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 First Quarter 2024 Results
Lod, Israel – May 7, 2024 -First Quarter Highlights•

Quarterly revenues increased by 1.5% year-over-year to $60.1 million;•Quarterly service revenues increased by 3.3% year-over-year to $31.5 million;•GAAP results:•oQuarterly GAAP gross margin was 64.4%;

oQuarterly GAAP operating margin was 5.5%;oQuarterly GAAP net income was $2.1 million, or $0.07 per diluted share.

Non-GAAP results:
oQuarterly Non-GAAP gross margin was 65.2%;

oQuarterly Non-GAAP operating margin was 10.5%;

oQuarterly Non-GAAP net income was $5.2 million, or $0.17 per diluted share.

•Net cash provided by operating activities was $15.0 million for the quarter.

•AudioCodes declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of $5.5million, was paid on March 6, 2024 to shareholders of record on February 20, 2024.

•

AudioCodes repurchased 301,937 of its ordinary shares during the quarter at an aggregate cost of $3.6
million.

AudioCodes Reports First Quarter 2024 Results

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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 first quarter ended March 31, 2024.
Revenues for the first quarter of 2024 were $60.1 million compared to $59.2 million for the first quarter of 2023.
Net income was $2.1 million, or $0.07 per diluted share, for the first quarter of 2024 compared to net loss of $0.2million, or $0.01 per diluted share, for the first quarter of 2023.
On a Non-GAAP basis, net income was $5.2 million, or $0.17 per diluted share, for the first quarter of 2024 compared
to $2.7 million, or $0.08 per diluted share, for the first 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 related to exchange rate differences in connection with revaluation of assets and liabilities in nondollar denominated currencies; (v) non-cash deferred tax expenses (income); and (vi) non-cash lease expense whichis required to be recorded during the quarter even though this is a free rent period under the lease for theCompany’s new headquarters. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in thetables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities was $15.0 million for the first quarter of 2024. Cash and cash equivalents,
long and short-term bank deposits, long and short-term marketable securities and long and short-term financial
investments were $106.0 million as of March 31, 2024 compared to $106.7 million as of December 31, 2023. The
decrease in cash and cash equivalents, long and short-term bank deposits, long and short-term marketable securities
and long and short-term financial investments was the result of the use of cash for the continued repurchasing of theCompany’s ordinary shares pursuant to its share repurchase program and the payment of a cash dividend during thefirst quarter of 2024, , offset, in part, by cash from operating activities.
“Our first quarter 2024 results were highlighted by healthy revenue growth of 1.5% year-over-year and progress
made in strategic areas for our business”, said Shabtai Adlersberg, President and Chief Executive Officer ofAudioCodes. “In parallel with the nice growth in key business lines such as Microsoft Teams, voice services for CX,
and conversational AI applications, we saw continued decline in our legacy gateway networking business, similar totrends seen in 2023. The continued transition from capex to recurring revenue model also posed revenue headwinds
in the quarter.

AudioCodes Reports First Quarter 2024 Results

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Growth in key business lines for our future continued as planned. Microsoft business grew 8% year-over-year, withsteady increase in the Live managed services, which grew 45% year-over-year, and have reached ARR of $53M
exiting 1Q24. We are thus confident that we are on track to achieve our Live ARR plan of $64-$70 million for 2024.
Live managed services represent now nearly 45% of our Microsoft business compared to 25% in the year ago
quarter, and thus we believe the impact of our shift to recurring revenue model should ease in coming quarters. We
also enjoyed growth in total contract value of Live services which grew above 45% year-over-year. Additionally, wehave seen strong performance in customer experience (CX) and conversational AI (CAI), up 15% and 50% year overyear, respectively. The strength has been driven by sales of our voice connectivity solutions in the CX market, andcross-selling of our Voca CIC AI first, Azure-native contact center for Teams. We are heartened by the market’s
growing recognition of Voca CIC, which has recently been awarded by CX Today as the best Microsoft Teams Contact
Center solution. We expect Voca CIC to be a major growth pillar of our CX and of the Company over the long-term.
We believe we are the de facto leader for complete calling and contact center solutions for Microsoft Teams.
On the financial front, we enjoyed strong positive cash flow from operations in the quarter. To support further
margin expansion, we have recently initiated the second phase of cost rationalization plans discussed previously.
Overall, while we had a slower than expected start of revenue growth to the year due to the decline in gateways andmuted business spending as a result of the elevated interest rate environment in 2024, we remain confident in ourability to sustain healthy top-line growth long-term while driving significant margin expansion in 2024 and beyond,”
concluded Mr. Adlersberg.

AudioCodes Reports First Quarter 2024 Results

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Share Buy Back Program and Cash Dividend
In December 2023, 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 this amount. The approval is valid through June 18, 2024.
On February 6, 2024, the Company declared a cash dividend of 18 cents per share. The dividend, in the aggregate
amount of approximately $5.5 million, was paid on March 6, 2024 to all of the Company's shareholders of record onFebruary 20, 2024.
During the quarter ended March 31, 2024, the Company acquired 301,937 of its ordinary shares under its share
repurchase program for a total consideration of $3.6 million.
As of March 31, 2024, the Company had $10.2 million available under this approval for the repurchase of shares and/ordeclaration of cash dividends.

