Operating margins have compressed to 5.4% in 2026Q1, reflecting the company's struggle to scale profitability despite maintaining a robust 66.2% gross margin.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Sales/Revenue | 247.37M | 245.6M | 242.18M | 244.38M | 275.09M | 248.92M | 220.77M | 200.29M | 176.22M | 156.74M | 145.57M | 139.76M | 151.58M | 137.23M | 127.49M | 155.83M | 150.04M | 125.89M | 174.74M | 158.24M | 147.35M | 115.83M | 82.76M | 44.23M | 27.19M | 35.73M | 71.8M | 31.2M | 9.2M |
| Revenue Growth % | 2.02% | 1.42% | -0.9% | -11.16% | 10.51% | 12.75% | 10.23% | 13.66% | 12.43% | 7.67% | 4.16% | -7.8% | 10.45% | 7.64% | -18.18% | 3.86% | 19.18% | -27.96% | 10.43% | 7.38% | 27.22% | 39.96% | 87.11% | 62.67% | -23.91% | -50.23% | 130.09% | 239.17% | - |
| Cost of Goods Sold | 85.75M | 85.97M | 84.02M | 86.03M | 96.31M | 78.03M | 70.96M | 105.33M | 65.62M | 58.89M | 57.23M | 56.97M | 62.59M | 58.56M | 54.29M | 64.16M | 66.14M | 56.19M | 77.45M | 69.19M | 61.24M | 46.99M | 34.38M | 20.04M | 13.01M | 21.94M | 27.1M | 11.52M | 3M |
| COGS % of Revenue | - | 35% | 34.69% | 35.2% | 35.01% | 31.35% | 32.14% | 52.59% | 37.24% | 37.57% | 39.31% | 40.76% | 41.29% | 42.68% | 42.59% | 41.17% | 44.08% | 44.64% | 44.32% | 43.72% | 41.56% | 40.57% | 41.54% | 45.3% | 47.84% | 61.4% | 37.75% | 36.91% | 32.61% |
| Gross Profit | 161.62M | 159.63M | 158.16M | 158.35M | 178.78M | 170.89M | 149.82M | 94.96M | 110.61M | 97.84M | 88.34M | 82.79M | 88.99M | 78.67M | 73.2M | 91.67M | 83.9M | 69.7M | 97.29M | 89.05M | 86.11M | 68.83M | 48.38M | 24.19M | 14.18M | 13.79M | 44.7M | 19.69M | 6.2M |
| Gross Margin % | 65.34% | 65% | 65.31% | 64.8% | 64.99% | 68.65% | 67.86% | 47.41% | 62.76% | 62.43% | 60.69% | 59.24% | 58.71% | 57.32% | 57.41% | 58.83% | 55.92% | 55.36% | 55.68% | 56.28% | 58.44% | 59.43% | 58.46% | 54.7% | 52.16% | 38.6% | 62.25% | 63.09% | 67.39% |
| Gross Profit Growth % | - | 0.93% | -0.12% | -11.43% | 4.62% | 14.07% | 57.77% | -14.15% | 13.04% | 10.76% | 6.71% | -6.97% | 13.12% | 7.48% | -20.15% | 9.26% | 20.38% | -28.36% | 9.25% | 3.41% | 25.1% | 42.27% | 100% | 70.56% | 2.83% | -69.14% | 127.04% | 217.52% | - |
| Operating Expenses | 147.87M | 145.59M | 140.97M | 143.93M | 147.46M | 131.37M | 111.47M | 104.51M | 94.25M | 88.19M | 80.59M | 80.08M | 85.49M | 75.93M | 76.93M | 84.44M | 73.47M | 69.88M | 91.71M | 93.24M | 81.85M | 56.36M | 44.75M | 34.08M | 30.66M | 32.7M | 24.71M | 11.14M | 5.7M |
| OpEx % of Revenue | - | 59.28% | 58.21% | 58.89% | 53.6% | 52.77% | 50.49% | 52.18% | 53.48% | 56.27% | 55.36% | 57.3% | 56.4% | 55.33% | 60.34% | 54.19% | 48.96% | 55.51% | 52.48% | 58.93% | 55.54% | 48.66% | 54.08% | 77.05% | 112.78% | 91.52% | 34.41% | 35.71% | 61.96% |
