AUDC - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the AudioCodes' Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Roger Chuchen, Vice President of Investor Relations. Sir, you may begin.

Roger Chuchen

Thank you, operator. are Baruch, President and Vice Officer. today Officer; Chief Chief call Niran and President the Shabtai and Adlersberg, Executive Financial Hosting of Finance

under we plans relating to that business outlook, remind this Before performance, may AudioCodes' like product economic provided introductions, matters thereto U.S. call statements information objectives term events, conditions, future and to as any the during law. statements you forward-looking contain related securities as future or I'd begin, federal concerning are other expectations is statements assumptions and defined made the or to forward-looking performance

actions the possible competitive AudioCodes covenants are include, products as ability agreements, various need changes financing, conditions to limited new results conditions to effect additional supply other to statements successfully satisfy of other but that risks, the in in and and terrorist war and with results Hamas COVID-XX AudioCodes actual and factors and not business; possibility in of needed, market of conflict ability may as to, disruptions between AudioCodes conditions into from into demand ability and from Israel and affect materially well our could business and manage target in to uncertainties limit or involving adverse to These the our products Any of in develop economic sell a Hamas a operations. pandemic update as filings development, in the and products disruption Israel regional our upgrades with and may military particular, impact timely parties operations those to loan results the technology company's the stated and the industry markets; to of Exchange Forward-looking this and broader personnel subject to military Hezbollah the the differ future hostilities its for customers' on possible shifts in acquisitions, Israel; the general Israel and this attacks obligation acceptance and Commission. result and detailed by integrate and in current perform U.S. such products solutions. cause The our factors pricing that the on as existing and assumes products; global and for current effects product the could information. by AudioCodes' factors statements. operations of ability companies AudioCodes market of risks of in and and our demand, markets, service no impact the other the and and produce uncertainties acquired of involving Securities are obligations AudioCodes' and operations possible of

non-GAAP addition, the full provided to income per net and during its of on the that and net AudioCodes and income posted income income share In reconciliation refer GAAP net net share. to a its the release call, AudioCodes website. has press is share per per in to according income net income will non-GAAP net

An like archived call the I Shabtai, the the section go will made said, I'd ahead. to Investor all Relations that at is recorded. to webcast remind everyone call. With call over that turn like turn I of Before this conclusion please the management, Shabtai. would website be being on the call the available to company's to of over

Shabtai Adlersberg

developments and summary business like trends for will the discuss start presenting AudioCodes. a highlights and of in quarter. the of of is to and our morning this call. and financial With fourth Niran review Good off the Vice welcome business Roger. year-end by conference all overview afternoon, Baruch, Chief I to and then XXXX quarter quarter and everybody. morning our you, President Finance Thank Financial good will would I Niran industry. Officer me and

session. Q&A the We Niran? will it turn into then

Niran Baruch

everyone. Shabtai, you, and Thank hello,

our Before and would my call, will formal website earnings release I shortly with this morning, I on that contains both a The we that conjunction that we Relations our to call. earnings financial referring post today's earnings this non-GAAP deck. financial to start the we morning release I On be everyone remind Investor earlier press discussing GAAP issued results. reconciliation like non-GAAP in supplemental remarks, will on an be this supplemental will information of

compared as the of as million geographical revenues in were performance. Revenues quarter were quarter December revenues our it of reported revenues quarter X.X% XX, XXXX. Revenues $XX.X for $XX.X comparing results XXXX fourth million, gauge September of were annual $XX.X $XX.X service reported split the Services provides as in third an the our the believe fourth XXXX. the year. was XXXX of Latin Services of the the and be America, X%. $XX.X increase X.X% over follows: quarter X.X% decrease quarter the XXXX. million America, million $XX.X were amount current XX%; over North total X.X% we of for an million, XX, revenues for will the in $XXX.X of of a prior revenues an Central Asia XXXX, $XXX.X EMEA, the the current $XXX.X increase basis, a by The quarter fourth to million, to of XX%; better year. of the the and $XXX.X of million revenues. increase million, On We financial XX%; million as million an in over over accounted Pacific, XX.X% Full for quarter reported fourth were third in year region reported quarter deferred

