Earnings release
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Page 1 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release Company Contact Niran Baruch, Chief Financial Officer AudioCodes Tel: +972-3-976-4000 niran.baruch@audiocodes.com AudioCodes Reports Third Quarter 2026 Results Or Yehuda, Israel – November 4, 2026 - Third Quarter Highlights • Quarterly revenues increased by 4.2% year-over-year to $64.1 million; • Quarterly services revenues increased by 19.9% year-over-year to $37.1 million ; • GAAP results: o Quarterly GAAP gross margin was 65.7%; o Quarterly GAAP operating margin was 5.3%; o Quarterly GAAP net income was $3.6 million, or $0.15 per diluted share; • Non-GAAP results: o Quarterly Non-GAAP gross margin was 65.8%; o Quarterly Non-GAAP operating margin was 7.4%; o Quarterly Non-GAAP net income was $4.0 million, or $0.16 per diluted share; • Net cash provided by operating activities was $4.1 million for the quarter; • AudioCodes repurchased 1,517,568 of its ordinary shares during the quarter at an aggregate cost of $ 15.1 million.
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Page 2 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release Details AudioCodes (NASDAQ: AUDC) (the “Company”), a global leader in enterprise voice and VoiceAI business solutions, today announced its financial results for the third quarter ended September 30, 2026. Revenues for the third quarter of 2026 were $64.1 million compared to $61.5 million for the third quarter of 2025. Net income was $3.6 million, or $0.15 per diluted share, for the third quarter of 2026 compared to net income of $2.7 million, or $0.10 per diluted share, for the third quarter of 2025. On a non-GAAP basis, net income was $4.0 million, or $0.16 per diluted share, for the third quarter of 2026 compared to $4.9 million, or $0.17 per diluted share, for the third quarter of 2025. Non-GAAP net income excludes: (i) share -based compensation expenses; (ii) amortization expenses related to intangible assets; and (iii) financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non -dollar denominated currencie s. Non-GAAP gross profit, non -GAAP gross margin, non-GAAP operating income and non-GAAP operating margin exclude: (i) share-based compensation expenses and (ii) amortization expenses related to intangible assets. R econciliations of the non-GAAP measures to their most directly comparable GAAP measures are provided in the tables that accompany the condensed consolidated financial statements contained in this press release. Net cash provided by operating activities was $ 4.1 million for the third quarter of 202 6. Cash and cash equivalents, short-term bank deposits, short -term marketable securities, and long-term financial investments were $ 47.1 million as of September 30, 202 6, compared to $ 75.7 million as of December 31 , 202 5. The decrease in cash and cash equivalents, short -term bank deposits, short -term marketable securities , and long -term financial investments was primarily the result of the use of cash for the continued repurchas e of the Company’s ordinary shares pursuant to its share repurchase program and the payment of a cash dividend during each of the first and third quarters of 2026. This was partially offset by cash generated from operating activities.
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Page 3 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release “I am pleased to report strong financial results and continued business momentum for the third-quarter 2026. Our solid financial results demonstrate progress in our strategic transformation of AudioCodes into a voice AI-driven cloud software and services company,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes. “Third-quarter results were driven by continued momentum in our two key growth pillars: the Live suite of managed services for UCaaS and CX, and our VoiceAI business. Combined annual recurring revenue (ARR) for these segments reached $87 million, up 16% year over year. Our Microsoft Teams business continued to grow with sustained momentum, growing 4% year over year. “Our UCaaS and CX connectivity business, which now accounts for more than 85% of our overall business, has remained resilient, with a promising outlook for 2027. “Building on revenue growth earlier this year, our VoiceAI business grew 50% in the first three quarters of 2026 year- over-year, reflecting strong, broad-based demand across the portfolio. During the quarter, VoiceAI Connect and Live Hub continued to achieve record bookings, supported by a growing pipeline, new customer wins, and significant expansion among existing customers. Revenue from Voca CIC, our Microsoft Teams-certified contact center solution, grew more than 40% year over year during the quarter. Meeting Insights and Mia Edge, our enterprise-grade meeting intelligence solutions for cloud and on-premises environments, also gained traction, with revenue growing more than 100% during this quarter compared with the same period a year earlier. “Overall, we achieved our operational and financial targets for the third quarter period. The ongoing investments in Live services and VoiceAI have significantly contributed to our success and position us favorably for continued healthy top-line growth throughout the rest of 2026 and 2027,” concluded Mr. Adlersberg.