| Selling, General & Admin | 94.24M | 93M | 88.84M | 86.76M | 87.62M | 77.97M | 65.39M | 63.31M | 59.59M | 57.85M | 51.45M | 52.09M | 53.21M | 47.73M | 48.25M | 52.29M | 43.28M | 39.93M | 53.88M | 52.54M | 46.43M | 31.95M | 24.74M | 18.6M | 17.64M | 18.9M | 14.12M | 5.93M | 3.3M |
| SG&A % of Revenue | - | 37.87% | 36.69% | 35.5% | 31.85% | 31.32% | 29.62% | 31.61% | 33.81% | 36.91% | 35.34% | 37.27% | 35.1% | 34.78% | 37.85% | 33.56% | 28.84% | 31.72% | 30.83% | 33.2% | 31.51% | 27.58% | 29.9% | 42.06% | 64.88% | 52.88% | 19.67% | 18.99% | 35.87% |
| Research & Development | 53.62M | 52.59M | 52.13M | 57.17M | 59.84M | 53.4M | 46.07M | 41.2M | 34.66M | 30.35M | 29.14M | 28M | 32.27M | 28.19M | 28.68M | 32.15M | 30.19M | 29.95M | 37.83M | 40.71M | 35.42M | 24.41M | 20.01M | 15.48M | 13.02M | 13.81M | 10.59M | 4.81M | 2.1M |
| R&D % of Revenue | - | 21.41% | 21.52% | 23.39% | 21.75% | 21.45% | 20.87% | 20.57% | 19.67% | 19.36% | 20.02% | 20.03% | 21.29% | 20.54% | 22.49% | 20.63% | 20.12% | 23.79% | 21.65% | 25.72% | 24.03% | 21.08% | 24.18% | 34.99% | 47.89% | 38.64% | 14.75% | 15.42% | 22.83% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 403K | 300K |
| Operating Income | 13.76M | 14.04M | 17.19M | 14.42M | 31.32M | 39.52M | 38.35M | -9.55M | 16.36M | 9.65M | 7.75M | 2.71M | 3.5M | 2.74M | -3.73M | 7.23M | 10.44M | -184K | -79.44M | -4.19M | 4.26M | 12.47M | 3.63M | -9.89M | -16.48M | -18.91M | 19.06M | 8.54M | 500K |
| Operating Margin % | 5.56% | 5.72% | 7.1% | 5.9% | 11.38% | 15.88% | 17.37% | -4.77% | 9.28% | 6.16% | 5.33% | 1.94% | 2.31% | 2% | -2.93% | 4.64% | 6.96% | -0.15% | -45.46% | -2.65% | 2.89% | 10.77% | 4.39% | -22.36% | -60.61% | -52.92% | 26.55% | 27.38% | 5.43% |
| Operating Income Growth % | - | -18.34% | 19.18% | -53.94% | -20.76% | 3.06% | 501.4% | -158.4% | 69.52% | 24.45% | 186.55% | -22.71% | 27.82% | 173.33% | -151.65% | -30.71% | 5772.28% | 99.77% | -1794.47% | -198.31% | -65.8% | 243.55% | 136.71% | 40% | 12.86% | -199.22% | 123.08% | 1608.8% | - |
| EBITDA | 18.12M | 18.27M | 21.07M | 17.02M | 34.3M | 41.96M | 40.62M | -7.51M | 18.67M | 12.09M | 10.65M | 5.67M | 6.73M | 5.79M | -852K | 10.5M | 14.8M | 5.09M | -71.88M | 3.84M | 10.23M | 16.22M | 6.7M | -6.8M | -14.25M | -16.98M | 20.18M | 8.95M | 800K |
| EBITDA Margin % | 7.32% | 7.44% | 8.7% | 6.96% | 12.47% | 16.86% | 18.4% | -3.75% | 10.59% | 7.71% | 7.31% | 4.06% | 4.44% | 4.22% | -0.67% | 6.74% | 9.86% | 4.04% | -41.14% | 2.43% | 6.94% | 14% | 8.1% | -15.37% | -52.4% | -47.51% | 28.1% | 28.67% | 8.7% |
| EBITDA Growth % | -17.14% | -13.29% | 23.82% | -50.38% | -18.24% | 3.29% | 640.85% | -140.23% | 54.43% | 13.54% | 87.79% | -15.78% | 16.33% | 779.11% | -108.12% | -29.06% | 190.86% | 107.08% | -1972.9% | -62.49% | -36.91% | 141.94% | 198.6% | 52.28% | 16.08% | -184.14% | 125.52% | 1018.38% | - |
