AudioCodes has announced its first-quarter revenues will fall below initial estimates, with economic uncertainty a factor.
AudioCodes’ first-quarter sales are anticipated between $58.5 million and $60 million, 10-12 percent lower than in 2022. These figures are below February’s previous estimates intended to provide guidance for the full financial year.
Mr. Shabtai Adlersberg, President and CEO of AudioCodes, said:
“Our first quarter results were impacted by general uncertainty in key global economies affecting customers’ spending decisions, with demand weakness concentrated mainly in the EMEA region. In addition, we saw North America service providers more tightly manage their inventories, which contributed to revenue decline.”
Record-high levels of inflation affecting many countries, a global energy crisis, and the economic knock-on effects of Russia’s invasion of Ukraine all contribute to customers and service providers tightening their budgets. Although unified communications and collaboration is a booming industry, the external context creates a problematic market for growth, naturally impacting vendors like AudioCodes.
Other findings from AudioCodes’ financial results include that net cash provided by operating activities for the first quarter is expected to be between $2 million and $3 million, clearly affected by current market instability.
Adlersberg added that the voice service vendor plans to reconsider its financial perspective later this year: “We intend to revise our outlook and guidance for 2023 at the time of our first quarter 2023 financial results conference call scheduled for May 9, 2023, as well as announce our plans to align our operating expenses for the year to our current business environment.”
AudioCodes Enjoyed Previous Year-on-Year Growth
AudioCodes had seen significant quarterly growth over the course of 2022, including annual revenues of $275.1 million in 2022 compared to $248.9 million in 2021. AudioCodes’ Zoom and Microsoft Teams collaboration offerings represented the primary drivers of this growth. Last year, the voice service company recorded 50 percent growth in both Zoom and Teams.
AudioCodes also introduced its entry-level Microsoft Teams-native conversational AI-first contact centre application in 2022, and plans to expand upon this product in 2023.
Adlersberg annotated AudioCodes’ financial report for 2022 and partly outlined its 2023 strategic plans in February of this year. “We see growing business activity in UCaaS and CX,” Adlersberg said, “and with the ongoing proliferation of AI in the enterprise, we believe we are well-positioned to extend our leadership in applying AI to voice applications and emerge a stronger and more competitive player.”
Adlersberg had been bullish with AudioCodes’ stance on further growth in 2023 after the 2022 FY results were published, saying: “Despite the macro uncertainty we faced in the second half of the year, we believe long-term secular growth drivers remain intact.” However, the realities of global economies and the budget-tightening of service providers have inevitably made an impact.