the $X.XX results for $X.X million to was the for $XX in QX was quarter XX.X% net QX net of compared in quarter XX.X% EBITDA the XXXX, of the Our quarter million XX, of investments XXXX. diluted of EBITDA $X.X for XXXX XXXX. XXXX. QX XXX totaled revenues per $XX.X Non-GAAP million $X.X million $X.X for year and income financial million XXXX. Full revenues equivalents, income the represented and year $X.X $X.X follows: was XXXX in sales EBITDA XXXX. XXXX. to was net fourth or income QX XXXX. in per $X.XX in million share revenues non-GAAP per compared QX Full deposits, was $XX.X or EBITDA non-GAAP quarter December the $X.XX Full XXXX. as activities $XX.X cash, $XX.X or million fourth compared Full $XX.X or attributed or of year Non-GAAP compared bank income quarter which was outstanding EBITDA Full diluted aggregate was compared for the million to compared XXXX. fourth million operating operating in income the per $XX $X.X million December for $X.X in $XX.X EBITDA or fourth for was XXXX. share share Gross of were $XX.X income by non-GAAP quarter million non-GAAP $X.X of to XXXX provided X.X% share $XX.X to operating was to $XX.X compared XXXX was diluted EBITDA the for XX.X% share million operating per X.X% million $X.X to margin of income Full securities XX quarter was for million gross $X.XX per of diluted or million million marketable customers year compared XXXX. At XX.X% of QX compared net to XXXX. Non-GAAP XX.X% share revenues income in days. or $X.XX income $XX.X Non-GAAP $XX.X million million million of compared million XXXX. Net was or our million for our cash million $X.XX year are of or was million to diluted $X Net Operating diluted XXXX million in or was of income of Non-GAAP XXXX. income $X.X XXXX. the to of cash follows: income top year XXXX XXXX, was of $XX share revenues of XX million operating distributors. GAAP million. to $X.XX compared EBITDA to $XX.X share for XX.X% in QX compared margin operating non-GAAP in operating for quarter or XXXX $X.XX are quarter of as diluted as an for QX year the XX% Days per million results in largest was to compared fourth compared to per diluted XX% the quarter, to end

amount. per XX, declare million. of to shares. February an dividend of XX, valid During ordinary XXX,XXX to permits million. amount $X.XX paid is The received of X, will us Earlier of aggregate a XXXX, the of additional of total this also The declared in approval on December for $X.X The be through of court million we morning, $X In amount approximately we XXXX, court approximately a share. The to of trading June any part this dividend of Israel all the up quarter, the of shareholders $XX record at ordinary also purchase March of XXXX. cash XXXX. dividend aggregate a close our approval we our consideration to dividend approval is of shares acquired

back full the will $XXX the million range the $XX Shabtai. year $XXX million. I XXXX range follows: and in of $XX Our for the to non-GAAP of over as turn to guidance in EBITDA expect is revenues call million million to We now

Shabtai Adlersberg

solid fourth with report quarter lines. key healthy growth performance you, business I'm Thank pleased Niran. to in

on before delve direction. on years, start over reflecting offering and financial Now into would our business, I the a like I to future off our fourth current journey quarter by reporting and position perspective recent past, our the

million take with a 'XX, exceptional let's was non-GAAP $XX for a level $XXX at First, of record which profits achievements the EPS. and us an reaching year million acknowledge moment to revenue of

our decline However, due This a business to a in primarily environmental resulted in has impact the products, global economic towards our had significant revenue, by turning in high 'XX. Then sales a of slowdown. services. an transition to from environment and our The XXXX, earnings 'XX. perpetual decrease challenging notable model crisis shift XX% interest in cloud a driven business to recurring rate hardware and in sales on experienced

