EX-99.1 2 tm2131055d1_ex1.htm EXHIBIT 1

Exhibit 1

AudioCodes Press Release

P R E S S R E L E A S E

Company Contacts

Niran Baruch,
Chief Financial Officer
AudioCodes

Tel: +972-3-976-4000
niran.baruch@audiocodes.com

Roger L. Chuchen

VP, Investor Relations
AudioCodes

Tel: 732-764-2552

Mobile: 347-752-0780

roger.chuchen@audiocodes.com

AudioCodes Reports Third Quarter 2021 Results

Lod, Israel – October 26, 2021 - AudioCodes (NASDAQ: AUDC) Press Release

Third Quarter Highlights

Quarterly revenues increased by 12.1% year-over-year to $63.4 million; Quarterly service revenues increased by 26.7% year-over-year to $24.8 million.

GAAP results:

Quarterly GAAP gross margin was 69.6%;

Quarterly GAAP operating margin was 15.8%; and

Quarterly GAAP net income was $8.3 million, or $0.24 per diluted share.

Non-GAAP results:

Quarterly Non-GAAP gross margin was 69.9%;

Quarterly Non-GAAP operating margin was 21.4%; and

Quarterly Non-GAAP net income was $12.9 million, or $0.38 per diluted share.

Net cash provided by operating activities was $13.0 million for the quarter.

AudioCodes repurchased 424,307 of its ordinary shares during the quarter at an aggregate cost of $13.8 million.

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

Details

AudioCodes, a leading vendor of advanced communications software, products and productivity solutions for the digital workplace, today announced its financial results for the third quarter ended September 30, 2021.

Revenues for the third quarter of 2021 were $63.4 million compared to $60.6 million for the second quarter of 2021 and $56.6 million for the third quarter of 2020.

Net income was $8.3 million, or $0.24 per diluted share, for the third quarter of 2021, compared to a net income of $7.0 million, or $0.20 per diluted share, for the third quarter of 2020.

On a Non-GAAP basis, net income was $12.9 million, or $0.38 per diluted share, for the third quarter of 2021 compared to $13.3 million, or $0.38 per diluted share, for the third quarter of 2020.

Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to the acquisition of Active Communications Europe assets; (iii) financial income or expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies and (iv) non-cash deferred tax expenses. 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 $13.0 million for the third quarter of 2021. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $184.9 million as of September 30, 2021 compared to $186.3 million as of December 31, 2020. Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were about the same as of the end of both periods as the use of cash for the repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the payment of cash dividends during 2021 was basically offset by cash generated from operating activities.

“We are pleased to report strong financial results for the third quarter of 2021,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

“In the third quarter of 2021 we saw continued momentum in our enterprise operations related to the UCaaS and Contact Center/customer experience (CX) markets. Contributing close to 85% of our revenues in the third quarter, and generating growth of above 20% year-over-year, the enterprise business provides a solid base for continued growth. At the core of this success was our UCaaS business which grew about 18% year-over-year and our contact center business which grew more than 20% year-over-year.”

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

“We experienced continued expansion in our services operations as revenues from services grew more than 25% year-over-year, representing close to 40% of our revenue in the third quarter of 2021 and becoming key to our continued business expansion. Growth in our services business was substantially related to the shift towards use of cloud communications and our focus on becoming a leading provider of Teams Voice as a Service. The increase in Services revenue was driven primarily by strength in our professional and managed services offerings. Key to this growth is our continued progress in generating recurring revenues with strong execution in our AudioCodes Live offering operations.”

“We continue to enjoy success in expanding our Voice.ai operations where bookings grew more than 100% year-over-year for both the three and nine month periods ended September 30, 2021. We now forecast Voice.ai bookings for 2021 to reach a level of $5M for the full year. We continue to invest heavily in this growth engine and believe that it will grow to become a meaningful line of business for us in coming years. Voice.ai which is part of our AudioCodes Live offering provides strong foundation for growth in recurring revenues over time,” concluded Mr. Adlersberg.

Share Buy Back Program

In July 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 January 03, 2022.

During the quarter ended September 30, 2021, the Company acquired 424,307 of its ordinary shares under its share repurchase program for a total consideration of $13.8 million.