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 of2024 operating performance, financial results and outlook. Interested parties may participate in the conference callby 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 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.
AudioCodes Reports First Quarter 2024 Results

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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, mayaffect 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 OneVoice, 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 First Quarter 2024 Results

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31,2024(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$ 30,410
208
15,322
48,977
8,841
40,658$ 30,546
212
7,438
51,125
9,381
43,959Total current assets

144,416

142,661

LONG-TERM ASSETS:
Long-term Trade receivables
Long-term marketable securities
Long-term financial investments
Deferred tax assetsOperating lease right-of-use assets
Severance pay funds$ 16,630
57,5322,543
6,890
35,061
17,219$ 16,798
65,732
2,730
6,208
36,712
17,202

Total long-term assets

135,875

145,382

PROPERTY AND EQUIPMENT, NET

17,394

10,893GOODWILL, INTANGIBLE ASSETS AND OTHER, NET

38,44838,581$ 336,133$ 337,517

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

7,322
28,46044,312
6,474

7,556
29,94338,8207,878

Total current liabilities

86,56884,197$ 16,569
17,92931,435$ 16,662
17,142
31,404

Total long-term liabilities

65,93365,208

Total shareholders’ equity

183,632

188,112$ 336,133$ 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 First Quarter 2024 Results

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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
Three months ended
March 31,2024

2023(Unaudited)

Revenues:
Products
Services$ 28,550
31,526$ 28,693
30,520Total Revenues

60,07659,213

Cost of revenues:
Products
Services

11,825
9,584

13,044
9,626

Total Cost of revenues

21,40922,670Gross profit

38,66736,543Operating expenses:
Research and development, net
Selling and marketing
General and administrative

13,93317,367
4,086

15,00917,847
4,531

Total operating expenses

35,38637,387

Operating income (loss)
Financial income, net

3,281
23(844)
949

Income before taxes on income

3,304

105

Taxes on income, net(1,221)(287)

Net income (loss)$ 2,083$ (182)

Basic net earnings (loss) per share$ 0.07$ (0.01)

Diluted net earnings (loss) per share$ 0.07$ (0.01)

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

30,33331,750Weighted average number of shares used in computing diluted net
earnings per share (in thousands)

30,79332,148

AudioCodes Reports First Quarter 2024 Results

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AUDIOCODES LTD. AND ITS SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
U.S. dollars in thousands, except per share data
Three months ended
March 31,20242023(Unaudited)
GAAP net income (loss)$ 2,083$ (182)GAAP net earnings (loss) per share$ 0.07$ (0.01)

79
122
304
505

107
135
242

592
342
934

743
125
868

723
11
38
772

1,237
11
125
1,373

742
76
818

1,259

Financial expenses:
Exchange rate differences (4)

(364)

(541)

Income taxes:
Deferred tax (5)471)338(Non-GAAP net income$ 5,219$ 2,681

Non-GAAP diluted net earnings per share$ 0.17$ 0.08Weighted average number of shares used in computing Non-GAAP
diluted net earnings per share (in thousands)

31,57033,056

Cost of revenues:
Share-based compensation (1)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)

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

1,259

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 expenses related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
Non-cash deferred tax expenses.
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 newheadquarters.

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.

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AudioCodes Press Release

AUDIOCODES LTD. AND ITS SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
Three months ended
March 31,2024
2023(Unaudited)
Cash flows from operating activities:
Net income (loss)$ 2,083$ (182)Adjustments required to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization

523

651

Amortization of marketable securities premiums and accretion ofdiscounts, net
Increase (decrease) in accrued severance pay, net
Share-based compensation expenses
Increase in deferred tax assets, net
Cash financial loss (income), net
Decrease in operating lease right-of-use assets
Decrease in operating lease liabilities
Decrease in trade receivables, net
Decrease in other receivables and prepaid expenses
Decrease (increase) in inventories
Decrease in trade payables
Decrease in other payables and accrued expenses
Increase in deferred revenues

314(110)
2,136)786(852,389(2,111)
2,316
540
3,258
(234)
(1,732)
6,310

372
16
3,346)366((390)2,150(3,537)
6,511
184
(5,766)(756)(4,065)
5,060

Net cash provided by operating activities

14,981

3,228

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

4
21500(6,785)

5,004
1,000
2,749
(1,316)

Net cash provided by (used in) investing activities(6,260)7,437

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AudioCodes Press Release

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

Three months ended
March 31,2024
2023(Unaudited)
Cash flows from financing activities:
Purchase of treasury shares
Cash dividends paid to shareholders
Proceeds from issuance of shares upon exercise of options(3,584)(5,453)180(5,718)96

Net cash used in financing activities(8,857)(5,622)

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

(136)

5,043

Cash, cash equivalents and restricted cash at beginning of period

30,546

24,535$ 30,410$ 29,578

Cash, cash equivalents and restricted cash at end of period

AudioCodes Reports First Quarter 2024 Results

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