XXXX, revenue similar pleased on and to comparison While continuing, by further we a XX% journey stabilization a year the a AI new comparable X% in of XXXX. for in began the new a about drop Furthermore, effect minimal in driven we the our opportunities application report from combining power XXXX to flow voice to I'm of decline that and faced anticipated operations XXXX business net company. trends earnings. of explore we with cash in had success underlines

mark embarking focus appears we a hold to year will we significant AI-powered from new will a connectivity you in renewed gradually value-added place Consequently, growth. profits. and revenue shortly, with to This for and AI are reversal potential growth a business direction, area for optimistic on plans of generative hear new shifting business. As our that services are XXXX our increased

market CX More to within leading services value-added AI-driven importantly, UCaaS establish aim we segments. the a focused in emerging the on and position

to Now quarter fourth results.

we XXXX. Business this year planned Microsoft Our X%. and Microsoft by the of business positive well XX%, business business, Live growth enterprise supports as represents UCaaS made very fourth progress quarterly our This the year. the services CX Related in the and revenue outlook Full highlighted In Live healthy for quarter. in the CX revenues pipeline growth increased quarter. in XX% our for XX% CX quarter, business at and up accounted for rate Customer in did Experience highest

of year-over-year well and our Overall grew grew XX.X% Professional also and revenues. did very managed year-over-year. We XX.X% services in accounted services for business. XX.X% services

the XX% for rates managed CAGR such coming market our services coming to of years. years, we Live growth in With expect at continue continued above UCaaS growth

connectivity quarter represented growth. the of Going Voice.ai recurring to an the for and should contributed the more important gear. revenue demand What's we is shift growing and of coupled Live with accounted back XXXX Full XXXX, full CX are annual see XX% to UCaaS value-add already majority for business. at markets. Teams in been same XX% enterprise, from growth associated the in developing with of CX this business. year UCaaS year and overall XX% on in This ahead Teams market XXXX, the ending stage, note our representing XX% XX% and Live a revenue to Microsoft in us the that grew it services to markets $XX the It focus year-over-year complementary with years is for increased at Microsoft XXXX growth, in business of and the XX% million,

this Just name include, solutions, to services, contact such recording solution, connectivity a and center among call others, few meeting solutions, more. analytics, CRM room

expect to voice applications. business shift with value-added services, to for offer a rise As such, Voice.ai with demand see the our our applications focus in we coupled in

company delivery single positions in platform and services a SaaS past into believe platform development service we solution, value-add We that are been X AudioCodes preparing to the platform, services in competitive services integrates management a years. our unified has This live launch us on market with connectivity, based which for advantage. a

expand and solution our supported strategy, by demonstrated our has growth. services solution by and complemented SBC As additional previously land and for mentioned, connectivity potential leading our consistently

our broadly began before moving our into as back with this in strategy, investment Voice.ai conversational classify cross-sell Gen enterprise utilizing AI that business now rise phase our of context, network realm in unit the strong to are the We application well of specifically AI. establishment To provide conversational some of AI. the XXXX the customers value-add of second we services within voice of

in and use of our of portion, to level now our believe our recognition is value-add we this a Gen as XXXX, of maturity R&D solution, concentrate on dedicated we will X Voice.ai us We area. increase operation justified leading customer budget and units, introduction in thereafter. internal portfolio receiving which X/X accelerated managing and revenue starting the continuing distinct cases, have a has to business interest notable approach significant observed of growth increased a and Consequently, for reached expansion has XXXX expect approximately With that our we services. connectivity market AI,

encompasses operating operations. financial Teams the and strong Now Operating this and outline traditional and business. will UC holds markets. achieving AudioCodes' of are to above well-established past Microsoft position, in grow company ecosystems voice and connectivity provide operations, which XX at XX% of and units overview and Starting enhance I attractive enterprises for understanding and the within this between continues which This infrastructure service a with the business solid the business particularly X our solution In XX% of market Genesys these that years, roughly XXXX, the XX%, business, revenue. designed are margins large our a non-GAAP operation an approximately current investors' for generated some characteristics segment has mature to XX% annually. is fairly CX that

in years growth ahead. player consistent the anticipate leading we this a long-term in area, As

