6-K
Audiocodes Ltd (AUDC)
UNITEDSTATES
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<br> and | |
| Chief Financial Officer |
Dated: May 2, 2022
EXHIBIT INDEX
Exhibit 1
| AudioCodes<br> Press Release |
|---|
PRESS RELEASE
| Company Contacts | |
|---|---|
| Niran Baruch,<br><br> Chief Financial Officer<br><br> AudioCodes<br><br> <br>Tel: +972-3-976-4000<br><br> [email protected] | Roger L. Chuchen<br><br> <br>VP, Investor Relations<br><br> AudioCodes<br><br> <br>Tel: 732-764-2552<br><br> <br>Mobile: 347-752-0780<br><br> <br>[email protected] |
AudioCodesReports First Quarter 2022 Results
Lod, Israel –May 2, 2022 - AudioCodes (NASDAQ: AUDC) Press Release
First Quarter Highlights
| · | Quarterly<br> revenues increased by 12.8% year-over-year to $66.4 million. |
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| · | Quarterly<br> service revenues increased by 26.2% year-over-year to $27.5 million. |
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| · | GAAP<br> results: |
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| o | Quarterly GAAP<br> gross margin was 66.9%; |
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| o | Quarterly GAAP<br> operating margin was 12.1%; and |
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| o | Quarterly GAAP<br> net income was $8.6 million, or $0.26 per diluted share. |
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| · | Non-GAAP<br> results: |
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| o | Quarterly Non-GAAP<br> gross margin was 67.2%; |
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| o | Quarterly Non-GAAP<br> operating margin was 18.0%; and |
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| o | Quarterly Non-GAAP<br> net income was $11.2 million, or $0.33 per diluted share. |
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| · | Net<br> cash provided by operating activities was $938,000 for the quarter. |
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| · | AudioCodes<br> declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of<br> $5.8 million, was paid on March 1, 2022 to shareholders of record on February 15, 2022. |
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| · | AudioCodes<br> repurchased 720,124 of its ordinary shares during the quarter at an aggregate cost of $20.9<br> million. |
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| AudioCodes Reports First Quarter 2022 Results | Page<br> 1 of<br> 10 |
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| AudioCodes Press Release | |
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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<br> 2 of<br> 10 |
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| AudioCodes Press Release | |
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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 Programand 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<br> 3 of<br> 10 |
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| AudioCodes Press Release | |
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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 |
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| AudioCodes Press Release | |
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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 |
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| AudioCodes Press Release | |
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| March 31, | December 31, | |||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (Unaudited) | (Audited) | |||
| ASSETS | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ | 37,978 | $ | 79,423 |
| Restricted cash | - | 5,100 | ||
| Short-term and restricted bank deposits | 5,217 | 220 | ||
| Short-term marketable securities and accrued interest | 750 | 669 | ||
| Trade receivables, net | 50,130 | 48,956 | ||
| Other receivables and prepaid expenses | 10,170 | 9,197 | ||
| Inventories | 25,347 | 23,988 | ||
| Total current assets | 129,592 | 167,553 | ||
| LONG-TERM ASSETS: | ||||
| Long-term and restricted bank deposits | $ | 94 | $ | 94 |
| Long-term marketable securities and accrued interest | 84,561 | 89,307 | ||
| Long Term financial investments | 15,469 | - | ||
| Deferred tax assets | 10,481 | 8,905 | ||
| Operating lease right-of-use assets | 15,524 | 16,457 | ||
| Severance pay funds | 21,329 | 22,724 | ||
| Total long-term assets | 147,458 | 137,487 | ||
| PROPERTY AND EQUIPMENT, NET | 4,197 | 4,394 | ||
| GOODWILL, INTANGIBLE ASSETS AND OTHER, NET | 39,729 | 39,930 | ||
| Total assets | $ | 320,976 | $ | 349,364 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Trade payables | 6,017 | 7,863 | ||
| Other payables and accrued expenses | 33,048 | 38,350 | ||
| Deferred revenues | 42,572 | 41,591 | ||
| Short-term operating lease liabilities | 8,136 | 8,139 | ||
| Total current liabilities | 89,773 | 95,943 | ||
| LONG-TERM LIABILITIES: | ||||
