AudioCodes Press Release

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
roger.chuchen@audiocodes.com

AudioCodes Reports Fourth Quarter and Full Year 2023 Results andDeclares Semi-Annual Dividend of 18 cents per share
Lod, Israel – February 6, 2024 -Fourth Quarter and Full Year 2023 Highlights•

Quarterly revenues increased by 3.2% sequentially to $63.6 million;
full year 2023 revenues decreased by 11.2% to $244.4 million.

•

Quarterly Service revenues of $30.9 million accounted for 48.6% of revenues;
full year 2023 service revenues increased by 8.7% to $120.4 million.

•

GAAP results:oQuarterly GAAP gross margin was 66.7% compared to 66.5% in the prior quarter;o

Quarterly GAAP operating margin was 11.4% compared to 9.4% in the priorquarter;oQuarterly GAAP net income was $3.7 million, or $0.12 per diluted share compared to $4.3 million, or$0.14 per diluted share, in the prior quarter;o•Full 2023 year GAAP net income was $8.8 million, or $0.28 per diluted share.

Non-GAAP results:oQuarterly Non-GAAP gross margin was 67.6% compared to 67.3% in the prior quarter;o

Quarterly Non-GAAP operating margin was 16.9% compared to 15.5% in the priorquarter;oQuarterly Non-GAAP net income was $8.9 million, or $0.28 per diluted share compared to $8.3
million, or $0.25 per diluted share in the prior quarter;o•Full 2023 year Non-GAAP net income was $25.0 million, or $0.77 per diluted share.

Net cash provided by operating activities was $9.3 million for the quarter and $14.9 million for the full year.

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 1 of 11

AudioCodes Press Release•

AudioCodes repurchased 595,583 of its ordinary shares during the quarter at an aggregate cost of $6.3 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 period
ended December 31, 2023.
Revenues for the fourth quarter of 2023 were $63.6 million compared to $61.6 million for the third quarter of 2023.
Revenues were $244.4 million in 2023 compared to $275.1 million in 2022.
Net income was $3.7 million, or $0.12 per diluted share, for the fourth quarter of 2023 compared to $4.3 million, or $0.14
per diluted share, for the third quarter of 2023. Net income was $8.8 million, or $0.28 per diluted share, in 2023 compared
to $28.5 million, or $0.88 per diluted share, in 2022.
On a Non-GAAP basis, net income was $8.9 million, or $0.28 per diluted share, for the fourth quarter of 2023 compared
to $8.3 million, or $0.25 per diluted share, for the third quarter of 2023. Non-GAAP net income was $25.0 million, or $0.77
per diluted share, in 2023 compared to $45 million, or $1.35 per diluted share, in 2022.
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 thetermination of a lease agreement for its offices in New Jersey; (v) financial income related to exchange rate differencesin connection with revaluation of assets and liabilities in non-dollar denominated currencies; (vi) non-cash deferred tax
expenses (income); and (vii) non-cash lease expense which is required to be recorded during the quarter even though
this is a free rent period under the lease for the Company’s new headquarters. 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 $9.3 million for the fourth quarter of 2023 and $14.9 million for 2023.
Cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities and long andshort-term financial investments were $106.7 million as of December 31, 2023 compared to $124.3 million as of December
31, 2022. The decrease in cash and cash equivalents, long and short-term bank deposits, long and short-term marketablesecurities and long and short-term financial investments was the result of the use of cash for the continued repurchasing

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 2 of 11

AudioCodes Press Releaseof the Company’s ordinary shares pursuant to its share repurchase program and the payment of a cash dividend during
each of the first and third quarters of 2023.
“I am pleased to report solid fourth quarter 2023 results with strength across the strategic areas of our business,” said
Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
We continued to perform well in the enterprise space with business reaching roughly 90% for the fourth quarter and thefull year. Microsoft-related business in the quarter grew 5% year-over-year, within which Teams grew 10% year-overyear. Full year Microsoft increased 7% year over year while Teams related business grew 13% year over year. We
experienced continued strong momentum of our AudioCodes Live managed services, with ARR growing 50% year-overyear ending the quarter at $48 million, consistent with our expectations.
Importantly, our customer experience (CX) and conversational AI (CAI) operations have clearly emerged as a second
major growth pillar in our business. CX growth accelerated in the fourth quarter to over 40% year-over -year and to 19%
for the full year. Conversational AI bookings grew over 50% for the quarter and the full year. Leading the growth in the
CX and CAI markets has been Voca CIC, our Azure-native CCaaS solution for the Teams ecosystem, having won two large
opportunities in North America. We have also seen solid growth with Meeting Insights, our enterprise grade solution forthe meeting space.
On the operations side, I am glad to report solid progress in non-GAAP gross margin, which has recovered from early2023 to reach 67.6%. Coupled with disciplined expense management, non-GAAP operating margin reached 16.9% in thequarter. With continued focus on shifting our business model into subscription and recurring sales, and the shift tohigher margin cloud software solutions, we are making significant progress in our transformation to becoming asoftware and services company. With increased focus and investments in technologies and services for the UCaaS, CX
and Conversational AI markets backed by strong Live bookings mainly in Teams, Live CX, and Voca CIC, we believe we areon the right path to execute on our plan to achieve revenue growth and drive improved profitability in 2024,” concluded
Mr. Adlersberg.

