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      AudioCodes Reports Fourth Quarter and Full Year 2021 Results and Declares Semi-Annual Dividend of 18 cents per share


      News provided by

      AudioCodes

      Feb 01, 2022, 02:00 ET

      Share this article

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      LOD, Israel, Feb. 1, 2022 /PRNewswire/ --

      Fourth Quarter and Full Year 2021 Highlights

      • Quarterly revenues increased by 12.7% year-over-year to $66.1 million; full 2021 year revenues increased by 12.7% to $248.9 million.
      • Quarterly service revenues increased by 16.2% year-over-year to $24.4 million; full 2021 year service revenues increased by 24.4% to $93.8 million.
      • GAAP results:
        - Quarterly GAAP gross margin was 67.2%;
        - Quarterly GAAP operating margin was 14.0%;
        - Quarterly GAAP net income was $7.3 million, or $0.22 per diluted share; and
        - Full 2021 year GAAP net income was $33.8 million, or $1.00 per diluted share.
      • Non-GAAP results:
        - Quarterly Non-GAAP gross margin was 67.6%;
        - Quarterly Non-GAAP operating margin was 20.4%;
        - Quarterly Non-GAAP net income was $13.4 million, or $0.39 per diluted share; and
        - Full 2021 year Non-GAAP net income was $51.8 million, or $1.50 per diluted share.
      • Net cash provided by operating activities was $4.3 million for the quarter and $47.3 million for the full year.
      • AudioCodes repurchased 314,227 of its ordinary shares during the quarter at an aggregate cost of $10.7 million.

      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 fourth quarter and full year periods ended December 31, 2021.

      Revenues for the fourth quarter of 2021 were $66.1 million compared to $63.4 million for the third quarter of 2021 and $58.7 million for the fourth quarter of 2020. Revenues were $248.9 million in 2021 compared to $220.8 million in 2020.

      Net income was $7.3 million, or $0.22 per diluted share, for the fourth quarter of 2021 compared to $8.4 million, or $0.24 per diluted share, for the fourth quarter of 2020. Net income was $33.8 million, or $1.00 per diluted share, in 2021 compared to $27.2 million, or $0.83 per diluted share, in 2020.

      On a Non-GAAP basis, net income was $13.4 million, or $0.39 per diluted share, for the fourth quarter of 2021 compared to $15.2 million, or $0.44 per diluted share, for the fourth quarter of 2020. Non-GAAP net income was $51.8 million, or $1.50 per diluted share, in 2021 compared to $46.7 million, or $1.41 per diluted share, in 2020.

      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 expenses 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. 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 $4.3 million for the fourth quarter of 2021 and $47.3 million for 2021. Net cash provided by operating activities in both periods was impacted by the $12.2 million payment made in December 2021 which was the third and last installment payment pursuant to the royalty buyout agreement.

      Cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities were $174.8 million as of December 31, 2021 compared to $186.3 million as of December 31, 2020. The decrease in cash and cash equivalents, long and short-term bank deposits and long and short-term marketable securities 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 2021, offset, in part, by cash provided by operating activities.

      "We are pleased to report strong financial results for the fourth quarter and full year 2021 which demonstrate exceptional performance for the Company. With year over year growth in annual revenues accelerating from 10.2% in 2020 to 12.7% in 2021, ongoing improved gross margin, stronger competitive positioning, and expansion of our core service offerings, 2021 sets the stage for success in coming years" said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.

      "We executed successfully on our long term strategic plan while pivoting the business towards greater contribution from recurring revenues and Cloud Communications," Mr. Adlersberg continued. "At the heart of our success was our offering and sales of solutions for Microsoft UC, which grew about 20% year over year. Additionally, our contact center business in the quarter grew 12% YoY and more than 15% for the full year. Enterprise contributed nearly 85% of our revenue during the year, growing above 15% in 2021. Our AudioCodes Live managed service performance exceeded our internal expectations, with ARR exiting this year well above our target of $15 million, and more than doubling from a year ago. Our services revenue grew 24.4% year-on-year and accounted for 37.7% of revenues, up from 34.2% a year ago.  Additionally, our pipeline continues to expand across core areas of our business, supported by long-term trends of migration of voice infrastructure to the cloud, hybrid work, and enhanced customer engagement and experience (CX) solutions powered by AI."