| D&A (Non-Cash Add-back) | 4.36M | 4.24M | 3.88M | 2.6M | 2.98M | 2.43M | 2.27M | 2.04M | 2.31M | 2.44M | 2.89M | 2.96M | 3.23M | 3.05M | 2.88M | 3.26M | 4.36M | 5.27M | 7.55M | 8.03M | 5.97M | 3.75M | 3.07M | 3.09M | 2.23M | 1.94M | 1.12M | 403K | 300K |
| EBIT | 13.82M | 14.04M | 17.19M | 15.94M | 36.38M | 41.91M | 37.3M | -10.71M | 16.85M | 9.93M | 7.86M | 3.43M | 3.72M | 3.45M | -2.38M | 8.03M | 10.66M | 2.3M | -75.9M | -4.19M | 10.13M | 17.59M | 5.77M | -9.89M | -16.48M | -18.91M | 19.99M | 8.54M | 475K |
| Net Interest Income | -2.56M | -461K | 2.61M | 129K | 2.45M | 428K | 255K | 410K | 241K | 642K | 1.3M | 1.74M | 1.15M | 448K | 441K | 1.45M | 5K | -2.74M | -3.03M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 64K | 0 | 2.91M | 3.37M | 2.8M | 2.69M | 1.25M | 1.01M | 1.13M | 1.21M | 1.85M | 2.3M | 1.77M | 1.1M | 1.99M | 1.93M | 600K | 2.48M | 3.78M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 2.62M | 461K | 296K | 3.24M | 358K | 2.26M | 1M | 600K | 884K | 567K | 545K | 564K | 620K | 617K | 900K | 346K | 694K | 4.74M | 2.36M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -2.56M | -461K | -2.1M | -52K | 2.86M | 123K | -1.7M | -1.76M | 228K | -10K | -160K | 442K | -196K | 96K | 453K | 423K | -94K | -2.74M | 1.18M | 2.67M | 2.9M | 1.76M | 1.65M | -404K | 2.62M | 5.64M | 8.06M | 2.47M | 200K |
| Pretax Income | 11.2M | 13.58M | 15.1M | 14.37M | 34.18M | 39.65M | 36.65M | -11.31M | 16.59M | 9.64M | 7.59M | 3.15M | 3.31M | 2.83M | -3.28M | 7.66M | 10.34M | -2.93M | -78.25M | -2.62M | 7.17M | 14.23M | 5.28M | -10.29M | -13.86M | -13.27M | 27.12M | 11.02M | 700K |
| Pretax Margin % | 4.53% | 5.53% | 6.23% | 5.88% | 12.43% | 15.93% | 16.6% | -5.65% | 9.41% | 6.15% | 5.22% | 2.25% | 2.18% | 2.07% | -2.57% | 4.91% | 6.89% | -2.33% | -44.78% | -1.66% | 4.86% | 12.29% | 6.38% | -23.27% | -50.97% | -37.14% | 37.77% | 35.3% | 7.61% |
| Income Tax | 4.31M | 4.62M | -215K | 5.59M | 5.72M | 5.9M | 9.4M | -15.29M | 3.09M | 5.61M | -8.64M | 2.78M | 3.39M | -1.4M | 541K | 238K | -1.89M | -445K | 505K | 1.26M | 289K | 799K | 273K | -1.48M | 0 | 0 | 438K | 355K | 100K |
| Effective Tax Rate % | 38.46% | 34.05% | -1.42% | 38.91% | 16.72% | 14.87% | 25.65% | 135.15% | 18.65% | 58.2% | -113.83% | 88.37% | 102.6% | -49.52% | -16.48% | 3.11% | -18.22% | 15.2% | -0.65% | -48.28% | 4.03% | 5.61% | 5.17% | 14.37% | 0% | 0% | 1.62% | 3.22% | 14.29% |
| Net Income | 6.89M | 8.96M | 15.31M | 8.78M | 28.47M | 33.75M | 27.25M | 3.98M | 13.49M | 4.03M | 16.24M | 366K | -86K | 4.22M | -4.18M | 7.16M | 12.13M | -2.08M | -81.34M | -3.88M | 6.88M | 13.44M | 5.01M | -8.43M | -13.86M | -13.27M | 26.68M | 10.66M | 600K |