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 3 of 11

AudioCodes Press Release

Share Buy Back Program
During the quarter ended December 31, 2023, the Company acquired 595,583 of its ordinary shares under its share
repurchase program for a total consideration of $6.3 million.
In December 2023, the Company received court approval in Israel to purchase up to an aggregate amount of $20 millionof additional ordinary shares. The court approval also permits AudioCodes to declare a dividend out of any part of thisamount. The approval is valid through June 18, 2024.
As of December 31, 2023, the Company had $19.2 million available under the approval for the repurchase of shares and/or
declaration of cash dividends.
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 $5.5 million. The dividend is payable on March
6, 2024, to all of the Company’s shareholders of record at the close of trading on the NASDAQ Global Select Market on
February 20, 2024.
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 thetime 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 andfull year of 2023 operating performance, financial results and outlook. Interested parties may participate in the conference
call by dialing one of the following numbers:
United States Participants: 888-506-0062
International Participants: +1 (973) 528-0011

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 4 of 11

AudioCodes Press Release

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 andproductivity 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 abroad range of innovative products, solutions and services that are used by large multi-national enterprises and leadingtier-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 ofcompetitive 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 operationsof acquired companies into AudioCodes’ business; possible adverse impact of the COVID-19 pandemic on our business and results of operations; theeffects of the current terrorist attacks by Hamas in Israel, and the war and hostilities between Israel and Hamas, and Israel and Hezbollah as well as
the possibility that this could develop into a broader regional conflict involving Israel with other parties, may affect our operations and may limit ourability to produce and sell our solutions; any disruption in our operations by the obligations of our personnel to perform military service as a resultof current or future military actions involving Israel; 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.
©2024 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. Allother products or trademarks are property of their respective owners. Product specifications are subject to change without notice.

Summary financial data follows

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 5 of 11

AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31,
2023(Unaudited)

December 31,
2022(Audited)

CURRENT ASSETS:
Cash and cash equivalents
Short-term and restricted bank deposits
Short-term marketable securities
Short-term financial investments
Trade receivables, net
Other receivables and prepaid expenses
Inventories
Total current assets$ 30,546
212
7,438
51,125
9,381
43,959142,661$ 24,535
5,210
2,120
15,25856,42410,00636,377
149,930

LONG-TERM ASSETS:
Long-term Trade receivables
Long-term marketable securities
Long-term financial investments
Deferred tax assets
Operating lease right-of-use assets
Severance pay funds
Total long-term assets$ 16,798
65,732
2,730
6,208
36,712
17,202
145,382$ 13,099
75,946
1,242
9,073
13,517
17,933130,810PROPERTY AND EQUIPMENT, NET

10,8933,965

GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,581

39,126$ 337,517$ 323,831

CURRENT LIABILITIES:
Trade payables
Other payables and accrued expenses
Deferred revenues
Short-term operating lease liabilities
Total current liabilities

7,556
29,94338,8207,878
84,197

11,33838,316
36,634
8,169
94,457

LONG-TERM LIABILITIES:
Accrued severance pay
Deferred revenues and other liabilities
Long-term operating lease liabilities
Total long-term liabilities$ 16,662
17,142
31,40465,208$ 17,755
16,3085,551
39,614

Total shareholders’ equity

188,112

189,760$ 337,517$ 323,831

ASSETS

Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY

Total liabilities and shareholders' equity

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 6 of 11

AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data

Revenues:
Products
ServicesYear ended

Three months ended

December 31,

December 31,

2023

2022

(Unaudited)(Audited)

2023

2022
(Unaudited)$ 123,991
120,392$ 164,302
110,791$ 32,692
30,867$ 42,017
28,639Total Revenues

244,383

275,093

63,55970,656

Cost of revenues:
Products
Services

47,96438,07063,68632,62911,396
9,771

15,835
8,663

Total Cost of revenues

86,03496,315

21,167

24,498Gross profit

158,349

178,778

42,392

46,158Operating expenses:
Research and development, net
Selling and marketing
General and administrative

57,16970,243
16,513

59,842
70,123
17,494

13,806
17,496
3,856

15,09018,088
4,644

Total operating expenses

143,925

147,459

35,15837,822

Operating income
Financial income (loss), net

14,424)52(

31,3192,864

7,234(1,740)8,336
669

Income before taxes on income

14,372

34,183

5,494

9,005

Taxes on income, net(5,592)(5,717)(1,839)(1,456)

Net income$ 8,780$ 28,466$ 3,655$ 7,549

Basic net earnings per share$ 0.28$ 0.89$ 0.12$ 0.24

Diluted net earnings per share$ 0.28$ 0.88$ 0.12$ 0.23Weighted average number of shares used incomputing basic net earnings per share (inthousands)

31,401

31,84930,67831,642

Weighted average number of shares used incomputing diluted net earnings per share (inthousands)