highly adopted managed both improve With perpetual expected our Consequently, the evolution supporting solution us solution, of operations, advancement while cloud profitable view promising have model software stability to from invest significant from is expenditures long-term or and we our business services. Voice.ai. sales services, potential with voice and and to capital the infrastructure to fund products as we Transitioning sustained recurring flow growth services hardware-focused growth. this visibility value-added services cash shifting to traditional from and for allow which and will revenue

back AI of are initiated the business. technology rapidly and investment investment back year of Voice.ai $XX operational this value-added in financial applications Voice.ai we due bottom the and area XXXX around in each overall our discuss let's to We to sector, OpenAI support Now allocated total to increasing in Gen of From growth we has an business XXXX X% and the million contributing standpoint, is by services investment phase launched Voice.ai the saw an XXXX. The of revenue. about in company's emergence number XX% as XXXX, approximately influenced November still $X million which largely we line. In in performance in XXXX.

further Voice.ai XX% rate will investment business this annual of that facilitate expect years. XX% to for We the continuous annual coming growth in

resulting current few we in gross margin its an the Voice.ai over margins company the will the gross enhanced offers next application increase As years. SaaS and business voice that solution, in average, exceed foresee

we Today have the Microsoft Voice.ai market. Why and best field will Insights we We & Today succeed Center XXXX CX factors. CIC AI just and meetings Contact winning from start-ups? for industry last to Frost the yesterday, the garnered solution including due award XXXX, several business July established believe AI solution use for leader key multiple in the accolades, AI Insights for the leadership from among Teams business in Meeting in UC the positioned best Meeting uniquely a to conversational our award for Voca players an emerge Over recognition are February lines strategy Sullivan year, by of in by competitive

telephony investment domain XXXX, Also, VoIP AI. significant have expertise extensive networking in built possess services we years. since we and past over XX in and technology First, made the cognitive

has team and experience vast SaaS Our and in cloud developing delivering on-premises services.

brand and We are and further our top that will have the enterprises conversational CCaaS is experience deployed of believe X application. of in landscape our the we noteworthy, UCaaS AI out the competitive banks. Fortune companies business collectively UCCX further solutions position. or in within solution out these position in We proven of have managed Moreover, and infrastructure favorably voice XXX deploying strengths us voice with XX mission-critical multinational established that record services, the we have voice extensive trust strengthen major XX AI of

me into turning discussion, detailed before profitability Now line more quickly business into quarter the metrics. fourth shift let

increase revenue XXXX. linked target as quarter an within Our third fourth expenses growth non-GAAP in to at growth, we bolstering of improvement This driving towards services investment non-GAAP the live business services focused operating and Voice.ai. $XX.X sales travel quarter primarily team is The In all in managed cloud and range attributed of and especially million, from enhanced the costs, XX.X%. expanded move mainly and expenses marketing, in in to million and previous aimed for participation quarter. travel hike was can marketing XX.X%, higher to in falling be our events on up the margin quarter, to XX% rose long-term XX% the increase gross $XX.X from

XXX in of from XXXX. from for but was In slight in previous XX.X% in million, the the reflecting a EBITDA terms decline employees, of margin quarter $X.X with fourth Adjusted XXX XX.X% compared $X.X workforce, XXX to quarter XXXX the or million third we quarter. the a increase fourth an quarter, concluded

EBITDA entire $XX.X the For adjusted million. year, reached

from was and for in Lastly, year flow XXXX. the our $XX.X regarding quarter operation in a million million $XX and our positive outlook cash investing Clearly, positive business development, net the generated this keep robust full forward. expanding to supports activities capacity for our moving cash