| Accrued severance pay | $ | 20,812 | $ | 22,895 |
| Deferred revenues and other liabilities | 15,122 | 13,637 | ||
| Long-term operating lease liabilities | 7,605 | 11,391 | ||
| Total long-term liabilities | 43,539 | 47,923 | ||
| Total shareholders’ equity | 187,664 | 205,498 | ||
| Total liabilities and shareholders' equity | $ | 320,976 | $ | 349,364 |
| AudioCodes Reports First Quarter 2022 Results | Page 6 of 10 | |||
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| AudioCodes Press Release | ||||
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, exceptper 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 | |||||
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATIONOF GAAP NET INCOME TO NON-GAAP NET INCOME
U.S. dollars in thousands, exceptper 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<br> to options and restricted share units granted to employees and others. | |||||
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| (2) | Amortization expenses related to intangible<br> assets. | |||||
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| (3) | Expenses related to deferred payments in<br> connection with the acquisition of Callverso Ltd. | |||||
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| (4) | Other income related to a payment made<br> to AudioCodes Inc. in connection with the termination of a lease agreement for its offices<br> in New Jersey. | |||||
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| (5) | Financial income related to exchange rate<br> differences in connection with revaluation of assets and liabilities in non-dollar denominated<br> currencies. | |||||
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| (6) | Non-cash deferred tax expenses (income). | |||||
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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 |
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| AudioCodes Press Release | |
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSEDCONSOLIDATED 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 | |||||
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| AudioCodes Press Release | ||||||
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AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSEDCONSOLIDATED 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<br> 10 of 10 | |||||
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Exhibit 2
1Q 2022 Earnings Call Supplementary Slides
1Q 2022 Earnings Call Supplementary Slides Safe Harbor This presentation contains forward - looking statements . All 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 “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “guide,” “may,” “will” and similar expressions and their negatives are intended to identify forward looking 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 objectives and financial 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 compliance with applicable laws, as well as other risks and uncertainties set forth in the “Risk Factors” section of our latest Form 20 - F filed with the Securities and Exchange Commission and any subsequent reports that we file with the Securities and Exchange Commission . Moreover, 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 can 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 make . In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward - looking statements will occur . We are under no obligation to update any of these forward - looking statements after the date of this presentation to conform these statements to actual results or revised expectations, except as required by law . You should, therefore, not rely on these forward - looking statements as representing our views as of any date subsequent to the date of this presentation . This presentation also includes certain guidance on non - GAAP financial measures . These non - GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP . There are a number of limitations related to the use of these non - GAAP financial measures versus their nearest GAAP equivalents . For example, other companies may calculate non - GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company’s non - GAAP financial measures as tools for comparison . The Company provides a reconciliation of certain non - GAAP measures to the most directly comparable GAAP measures, which are available 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 Q 1 2022 (the “Q 1 Press Release”) . The Q 1 Press Release contains additional information regarding our financial outlook and certain non - GAAP metrics and their reconciliations . The information contained in this presentation, or delivered or to be delivered in connection with this presentation, does not constitute an offer, express or implied, or a recommendation to do any transaction, or make any investment, in our securities or in any securities of our affiliates or subsidiaries .
