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AudioCodes Reports Strong Q2 2025 Results and Dividend Declaration

AudioCodes Ltd. (NASDAQ: AUDC), a prominent provider of unified communications and conversational AI solutions, has revealed its financial performance for the second quarter of 2025, showcasing a solid growth trajectory amid increasing demands for its services. The company's revenue during this period reached $61.1 million, marking a 1.3% increase compared to the same quarter last year. Notably, service revenues saw a slightly higher increase of 1.9%, totaling $32.6 million.

The company's operating margins reflected a good performance with a GAAP gross margin standing at 64.1% and a GAAP operating margin of 4.3%. AudioCodes reported an EBITDA of $3.6 million and a net income of $0.3 million, which equates to $0.01 per diluted share. However, from a Non-GAAP perspective, the net income surged to $4.1 million or $0.14 per diluted share, significantly excluding certain costs associated with share-based compensation and amortization expenses.

In addition to these financial highlights, AudioCodes has confirmed its commitment to returning value to shareholders by declaring a semi-annual dividend of 20 cents per share, amounting to approximately $5.7 million. This dividend will be payable on August 28, 2025, to shareholders recorded on August 14, 2025. The dividend is subject to a withholding tax of 25%, as per Israeli tax regulations.

Growth through Strategic Initiatives

As stated by Shabtai Adlersberg, President and CEO of AudioCodes, the growth in revenues was greatly driven by the company's Live managed services in the Unified Communications as a Service (UCaaS) and Customer Experience (CX) markets. The quarter also presented a 6.5% increase in demand from Microsoft, illustrating the positive trend in collaborative technologies.

The demand for Conversational AI solutions remains robust, with AudioCodes projecting an optimistic 40%-50% growth segment for 2025. The launch of its Live Platform, which integrates UCaaS with CX features and is compliant with major global vendors such as Webex, signals AudioCodes' ongoing innovation and adaptation to market needs.

Furthermore, the introduction of the Meeting Insights On-Prem (Mia OP) solution caters to enterprises requiring enhanced data security, particularly in sensitive sectors like government and healthcare. This new offering reflects AudioCodes’ commitment to meeting the diverse requirements of its client base.

Financial Setbacks and Future Protection

Despite these successes, the company faced increased operational costs due to recently implemented tariffs on U.S. imports, totaling an additional $1 million expense, coupled with growing costs in the EMEA region, driven by shifts in currency values against the U.S. dollar. This result affected the company’s net income generation for the quarter.

Operationally, AudioCodes recorded a net cash inflow of $7.7 million from its operating activities, resulting in total cash and investment assets amounting to $95.3 million as of June 30, 2025, up from $93.9 million at the end of 2024. The increase in cash positions the company favorably to continue investing in its growth strategy.

During this quarter, AudioCodes also executed a share repurchase of 715,732 ordinary shares at a total cost of $6.6 million to enhance shareholder value further. With recent court approval in Israel for an additional $20 million share buyback, the company aims to expand these initiatives in the latter half of 2025.

Conclusion

AudioCodes continues to evolve within the rapidly growing market for unified communications and AI-based services. The financial results for Q2 2025 reflect both the potential of AudioCodes' business model and its proactive measures in response to market demands. With the declared dividend and robust performance measures, AudioCodes demonstrates resilience and a commitment to providing value to its stakeholders, positioning itself well for sustainable growth in the future. Investors will want to pay attention to the developments in the company’s ongoing projects and market positioning as it navigates this dynamic landscape.