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Audiocodes Ltd. Earnings Release 2022
6659_rns_2022-05-02_8e0fc066-bf98-4e02-93b7-41aca006135f.pdf
Earnings Release
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the Month of May 2022
Commission file number 0-30070
AUDIOCODES LTD.
(Translation of registrant's name into English)
1 Hayarden Street • Airport City, Lod 7019900 • ISRAEL (Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
On May 2, 2022, AudioCodes Ltd. (the "Registrant") issued a press release announcing financial results for the first quarter of 2022, and other matters. A copy of this press release is attached hereto as Exhibit 1 and incorporated by reference herein. The Registrant will also use presentation materials in connection with its first quarter conference call (the "Earnings Release Presentation"), which will be posted on the Registrant's website at https://www.audiocodes.com/investor-relations. A copy of the Earnings Release Presentation is attached hereto as Exhibit 2 and incorporated by reference herein.
The information set forth in (a) the first, second, third and sixth paragraphs following the heading "Details," and the four paragraphs immediately following the heading "Share Buy Back Program and Cash Dividend" and (b) the condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows contained in the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into (i) the Registrant's Registration Statement on Form F-3ASR, File No. 333-238867; (ii) the Registrant's Registration Statement on Form S-8, File No. 333-11894; (iii) the Registrant's Registration Statement on Form S-8, File No. 333-13268; (iv) the Registrant's Registration Statement on Form S-8, File No. 333-105473; (v) the Registrant's Registration Statement on Form S-8, File No. 333-144825; (vi) the Registrant's Registration Statement on Form S-8, File No. 333-160330; (vii) the Registrant's Registration Statement on Form S-8, File No. 333-170676; (viii) the Registrant's Registration Statement on Form S-8, File No. 333-190437; (ix) the Registrant's Registration Statement on Form S-8, File No. 333-210438; (x) the Registrant's Registration Statement on Form S-8, File No. 333-230388; and (xi) the Registrant's Registration Statement on Form S-8, File No. 333-264535.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AUDIOCODES LTD. (Registrant)
By: /s/ NIRAN BARUCH
Niran Baruch Vice President Finance and Chief Financial Of icer
Dated: May 2, 2022
| Exhibit No. | Description |
|---|---|
| 1 | Press release, dated May 2, 2022, announcing financial results for the first quarter of 2022, and other matters. |
| 2 | 1Q 2022 Earnings Call Supplementary Slides, dated May 2, 2022. |
AudioCodes Press Release
PRESS RELEASE
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]
AudioCodes Reports First Quarter 2022 Results
Lod, Israel – May 2, 2022 - AudioCodes (NASDAQ: AUDC) Press Release
First Quarter Highlights
- · Quarterly revenues increased by 12.8% year-over-year to \$66.4 million.
- · Quarterly service revenues increased by 26.2% year-over-year to \$27.5 million.
- · GAAP results:
- o Quarterly GAAP gross margin was 66.9%;
- o Quarterly GAAP operating margin was 12.1%; and
- o Quarterly GAAP net income was \$8.6 million, or \$0.26 per diluted share.
- · Non-GAAP results:
- o Quarterly Non-GAAP gross margin was 67.2%;
- o Quarterly Non-GAAP operating margin was 18.0%; and
- o Quarterly Non-GAAP net income was \$11.2 million, or \$0.33 per diluted share.
- · Net cash provided by operating activities was \$938,000 for the quarter.
- · AudioCodes declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of \$5.8 million, was paid on March 1, 2022 to shareholders of record on February 15, 2022.
- · AudioCodes repurchased 720,124 of its ordinary shares during the quarter at an aggregate cost of \$20.9 million.
AudioCodes Reports First Quarter 2022 Results Page 1 of 10
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 first quarter ended March 31, 2022.
Revenues for the first quarter of 2022 were \$66.4 million compared to \$58.8 million for the first quarter of 2021.
Net income was \$8.6 million, or \$0.26 per diluted share, for the first quarter of 2022 compared to \$10.0 million, or \$0.29 per diluted share, for the first quarter of 2021.