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
1Q 2022 Earnings Call Supplementary Slides 1Q’22 Operational and Customer Highlights Working with a large SI, signed a contract with global healthcare company for ~3k seats; potential to reach over 50k seats Launched Live Express, a multitenant SaaS offering, enabling VAR/SI partners to offer Microsoft Teams voice via Direct Routing Certified by Microsoft as an Operator Connect Accelerator partner and released updated Live Cloud white - label, multi - tenant SaaS offering for service providers Colt selects AudioCodes to deliver Microsoft Operator Connect Working with a Tier - 1 service provider, signed a 78 - month contract with global freight transport company for $ 5 M TCV AudioCodes ranked # 1 Enterprise SBC vendor in 2021 by Omdia
1Q 2022 Earnings Call Supplementary Slides 1Q’22 Financial Highlights Total revenues of $66.4M vs. $58.8M in 1Q’21, up 12.8% yoy Service revenues of $27.5M vs. $21.8M in 1Q’21, up 26.2% yoy Non - GAAP Gross Margin of 67.2 % * vs. 68.7 % in 1 Q ’ 21 Non - GAAP Operating Margin at 18.0% * vs. 20.4% in 4Q’21 Non - GAAP EPS of $ 0.33 * vs. $ 0.37 in 1 Q ’ 21 Product revenues of $ 38.8 M vs. $ 37.0 M in 1 Q ’ 21 , up 4.9 % yoy * Impacted primarily by higher - than - expected component procurement costs
1Q 2022 Earnings Call Supplementary Slides 1 Q ’ 22 Business Performance Enterprise business grew > 15 % yoy Unified Communications & Collaboration (UCC) grew > 20% yoy Microsoft business grew > 25% yoy Customer Experience (CX) down high - single digits % yoy Conversational AI (CAI), including Intelligent Virtual Agent (IVA), up 40% yoy Service provider/ Other business down ~ 10 % yoy ~ 85% Enterprise ~ 15 % Service Provider/ Other ~ 85 % UCC ~ 15% CX + CAI Enterprise Business
1 Q 2022 Earnings Call Supplementary Slides Ongoing Shift to Services Revenue 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 $ 37.6 $37.0 $37.8 $38.6 $ 41.7 $ 38.8 $21.0 $21.8 $ 22.8 $24.8 $24.4 $27.5 $0.0 $25.0 $50.0 $75.0 4Q:20 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 Products Services $ 58.7 $ 60.6 $63.4 $66.1 $ 58.8 $66.4 35.8% 37.1% 37.6 % 39.1 % 37.0% 41.5% 30.0% 35.0% 40.0% 45.0% 4Q:20 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 (USD Millions)
1Q 2022 Earnings Call Supplementary Slides Non - GAAP Gross Margin 63.7 % 68.1% 69.0% 60.0% 65.0% 70.0% 2019 2020 2021 68.7% 69.7 % 69.9 % 67.6% 67.2 % * 60.0% 65.0% 70.0% 75.0% 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 Mix shift to services contributing to increasing gross margins annually, offset by temporarily elevated supply chain costs in 2022 * Excluding open market component costs of $1.4 million, 1Q’22 non - GAAP gross margin would have been 69.3%
1Q 2022 Earnings Call Supplementary Slides Non - GAAP Operating Margin Balancing revenue growth with investments to capitalize on significant secular growth opportunities 22.4 % 22.4% 21.4 % 20.4 % 18.0% * 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1Q:21 2Q:21 3Q:21 4Q:21 1Q:22 14.1% 21.5 % 21.6 % 10.0% 15.0% 20.0% 25.0% 2019 2020 2021 * Excluding open market components costs of $ 1.4 million, 1 Q ’ 22 non - GAAP operating margin would have been 20 .1 %
1Q 2022 Earnings Call Supplementary Slides AudioCodes Live On track to more than double Live ARR in 2022 December 2022 December 2021 December 2020 $ 6.5 $ 15 $30 + $0 $10 $20 $30 $40 (Achieved) (Achieved) (Target) (USD Millions)
1Q 2022 Earnings Call Supplementary Slides ʥʣʥʥ Outlook Revenues (in million) $ 277 - $ 285 $1.40 - $1.60 Non - GAAP EPS
1Q 2022 Earnings Call Supplementary Slides Three - Year Financial Model And Long - Term Targets 2019 2020 1 Q 22 LONG - TERM TARGETS Revenue growth Non - GAAP Gross margin Non - GAAP OPEX as % of revenues Non - GAAP Operating margin 13.7 % 63.7 % 49.6 % 14.1 % 10.2% 68.1 % 46.6% 21.5 % 12.8 % 67.2 % * 49.3 % 18.0 % * 13% - 15% 67 % - 70 % 47% - 50% 20 % - 23 % 2021 12.7 % 69.0 % 47.3 % 21.6% * Impacted primarily by higher - than - expected component procurement costs
1Q 2022 Earnings Call Supplementary Slides GAAP to Non - GAAP Reconciliation 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 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 .
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