AudioCodes Reports Third Quarter 2025 Financial Performance and Growth Metrics

On November 4, 2025, AudioCodes (NASDAQ: AUDC), a leading enterprise voice and VoiceAI business solutions provider, announced its financial results for the third quarter of 2025, highlighting a steady growth trajectory amid evolving market dynamics. The company reported quarterly revenues of $61.5 million, reflecting a 2.2% increase year-on-year from $60.2 million in Q3 2024. A notable segment of this revenue came from services, which accounted for $30.9 million and 50.3% of the total revenues, indicating a firm demand for AudioCodes' solutions in the enterprise market.

Financial Overview

In terms of profitability, the company recorded a quarterly GAAP gross margin of 65.5% and an operating margin of 6.6%. The GAAP EBITDA stood at $5.2 million, while net income matched the previous year at $2.7 million. This consistent net income translates into $0.10 per diluted share, slightly up from $0.09 per diluted share in Q3 2024.

Conversely, non-GAAP metrics reflected even more promising results, with a gross margin of 65.8% and an operating margin of 9.5%. The non-GAAP EBITDA was reported at $6.9 million, and net income reached $4.9 million—or $0.17 per diluted share—which represents an increase compared to the $4.9 million and $0.16 per diluted share reported in the same quarter last year.

Cash flow from operating activities for Q3 2025 was a robust $4.1 million. To enhance shareholder value, AudioCodes initiated a share buyback program, repurchasing 1,267,436 ordinary shares during the quarter at a total cost of $12.7 million.

Strategic Insights and Future Outlook

Shabtai Adlersberg, President and CEO of AudioCodes, expressed satisfaction with the quarter’s performance, crediting ongoing momentum in key segments, particularly the unified communications and contact center connectivity services. The company’s focus on its Live family of offerings and conversational AI solutions has been instrumental in driving the results. Particularly noteworthy was a 50% growth rate in the Conversational AI (CAI) segment, positioning AudioCodes well to achieve annual growth targets of 40%-50% for 2025.

By the end of the third quarter, AudioCodes' Annual Recurring Revenue (ARR) climbed to $75 million, a significant 25% year-over-year increase, paving the way towards its annual target of $78-$82 million. Key achievements include the recent launch of the Live Platform, which led to a landmark agreement with a tier-1 system integrator, enhancing AudioCodes’ presence in managed connectivity services across major UC/CX systems.

The advancements made in the Meeting Insights On-Prem (Mia OP) service and a newfound contract under Israel's Project Nimbus also illustrate AudioCodes’ solidified market leadership, particularly in its domestic sector. Sales efforts in the U.S. market for the Mia OP service indicate promising customer interest, suggesting potential avenues for further expansion.

Shareholder Returns and Market Engagement

On July 29, 2025, AudioCodes declared a cash dividend of $0.20 per share, with the dividend totaling approximately $5.6 million and paid out in August. Furthermore, with court approval to repurchase another $25 million worth of shares, AudioCodes has ample room to engage in shareholder returns while simultaneously reinvesting in innovative growth sectors.

The company plans to discuss its performance further in a conference call scheduled for today, providing analysts and investors with more detailed insights into its operating performance and future outlook. Interested parties can participate by dialing in or accessing the call via webcast on AudioCodes' investor relations website.

Conclusion

The third quarter results underline AudioCodes' commitment to strategic priorities and to continually investing in high-growth areas that promise sustainable growth. The company's momentum, driven by innovative product launches and strong service demand, positions it favorably in the competitive landscape of enterprise voice and AI-driven solutions. As AudioCodes sets its sights on further growth, its strategic initiatives will be crucial in driving long-term value for both customers and shareholders alike.