GET DAILY SIGNALSAudioCodes (AUDC) Q3 2026 Earnings Show 4.2% Revenue Rise as Services and AI Drive Growth
Key Takeaways
- AudioCodes reported third quarter 2026 revenue of $64.1 million, up 4.2% year over year and above the roughly $63.4 million consensus estimate.
- Non-GAAP earnings came in at $0.16 per diluted share, in line with analyst expectations, while GAAP diluted EPS rose to $0.15 from $0.10 a year earlier.
- Services revenue climbed 19.9% year over year to $37.1 million, now representing about 58% of total revenue and reinforcing a recurring-revenue shift.
- Voice AI revenue kept growing at a 40% to 50% pace, keeping the company on track toward its $25 million full-year target.
- Management reiterated full-year 2026 guidance of $251 million to $256 million in revenue and non-GAAP EPS of $0.60 to $0.75.
Why These Results Matter in the Broader Shift
AudioCodes is in the middle of a deliberate transformation, shifting from its legacy voice-networking hardware toward software, managed services, and conversational AI. That transition has made its quarterly results an important gauge of whether recurring revenue can offset slower growth in traditional gateway products. The company has also become deeply tied to the Microsoft Teams ecosystem, which accounted for roughly two-thirds of its business, making its Microsoft-related bookings a closely watched signal. Heading into this report, investors were focused on whether Voice AI growth could sustain its momentum, whether margins could hold up under increased investment, and whether the company would reaffirm its full-year outlook. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Reported Numbers
For the third quarter ended September 30, 2026, AudioCodes posted revenue of $64.1 million, a 4.2% increase from $61.5 million in the prior-year period and ahead of the consensus estimate of about $63.4 million. Services revenue grew 19.9% year over year to $37.1 million and represented 57.8% of total revenue. GAAP gross margin was 65.7%, up slightly from 65.5% a year earlier, while GAAP operating income was $3.4 million, or 5.3% of revenue, compared with $4.1 million, or 6.6%, in the prior-year quarter. GAAP net income rose to $3.6 million, or $0.15 per diluted share, from $2.7 million, or $0.10 per diluted share.
On a non-GAAP basis, which excludes items such as share-based compensation and amortization, gross margin held steady at 65.8%, and non-GAAP operating income was $4.8 million, or 7.4% of revenue, down from $5.8 million, or 9.5%, a year earlier. Non-GAAP net income was $4.0 million, or $0.16 per diluted share, compared with $4.9 million, or $0.17, in the year-ago quarter. Management reiterated its full-year 2026 outlook for revenue of $251 million to $256 million and non-GAAP earnings per share of $0.60 to $0.75.
Market Reaction and What It Signals
The initial market response was cautious. Despite revenue coming in above consensus and non-GAAP EPS landing in line with expectations, the stock traded lower in the wake of the release, suggesting investors focused on the decline in non-GAAP operating margin, which fell from 9.5% to 7.4% year over year. That compression reflects stepped-up investment in the Voice AI and Live Platform initiatives, a dynamic that weighs on near-term profitability even as recurring revenue expands. Sentiment also reflects broader uncertainty around the pace at which the company's AI-related growth can translate into higher earnings, particularly given the company's heavy concentration in the Microsoft ecosystem.
Forward Outlook and Factors Worth Monitoring
Looking ahead, investors will be watching whether AudioCodes can convert its expanding recurring-revenue base into more consistent profitability. Annual recurring revenue reached $87 million by the end of the third quarter, up 16% from a year earlier, with Live managed services and Voice AI applications acting as the two primary growth engines. The company reaffirmed its target of $25 million in Voice AI revenue for 2026 and a longer-term goal of $50 million by 2028, making the trajectory of conversational AI adoption a central theme.
Margin trends will also remain in focus. As AudioCodes accelerates investment in intelligent-voice solutions, the gap between GAAP and non-GAAP results, and any further compression in operating margin, could shape investor confidence. Microsoft-related bookings are another key indicator: new-contract value tied to Microsoft Teams Phone activity has been rising sharply, and continued momentum there would support the revenue outlook.
Finally, capital-allocation decisions deserve attention. The company declared a semiannual cash dividend of $0.20 per share earlier in the year and received Israeli court approval to repurchase up to $30 million of shares, buying back roughly $15.1 million in the quarter. Any updates to guidance, cost trends, or the Voice AI roadmap in the next report will help clarify whether the current growth strategy is translating into durable shareholder value. From what I see, these elements together provide a clearer picture of the path ahead.
Using AI Tools in My Research Process
In my analysis of names like AUDC, I often rely on Tickeron’s AI Screener to quickly filter for comparable setups and monitor technical patterns alongside fundamental trends. It helps surface ideas efficiently when evaluating how a company’s recurring revenue shift might play out relative to peers.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AUDC sees MACD Histogram crosses below signal line
AUDC saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 19, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 51 instances where the indicator turned negative. In 41 of the 51 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 80%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 30, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on AUDC as a result. In 67 of 86 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
AUDC moved below its 50-day moving average on November 03, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AUDC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 76%.
Bullish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a +3.45% 3-day Advance, the price is estimated to grow further. Considering data from situations where AUDC advanced for three days, in 176 of 282 cases, the price rose further within the following month. The odds of a continued upward trend are 62%.
AUDC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In 119 of 161 cases where AUDC Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 74%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 41 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.340) is normal, around the industry mean (6.305). P/E Ratio (32.360) is within average values for comparable stocks, (5.681). Projected Growth (PEG Ratio) (0.110) is also within normal values, averaging (0.778). Dividend Yield (0.099) settles around the average of (0.113) among similar stocks. P/S Ratio (1.098) is also within normal values, averaging (11.937).
The Tickeron Price Growth Rating for this company is 45 (best 1 - 100 worst), indicating steady price growth. AUDC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is 84 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AUDC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 79, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a manufacturer of voice over IP phones, converged VoIP and data networking products
Industry TelecommunicationsEquipment
Advertisement