31,57932,50030,89332,145

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 7 of 11

AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
U.S. dollars in thousands, except per share data
Year ended
December 31,
2022(Unaudited)(Audited)(Unaudited)

GAAP net income$ 8,780$ 28,466$ 3,655$ 7,549

GAAP net earnings per share$ 0.28$ 0.88$ 0.12$ 0.23

388
501
685
1,574

425
760
1,185

84
122
363
569

125
190
315

2,685
770
430
3,885

3,481
500
3,981

595
408
55
1,058

839
125
964

4,297
44
86
430
4,857

6,032
44
500
6,576

917
11
46
55
1,029

1,338
11
125
1,474

4,010
171
4,181

5,184
(1,093)
4,091

768
91
859

1,450
1,450

205

(1,321)

1,442

(227)

1,549

1,974

302

398

$ 25,031$ 44,952$ 8,914$ 11,923$ 0.77$ 1.35$ 0.28$ 0.3632,63733,35931,93733,088

Cost of revenues:
Share-based compensation (1)Amortization expenses (2)Lease expenses (7)Research and development, net:
Share-based compensation (1)Deferred payments expenses (3)Lease expenses (7)Selling and marketing:Share-based compensation (1)Amortization expenses (2)Deferred payments expenses (3)Lease expenses (7)General and administrative:
Share-based compensation (1)Other Income (4)Lease expenses (7)Financial expenses:
Exchange rate differences (5)Income taxes:
Deferred tax (6)Non-GAAP net income
Non-GAAP diluted net earnings per share
Weighted average number of shares used incomputing Non-GAAP diluted net earnings per share(in thousands)
(1)
(2)
(3)
(4)
(5)
(6)

2023

Three months ended
December 31,
2023
2022

Share-based compensation expenses related to options and restricted share units granted to employees and others.
Amortization expenses related to intangible assets.
Expenses related to deferred payments in connection with the acquisition of Callverso Ltd.
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.
Financial expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
Non-cash deferred tax expenses.

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 8 of 11

AudioCodes Press Release(7)

Non-cash lease expense which is required to be recorded during the quarter even though this is a free rent period under the lease for the Company’s new
headquarters.

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 ofoperating 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 Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 9 of 11

AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
Year ended
December 31,
2023

2022

Three months ended
December 31,
2023
2022

(Unaudited)(Audited)(Unaudited)

Cash flows from operating activities:
Net income$ 8,780$ 28,466$ 3,655$ 7,549

2,596

2,984

624

723

1,348
(362)
11,380
1,437
(218)
9,281
(6,914)
1,600

1,533
(349)
15,122
1,780
(912)
6,712
(9,582)(20,567)

321
131
2,364
273
179
2,593
1,497
(3,045)

378
(17)
3,752
356
(184)
2,073
(324)
(8,080)625(7,791)(3,782)(1,621)(12,653)
3,475

(947)
814
918

(277)
(4,605)(1,164)(6,233)
3,144(4,077)(2,030)

181
(279)

2,126
(1,883)

14,891

8,281

9,279

423

Investment in short-term deposits
Proceeds from short-term deposits
Proceeds from long-term deposits
Proceeds from redemption of marketable securities
Proceeds from redemption of financial investments
Purchase of financial investments
Proceeds from sale of marketable securities
Net cash paid in acquisition of subsidiary
Purchase of property and equipment

4,998
3,084
14,094(81)
3,846(5,965)(5,000)
10
94
1,123
1,052
(16,615)
2,250(1,100)(1,487)

(10)
(664)

1,052
(405)
2,250
(1,000)(336)

Net cash provided by (used in) investing activities

19,976(19,673)

(674)

1,556

Adjustments required to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
Amortization of marketable securities premiums andaccretion of discounts, net
Increase (decrease) in accrued severance pay, net
Share-based compensation expenses
Decrease in deferred tax assets, net
Cash financial loss (income), net
Decrease in operating lease right-of-use assets
Increase (decrease) in operating lease liabilities
Decrease (increase( in trade receivables, net
Decrease (increase) in other receivables and prepaid
expenses
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in other payables and accrued
expenses
Increase (decrease) in deferred revenues
Net cash provided by operating activities
Cash flows from investing activities:(5)

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 10 of 11

AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands

Year ended
December 31,

Cash flows from financing activities:
Purchase of treasury shares
Cash dividends paid to shareholders
Proceeds from issuance of shares upon exercise of
options and warrants

2023

2022

Three months ended
December 31,
2023
2022

(Unaudited)(Audited)(Unaudited)(18,259)(11,399)(38,099)(11,552)(6,286)-(2,858)
-

802

1,055

548

522

(28,856)(48,596)(5,738)(2,336)

Net increase (decrease) in cash, cash equivalents, andrestricted cash

6,011

(59,988)

2,867

(357)

Cash, cash equivalents and restricted cash at beginningof period

24,53584,52327,67924,892

Cash, cash equivalents and restricted cash at end of
period$ 30,546$ 24,535$ 30,546$ 24,535

Net cash used in financing activities

AudioCodes Reports Fourth Quarter and Full Year 2023 Results and Declares Semi-Annual Dividend of 18 cents per share

Page 11 of 11