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 Second Quarter 2024 Results and Declares SemiAnnual Dividend of 18 cents per share
Or Yehuda, Israel – July 30, 2024 -Second Quarter Highlights•

Quarterly revenues increased by 0.5% year-over-year to $60.3 million;•

Quarterly service revenues increased by 12.3% year-over-year to $32 million;•

GAAP results:•oQuarterly GAAP gross margin was 65.5%;oQuarterly GAAP operating margin was 8.2%;oQuarterly GAAP EBITDA was $6.2 million;oQuarterly GAAP net income was $3.8 million, or $0.12 per diluted share.

Non-GAAP results:oQuarterly Non-GAAP gross margin was 65.8%;oQuarterly Non-GAAP operating margin was 11.9%;oQuarterly Non-GAAP EBITDA was $8.3 million;oQuarterly Non-GAAP net income was $5.5 million, or $0.18 per diluted share.

•

Net cash used by operating activities was $2.9 million for the quarter.

•

AudioCodes repurchased 116,453 of its ordinary shares during the quarter at an aggregate cost of $1.2
million.

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

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 second quarter ended June 30, 2024.
Revenues for the second quarter of 2024 were $60.3 million compared to $60.0 million for the second quarter of 2023.
EBITDA for the second quarter of 2024 was $6.2 million compared to $2.9 million for the second quarter of 2023.
On a Non-GAAP basis, EBITDA for the second quarter of 2024 was $8.3 million compared to $6.2 million for the second
quarter of 2023.
Net income was $3.8 million, or $0.12 per diluted share, for the second quarter of 2024 compared to net income of$1.1 million, or $0.03 per diluted share, for the second quarter of 2023.
On a Non-GAAP basis, net income was $5.5 million, or $0.18 per diluted share, for the second quarter of 2024
compared to $5.1 million, or $0.16 per diluted share, for the second quarter of 2023.
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related tointangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Callverso Ltd; (iv)financial income (expenses) related to exchange rate differences in connection with revaluation of assets andliabilities in non-dollar denominated currencies; (v) tax impact which relates to our Non-GAAP adjustments; and (vi)in Q1 2024 non-cash lease expense which is required to be recorded during the quarter even though this is a freerent period under the lease for the Company’s new headquarters. A reconciliation of net income on a GAAP basis toa non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements
contained in this press release.
Net cash used by operating activities was $2.9 million for the second quarter of 2024. Cash and cash equivalents,
short-term bank deposits, long and short-term marketable securities and long financial investments were $93.7 million
as of June 30, 2024 compared to $106.7 million as of December 31, 2023. The decrease in cash and cash equivalents,
short-term bank deposits, long and short-term marketable securities and long financial investments was the result of
the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchaseprogram and the payment of a cash dividend during the first quarter of 2024 and purchase of property and equipment
related to leasehold improvements of our new corporate headquarter in Israel, offset, in part, by cash from operating
activities.

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release“I am pleased to report solid second quarter 2024 results, marked by the second consecutive quarter of positive topline growth and ongoing momentum in our Microsoft and conversational AI businesses with sequential uptick in ourlegacy gateway business,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
In terms of our strategic business lines, Microsoft Teams business in the second quarter grew 3.3% year-over-year,with steady increase in the Live managed services, which grew about 35% year-over-year and reached ARR of $56
million exiting second quarter 2024. Second quarter Live business growth puts us on track to land within our full year
2024 ARR target range of $64-$70 million, representing an average approximate annual growth rate of 40%
compared to 2023.
In the CX business, our healthy pipeline continues to support a positive outlook for second half and full year 2024.
Conversational AI business grew over 50% year-over-year, benefiting from customers’ inexorable demand to drive
innovation and deliver productivity improvements on projects in both the UC and CX space. We have witnessed
progress made in several new Conversational AI activities. These include among others, Voca CIC, our AI first CX
solution for Microsoft Teams, SaaS Recording solutions such as Meeting Insights and interaction recording, and in
the MS Teams meeting room space.
Underlying business momentum remains strong, as we had several notable wins with marquee accounts in thequarter, from a combination of new customer additions as well as cross-sell of products and services to existing
ones. Key to such cross sales success is our Live Platform for UCaaS and CCaaS, which encompasses a comprehensive
stack of voice related services to the Microsoft Teams ecosystem.
Overall, we delivered on our business priorities in the quarter, fostering momentum in strategic areas of ourbusiness and successfully executing on the cost rationalization initiatives. We believe this lays the foundation todrive healthy top-line growth long-term while driving significant margin expansion in 2024 and beyond,” concluded
Mr. Adlersberg.