| Net Margin % | 2.79% | 3.65% | 6.32% | 3.59% | 10.35% | 13.56% | 12.34% | 1.99% | 7.66% | 2.57% | 11.15% | 0.26% | -0.06% | 3.07% | -3.28% | 4.6% | 8.08% | -1.66% | -46.55% | -2.46% | 4.67% | 11.6% | 6.05% | -19.07% | -50.97% | -37.14% | 37.16% | 34.16% | 6.52% |
| Net Income Growth % | -60.03% | -41.51% | 74.39% | -69.16% | -15.66% | 23.87% | 585.14% | -70.53% | 234.81% | -75.18% | 4336.61% | 525.58% | -102.04% | 200.98% | -158.31% | -40.92% | 681.58% | 97.44% | -1993.69% | -156.49% | -48.82% | 168.4% | 159.35% | 39.14% | -4.4% | -149.75% | 150.27% | 1676.67% | - |
| Net Income (Continuing) | 6.89M | 8.96M | 15.31M | 8.78M | 28.47M | 33.75M | 27.25M | 3.98M | 13.49M | 4.03M | 16.24M | 366K | -86K | 4.24M | -4.18M | 7.16M | 12.23M | -3.22M | -85.79M | -2.79M | 6.88M | 13.44M | 5.01M | -8.43M | -13.86M | -13.27M | 26.68M | 10.66M | 600K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -244K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.26 | 0.31 | 0.50 | 0.28 | 0.88 | 1.00 | 0.83 | 0.13 | 0.45 | 0.13 | 0.45 | 0.01 | -0.00 | 0.11 | -0.11 | 0.17 | 0.30 | -0.05 | -1.97 | -0.09 | 0.16 | 0.31 | 0.12 | -0.22 | -0.36 | -0.37 | 0.62 | 0.30 | 0.03 |
| EPS Growth % | -55.75% | -38% | 78.57% | -68.18% | -12% | 20.48% | 538.46% | -71.11% | 246.15% | -71.11% | 4400% | - | -101.82% | 200% | -164.71% | -43.33% | 678.03% | 97.37% | -2088.89% | -156.25% | -48.39% | 158.33% | 154.55% | 38.89% | 2.7% | -159.68% | 106.67% | 900% | - |
| EPS (Basic) | - | 0.31 | 0.51 | 0.28 | 0.89 | 1.03 | 0.87 | 0.14 | 0.47 | 0.13 | 0.46 | 0.01 | -0.00 | 0.11 | -0.11 | 0.17 | 0.30 | -0.05 | -1.97 | -0.09 | 0.16 | 0.33 | 0.13 | -0.22 | -0.36 | -0.44 | 0.68 | 0.35 | 0.03 |
| Diluted Shares Outstanding | 26.89M | 28.98M | 30.64M | 31.58M | 32.5M | 33.85M | 32.92M | 30.8M | 30.22M | 32.17M | 35.78M | 40.56M | 42.29M | 39.1M | 39.13M | 41.94M | 40.96M | 40.21M | 41.2M | 43.17M | 42.98M | 43.34M | 41.72M | 37.51M | 38.77M | 36.16M | 43.05M | 36.16M | 15.31M |
| Basic Shares Outstanding | 26.47M | 28.89M | 30.2M | 31.4M | 31.85M | 32.7M | 31.44M | 29.25M | 28.93M | 31.1M | 35.17M | 40.18M | 42.29M | 38.24M | 37.97M | 41.44M | 40.56M | 40.21M | 41.2M | 43.17M | 42.98M | 40.72M | 38.51M | 37.51M | 38.52M | 30.4M | 39.27M | 30.4M | 15.31M |
| Dividend Payout Ratio | - | 122.1% | 71.16% | 129.83% | 40.58% | 32.19% | 30.98% | 168.97% | 42.7% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Geopolitical and transition execution
According to quarterly financial disclosures, AUDC's revenue growth remains muted at 2.9% year-over-year as of 2026Q1, reflecting a challenging transition from legacy hardware sales toward a recurring subscription model that has yet to provide a meaningful acceleration in the company's top-line performance metrics.
