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AudioCodes Reports Fourth Quarter and Full Year 2022 Results and Declares Semi-Annual Dividend of 18 cents per share
[February 07, 2023]

AudioCodes Reports Fourth Quarter and Full Year 2022 Results and Declares Semi-Annual Dividend of 18 cents per share


LOD, Israel, Feb. 7, 2023 /PRNewswire/ -- 

Fourth Quarter and Full Year 2022 Highlights

  • Quarterly revenues increased by 6.9% year-over-year to $70.7 million;
    full 2022 year revenues increased by 10.5% to $275.1 million.
  • Quarterly service revenues increased by 17.2% year-over-year to $28.6 million;
    full 2022 year service revenues increased by 18.1% to $110.8 million.
  • GAAP results:
    - Quarterly GAAP gross margin was 65.3%;
    - Quarterly GAAP operating margin was 11.8%;
    - Quarterly GAAP net income was $7.5 million, or $0.23 per diluted share; and
    - Full 2022 year GAAP net income was $28.5 million, or $0.88 per diluted share.
  • Non-GAAP results:
    - Quarterly Non-GAAP gross margin was 65.8%;
    - Quarterly Non-GAAP operating margin was 17.7%;
    - Quarterly Non-GAAP net income was $11.9 million, or $0.36 per diluted share; and
    - Full 2022 year Non-GAAP net income was $45 million, or $1.35 per diluted share.
  • Net cash provided by operating activities was $0.4 million for the quarter and $8.3 million for the full year.
  • AudioCodes repurchased 145,380 of its ordinary shares during the quarter at an aggregate cost of $2.9 million.

Details

AudioCodes (NASDAQ: AUDC), a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced its financial results for the fourth quarter and full year periods ended December 31, 2022.

Revenues for the fourth quarter of 2022 were $70.7 million compared to $69.7 million for the third quarter of 2022 and $66.1 million for the fourth quarter of 2021. Revenues were $275.1 million in 2022 compared to $248.9 million in 2021.

Net income was $7.5 million, or $0.23 per diluted share, for the fourth quarter of 2022 compared to $7.3 million, or $0.22 per diluted share, for the fourth quarter of 2021. Net income was $28.5 million, or $0.88 per diluted share, in 2022 compared to $33.8 million, or $1.00 per diluted share, in 2021.

On a Non-GAAP basis, net income was $11.9 million, or $0.36 per diluted share, for the fourth quarter of 2022 compared to $13.4 million, or $0.39 per diluted share, for the fourth quarter of 2021. Non-GAAP net income was $45 million, or $1.35 per diluted share, in 2022 compared to $51.8 million, or $1.5 per diluted share, in 2021.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Callverso Ltd; (iv) other income related to a payment made by the landlord to AudioCodes Inc., a subsidiary of the Company, in connection with the termination of a lease agreement for its offices in New Jersey; (v) financial expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies; and (vi) 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 $0.4 million for the fourth quarter of 2022 and $8.3 million for 2022.

Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long and short-term financial investments were $124.3 million as of December 31, 2022 compared to $174.8 million as of December 31, 2021. The decrease in cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long and short-term financial investments was the result of the use of cash for the continued repurchasing 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 2022.

"I am pleased to report solid financial results for the fourth quarter, growing revenues 6.9% year-over-year and capping 2022 with a double-digit growth rate of 10.5%," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.  "We see growing business activity in UCaaS and CX, and with the ongoing proliferation of AI in the enterprise, we believe we are well-positioned to extend our leadership in applying AI to voice applications and emerge a stronger and more competitive player. 

 Primary growth engine during the year came from our Microsoft-related business, which grew 12% year-over-year in the quarter and 18% for the full year. Our Microsoft Teams business grew 33% for the full year. We saw ongoing momentum of AudioCodes Live managed services, which exited the year at over $30 million, growing close to 80% year-over-year, with TCV expanding to over $100 million. Service revenue grew 18% year-over-year and accounted for 40.3% of revenues, up from 37.7% a year ago. Another growth vector in UCaaS is our business in the Zoom ecosystem, which grew above 50% year over year.

We saw healthy customer activity during the quarter in the customer experience (CX) market. For the full year and excluding declining OEM revenue, which we will focus less on going forward, our direct enterprise CX business grew 13%.  We have already introduced our entry-level Microsoft Teams-native conversational AI-first contact center application for the CX market and plan to significantly expand this effort in 2023. Overall, Voice AI applications grew above 15% year over year.

Finally, on the profitability front, we are pleased to have delivered improved non-GAAP gross and operating margins in the fourth quarter, helped by easing supply chain pressures. This, coupled with continued prudent allocation of investments give us increasing confidence to deliver on our commitment to drive improved operating leverage in 2023," concluded Mr. Adlersberg.

Share Buy Back Program

During the quarter ended December 31, 2022, the Company acquired 145,380 of its ordinary shares under its share repurchase program for a total consideration of $2.9 million.

In January 2023, the Company received court approval in Israel to purchase up to an aggregate amount of $25 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend out of any part of this amount. The approval is valid through July 4, 2023.

