AudioCodes Ltd. reported first‑quarter 2026 results, with revenue of $62.1 million, up 2.9% from $60.4 million a year earlier. GAAP net income was $2.0 million, or $0.07 per diluted share, down from $4.0 million and $0.13 a year ago. Non‑GAAP net income was $3.8 million, or $0.14 per diluted share, versus $4.7 million and $0.15 a year earlier.
Annual recurring revenue climbed to $80 million, a 20% year‑over‑year increase, driven by the Live suite of managed services and the Conversational AI business. The Conversational AI segment grew more than 50% year‑over‑year, while services revenue represented 54.7% of total revenue at $34 million.
Cash and cash equivalents stood at $68.1 million as of March 31, 2026, down from $75.7 million at the end of 2025. The decline was largely due to a $5.3 million dividend paid on March 6 and share repurchases of approximately 1.7 million shares for $13.7 million during the quarter.
Management reaffirmed its full‑year 2026 guidance, projecting revenue of $247 million to $255 million and non‑GAAP EPS of $0.60 to $0.75. The guidance reflects confidence in continued demand for the company’s AI‑driven services, even as it invests heavily in the Conversational AI platform.
Consensus analyst estimates for the quarter ranged from $0.16 to $0.17 per share, so the reported $0.14 non‑GAAP EPS missed expectations by 12–17%. Revenue beat estimates by about $0.6 million, or roughly 1%, driven by strong demand for services. Investors reacted negatively, citing the EPS miss as the primary driver of the market’s response.
President and CEO Shabtai Adlersberg said the quarter “made important progress in our transformation into an AI‑driven hybrid cloud software and services organization.” He highlighted sustained momentum in the Live suite and Conversational AI, noting that the company’s focus on AI‑powered solutions is positioning it for long‑term growth.
The results underscore a strategic shift toward higher‑margin, recurring revenue streams, but also reveal short‑term profitability pressure from AI investments. While the company’s ARR and Conversational AI growth signal strong tailwinds, the EPS miss and margin compression highlight headwinds that may temper near‑term earnings until the AI platform matures.
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