The company's revenue trajectory suggests that the decline in transactional hardware sales is largely offsetting the gains from its 'AudioCodes Live' managed services. Investors should monitor whether this stagnation is a temporary byproduct of the business model shift or an indication of waning demand for its core communication infrastructure within the Microsoft ecosystem.
Based on reported income statements, AudioCodes maintains a robust gross margin profile of 66.2% as of 2026Q1, which appears to be supported by the high-value software and service components of its portfolio despite the ongoing volatility in hardware production costs and supply chain dynamics.
The stability of these margins suggests that the company retains significant pricing power within its niche, likely due to its deep integration with Microsoft Teams. However, the inability to translate these high gross margins into superior operating profitability warrants further investigation into the company's underlying cost structure.
As reported in recent filings, operating margins have compressed to 5.4% in 2026Q1, indicating that the company is struggling to achieve meaningful operating leverage as SG&A and R&D expenses continue to scale in tandem with or faster than the company's modest gross profit growth.
The lack of operating margin expansion suggests that the company's current investment in R&D and sales infrastructure is not yet yielding the expected efficiency gains. This may imply that the cost of acquiring and supporting new subscription-based customers is higher than the historical cost of selling legacy hardware.
Based on the provided income statement data, net income has exhibited significant quarterly fluctuations, dropping to $2.0 million in 2026Q1 from a peak of $6.8 million in 2024Q4, which suggests that non-operating items and shifting expense patterns are obscuring the underlying quality of the company's earnings.
The variability in net income appears to be exacerbated by the timing of stock-based compensation and potential currency impacts, which complicates the assessment of true operational profitability. Investors should look past the headline EPS figures to evaluate whether the core business is generating sustainable cash-backed earnings.
As indicated by the financial data, the company's reliance on a single ecosystem partner and the persistent stagnation in revenue growth may suggest that the market's valuation of AUDC as a growth-oriented software player is potentially disconnected from its current operational reality.
Short-term observers might argue that the company is essentially a legacy hardware vendor in disguise, facing long-term margin compression as software-only competitors gain traction. The lack of significant top-line growth despite the 'VoiceAI' pivot suggests that these new initiatives may not be sufficient to offset the secular decline in traditional voice gateway demand.
Quick answers to the most common questions about buying AUDC stock.
For fiscal year 2025, AudioCodes Ltd. (AUDC) reported total revenue of $245.6M. This represents a 2569.6% increase compared to $9.2M in 1998.
AudioCodes Ltd. (AUDC) is profitable, generating $9.0M in net income for the fiscal year ending 2025 with a net profit margin of 3.6%.
AudioCodes Ltd. (AUDC) reported an operating income of $14.0M, resulting in an operating profit margin of 5.7%. This margin reflects the operational efficiency of the business before interest and taxes.
AudioCodes Ltd. (AUDC) generated $159.6M in gross profit for the year, representing a gross profit margin of 65.0%. This demonstrates the company's core pricing power and production efficiency.