The following is a summary of the AudioCodes Ltd. (AUDC) Q1 2024 Earnings Call Transcript:

Financial Performance:

• AudioCodes reported Q1 revenues of $60.1 million, a marginal increase of 1.5% from the previous year.

• The gross margin rose to 64.4% from 61.7% in Q1 2023, indicating an improvement in cost efficiency.

• Non-GAAP net income for Q1 2024 clocked in at $5.2 million, a significant increase from $2.7 million in Q1 2023.

• The company made a substantial investment in improving its new corporate headquarter in Israel and executed a headcount reduction expected to result in annual savings of $6 million.

• Its full-year guidance for 2024 predicts revenues in the range of $240 to $250 million and non-GAAP diluted net income per share between $0.85 and $1.

Business Progress:

• AudioCodes is transitioning from a network equipment vendor to a software and services company.

• Microsoft and Teams business grew by 8% and 9.6% respectively year-over-year.

• Services accounted for more than half of revenues, marking a significant transition in the company's revenue streams.

• The company expects to continue strong growth in its live business for Microsoft Teams and its new Voca CIC solution.

• It also plans to further reduce its headcount as part of a cost reduction initiative, set to be executed in Q2 and Q3 2024.

• The company is looking to increase its service output from the 50% benchmark set last year, targeting a rate of 52-55% for this year.

• It anticipates the transition from a CapEx model to an OpEx model to continue through 2023, 2024, and possibly the first half of 2025.

• Despite a decline in the legacy business, the company maintains a positive outlook for its service pipelines for the rest of FY 2024.

More details: AudioCodes IR

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