On a Non-GAAP basis, net income was \$11.2 million, or \$0.33 per diluted share, for the first quarter of 2022 compared to \$12.7 million, or \$0.37 per diluted share, for the first quarter of 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 income 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 (income). 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 \$938,000 for the first quarter of 2022. Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long-term financial investments were \$144.1 million as of March 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-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 dividends during the first quarter of 2022.
"We are pleased to report solid top-line financial results for the first quarter of 2022, growing 12.8% year-over-year," said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
"Strong sales in the Unified Communications and Collaboration (UCC) business were the key driver for our continued growth in the first quarter of 2022. Revenue growth acceleration was reflected mainly in enterprise sales in the Microsoft Teams Voice and the Zoom Phone environments which grew each above 50% year-over-year. Microsoft business as a whole grew above 25% year over year. AudioCodes Live for Microsoft Teams managed services continue to grow at a nice clip. We now forecast Live for Teams ARR to double in 2022 and reach a level of above \$30 million. The second important driver of growth is attributed to service revenues which grew above 25% year-over-year. The services business growth was driven primarily by professional services and AudioCodes Live managed services. Exiting the first quarter of 2022, services revenue reached a level of 41.5% of total company revenue. We regard this momentum as an important indicator of our ongoing successful transformation to cloud services and recurring revenue model.
AudioCodes Reports First Quarter 2022 Results Page 2 of 10
In our customer experience market business (CX), we continue to see great progress with our conversational AI business where total contract value (TCV) signed during the quarter grew 40% year-over-year. We are now confident that we are well on track to grow our conversational AI business more than 50% in 2022. We are glad to report that the acquisition of Callverso at the end of 2021 started to bear fruit with a growing number of new opportunities for intelligent virtual agent (IVA) solutions for the CX market. Following our success in the Israeli market with IVA applications, we have plans to start addressing the global market in the second half of 2022. Finally, our Voice.ai Connect platform which powers voice interactions for the growing market of chatbots, our conversational IVR for contact centers, and AI-powered call recording in enterprise applications, performed well above our expectations. As such, we strongly believe in our ability to develop a new meaningful growth engine to fuel further success in our core markets," continued Mr. Adlersberg.
"On the operational front, first quarter 2022 non-GAAP operating margin came in at 18%, 240 basis points below last quarter's, nearly all of which was attributable to \$1.4 million higher components costs affecting our gross margins. The higher non-GAAP operating expenses and change in non-GAAP operating margin on an annual basis was the result of increase of 17% in headcount and related budget to support our business expansion and higher components costs, both of which are expected to continue throughout this year but subside in 2023 and beyond," concluded Mr. Adlersberg.
Share Buy Back Program and Cash Dividend
In December 2021, the Company received court approval in Israel to purchase up to an aggregate amount of \$35 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend of any part of this amount. The approval is valid through June 19, 2022.
On February 1, 2022, the Company declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of approximately \$5.8 million, was paid on March 1, 2022 to all of the Company's shareholders of record on February 15, 2022.
During the quarter ended March 31, 2022, the Company acquired 720,124 of its ordinary shares under its share repurchase program for a total consideration of \$20.9 million. As of March 31, 2022, the Company had \$8.3 million available under this approval for the repurchase of shares and/or declaration of cash dividends.
AudioCodes Reports First Quarter 2022 Results Page 3 of 10
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's first quarter 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
First quarter of 2022 earnings call supplementary slides are available at 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.
AudioCodes Reports First Quarter 2022 Results Page 4 of 10
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.