XX% momentum non-GAAP Concerning this managed and strong will connectivity of EBITDA revenue to guidance to pipeline stable a million. growth value-added services services to space continued These connectivity recurring million. in for AI connectivity Now XX% take setting and in million anticipate operational million sector million XXXX, in growth XX% year the growth are XXXX, assuming along Voice.ai, of revenue with the conversational we to planning, services In full target our and $XX annual million. significant Live the front. outlook, booking earlier, we in with of we $XXX aim guidance, macroeconomic guidance $XX over strategies in as of $XX the light $XX our for sector value-added Niran to projections $XXX the guidance to to million our strong to $XX landscape. with In of by and exceed into increase sector, year-over-year account no changes mentioned sustain

bit a give to background move more me Let business. on Microsoft

business Regarding of year-over-year year. highest Teams full The strategic the the growth business Microsoft was quarter Microsoft year the growth increase fourth XX% quarter, segments, in previously noted, as X%. for experienced marking

versus in contract XX%, year million. XX% last aspects, from XX%, an new year-over-year constituting contracts for exceeding our total Looking remained the down CapEx quarter. of booking year. at in Live activity robust with surged the the live with Teams previous in expenditure increase XX% booking in from quarter. live segment The time, Consequently, $XX value year XX% fourth booking the accounted Teams this fourth regarding same capital quarter by recurring

for contract this to platform This on in For value services management we year. A surpassing and end faster connectivity businesses. for factor value-added accounts which entirety is growth significant XXXX, platform, of compared prior within domain small- combines and XX% live success annual enables medium-sized then the development and the observed quick facilitates large onboarding enterprise one services.

the UCaaS year, is adding been in Teams seats to look XXXX. XX% I'm million, fraction for that shown over to we and as for market million connectivity comparable segment As the likely of million view pleased rates prepare Teams solution and X share will estimated potential program. the valuable has to out successful the an we ourselves market XX Webex Calling of that offer not as Microsoft a report strength phone we market new past the to additional have discussion, sector. an seats an we previous within also expand its momentum I'm small beyond, new ecosystem to X highlighted education The forecasts Microsoft in total reaching of focusing recently chance about With past presence. In our the seats market a year, throughout Cisco persisted, estimated million the seats. Also, opportunity on this a XX to this but XXXX continue has which we happy a excellent creating ecosystem, million expand growth, that especially robust ongoing for the indicate has intensified. only exceeding the XXX

a are achievements Here quarter. from the significant few

to Throughout clients voice with the quarter, North many the comprising partners and Live this from involves preferred Pro and across with center agreements several months. Getting third their services XX of administration, CX fourth anticipate the master finalized which as agreement increased and university call number in state system a the the a IP upcoming designates our choosing the In The IT our are challenges of to to customers campuses contracts that of infrastructure business. In Notably, fourth quarter, getting single-digit quarter X America, university CALA aim the services, the first only successfully a expenditures just CX XX infrastructure enhance the we campuses is the and significant We more initial by success cloud, secured XX% includes service. value professional associated CX phones. we Despite managed with out years. as join figure it low to quarter. capital coming in of fourth will represents the campuses. the us we in India. part campuses million, alone, Recently, total communication UCCX revenue commitment compared small the finalized over available. for us partner which Live major

a contract agreements beginning By migration the of financial weeks $X with went in During quarter, multi-region banking CX in few BPO In QX established with to America, we leading cloud. multiple assist organizations. live within and Live service using fourth partnership million banking institution a which a their in exceeding fourth Brazil infrastructure we transition voice quarter, the They we their established our delivery North with for CX network with to CX platform, secured Indian Live live to traditional cloud. a deployment an months typically to takes methods.

Our X efforts live Tier system practices. new North in has that with and major partners platform our contract to encourage Genesys the integrator American a Cisco to resulted SI adopt CX

working more expand Live of onto our our CX partners the platform continue to service. to onboard will We reach

nearly grow that technologies by it growth. XXXX. Now Voice.ai voice Development Voice.ai role $XX in increasing XX% Gen company contributing to and 'XX, Voice.ai of new will projected booking revenue XX% business, about of in application. steady, in reaching customer business to and opportunities nicely AI-driven million is With this to sector this in segment mentioned AI application 'XX, moving emerging the business. remain play demand demand details significant is adoption anticipated to as before, XX% in overall for I and grew a

Let a businesses X or me quick X Voice.ai in through make area. run the

in solution center large and enterprises contact voice or bots Europe custom agent-assist America First deploy to serve and primary that is target solutions. the and develop multiple North VoiceAI a Connect,

solution, Following X, a of has over SBC-based large mature stage the to years which X is corporation. appealing development, and highly is reached