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

Share Buy Back Program
During the quarter ended June 30, 2024, the Company acquired 116,453 of its ordinary shares under its share
repurchase program for a total consideration of $1.2 million.
In July 2024, the Company received court approval in Israel to purchase up to an aggregate amount of $20 million of
additional ordinary shares. The court approval also permits AudioCodes to declare a dividend out of any part of thisamount. The approval is valid through January 1, 2025.

Cash Dividend
AudioCodes also announced today that the Company’s Board of Directors has declared a cash dividend in the amountof 18 cents per share. The aggregate amount of the dividend is approximately $5.5 million. The dividend is payable on
August 29, 2024, to all of the Company’s shareholders of record at the close of trading on the NASDAQ Global SelectMarket on August 15, 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
the time of distribution or was at any time during the preceding 12-month period the holder of 10% or more of theCompany'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 second quarterof 2024 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.

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

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 andoperate 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 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 theproducts and operations of acquired companies into AudioCodes’ business; possible adverse impact of the COVID-19 pandemic on our businessand results of operations; the effects 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 our ability to produce and sell our solutions; any disruption in our operations by the obligations of ourpersonnel to perform military service as a result of 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 are trademarks or registered trademarks of AudioCodes Limited. All otherproducts or trademarks are property of their respective owners. Product specifications are subject to change without notice.

Summary financial data follows

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30,
2024(Unaudited)

December 31,
2023(Audited)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Short-term and restricted bank deposits
Short-term marketable securities
Trade receivables, net
Other receivables and prepaid expenses
Inventories$ 20,849
206
21,11355,0109,146
37,893$ 30,546
212
7,438
51,125
9,381
43,959Total current assets

144,217

142,661

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$ 16,680
48,944
2,557
5,966
34,263
16,975$ 16,798
65,732
2,730
6,208
36,712
17,202

Total long-term assets

125,385

145,382

PROPERTY AND EQUIPMENT, NET

21,846

10,893GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,31538,581$ 329,763$ 337,517

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

5,102
26,36939,9885,931

7,556
29,94338,8207,878

Total current liabilities

77,39084,197$ 15,956
17,27731,024$ 16,662
17,142
31,404

Total long-term liabilities

64,257

65,208

Total shareholders’ equity

188,116

188,112$ 329,763$ 337,517

Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITYLONG-TERM LIABILITIES:
Accrued severance pay
Deferred revenues and other liabilities
Long-term operating lease liabilities

Total liabilities and shareholders' equity

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

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

Six months ended
June 30,
2024
2023

Three months ended
June 30,
2024
2023(Unaudited)(Unaudited)

Revenues:
Products
Services$ 56,897
63,482$ 60,260
58,973$ 28,347
31,956$ 31,567
28,453

Total Revenues

120,379

119,233

60,30360,020

Cost of revenues:
Products
Services

22,743
19,49425,221
18,992

10,9189,910

12,177
9,366

Total Cost of revenues

42,23744,213

20,82821,543Gross profit

78,14275,02039,47538,477

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

27,11434,8207,991

29,40335,526
8,680

13,181
17,453
3,905

14,394
17,6794,149

Total operating expenses

69,92573,60934,53936,222

Operating income
Financial income (expenses), net

8,217
419

1,411
1,196

4,936
396

2,255
247

Income before taxes on income
Taxes on income, net

8,636(2,779)2,607(1,734)

5,332(1,558)2,502(1,447)

Net income$ 5,857$ 873$ 3,774$ 1,055

Basic net earnings per share$ 0.19$ 0.03$ 0.12$ 0.03

Diluted net earnings per share$ 0.19$ 0.03$ 0.12$ 0.03Weighted average number of shares used incomputing basic net earnings per share (inthousands)

30,33732,02430,341

31,900Weighted average number of shares used incomputing diluted net earnings per share (inthousands)

