continue on cash and equivalents generating million cash,

headcount XXX Our end at the of XXXX. the of quarter was third

I fourth back remarks. will operator your for That in similar remain questions. to prepared the our to turn ends headcount our expect call now the the We quarter.

Operator

Bhatia Instructions] Blair. William is of [Operator The question from Rosen first

Arjun Bhatia

say on the path operator? X-figure how just from Can that the correctly, sounds to adoption you so, I'm I here here. understanding is new the do using win. And about Continual contributor deal get American start that for like platform it expansion today? them a they're the it North customer big to strong to quarter to with Congrats Continual broader fair time? a If with And was over if capabilities mostly think

Hilik Itman

customers It's from from to and Continual get sophisticated but to is insight network, ability actually our because matching the actually, add the and that is So that I our the acquisition advanced to logos And that between more is portfolio is we two if increase new something data. The the complementary of I'm platforms. platform. offering our something matching the two to platforms. looking lot for contribute would think produced, ACE actually opportunities those between and the forward, platform it a new

Continual. So, the main for plan this is

Arjun Bhatia

that then you more it is path deal? that typical a anything there go that about like follow-up beyond maybe like to room note are look of just, that, sounds the customer? So the in And both. structure now? they're to it there Or on should for ramp what we expansion can the using contract? does they special where Is Is

Hadar Rahav

Yes.

multiyear contract. a is this So,

start will We revenues in recognizing XXXX.

it's recognize As we start contract, about and in And revenue. mentioned license. call, seven includes the figures upon in acceptance, the delivery to which will the annual we

Arjun Bhatia

on follow-up Actually, thing. and if more I can one

kind for think new relation in a XXXX -- growth of maybe that set the signings had lot dynamics Is contract should of So, rec them how any to deal kind until like XXXX. Can quite guide think implied or other about starting I you've start XXXX's about a rev in are this just few to And is doesn't think this point we to year. we a about XX% as revenue? quarter. I fair potential level you of look help think that there fourth your the us

Hadar Rahav

Okay.

So, continue we over business grow expect our to time. to

over sustain with one how have we're growth our profit we expect it's this. operating really time. Yes, should believe performing, that and we I been of that can you So, continuation a pleased

We opportunities which are business solution additional portfolio continue inorganic and that are contracts our I revenues powerful. Most of about to is have growth drive from incredibly organic and and expand our contracts a think we multiyear revenues. recurring model, and XX% our see

growth, that quarter we fourth our and revenue increase really that into expenses any can believe revenue healthy growth, profitability. backlog, will to in we we truly we solid ForEx understand operating current this excluding impact, we a and position additional our and you the heading So, but I'm that yes, this and puts support have us sustain deliver XXXX. And, may confident

definitely assumption your them. is is reason something that So,

Operator

Ryan from Needham Instructions] The next of Koontz Company. & is [Operator question

Ryan Koontz

up the state I characterize to bit opportunity. Maybe maybe their continental some understanding North step the you or for relates of and and opportunity places geographies but XG, some be maybe you geographies still to of deployments they're maybe a like would that each kind back assume, geographies, hoping can stand-alone advanced was the different the speak your if I them deployments the of different could America. still maybe limited the But they're at cores, of helpful sell-in of XG of more standing of are it in as XG hand. just

Hilik Itman

Okay.

to are of So, North cloud definitely and focus is our positioned for the example is and geographically the terms now part you progress of it a different And platform is much great be sure all we this Europe. also as AI said, migration that main attractive that of investment of see and for trend. example provides see cloud of is our platforms. Part for still of is way, well in in by that Gen in XG to public, stand-alone that to We we America private. migration the see us also, technologies. very And the Continual analytics we continue kind AI and the to and now. And see more investment doing in is that the

especially RADCOM the assurance in with regions positioned for is analytics advanced Core to But XG experience now few and terms sure, user in North but see a cloud, and in core in more opportunities RAN the also. it's the addition America technology of of also for and areas. But transition. well and these Europe, In in other combination for we capabilities

Ryan Koontz

over primarily most still the you're New of And is is for Radio, coming the Or the most over seeing applications demand data XG? so interest? from Voice voice it

Hilik Itman

and start critical they to us data, Voice that But New America new our come Voice see see and a up because services tools over which of New in For Radio, the is positioning much still well. over Europe in is that we the the is North sure, Radio very technologies new also sure, more for transitions. in is but we most interest needs the these

Ryan Koontz

deployments over Radio 'XX? some think New you Voice you'll And in see

Hilik Itman

Yes.

Operator

Ltd. concludes This the RADCOM

Third Thank Quarter Conference your participation. you XXXX Results for Call.

You may and ahead go disconnect.

RADCOM (RDCM) 13 Nov 242024 Q3 Earnings call transcript