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Page 4 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release Share Buy Back Program and Cash Dividend On August 4, 2026, the Company declared a cash dividend of 20 cents per share. The dividend, in the aggregate amount of approximately $4.8 million, was paid on September 3, 2026, to all of the Company's shareholders of record on August 19, 2026. In September 2026, the Company received court approval in Israel to purchase up to an aggregate amount of $30 million of ordinary shares. The court approval also permits AudioCodes to declare a dividend out of any part of this amount. The approval is valid through March 9, 2027. During the quarter ended September 30, 2026, the Company acquired 1,517,568 of its ordinary shares under its share repurchase program for a total consideration of $15.1 million. As of September 30, 2026, the Company had $26.7 million available under this approval for the repurchase of shares and/or declaration of cash dividends. As of September 30, 2026, the total outstanding shares of the Company were 23,296,828. 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 2026 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one of the following numbers: United States Participants: 888-506-0062 International Participants: +1 (973) 528-0011 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.
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Page 5 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release Follow AudioCodes’ social media channels: AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, X, Facebook, and YouTube. About AudioCodes AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a global leader in enterprise voice and VoiceAI business solutions. We help organizations unlock the full value of voice, transforming every conversation, whether human or AI, into a strategic asset that drives better business outcomes. Our portfolio spans voice connectivity, unified communications and contact center integration, and next-generation voice AI applications that enhance collaboration, automate workflows and deliver real -time insights. With over 30 years of global experience and trusted by 65 of the Fortune 100, AudioCodes powers the intelligent enterprise, connecting people, platforms and data to move business forward. For more information on AudioCodes, visit http://www.audiocodes.com. Statements concerning AudioCodes' business outlook or future economic performance, product introductions and plans and objectives related thereto, and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as the term is defined under U.S. federal securities laws. Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to, the following: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular, including governmental undertakings to address such conditions; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development, upgrades, the advent of artificial intelligence, and the ability to manage changes in market conditions and evolving regulatory regimes, as applicable; possible need for additional financing; the ability to satisfy covenants in AudioCodes’ financing agreements; possible impacts and disruptions from AudioCodes’ acquisitions, including the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes’ business; possible adverse impacts attributable to any pandemic or other public health crisis on our business and results of operations; the effects of the current and any future hostilities involving Israel, including in the regions in which we or our counterparties operate, which may affect our operations and may limit our ability to produce and sell our solutions; any disruption in our operations by the obligations of our personnel to perform military service as a result of current or future military actions involving Israel; and any other factors described in AudioCodes' filings made with the U.S. Securities and Exchange Commission from time to time. AudioCodes assumes no obligation to update the information in this release. ©2026 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What’s Insi de Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, AudioCodes One Voice, AudioCodes Meeting Insights, and AudioCodes Room Experience are trademarks or registered trademarks of AudioCodes Limited. Al l other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.
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Page 6 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands September 30, December 31, 2026 2025 (Unaudited) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 41,991 $ 45,282 Short-term bank deposits 252 239 Short-term marketable securities 2,520 27,350 Trade receivables, net 64,553 67,358 Other receivables and prepaid expenses 13,357 19,064 Inventories 24,926 22,032 Total current assets 147,599 181,325 LONG-TERM ASSETS: Long-term Trade receivables $ 12,150 $ 13,065 Long-term financial investments 2,372 2,790 Deferred tax assets 6,501 7,773 Operating lease right-of-use assets 30,491 30,077 Severance pay funds 22,227 21,163 Total long-term assets 73,741 74,868 PROPERTY AND EQUIPMENT, NET 29,679 29,248 GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 40,054 37,579 Total assets $ 291,073 $ 323,020 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Trade payables $ 10,849 $ 6,416 Other payables and accrued expenses 29,584 30,284 Deferred revenues 40,017 38,243 Short-term operating lease liabilities 7,122 6,635 Total current liabilities 87,572 81,578 LONG-TERM LIABILITIES: Accrued severance pay $ 18,609 $ 18,278 Deferred revenues and other liabilities 25,414 20,517 Long-term operating lease liabilities 32,084 31,348 Total long-term liabilities 76,107 70,143 Total shareholders’ equity 127,394 171,299 Total liabilities and shareholders' equity $ 291,073 $ 323,020