30,76433,01730,73532,977

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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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
Six months ended
June 30,
2024
2023(Unaudited)Three months ended
June 30,
2024
2023(Unaudited)

GAAP net income$ 5,857$ 873$ 3,774$ 1,055

GAAP net earnings per share$ 0.19$ 0.03$ 0.12$ 0.03

Cost of revenues:
Share-based compensation (1)

175

210

96

103

244
304
723

257
467

122
218

122
225

1,171
342
1,513

1,441
250
1,691

579
579

698
125
823

1,472
22
38
1,532

2,330
22
250
2,602

749
11
760

1,093
11
125
1,229

1,434
76
1,510

2,428
2,428

692
692

1,169
1,169

Financial expenses (income):
Exchange rate differences (4)

)809(

)470(

(445)

71

Income taxes:
Taxes on income, net (5)

422

224

)49(

562

$ 10,748$ 7,815$ 5,529$ 5,134

Non-GAAP diluted net earnings per share$ 0.34$ 0.24$ 0.18$ 0.16Weighted average number of shares used in computing
Non-GAAP diluted net earnings per share (in thousands)

31,561

32,97731,55233,017

Amortization expenses (2)Lease expenses (6)Research and development, net:
Share-based compensation (1)Deferred payments expenses (3)Lease expenses (6)Selling and marketing:Share-based compensation (1)Amortization expenses (2)Deferred payments expenses (3)Lease expenses (6)General and administrative:
Share-based compensation (1)Lease expenses (6)Non-GAAP net income

(1)
(2)
(3)
(4)
(5)
(6)

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.
Financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominatedcurrencies.
Tax impact which relates to our non-GAAP adjustments.
In Q1 2024, 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 theCompany’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

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release
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 second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

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

Cash flows from operating activities:
Net income

Six months ended
June 30,
2024
2023

Three months ended
June 30,
2024
2023(Unaudited)(Unaudited)$ 5,857$ 873$ 3,774$ 1,055

1,784

1,320

1,261

669

615
(479)
4,252
64
154
3,557
(3,435)(3,767)

712
(272)
6,409
168
(332)
4,282
(4,355)
6,939

301
(369)
2,116
850
69
1,168
(1,324)(6,083)

340
(288)
3,063
534
58
2,132
(818)
428

235
5,947
(2,454)

1,911(9,512)(4,218)

(305)
2,689
(2,220)1,727(3,746)(3,462)(1,605)
1,365(4,934)6,443

127(4,945)

(869)
1,383

Net cash provided by operating activities

12,0905,434(2,891)

2,206

Cash flows from investing activities:
Proceeds from short-term deposits
Proceeds from financial investment
Proceeds from redemption of marketable securities
Proceeds from redemption of financial investments
Purchase of property and equipment

6
47
3,450
(15,263)

5,006
2,000
11,043(3,263)2
26
2,950(8,478)

2
1,000
8,294
(1,947)

Net cash provided by (used in) investing activities(11,760)

14,786(5,500)7,349

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
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
Decrease in operating lease liabilities
Decrease (increase) in trade receivables, net
Decrease (increase) in other receivables and prepaid
expenses
Decrease (increase) in inventories
Decrease in trade payables
Increase (decrease) in other payables and accrued
expenses
Increase (decrease) in deferred revenues

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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AudioCodes Press Release

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

Cash flows from financing activities:
Purchase of treasury shares
Cash dividends paid to shareholders

Six months ended
June 30,
2024
2023

Three months ended
June 30,
2024
2023(Unaudited)(Unaudited)(4,754)(5,453)(2,926)(5,718)(1,170)-(2,926)
-

180

114

-

18

Net cash used in financing activities(10,027)(8,530)(1,170)(2,908)Net increase (decrease) in cash, cash equivalents, andrestricted cash

(9,697)

11,690(9,561)

6,647

Cash, cash equivalents and restricted cash at beginningof period

30,546

24,53530,41029,578

Cash, cash equivalents and restricted cash at end of
period$ 20,849$ 36,225$ 20,849$ 36,225

Proceeds from issuance of shares upon exercise of
options

AudioCodes Reports second Quarter 2024 Results and Declares Semi-Annual Dividend of 18 cents per share

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