©2022 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 Reports First Quarter 2022 Results Page 5 of 10
AudioCodes Press Release
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2022 |
December 31, 2021 |
|
|---|---|---|
| (Unaudited) | (Audited) | |
| \$ 37,978 \$ |
79,423 | |
| - | 5,100 | |
| 5,217 | 220 | |
| 750 | 669 | |
| 50,130 | 48,956 | |
| 10,170 | 9,197 | |
| 25,347 | 23,988 | |
| 129,592 | 167,553 | |
| \$ 94 \$ |
94 | |
| 84,561 | 89,307 | |
| 15,469 | - | |
| 10,481 | 8,905 | |
| 15,524 | 16,457 | |
| 21,329 | 22,724 | |
| 147,458 | 137,487 | |
| 4,197 | 4,394 | |
| GOODWILL, INTANGIBLE ASSETS AND OTHER, NET 39,729 |
39,930 | |
| \$ 320,976 \$ |
349,364 | |
| 6,017 | 7,863 | |
| 33,048 | 38,350 | |
| 42,572 | 41,591 | |
| 8,136 | 8,139 | |
| 89,773 | 95,943 | |
| \$ 20,812 \$ |
22,895 | |
| 15,122 | 13,637 | |
| 7,605 | 11,391 | |
| 43,539 | 47,923 | |
| 205,498 | ||
| \$ 320,976 \$ |
349,364 | |
| 187,664 |
AudioCodes Reports First Quarter 2022 Results Page 6 of 10
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
| Three months ended March 31, |
|||
|---|---|---|---|
| 2022 | 2021 | ||
| (Unaudited) | |||
| Revenues: | |||
| Products | \$ 38,820 |
\$ 37,021 |
|
| Services | 27,537 | 21,817 | |
| Total Revenues | 66,357 | 58,838 | |
| Cost of revenues: | |||
| Products | 14,275 | 13,536 | |
| Services | 7,722 | 5,031 | |
| Total Cost of revenues | 21,997 | 18,567 | |
| Gross profit | 44,360 | 40,271 | |
| Operating expenses: | |||
| Research and development, net | 14,982 | 12,047 | |
| Selling and marketing | 17,288 | 14,476 | |
| General and administrative | 4,038 | 3,625 | |
| Total operating expenses | 36,308 | 30,148 | |
| Operating income | 8,052 | 10,123 | |
| Financial income, net | 1,010 | 1,578 | |
| Income before taxes on income | 9,062 | 11,701 | |
| Taxes on income, net | (454) | (1,708) | |
| Net income | \$ 8,608 |
\$ 9,993 |
|
| Basic net earnings per share | \$ 0.27 |
\$ 0.30 |
|
| Diluted net earnings per share | \$ 0.26 |
\$ 0.29 |
|
| Weighted average number of shares used in computing basic net earnings per share (in thousands) | 32,230 | 32,895 | |
| Weighted average number of shares used in computing diluted net earnings per share (in thousands) | 33,082 | 34,089 |
AudioCodes Reports First Quarter 2022 Results Page 7 of 10
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
| U.S. dollars in thousands, except per share data | ||||
|---|---|---|---|---|
| Three months ended March 31, |
||||
| 2022 | 2021 | |||
| (Unaudited) | ||||
| GAAP net income | \$ | 8,608 | \$ | 9,993 |
| GAAP net earnings per share | \$ | 0.26 | \$ | 0.29 |
| Cost of revenues: | ||||
| Share-based compensation (1) | 49 | 76 | ||
| Amortization expenses (2) | 190 | 68 | ||
| 239 | 144 | |||
| Research and development, net: | ||||
| Share-based compensation (1) | 1,159 | 577 | ||
| Deferred payments expenses (3) | 125 | - | ||
| 1,284 | 577 | |||
| Selling and marketing: | ||||
| Share-based compensation (1) | 1,439 | 1,300 | ||
| Amortization expenses (2) | 11 | 6 | ||
| Deferred payments expenses (3) | 125 | - | ||
| 1,575 | 1,306 | |||
| General and administrative: | ||||
| Share-based compensation (1) | 1,168 | 1,034 | ||
| Other Income (4) | (405) | - | ||
| 763 | 1,034 | |||
| Financial income: | ||||
| Exchange rate differences (5) | (720) | (1,530) | ||
| Income taxes: | ||||
| Deferred tax (6) | (587) | 1,219 | ||
| Non-GAAP net income | \$ | 11,162 | \$ | 12,743 |
| Non-GAAP diluted net earnings per share | \$ | 0.33 | \$ | 0.37 |
| Weighted average number of shares used in computing Non-GAAP diluted net earnings per share (in thousands) | 33,783 | 34,598 | ||
(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 income related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
(6) Non-cash deferred tax expenses (income).