This application it developers highly rapidly have we making application Additionally, SaaS a derivative named or product, Hub. both onboard minutes, test both solution. to both attractive of enables cloud created to Live a platform developers within self-service

is mid-November. development our our exciting of Another capability recent real-time in launch soft translation

over of We new in sales by in XXXX, strong interest, multiple existing market proof and XX%, and same seen concepts 'XX. In with growth maintaining customers. we anticipate resulting grew the rate have

some contact calling When calling and Microsoft third Microsoft large center by of Voca and enterprises competitors. our and In center deployments Teams. operation, Azure-based these for This and comprehensive Voca Turning a combined for this winning successfully XXXX, In In deployments, displacing successfully year to AI-first our and expanded delivered contact approximately CIC. APAC. key CIC business XX%. with with solution offers Teams we of solution. is America, EMEA we against its North advanced solution were bookings in Phone, grew

for now are planning in XX% XXXX. growth of a We

Now turning has an few on This months Meeting been eventful into Meeting Insights. all for past Insights fronts.

breaking UC of in in and are off already we Frost x X.X nearly will centralized present was AI hub, of this proof good days. have customer expect in to validates is in another the organizational first concept proof-of-concept recognition, business the across & major the Award across made quarter The fourth us market. for Leadership at Strategy unlocking meetings the Practices Meeting XXXX. record all it insights for Even announcement First, We Sullivan we Competitive vision believe thrilled serving the to in trials Best with we new knowledge silos make yesterday, down from of public of saw a increase by coming geos a valuable from concept would platforms. so proof Insights function January previous interest step before quarter. quarter and level a start with this meetings

proposition users by solution to the product conference operational portfolio enhances receive interest meeting move our Meeting spare will full a bear capabilities of bringing can This all and Meeting name value summaries. AI and Intelligent automatically few. and powering Room participants auto-generated Insights. with Insights that We by further to recently updates, populating adoption of of terms meeting own such our In unveiled devices I'll development video

We option, Storage adding announcement have Since in customers believe the late to Salesforce a starting required meeting to support and Own on preferred integrated offer next CRM of we this which meetings very to Zoom in we their vision good Zoom repository. will be Your have in demand the seen important the Meeting will knowledge environment, validating weeks, a our or who Bring market of also high the few functionality, with recording conducted Insights. to major are value are market. private cloud. We expands look number platform, Meeting centralized storage the of October, proposition In addressable

a meeting secured announced of the months. selling we the have in Insights Israel. government Internet. coming week It in to evolution, complete is offer from Very in about international new is and a area and on-prem. We This solution Israel, first application ago, markets seeking intend environment for unique stages in meeting it solution disconnect organizations in Meeting solution highly We're nice quite talking operating exciting a for in and offering. already

We have management momentum, healthcare for most family and good operational XXXX as touches particularly growth my government, with strong in primary presentation, of in managed demand Live finance defense, sensitive our Voice.ai. exited our the areas X engines, solution services with continued up high wrap it the seen the markets. To for and we the

half presentation with to progress top making and 'XX support and increasing we the and I'd believe and the line I've like Live that, Teams expansion Microsoft are in sustainable over session. our revenues to recurring in to foundation move healthy have nearing the beyond. concluded and margin of With we Q&A And currently laid that bookings, we my

Operator

coming Barclays. with is [Operator from Ryan Our question Instructions] first MacWilliams

Damian Cogen

the opportunity? in and spend for Ryan AI on for driven by what about in optimistic is Cogen Damian AudioCodes' top in XXXX revenue XXXX? confidence understand this help you growth their quarter. see customers Great improved in Are solid is being line beyond? MacWilliams. your services to Can is Or more This driving growth us

Shabtai Adlersberg

we in backlog a my and pickup the the for As to presentation, signed mentioned than roughly contract total quarter, the value $XX $XX million million. in And more a bookings. previous throughout fourth compares have of in That average new quarter I've in seen I saw record an projects of believe we fourth year.

