AudioCodes: Margins Improve, But Growth Still Missing

Jun. 18, 2025 3:56 AM ETAudioCodes Ltd. (AUDC) StockAUDC
(12min)

Summary

  • AudioCodes is transitioning successfully to a service-led model, with services now contributing over 53% of revenue, driving higher margins and recurring cash flows.
  • Revenue growth remains flat, with 2024 revenue slightly down and only modest 2025 guidance, suggesting the turnaround is still in progress.
  • Deep integrations with Microsoft Teams and Genesys Cloud position AudioCodes well in the unified communications and contact center markets, but competition from larger players like Cisco and Oracle limits upside.
  • Valuation is modest at ~10x forward P/E and ~0.85x EV/sales, reflecting market caution amid low growth and execution risks.
  • Technical setup remains weak, and a re-rating likely requires clear momentum in AI-driven software sales and sustained ARR growth.
Artificial Intelligence in network space

Hiroshi Watanabe

Introduction

AudioCodes (NASDAQ:AUDC) is a mixed investment. Though management has successfully transitioned the company toward recurring revenue and improved profitability, the top-line growth has continued to be weak. This limited momentum is being translated into subdued investor sentiment and conservative valuation multiples. Strategically

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