       "While still a small percentage of our revenues, Voice.ai bookings and revenues grew over 100% during the year, eclipsing our projection of $5 million booking for the year. We now project this business should nearly double again in 2022. In the 4th quarter of 2021, we announced the acquisition of Callverso which specializes in development and deployment of state-of-the-art virtual agent solutions for contact center applications. This acquisition further strengthens AudioCodes' ability to help contact centers improve their customer experience while reducing operational costs," concluded Mr. Adlersberg.

      Acquisition of Callverso Ltd.

      In November 2021, the Company acquired Callverso, a leading Israeli developer and provider of conversational AI solutions for contact centers. This acquisition is intended to add Callverso's Conversational AI capabilities to AudioCodes portfolio of innovative contact center solutions and Live CX services that already cover high quality voice connectivity, work from home solutions, contextual click-to-call and voice channel integration with chatbots. The Company acquired Callverso for cash plus an earn-out arrangement based on attaining certain sales targets over the next three years.

      Share Buy Back Program

      During the quarter ended December 31, 2021, the Company acquired 314,227 of its ordinary shares under its share repurchase program for a total consideration of $10.7 million.

      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.

      Cash Dividend

      AudioCodes also announced today that the Company's Board of Directors has declared a cash dividend in the amount of 18 cents per share. The aggregate amount of the dividend is approximately $5.8 million. The dividend is payable on March 1, 2022, to all of the Company's shareholders of record at the close of trading on the NASDAQ Global Select Market on February 15, 2022. 

      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%.

      The dividend will be paid in U.S. dollars on the ordinary shares of AudioCodes Ltd. that are traded on the Nasdaq Global Select Market or the Tel-Aviv Stock Exchange. The amount and timing of any other dividends will be determined by the Board.

      Conference Call & Web Cast Information

      AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company's fourth quarter and full year 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.

      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 LTD. AND ITS SUBSIDIARIES

      CONDENSED CONSOLIDATED BALANCE SHEETS

      U.S. dollars in thousands  






      December 31,


      December 31,


      2021


      2020


      (Unaudited)


      (Audited)

      ASSETS








      CURRENT ASSETS:




      Cash and cash equivalents

      $ 79,423


      $ 40,934

      Restricted cash

      5,100


      5,100

      Short-term and restricted bank deposits

      220


      84,817

      Short-term marketable securities and accrued interest

      669


      449

      Trade receivables, net

      48,956


      34,518

      Other receivables and prepaid expenses

      9,197


      8,631

      Inventories

      23,988


      29,193

      Total current assets

      167,553


      203,642





      LONG-TERM ASSETS:




      Long-term and restricted bank deposits

      $ 94


      $ 94

      Long-term marketable securities and accrued interest

      89,307


      54,895

      Deferred tax assets

      8,812


      12,081

      Operating lease right-of-use assets

      16,457


      25,430

      Severance pay funds

      22,724


      20,597

      Total long-term assets

      137,394


      113,097





      PROPERTY AND EQUIPMENT, NET

      4,394


      4,593





      GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

      39,930


      36,791





      Total assets

      $ 349,271


      $ 358,123





      LIABILITIES AND SHAREHOLDERS' EQUITY








      CURRENT LIABILITIES:




      Current maturities of long-term bank loans

      $            -


      $ 1,200

      Trade payables

      7,863


      6,984

      Other payables and accrued expenses

      38,350


      28,531

      IIA settlement liability

      -


      11,684

      Deferred revenues

      41,591


      37,182

      Short-term operating lease liabilities

      8,139


      9,178

      Total current liabilities

      95,943


      94,759





      LONG-TERM LIABILITIES:




      Accrued severance pay

      $ 22,895


      $ 21,830

      Deferred revenues and other liabilities

      13,544


      12,243

      Long-term operating lease liabilities

      11,391


      19,436

      Total long-term liabilities

      47,830


      53,509





      Total shareholders' equity

      205,498


      209,855

      Total liabilities and shareholders' equity

      $ 349,271


      $ 358,123


      AUDIOCODES LTD. AND ITS SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



       Year ended


      Three months ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020


      (Unaudited)

      (Audited)


      (Unaudited)

      Revenues:








      Products

      $ 155,089


      $ 145,332


      $ 41,666


      $ 37,644

      Services

      93,831


      75,442


      24,433


      21,022

      Total Revenues

      248,920


      220,774


      66,099


       

      58,666

      Cost of revenues:








      Products

      52,750


      54,384


      14,305


      12,071

      Services

      25,279


      16,574


      7,357


      4,735

      Total Cost of revenues

      78,029


      70,958


      21,662


      16,806

      Gross profit

      170,891


      149,816


      44,437


      41,860

      Operating expenses:








      Research and development, net

      53,396


      46,072


      14,452


      12,528

      Selling and marketing

      62,057


      51,217


      16,597


      13,110

      General and administrative

      15,914


      14,177


      4,117


      4,104

      Total operating expenses

      131,367


      111,466


      35,166


      29,742

      Operating income

      39,524


      38,350


      9,271


      12,118

      Financial income (loss), net

      123


      (1,703)


      (976)


      (2,661)

      Income before taxes on income

      39,647


      36,647


      8,295


      9,457

       

      Taxes on income, net

      (5,896)


      (9,399)


      (1,040)


      (1,076)

      Net income

      $ 33,751


      $ 27,248


      $ 7,255


      $ 8,381

      Basic net earnings per share

      $ 1.03


      $ 0.87


      $ 0.22


      $ 0.25

      Diluted net earnings per share

      $ 1.00


      $ 0.83


      $ 0.22


      $ 0.24

      Weighted average number of shares used in
      computing basic net earnings per share (in
      thousands)

      32,703


      31,440


      32,445


      32,907

      Weighted average number of shares used in
      computing diluted net earnings per share (in
      thousands)

      33,846


      32,916


      33,555


      34,210










      AUDIOCODES LTD. AND ITS SUBSIDIARIES

      RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

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



      Year ended


      Three months ended


      December 31,


      December 31,


      2021


      2020


      2021


      2020


      (Unaudited)

      (Audited)


      (Unaudited)

      GAAP net income

      $ 33,751


      $ 27,248


      $ 7,255


      $ 8,381

      GAAP net earnings per share

      $ 1.00


      $ 0.83


      $ 0.22


      $ 0.24

      Cost of revenues:








      Share-based compensation (1)

      411


      181


      134


      24

      Amortization expenses (2)

      340


      272


      136


      68


      751


      453


      270


      92

      Research and development, net:








      Share-based compensation (1)

      2,772


      1,535


      754


      771

      Deferred payments expenses (3)

      70


      -


      70


      -


      2,842


      1,535


      824


      771

      Selling and marketing:








      Share-based compensation (1)

      6,170


      3,635


      1,924


      967

      Amortization expenses (2)

      18


      60


      8


      15

      Deferred payments expenses (3)

      70


      -


      70


      -


      6,258


      3,695


      2,002


      982

      General and administrative:








      Share-based compensation (1)

      4,811


      3,420


      1,525


      1,436

      Other Income (4)

      (382)


      -


      (382)


      -


      4,429


      3,420


      1,143


      1,436

      Financial expenses:








      Exchange rate differences (5)

      294


      1,973


      1,238


      2,844









      Income taxes:








      Deferred tax (6)

      3,463


      8,398


      700


      720

      Non-GAAP net income

      $ 51,788


      $ 46,722


      $ 13,432


      $ 15,226

      Non-GAAP diluted net earnings per share

      $ 1.50


      $ 1.41


      $ 0.39


      $ 0.44

      Weighted average number of shares used in
      computing Non-GAAP diluted net earnings per share
      (in thousands)