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 Reports First Quarter 2022 Results Page 8 of 10
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
| U.S. dollars in thousands | ||||
|---|---|---|---|---|
| Three months ended | ||||
| March 31, | ||||
| 2022 | 2021 | |||
| (Unaudited) | ||||
| Cash flows from operating activities: | ||||
| Net income | \$ | 8,608 | \$ | 9,993 |
| Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 742 | 559 | ||
| Amortization of marketable securities premiums and accretion of discounts, net | 360 | 129 | ||
| Decrease in accrued severance pay, net | (688) | (300) | ||
| Share-based compensation expenses | 3,815 | 2,987 | ||
| Increase (decrease) in deferred tax assets, net | (650) | 1,207 | ||
| Decrease in accrued interest and exchange rate effect of loans, marketable securities and bank deposits | (81) | (69) | ||
| Gain derived from Long Term financial investments | (69) | - | ||
| Decrease in operating lease right-of-use assets | 1,350 | 1,779 | ||
| Decrease in operating lease liabilities | (4,206) | (4,487) | ||
| Changes in IIA settlement liability, net | - | (389) | ||
| Increase in trade receivables, net | (1,174) | (1,672) | ||
| Decrease (increase) in other receivables and prepaid expenses | (1,133) | 842 | ||
| Decrease (increase) in inventories | (1,413) | 1,026 | ||
| Decrease in trade payables | (1,846) | (532) | ||
| Decrease in other payables and accrued expenses | (5,202) | (2,709) | ||
| Increase in deferred revenues | 2,525 | 4,656 | ||
| Net cash provided by operating activities | 938 | 13,020 | ||
| Cash flows from investing activities: | ||||
| Investment in short-term deposits | (5,000) | - | ||
| Proceeds from short-term deposits | 3 | 84,156 | ||
| Purchase of marketable securities | - | (14,314) | ||
| Purchase of long-term financial investments | (15,400) | - | ||
| Net cash paid in acquisition of subsidiary | (100) | - | ||
| Purchase of property and equipment | (290) | (103) | ||
| Net cash provided by (used in) investing activities | (20,787) | 69,739 | ||
AudioCodes Reports First Quarter 2022 Results Page 9 of 10
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
| Three months ended March 31, |
||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (Unaudited) | ||||
| Cash flows from financing activities: | ||||
| Purchase of treasury shares | (20,869) | (10,255) | ||
| Repayment of bank loans | - | (300) | ||
| Cash dividends paid to shareholders | (5,832) | (5,302) | ||
| Proceeds from issuance of shares upon exercise of options and warrants | 5 | 412 | ||
| Net cash used in financing activities | (26,696) | (15,445) | ||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (46,545) | 67,314 | ||
| Cash, cash equivalents and restricted cash at beginning of period | 84,523 | 46,034 | ||
| Cash, cash equivalents and restricted cash at end of period | \$ 37,978 |
\$ 113,348 |
||
AudioCodes Reports First Quarter 2022 Results Page 10 of 10
1Q 2022 Earnings Call Supplementary Slides
● Safe Harbor
This presentation contains forward-looking statements contained in this presentation other than statements of historical facts, including, without limitation, future financial and business performance for the first quarter 2022, attractiveness of our product offerings and platform and the value proposition of our products, are forward-looking statements. The words "believe," "continue," "estimate," "expect," "intend," "guide," "may" "will" and similar expressions and their negatives are intenctive lorward locking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and linancial needs. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to expand effectively into new markets, risks that the anticipated benefits of an acquisition may not be fully realized or may take longer to realize than expected, our ability to operate in complicable laws, as well as other risks and uncertainties set forth in the "Risk Factors" section of our latest Form 20-F filled with the Securities and Exchange Commission and any subsequent reports that we file with the Securities and Exchange Commission. Morecyer, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor con we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may moke. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, or events and circumstances reflected in the forward-looling stutements will these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forwardlooking statements as representing our views as of any date subsequent to the date of this presentation.