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Page 7 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except per share data Nine months ended Three months ended September 30, September 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) Revenues: Products $ 83,545 $ 86,896 $ 27,037 $ 30,606 Services 105,700 96,103 37,107 30,941 Total Revenues 189,245 182,999 64,144 61,547 Cost of revenues: Products 30,667 33,086 10,507 11,150 Services 33,958 31,370 11,503 10,112 Total Cost of revenues 64,625 64,456 22,010 21,262 Gross profit 124,620 118,543 42,134 40,285 Operating expenses: Research and development, net 40,801 39,087 13,447 13,188 Selling and marketing 61,867 57,318 21,203 18,942 General and administrative 12,018 11,832 4,112 4,094 Total operating expenses 114,686 108,237 38,762 36,224 Operating income 9,934 10,306 3,372 4,061 Financial income (expenses), net (898) 586 1,243 64 Income before taxes on income 9,036 10,892 4,615 4,125 Taxes on income, net (2,968) (3,838) (977) (1,393) Net income $ 6,068 $ 7,054 $ 3,638 $ 2,732 Basic net earnings per share $ 0.24 $ 0.24 $ 0.15 $ 0.10 Diluted net earnings per share $ 0.24 $ 0.24 $ 0.15 $ 0.10 Weighted average number of shares used in computing basic net earnings per share (in thousands) 25,197 28,858 23,939 28,169 Weighted average number of shares used in computing diluted net earnings per share (in thousands) 25,716 29,356 24,504 28,672
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Page 8 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release AUDIOCODES LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in thousands, except per share data Nine months ended Three months ended September 30, September 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) Gross profit $ 124,620 $ 118,543 $ 42,134 $ 40,285 Gross margin 65.9% 64.8% 65.7% 65.5% Share-based compensation (1) 215 319 62 94 Amortization expenses (2) - 366 - 122 Non-GAAP gross profit 124,835 119,228 42,196 40,501 Non-GAAP gross margin 66.0% 65.2% 65.8% 65.8% Operating income $ 9,934 $ 10,306 $ 3,372 $ 4,061 Operating margin 5.2% 5.6% 5.3% 6.6% Share-based compensation (1) 4,193 4,901 1,382 1,625 Amortization expenses (2) 19 399 - 133 Non-GAAP operating income 14,146 15,606 4,754 5,819 Non-GAAP operating margin 7.5% 8.5% 7.4% 9.5% Net income $ 6,068 $ 7,054 $ 3,638 $ 2,732 Net earnings per share $ 0.24 $ 0.24 $ 0.15 $ 0.10 Share-based compensation (1) 4,193 4,901 1,382 1,625 Amortization expenses (2) 19 399 - 133 Exchange rate differences (3) 1,329 1,310 (1,059) 392 Non-GAAP net income $ 11,609 $ 13,664 $ 3,961 $ 4,882 Non-GAAP diluted net earnings per share $ 0.44 $ 0.45 $ 0.16 $ 0.17 Weighted average number of shares used in computing Non-GAAP diluted net earnings per share (in thousands) 26,447 30,094 25,191 29,437 (1) Share-based compensation expenses related to options and restricted share units granted to employees and others. (2) Amortization expenses related to intangible assets. (3) Financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies. Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information. The non-GAAP measures used by the Company may not be comparable to similarly titled non-GAAP measures used by other companies.
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Page 9 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS U.S. dollars in thousands Nine months ended Three months ended September 30, September 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) Cash flows from operating activities: Net income $ 6,068 $ 7,054 $ 3,638 $ 2,732 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,386 3,096 1,174 1,183 Amortization of marketable securities premiums and accretion of discounts, net 136 312 14 115 Decrease (increase) in accrued severance pay, net (733) (714) 342 (790) Share-based compensation expenses 4,193 4,901 1,382 1,625 Decrease in deferred tax assets, net 1,206 708 516 401 Cash financial loss (income), net 571 37 164 15 Decrease in operating lease right-of-use assets 3,649 3,292 1,386 1,093 Decrease (increase) in operating lease liabilities (2,840) (133) (2,466) (555) Decrease (increase) in trade receivables, net 3,720 (10,373) (3,041) (7,237) Decrease (increase) in other receivables and prepaid expenses 3,213 (6,464) 2,730 (2,020) Decrease (increase) in inventories (3,054) 7,261 (1,188) 2,285 Increase in trade payables 4,161 2,761 1,278 2,674 Decrease (increase) in other payables and accrued expenses (8,170) 7,027 (4,020) 277 Increase in deferred revenues 7,491 6,471 2,171 2,256 Net cash provided by operating activities 22,997 25,236 4,080 4,054 Cash flows from investing activities: Proceeds from short-term deposits (13) (23) 3 (5) Proceeds from financial investments 134 243 12 65 Proceeds from maturity of marketable securities 24,827 5,200 7,450 2,000 Purchase of financial investments (135) (442) - - Purchase of property and equipment (3,355) (4,830) (1,059) (1,571) Net cash provided by investing activities 21,458 148 6,406 489
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Page 10 of 10 AudioCodes Reports Third Quarter 2026 Results AudioCodes Press Release AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS U.S. dollars in thousands Nine months ended Three months ended September 30, September 30, 2026 2025 2026 2025 (Unaudited) (Unaudited) Cash flows from financing activities: Purchase of treasury shares (37,669) (24,514) (15,121) (12,696) Cash dividends paid to shareholders (10,077) (10,934) (4,788) (5,608) Proceeds from issuance of shares upon exercise of options - 240 - 67 Net cash used in financing activities (47,746) (35,208) (19,909) (18,237) Net increase (decrease) in cash and cash equivalents (3,291) (9,824) (9,423) (13,694) Cash and cash equivalents at beginning of period 45,282 58,749 51,414 62,619 Cash and cash equivalents at end of period $ 41,991 $ 48,925 $ 41,991 $ 48,925