Cash Dividend

On July 27, 2021, the Company declared a cash dividend of $0.17 per share. The dividend, in the aggregate amount of approximately $5.6 million, was paid on August 26, 2021 to all of the Company's shareholders of record on August 11, 2021.

In accordance with Israeli tax law, the dividend is subject to withholding tax at source at the rate of 25% of the dividend amount payable to each shareholder of record, subject to applicable exemptions. If the recipient of the dividend is at the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of the Company's share capital, the withholding rate is 30%.

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

Conference Call & Web Cast Information

AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's third quarter of 2021 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

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 Third Quarter 2021 Results

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AudioCodes Press Release

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.

©2021 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 Third Quarter 2021 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	September 30,		December 31,
	2021		2020
	(Unaudited)		(Audited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	88,448	$	40,934
Restricted cash		5,100		5,100
Short-term and restricted bank deposits		363		84,817
Short-term marketable securities and accrued interest		752		449
Trade receivables, net		40,270		34,518
Other receivables and prepaid expenses		8,102		8,631
Inventories		23,841		29,193
Total current assets		166,876		203,642

LONG-TERM ASSETS:
Long-term and restricted bank deposits	$	94	$	94
Long-term marketable securities and accrued interest		90,133		54,895
Deferred tax assets		9,362		12,081
Operating lease right-of-use assets		21,103		25,430
Severance pay funds		21,333		20,597
Total long-term assets		142,025		113,097

PROPERTY AND EQUIPMENT, NET		4,608		4,593

GOODWILL, INTANGIBLE ASSETS AND OTHER, NET		36,577		36,791

Total assets	$	350,086	$	358,123

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Current maturities of long-term bank loans	$	300	$	1,200
Trade payables		5,204		6,984
Other payables and accrued expenses		31,960		28,531
IIA settlement liability		11,860		11,684
Deferred revenues		40,268		37,182
Short-term operating lease liabilities		8,987		9,178
Total current liabilities		98,579		94,759

LONG-TERM LIABILITIES:
Accrued severance pay	$	21,858	$	21,830
Deferred revenues and other liabilities		13,388		12,243
Long-term operating lease liabilities		12,760		19,436
Total long-term liabilities		48,006		53,509

Total shareholders’ equity		203,501		209,855
Total liabilities and shareholders' equity	$	350,086	$	358,123

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except per share data

	Nine months ended						Three months ended
	September 30,						September 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Revenues:
Products	$	113,423		$	107,688		$	38,610		$	36,987
Services		69,398			54,420			24,798			19,577
Total Revenues		182,821			162,108			63,408			56,564
Cost of revenues:
Products		40,483			42,313			13,513			14,520
Services		15,884			11,839			5,772			4,065
Total Cost of revenues		56,367			54,152			19,285			18,585
Gross profit		126,454			107,956			44,123			37,979
Operating expenses:
Research and development, net		38,944			33,544			14,172			10,738
Selling and marketing		45,460			38,107			15,781			12,521
General and administrative		11,797			10,073			4,172			3,495
Total operating expenses		96,201			81,724			34,125			26,754
Operating income		30,253			26,232			9,998			11,225
Financial income, net		1,099			958			103			504
Income before taxes on income		31,352			27,190			10,101			11,729
Taxes on income, net		(4,856	)		(8,323	)		(1,838	)		(4,765	)
Net income	$	26,496		$	18,867		$	8,263		$	6,964
Basic net earnings per share	$	0.81		$	0.61		$	0.25		$	0.21
Diluted net earnings per share	$	0.78		$	0.58		$	0.24		$	0.20
Weighted average number of shares used in computing basic net earnings per share (in thousands)		32,790			30,951			32,618			32,673
Weighted average number of shares used in computing diluted net earnings per share (in thousands)		34,005			32,484			33,843			34,198

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

U.S. dollars in thousands, except per share data

	Nine months ended						Three months ended
	September 30,						September 30,
	2021			2020			2021		2020
	(Unaudited)						(Unaudited)
GAAP net income	$	26,496		$	18,867		$	8,263	$	6,964
GAAP net earnings per share	$	0.78		$	0.58		$	0.24	$	0.20
Cost of revenues:
Share-based compensation (1)		277			157			123		58
Amortization expenses (2)		204			204			68		68
		481			361			191		126
Research and development, net:
Share-based compensation (1)		2,018			764			776		274
Selling and marketing:
Share-based compensation (1)		4,246			2,668			1,401		1,045
Amortization expenses (2)		10			45			2		15
		4,256			2,713			1,403		1,060
General and administrative:
Share-based compensation (1)		3,286			1,984			1,174		720
		3,286			1,984			1,174		720
Financial expenses (income):
Exchange rate differences (3)		(944	)		(871	)		38		(418	)