      34,432


      33,254


      34,183


      34,682











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

      (6)  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 LTD. AND ITS SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

      U.S. dollars in thousands




      Year ended


      Three months ended




      December 31,


      December 31,




      2021


      2020


      2021


      2020




      (Unaudited)

      (Audited)


      (Unaudited)


      Cash flows from operating activities:










      Net income


      $ 33,751


      $ 27,248


      $ 7,255


      $ 8,381


      Adjustments required to reconcile net income to net cash provided by operating activities:










      Depreciation and amortization


      2,432


      2,268


      686


      587


      Amortization of marketable securities premiums and accretion of discounts, net


      1,589


      172


      348


      134


      Increase (decrease) in accrued severance pay, net


      (1,062)


      290


      (354)


      (133)


      Share-based compensation expenses


      14,164


      8,771


      4,337


      3,198


      Decrease in deferred tax assets, net


      3,406


      8,329


      677


      692


      Increase (decrease) in accrued interest and exchange rate effect of loans, marketable securities and bank deposits


      54


       

      (26)


      85


      (7)


      Decrease in operating lease right-of-use assets


      7,445


      7,913


      1,740


      2,193


      Increase (decrease) in operating lease liabilities


      (7,556)


      (6,717)


      689


      789


      Changes in IIA settlement liability, net


      (11,684)


      (9,815)


      (11,860)


      (10,086)


      Increase in trade receivables, net


      (14,438)


      (7,017)


      (8,686)


      (3,364)


      Decrease (increase) in other receivables and prepaid expenses


      (1,221)


       

      (1,516(


      (261)


      233


      Decrease (increase) in inventories


      4,504


      (1,525)


      (244)


      929


      Increase in trade payables


      879


      356


      2,659


      390


      Increase in other payables and accrued expenses


      9,601


      3,839


      6,172


      4,143


      Increase in deferred revenues


      5,480


      5,906


      1,010


      2,008


      Net cash provided by operating activities


      47,344


      38,476


      4,253


      10,087


      Cash flows from investing activities:










      Investment in short-term deposits


      -


      (84,000)


      -


      (75)


      Proceeds from short-term deposits


      84,597


      599


      143


      -


      Proceeds from long-term deposits


      -


      600


      -


      375


      Proceeds from redemption of marketable securities


      3,240


      -


      2,187


      -


      Purchase of marketable securities


      (43,808)


      (54,977)


      (2,714)


      (27,313(


      Proceeds from sale of marketable securities


      2,571


      -


      -


      -


      Net cash paid in acquisition of subsidiary


      (2,804)


      -


      (2,804)


      -


      Purchase of property and equipment


      (1,174)


      (1,530)


      (231)


      (418)


      Net cash provided by (used in) investing activities


      42,622


      (139,308)


      (3,419)


      (27,431)























      AUDIOCODES LTD. AND ITS SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

      U.S. dollars in thousands




      Year ended


      Three months ended



      December 31,


      December 31,



      2021


      2020


      2021


      2020



      (Unaudited)

      (Audited)


      (Unaudited)

      Cash flows from financing activities:









      Purchase of treasury shares


      (41,849)


      -


      (10,650)


      -

      Repayment of bank loans


      (1,200)


      (2,497)


      (300)


      (632)

      Cash dividends paid to shareholders


      (10,865)


      (8,442)


      -


      (855)

      Proceeds from issuance of shares, net


      -


      85,426


      -


      -

      Proceeds from issuance of shares upon exercise of options and warrants


      2,437


      2,606


      1,091


      1,230

      Net cash provided by (used in) financing activities


      (51,477)


      77,093


      (9,859)


      (257)










      Net increase (decrease) in cash, cash equivalents, and restricted cash


      38,489


      (23,739)


      (9,025)


      (17,601)

      Cash, cash equivalents and restricted cash at beginning of period


      46,034


      69,773


      93,548


      63,635

      Cash, cash equivalents and restricted cash at end of period


      $ 84,523


      $ 46,034


      $ 84,523


      $ 46,034











                                                                                                                             

      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]

      SOURCE AudioCodes

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