AudioCodes (AUDC) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 revenue grew 1.7% year-over-year to $62.6 million, with full-year revenue up 1.4% to $245.6 million.

• VoiceAI and conversational AI revenues grew over 50% year-over-year in Q4, with VoiceAI reaching nearly $17 million and accounting for 7% of total revenues.

• Annual recurring revenue from Live managed services and VoiceAI reached $79 million at year-end, up 22%–25% year-over-year, targeting $92–$98 million for 2026.

• The company is transitioning from legacy connectivity to an AI-driven hybrid cloud software and services model, with strong momentum in Live managed services and VoiceAI.

• Declared a $0.20 per share dividend (totaling $5.4 million) and repurchased 667,000+ shares for $6.1 million in Q4.

Financial highlights

• Q4 GAAP gross margin was 65.6% and non-GAAP gross margin was 65.9%, both slightly down from the prior year.

• Q4 non-GAAP operating margin declined to 8.6% from 12.2% in 4Q'24; Q4 GAAP operating margin was 6.0%.

• Q4 net income was $1.9 million (GAAP) and $4.5 million (non-GAAP); full-year net income was $9 million (GAAP) and $18.1 million (non-GAAP).

• Adjusted/Non-GAAP EBITDA for Q4 was $6.5 million (10.4% margin); full-year adjusted EBITDA was $24.8 million (10.1% margin).

• Cash and equivalents totaled $75.7 million at year-end; net cash from operations was $29.4 million for 2025.

Outlook and guidance

• 2026 revenue guidance is $247 million–$255 million, with non-GAAP EPS expected at $0.60–$0.75.

• VoiceAI business expected to grow 40%-50% annually, aiming for $50 million revenue by 2028.

• Annual recurring revenue projected to reach $92 million–$98 million in 2026.

• Management expects continued healthy top-line growth in 2026 and beyond, driven by investments in Live services and Conversational AI.

• Tariff-related costs expected to decrease to $2.3 million in 2026.