Income taxes:
Deferred tax (4)		2,763			7,678			1,094		4,524
Non-GAAP net income	$	38,356		$	31,496		$	12,939	$	13,250
Non-GAAP diluted net earnings per share	$	1.11		$	0.96		$	0.38	$	0.38

(1)

Share-based compensation expenses related to options and restricted share units granted to employees and others.

(2)

Amortization of intangible assets related to the acquisitions of Active Communications Europe assets.

(3)

Financial expenses (income) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.

(4)

Non-cash deferred tax expenses.

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 Third Quarter 2021 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended						Three months ended
	September 30,						September 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Cash flows from operating activities:
Net income	$	26,496		$	18,867		$	8,263		$	6,964
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,746			1,681			588			562
Amortization of marketable securities premiums and accretion of discounts, net		1,241			38			500			38
Increase (decrease) in accrued severance pay, net		(708	)		423			284			(201	)
Share-based compensation expenses		9,827			5,573			3,474			2,097
Decrease in deferred tax assets, net		2,729			7,637			1,082			4,510
Increase in accrued interest and exchange rate effect of loans, marketable securities and bank deposits		(31	)		(19	)		(54	)		(20	)
Decrease in operating lease right-of-use assets		5,705			5,720			1,843			1,822
Decrease in operating lease liabilities		(8,245	)		(7,506	)		(3,638	)		(3,322	)
Changes in IIA settlement liability, net		176			271			235			210
Increase in trade receivables, net		(5,752	)		(3,653	)		(3,267	)		(1,010	)
Increase in other receivables and prepaid expenses		(960	)		(1,749	)		(1,757	)		(1,732	)
Decrease (increase) in inventories		4,748			(2,454	)		794			(1,046	)
Increase (decrease) in trade payables		(1,780	)		(34	)		2,588			1,983
Increase (decrease) in other payables and accrued expenses		3,429			(304	)		3,197			673	))
Increase (decrease) in deferred revenues		4,470			3,898			(1,119	)		692
Net cash provided by operating activities		43,091			28,389			13,013			10,874
Cash flows from investing activities:
Investment in short-term deposits		-			(84,000	)		-			(84,000	)
Proceeds from short-term deposits		84,454			674			151			223
Proceeds from long-term deposits		-			225			-			75
Proceeds from redemption of marketable securities		1,053			-			-			-
Purchase of marketable securities		(41,094	)		(27,664	)		(23,569	)		(27,664	)
Proceeds from sale of marketable securities		2,571			-			2,061			-
Purchase of property and equipment		(943	)		(1,112	)		(527	)		(471	)
Net cash provided by (used in) investing activities		46,041			(111,877	)		(21,884	)		(111,837	)

AudioCodes Reports Third Quarter 2021 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended						Three months ended
	September 30,						September 30,
	2021			2020			2021			2020
	(Unaudited)						(Unaudited)
Cash flows from financing activities:
Purchase of treasury shares		(31,199	)		-			(13,848	)		-
Repayment of bank loans		(900	)		(1,865	)		(300	)		(627	)
Cash dividends paid to shareholders		(10,865	)		(7,587	)		(5,563	)		(3,721	)
Proceeds from issuance of shares, net		-			85,426			-			(228	)
Proceeds from issuance of shares upon exercise of options and warrants		1,346			1,376			609			325
Net cash provided by (used in) financing activities		(41,618	)		77,350			(19,102	)		(4,251	)

Net increase (decrease) in cash, cash equivalents, and restricted cash		47,514			(6,138	)		(27,973	)		(105,214	)
Cash, cash equivalents and restricted cash at beginning of period		46,034			69,773			121,521			168,849
Cash, cash equivalents and restricted cash at end of period	$	93,548		$	63,635		$	93,548		$	63,635

AudioCodes Reports Third Quarter 2021 Results

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