AudioCodes Ltd. (AUDC) Tops Q4 EPS by 2c, Revenues Beat

AudioCodes Ltd. (NASDAQ: AUDC) reported Q4 EPS of $0.26, $0.02 better than the analyst estimate of $0.24. Revenue for the quarter came in at $52.8 million versus the consensus estimate of $51.95 million.

Fourth Quarter and Full Year 2019 Highlights

• Quarterly revenues increased by 15.3% year-over-year to $52.8 million; full 2019 year revenues increased by 13.7% to $200.3 million;
• Quarterly service revenues increased by 15.9% year-over-year to $17.5 million; full 2019 year service revenues increased by 14.7% to $64.6 million;
• Quarterly and full 2019 year UC-SIP revenues increased more than 20% year-over-year;
• AudioCodes entered into a royalty buyout agreement with the Israel National Authority for Technology and Innovation ("IIA") in November 2019 (detailed below). The agreement provided for a payment of $32.2 million to the IIA. This required payment of $32.2 million is included in expenses in the GAAP results for the three months and full year ended December 31, 2019;
• GAAP results:
  • Quarterly GAAP gross margin percentage was 3.9%;
  • Quarterly GAAP operating loss percentage was 49.2%;
  • Quarterly GAAP net loss was $8.2 million, or ($0.28) per diluted share;
  • Full 2019 year GAAP net income was $4.0 million, or $0.13 per diluted share;
• Non-GAAP results:
  • Quarterly Non-GAAP gross margin percentage was 65.1%;
  • Quarterly Non-GAAP operating margin percentage was 15.7%;
  • Quarterly Non-GAAP net income was $8.1 million, or $0.26 per diluted share;
  • Full 2019 year Non-GAAP net income was $27.8 million, or $0.89 per diluted share; and
  • Net cash provided by operating activities was $2.4 million for the quarter and $23.2 million for the full year.

"We are pleased to report record financial results for the fourth quarter and full year 2019," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

"The year 2019 ended on a strong note, underscoring strong performance for the full year, our best year ever. Underlining our success is our continued leadership of the Enterprise Voice segment with our voice connectivity solutions, delivery of strong results for our voice networking business, and increased investment in two new developing markets: the meeting space and Voice.ai. Growing our top line revenue by 13.7% year-over-year, the second year in a row of double digit revenue growth, improving non-GAAP annual operating income to 14.1% from 11.7% in the prior year, and growing non-GAAP annual net income by 38.9% compared to 2018, all demonstrate the strength of our Company's performance. A key factor driving this significant growth is the strength in our UC-SIP business which increased more than 20% year-over-year. Our success in growing our UC-SIP business is echoed in a strong industry position and successful execution in the markets we serve."

"In 2019 we continued to invest and develop technologies and solutions in the Voice.ai business unit which has demonstrated success in growing the number of project wins. In the second half of 2019 we have announced the launch of a new effort targeting a set of solutions and devices for the emerging meeting space. Coupling these new technologies with our strong position in the UC and UCaaS markets in the Microsoft Teams and Skype for Business ecosystem should further enhance our ability to expand our business. Looking forward, and based on current business momentum, we are confident in our ability to continue to expand our business in 2020 and beyond. We plan to continue our investment in future offerings, and focus on the return on investment to our shareholders."

For earnings history and earnings-related data on AudioCodes Ltd. (AUDC) click here.

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