therefore, have that Gen in Again, AI believe seen more adopt So Teams AI of to we be Teams advent fourth be and market. the will nice Microsoft calls. and of pickup will AI in enterprises deployments quarter. for we reason there the more Teams with meetings the believe Gen phone deal Copilot And technology, we there that to and with

Damian Cogen

fare that are on to And seeing voice compared the AI? the from in for then quarter, then Great. demand you XQ? And did buyers increased attention how CCaaS

Shabtai Adlersberg

of day we to So most offering. the cloud, and care Prior enterprises partners usually are really moving is on. operations X Live by of were the aided we're and who first, the of Well, the substantially increasing CX installation answer services yes. took to capacity

move from the support the to no were cloud, a partners to enterprises. the which market. gap of these needs much vendor the come with left With And therefore, ability kind support of that created in to themselves,

identified have We mid-XXXX. that

a have services. just Live And Now portfolio substantial a I had think very we fuller win. of CX substantially we

is It the North system it. Genesys of CX in mentioned I've one mainly largest that deals American the with think Cisco with integrator projects, I environment. and

out as just more to that Gen So lot this from the interest. Also, of a of move, faster center allows there's recordings. to of offering And technology find represents information. on-prem migration where all cloud. the AI trend deployments voice you those applying mentioned, find analysis really within have AI networks and of substantially is calls to we a analytics contact

over of talking but calls tens management So analysts hundreds into can hand identify trends. about and of AI going not will Gen what's be able about agent multitude sessions, analyzing also on. to more that and be you And talk helps to we're will you single sessions talk about when where patterns important insights you trends and sessions, to

Operator

Koontz question Company. next Needham with is & Our coming from Ryan

Ryan Koontz

this how to capability for around into toward traction attach relative there to Microsoft kind up And or what a seeing hear And rate trend picking new you on trend of operator impact seeing a lot does over voice Operator you're Are routing? your that Connect Teams. Teams? of connections Teams? still the direct Great

Shabtai Adlersberg

Connect Right. the Operator direct using a route. seen shift over in Well, a of encouragement we've

exposed organization do overwhelming mainly Is smaller not have We interested more. we trend? see such an been it to So trends.

in So trend stage, we still increase a to moving in big direct yes, is the from not SBC Operator this market. see at do the Connect. But route usage

Ryan Koontz

in are you just Got North customer about and you're activity more a higher opportunities systems down integrator number the wonder smaller I at have you in fewer a it. Great. in customer Brazil wins if And high of where wins? here toward seeing a America. level, seeing you talked trend larger customer pipeline? market Or the maybe some big

Shabtai Adlersberg

that to about me question the Thanks a key segmenting bit elaborate Okay. because areas. really into allows market X the for

believe competition. a here meetings dominant we large more space, drive very advent trend the adopting and mentioned And of space, towards we Teams not see this calls. we leader, Copilot AI do we enterprise On I've that and using the continued before, in generally enterprises as enterprise of year-by-year. solution and Teams will see much a seats But are

the is growth well. So here,

world's competition. in it, service there, to be that as Zoom you then I space is SMB trying. its area touching the Cisco I more right? leading with we There, know And it's allude playing over also the competition Microsoft to space mean relationship going Teams largest believe and Now you providers. have definitely with there's that the

that such we coming and the recording, have so that with CRM an see platform being However, solution, the we market. believe up be as We best be in advantage will value-add second contact player analytics, we delivering center, very core, many AI-driven strong meeting that services therefore, introducing strong applications the that. believe technologically a live we platform stuff. And you'll with with do connection platform the in we will believe of unique one

successful all, believe have X-pronged we'll in a in all we and we So strategy, both. mean, be I

Operator

from next Our Samana with is question Jefferies. coming Samad

William Fitzsimmons

and Shabtai, Samad. you their is to start, AudioCodes for and seeing with months of solution traction customers? you companion. between can This back, Insights Zoom your in-house launch you're also on solution for talk support Billy Obviously, AI maybe has differentiation internal Zoom couple Meetings. Fitzsimmons about Zoom's for Maybe announced just a since Meeting