Cash Dividend

AudioCodes also announced today that the Company's Board of Directors has declared a cash dividend in the amount of 18 cents per share. The aggregate amount of the dividend is approximately $5.7 million. The dividend is payable on March 7, 2023, to all of the Company's shareholders of record at the close of trading on the NASDAQ Global Select Market on February 21, 2023. 

In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 25% of the dividend amount payable to each shareholder of record, subject to applicable exemptions. If the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital, the withholding rate is 30%.

The dividend will be paid in U.S. dollars on the ordinary shares of AudioCodes Ltd. that are traded on the Nasdaq Global Select Market or the Tel-Aviv Stock Exchange. The amount and timing of any other dividends will be determined by the Board.

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's fourth quarter and full year of 2022 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one 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

Follow AudioCodes' social media channels:

AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.

About AudioCodes

AudioCodes Ltd. (NASDAQ, TASE: AUDC) is a leading vendor of advanced communications software, products and productivity solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.

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 that 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 effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; 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 and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company's loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business; possible adverse impact of the COVID-19 pandemic on our business and results of operations; and other factors detailed in AudioCodes' filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.

©2023 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What's Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room Experience and CloudBond are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.

Summary financial data follows

 

 





AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands  



December 31,


December 31,


2022


2021


(Unaudited)


(Audited)

ASSETS








CURRENT ASSETS:




Cash and cash equivalents

$ 24,535


$ 79,423

Restricted cash

-


5,100

Short-term and restricted bank deposits

5,210


220

Short-term marketable securities

2,120


669

Short-term financial investments

15,258


-

Trade receivables, net

56,424


48,956

Other receivables and prepaid expenses

10,006


9,197

Inventories

36,377


23,988

Total current assets

149,930


167,553





LONG-TERM ASSETS:




Long-term and restricted bank deposits

$ -


$ 94

Long-term Trade receivables

13,099


-

Long-term marketable securities

75,946


89,307

Long-term financial investments

1,242


-

Deferred tax assets

9,073


8,905

Operating lease right-of-use assets

13,517


16,457

Severance pay funds

17,933


22,724

Total long-term assets

130,810


137,487





PROPERTY AND EQUIPMENT, NET

3,965


4,394





GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

39,126


39,930





Total assets

$ 323,831


$ 349,364





LIABILITIES AND SHAREHOLDERS' EQUITY








CURRENT LIABILITIES:




Trade payables

11,338


7,863

Other payables and accrued expenses

38,316


38,350

Deferred revenues

36,634


41,591

Short-term operating lease liabilities

8,169


8,139

Total current liabilities

94,457


95,943





LONG-TERM LIABILITIES:




Accrued severance pay

$ 17,755


$ 22,895

Deferred revenues and other liabilities

16,308


13,637

Long-term operating lease liabilities

5,551


11,391

Total long-term liabilities

39,614


47,923





Total shareholders' equity

189,760


205,498

Total liabilities and shareholders' equity

$ 323,831


$ 349,364


 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data



 Year ended


Three months ended


December 31,


December 31,


2022


2021


2022


2021


(Unaudited)


(Audited)


(Unaudited)

Revenues:








Products

$ 164,302


$ 155,089


$ 42,017


$ 41,666

Services

110,791


93,831


28,639


24,433

Total Revenues

275,093


248,920


70,656


66,099

Cost of revenues:








Products

63,686


52,750


15,835


14,305

Services

32,629


25,279


8,663


7,357

Total Cost of revenues

96,315


78,029


24,498


21,662

Gross profit

178,778


170,891


46,158


44,437

Operating expenses:








Research and development, net

59,842


53,396


15,090


14,452

Selling and marketing

70,123


62,057


18,088


16,597

General and administrative

17,494


15,914


4,644


4,117

Total operating expenses

 

147,459


 

131,367


37,822


35,166

Operating income

 

31,319


 

39,524


8,336


9,271

Financial income (loss), net

2,864


123


669


(976)

Income before taxes on income

 

34,183


 

39,647


9,005


8,295

 

Taxes on income, net

(5,717)


(5,896)


(1,456)


(1,040)

Net income

$ 28,466


$ 33,751


$ 7,549


$ 7,255

Basic net earnings per share

$ 0.89


$ 1.03


$ 0.24


$ 0.22

Diluted net earnings per share

$ 0.88


$ 1.00


$ 0.23


$ 0.22

Weighted average number of shares used in computing
 basic net earnings per share (in thousands)

31,849


32,703


31,642


32,445

Weighted average number of shares used in computing
 diluted net earnings per share (in thousands)

32,500


33,846


32,145


33,555

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

U.S. dollars in thousands, except per share data



Year ended


Three months ended


December 31,


December 31,


2022


2021


2022


2021


(Unaudited)


(Audited)


(Unaudited)

GAAP net income

$ 28,466


$ 33,751


$ 7,549


$ 7,255

GAAP net earnings per share

$ 0.88


$ 1.00


$ 0.23


$ 0.22

Cost of revenues:








Share-based compensation (1)

425


411


125


134

Amortization expenses (2)

760


340


190


136


1,185


751


315


270

Research and development, net:








Share-based compensation (1)

3,481


2,772


839


754

Deferred payments expenses (3)

500


70


125


70


3,981


2,842


964


824

Selling and marketing:








Share-based compensation (1)

6,032


6,170


1,338


1,924

Amortization expenses (2)

44


18


11


8

Deferred payments expenses (3)

500


70


125


70


6,576


6,258


1,474


2,002

General and administrative:








Share-based compensation (1)

5,184


4,811


1,450


1,525

Other Income (4)

(1,093)


(382)


-


(382)


4,091


4,429


1,450


1,143

Financial expenses:








Exchange rate differences (5)

(1,321)


294


(227)


1,238









Income taxes:








Deferred tax (6)

1,974


3,463


398


700

Non-GAAP net income

$ 44,952


$ 51,788


$ 11,923


$ 13,432

Non-GAAP diluted net earnings per share

$ 1.35


$ 1.50


$ 0.36


$ 0.39

Weighted average number of shares used in computing Non-GAAP
 diluted net earnings per share (in thousands)

33,359


34,432


33,088


34,183










 

(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)  Expenses related to deferred payments in connection with the acquisition of Callverso Ltd.

(4)  Other income related to a payment made to AudioCodes Inc. in connection with the termination of a lease agreement for its offices in New Jersey. 

(5)  Financial expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(6)  Non-cash deferred tax expenses.

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. 

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands



Year ended


Three months ended


December 31,


December 31,


2022


2021


2022


2021


(Unaudited)


(Audited)


(Unaudited)

Cash flows from operating activities:








Net income

$ 28,466


$ 33,751


$ 7,549


$ 7,255

Adjustments required to reconcile net income to net cash
 provided by operating activities:








Depreciation and amortization

2,984


2,432


723


686

Amortization of marketable securities premiums and
 accretion of discounts, net

1,533


1,589


378


348

Decrease in accrued severance pay, net

(349)


(1,062)


(17)


(354)

Share-based compensation expenses

15,122


14,164


3,752


4,337

Decrease in deferred tax assets, net

1,780


3,406


356


677

Increase in accrued interest and exchange rate effect of
 loans, marketable securities and bank deposits

25


54


105


85

Gain derived from financial investments

(937)


-


(289)


-

Decrease in operating lease right-of-use assets

6,712


7,445


2,073


1,740

Increase (decrease) in operating lease liabilities

(9,582)


(7,556)


(324)


689

Changes in IIA settlement liability, net

-


(11,684)


-


(11,860)

Increase in trade receivables, net

(20,567)


(14,438)


(8,080)


(8,686)

Increase in other receivables and prepaid expenses

(1,621)


(1,221)


(277)


(261)

Decrease (increase) in inventories

(12,653)


4,504


(4,605)


(244)

Increase in trade payables

3,475


879


(1,164)


2,659

Increase (decrease) in other payables and accrued expenses

(4,077)


9,601


2,126


6,172

Increase (decrease) in deferred revenues

(2,030)


5,480


(1,883)


1,010

Net cash provided by operating activities

8,281


47,344


423


4,253

Cash flows from investing activities:








Investment in short-term deposits

(5,000)


-


(5)


-

Proceeds from short-term deposits

10


84,597


-


143

Proceeds from long-term deposits

94


-


-


-

Purchase of financial investments

(16,615)


(43,808)


(405)


(2,714)

Proceeds from redemption of marketable securities

1,123


3,240


-


2,187

Proceeds from redemption of financial investments

1,052


-


1,052


-

Proceeds from sale of marketable securities

2,250


2,571


2,250


-

Net cash paid in acquisition of subsidiary

(1,100)


(2,804)


(1,000)


(2,804)

Purchase of property and equipment

(1,487)


(1,174)


(336)


(231)

Net cash provided by (used in) investing activities

(19,673)


42,622


1,556


(3,419)

 

 

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands



Year ended


Three months ended



December 31,


December 31,



2022


2021


2022


2021



(Unaudited)


(Audited)


(Unaudited)

Cash flows from financing activities:









Purchase of treasury shares

(38,099)


(41,849)


(2,858)


(10,650)


Repayment of bank loans

-


(1,200)


-


(300)


Cash dividends paid to shareholders

(11,552)


(10,865)


-


-


Proceeds from issuance of shares upon exercise of options and warrants

1,055


2,437


522


1,091


Net cash used in financing activities

(48,596)


(51,477)


(2,336)


(9,859)











Net increase (decrease) in cash, cash equivalents, and restricted cash

(59,988)


38,489


(357)


(9,025)


Cash, cash equivalents and restricted cash at beginning of period

84,523


46,034


24,892


93,548


Cash, cash equivalents and restricted cash at end of period

$ 24,535


$ 84,523


$ 24,535


$ 84,523












 

 

Company Contacts




Niran Baruch,

Chief Financial Officer

AudioCodes

Tel: +972-3-976-4000

[email protected]


Roger L. Chuchen

VP, Investor Relations

AudioCodes

Tel:  732-764-2552

Mobile: 347-752-0780

[email protected]

 

 

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SOURCE AudioCodes


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