This presentation also includes cartain guidance on non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not as a substitute for or superior of financial performance prepared in accordance with GAAP. There are a umber companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the uselules of the Company's non-GAAP for comparison. The Componison The Compony provides in the earnings press release for the relevant period and in the appendix of this presentation.
Therefore, please review the information contained in our press release, dated May 2, 2022, with respect to our earnings for fiscal year Ql 2022 (the *Q) Press Release"). The Q1 Press Release contains regarding our linancial outlook and certain non-GAAP metrics and their reconciliations.
The information contained in this presentation, or delivered in connection with this presentation, does not constitute an offer, express or implied, or a recommendation or make any investment, in our securities or in any securities of our affiliates or subsidiaries.
1Q 2022 Earnings Call Supplementary Slides
1Q 2022 Earnings Call Supplementary Slides AudioCodes Scale ʙ Reach We are the leading provider of enterprise voice cloud Services 120 Countries 1,000 Employees 65 of Fortune 100 Companies are Customers Microsoft Teams Voice Partner 9 of Fortune Top 10 Global Enterprises # 1
O
1Q'22 services revenue grew 26.2% yoy and
reached 41.5% of overall revenues, fueled by AudioCodes Live and professional services
Services as % of revenues
1Q 2022 Earnings Call Supplementary Slides
Non-GAAP Gross Margin
75.0%
Mix shift to services contributing to increasing gross margins annually, offset by temporarily elevated supply chain costs in 2022
1Q 2022 Earnings Call Supplementary Slides
70.0%
65.0%
60.0%
63.7%
68.1%
acaudiocodes
69.0%
O
Non-GAAP Operating Margin
Balancing revenue growth with investments to capitalize on significant secular growth opportunities
1Q 2022 Earnings Call Supplementary Slides
25.0%
20.0%
15.0% -
10.0%
14.1%
2019
21.6%
2021
21.5%
2020
O
O
Three-Year Financial Model And Long-Term Targets
| 2019 | 2020 | 2021 | 1Q22 | LONG-TERM TARGETS |
|
|---|---|---|---|---|---|
| Revenue growth | 13.7% | 10.2% | 12.7% | 12.8% | 13%-15% |
| Non-GAAP Gross margin | 63.7% | 68.1% | 69.0% | 67.2%* | 67%-70% |
| Non-GAAP OPEX as % of revenues |
49.6% | 46.6% | 47.3% | 49.3% | 47%-50% |
| Non-GAAP Operating margin 14.1% 21.5% 21.6% | 18.0%* | 20%-23% |
* Impacted primarily by higher-than-expected component procurement costs
1Q 2022 Earnings Call Supplementary Slides
QCaudiocodes
GAAP to Non-GAAP Reconciliation
-- O
| Three months ended | |||
|---|---|---|---|
| 2022 | March 31, 2021 |
||
| (Unaudited) | |||
| GAAP net Income | \$ 8,608 | \$ 9.993 | |
| GAAP net earnings per share | \$ 0.26 | \$ 0.29 | |
| Cost of revenues: | |||
| Share-based compensation (1) | 49 | 76 | |
| Amortiration expenses [2) | 190 | 68 | |
| 239 | 144 | ||
| Research and development, net: | |||
| Share-based compensation (1) | 1,159 | 577 | |
| Deferred payments expenses (3) | 125 | ||
| 1,284 | 577 | ||
| Selling and marketing: | |||
| Share-based compensation (1) | 1,439 | 1,300 | |
| 11 | 6 | ||
| Deferred payments expenses (3) | 125 | ||
| 1,575 | 1,306 | ||
| General and administrative: | |||
| Share-based compensation (1) | 1,168 | 1,034 | |
| Other Income (4) | (405) | ||
| 763 | 1,034 | ||
| Financial Income: | |||
| Exchange rate differences (5) | (720) | (1,530) | |
| Income taxes: | |||
| Deferred tax (6) | (587) | 1,219 | |
| Non-GAAP net income | \$ 11,162 | \$ 12,743 | |
| Non-GAAP diluted net earnings per share | \$0.33 | \$ 0.37 | |
| Weighted average number of shares used in computing Non-GAAP diuted net earnings per share (in thousands) | 33,783 | 34,598 |
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