Shabtai Adlersberg

Right.

solution, of level you that example, solution targeting a meaning takes Microsoft what type Teams. us we're an is And So solution an adopted our solution. matter has is enterprise enterprise UC become in UC-agnostic to have using every as that enterprise, Meeting no Insights

We have talk to the often when to session. here a lot in Google of Meet need Zoom Israel, in government a it's sometimes and/or are calls we we called

enterprise Cisco will both Teams, solution want from our simply using the Microsoft solution, of different it solution that. able basically different coming add And that Meet allow one to and be to Google all sessions you Zoom able contain should to So meetings. from not calls just centralized will environments. WebEx be Anyone calling, therefore, Meetings Zoom

executives that use a of larger market with that business-driven believe And questions Meeting that other UC-agnostic. becoming and that research the strategy and will and solution because find we we enterprises, prompts. solutions. they different see custom which in that we in is can requirements within less Insights with finer fact answer our We that major also, dealing we So we have can believe are

Zoom companion. be could them of One AI

that believe detailed that enterprises we're we extensive large solutions. dealing more solutions the and our So with fact will make more substantially providing

William Fitzsimmons

the bit the there year start subscription kind more And the through term, to us product longer then some expect think there we services is and of in Can mix? Or transition make perennial declines there recurring that help of a point for support just revenue you And business legacy terms growth? going for stuff where to should to the more bottom? kind in next revenue of little ratable should of side the up broadly, shift obviously, has revenue. more been this about a

Shabtai Adlersberg

Right.

we'll 'XX, contrary We meaning in meaning the saw XX% drop drop to call, will as routers X% SBCs. believe in the we legacy 'XX, So in only and in we're and gateways drop in down gear stabilizing, as such we that and have the in I less trend mentioned went XXXX, glad continue legacy hardware-based less 'XX. that business in the drop earlier

targeting then million. I with business million, $XX ended was front, it business And $XX cloud revenues voice we Voice.ai as increased example, SaaS I era of a services, of is think about, software all that the new application, stepping use see before, at which on services. I stabilize. for we're So into will mentioned We And XXXX solutions. and believe, and we're

XX%. believe solutions are phase a we in where yet not are I And So quite those targeting frankly, that enough. mature we're

So as I rate growth believe more mature, the will and solutions intensify. that gets those more

we're revenue. drive our So upon ability building to much Voice.ai business

before, the in business, X, which we halt we're a and And of think obviously, is decline a the combining year, of So 'XX. good I emerging set said Voice.ai. for legacy as drop growing Live year XX% in the

William Fitzsimmons

if question. I sneak final in then could And one

further that maybe and obviously guys line, terms year next down lot you for OpEx year? you step individual help of kind maybe kind spending? Could EBITDA a of is products, You Where bit level and high of are us been the go over a actually where paring Obviously, of for lines to making you have to kind in investments year, back but past example, the AI there of incremental OpEx think just guided but pick headcount next expect spend spending? are of a even next could little years. couple about R&D up we

Niran Baruch

Yes.

sales will how $XXX at at million. all, only planning G&A of at In XXXX, We the definitely will more at sales X%, and invest believe maybe are not it that's terms OpEx for and budgeted OpEx, XXXX, marketing the area and we we and OpEx not area. all the mainly growth of to it, marketing. R&D. at more. the be And we the And be ended in X%,

Operator

have back Mr. any call we Adlersberg the to remarks. questions over As closing no like further I to at this for turn time, would

Shabtai Adlersberg

I in trends attended enterprise Voice.ai, we in growth Thank and to continued good the believe underlying towards call business We profitability growing With our market conference operator. conference next all. call. CX UCaaS and today. Have who thank years. our momentum look our we day. would good the you, like operations Thank are growth and you everyone nice business transitioning to a quarterly forward your coming in in participation

Operator

This time, at participation. thank you you. conference, and today's may Thank you disconnect this and concludes your we for your lines

AudioCodes (AUDC) 4 Feb 252024 Q4 Earnings call transcript