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
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.
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
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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
(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.
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