AudioCodes (NASDAQ:AUDC) reported third-quarter 2026 revenue growth driven by higher services sales and continued expansion in its Voice AI business, while maintaining its full-year revenue and non-GAAP earnings outlook.
Revenue for the quarter totaled $64.1 million, up 4.2% from $61.5 million a year earlier, according to Chief Financial Officer Niran Baruch. Services revenue increased 19.9% year over year to $37.1 million and represented 57.8% of total revenue.
Non-GAAP operating income was $4.8 million, or 7.4% of revenue, compared with $5.8 million, or 9.5% of revenue, in the prior-year period. Non-GAAP net income was $4 million, or $0.16 per diluted share, compared with $4.9 million, or $0.17 per diluted share, a year earlier.
Recurring Revenue and Outlook
President and Chief Executive Officer Shabtai Adlersberg said the company’s Live managed services and Voice AI applications represented a combined $87 million in annual recurring revenue at the end of the third quarter, an increase of 16% from the prior year. Over the past three years, annual recurring revenue has expanded by nearly 90%, he said.
AudioCodes reiterated its 2026 revenue guidance of $251 million to $256 million and its forecast for non-GAAP earnings per share of $0.60 to $0.75.
The company ended September with $47.1 million in cash equivalents, deposits, marketable securities and long-term financial investments. Operating activities generated $4.1 million in net cash during the quarter. Days sales outstanding stood at 109 days at Sept. 30.
During the quarter, AudioCodes repurchased 1.5 million ordinary shares for approximately $15.1 million. In September, the company received Israeli court approval to purchase up to $30 million of ordinary shares, with the approval also permitting dividends from that amount through March 9, 2027. AudioCodes had previously declared a semiannual cash dividend of $0.20 per share, totaling about $4.8 million.
Microsoft Business Remains Core Contributor
Adlersberg said Microsoft-related business accounted for close to 66% of AudioCodes’ overall operations. Revenue from the Microsoft business reached $43 million in the third quarter, up 4% year over year. For the first nine months of 2026, Microsoft-related revenue rose 5.2% to $125 million, keeping the company on track to exceed $170 million for the full year, he said.
More than 90% of quarterly revenue came from enterprise customers, while the Microsoft Teams Phone business grew 4% year over year. AudioCodes’ connectivity business, including session border controllers, gateways and customer-premises equipment, remained stable, according to Adlersberg.
Session border controller revenue was up 8.2% year to date versus the first three quarters of 2025, and AudioCodes expects full-year SBC revenue to exceed $135 million. Gateway revenue is expected to be about $50 million for the full year, following what Adlersberg described as the strongest gateway quarter of 2026 to date.
Bookings of new contract value related to Microsoft Teams Phone climbed 61% year over year to more than $20 million, while newly created opportunities reached $90 million, up 9.4% from the prior year.
AudioCodes’ Live Platform, its cloud-based voice service delivery platform, generated September monthly recurring revenue of nearly $500,000, up about 35% year over year. A new large Asia-Pacific customer helped lift Live Platform services above $5.5 million in annual recurring revenue.
Voice AI Growth and Customer Activity
Adlersberg said Voice AI revenue increased by nearly 50% year over year, supporting AudioCodes’ target of $25 million in Voice AI revenue for 2026 and $50 million by 2028. The company said it expects the business to be a major growth driver in coming years.
Its VoiceAI Connect offering, which links enterprise telephony networks to conversational AI applications, saw invoicing revenue grow by nearly 40% and bookings rise 60% during the first nine months of 2026, according to Adlersberg. New opportunities created in the period were more than 40% above the prior-year level.
The company cited a major multiyear, multimillion-dollar contract with a large North American network operator. Deutsche Telekom also announced in October that it had selected VoiceAI Connect for its AI-powered mobile Voice AI Notes service for business customers. The offering records, transcribes and summarizes mobile conversations and uses AudioCodes’ technology as a connectivity and orchestration layer between Deutsche Telekom’s network and Mistral AI.
During the question-and-answer session, Adlersberg said larger enterprises often favor a best-of-breed approach to AI, allowing them to select and change components such as large language models and speech-to-text technologies rather than relying on a single communications platform provider’s bundled tools.
Contact Center and Secure AI Deployments
AudioCodes said its Voca CIC contact-center offering added customers in education, financial services and large enterprises. A U.S. higher education institution selected Voca CIC alongside an AudioCodes Live Teams for Microsoft project, while a major German insurance company selected the platform to replace a legacy contact center. Through its partnership with AT&T Business, the company also won a Fortune 500 enterprise customer during the quarter.
Meeting Insights Cloud Edition saw meeting volume rise 90% year over year, monthly recurring revenue more than double and active users grow 50%, Adlersberg said. The company has shifted its go-to-market efforts toward specific verticals and tailored workflows.
Meanwhile, AudioCodes’ MIA Edge on-premises offering added 11 customers in Israel across defense, healthcare, security, infrastructure and government. The company also deployed a real-time translation application for Israel’s Population and Immigration Authority to assist with asylum-seeker intake interviews. Two comparable European authorities are evaluating the solution, AudioCodes said.
Adlersberg said demand for air-gapped and non-cloud AI deployments is rising among governments, defense organizations and other regulated sectors, citing growing focus on data sovereignty and the need for secure meeting analysis and information extraction.
About AudioCodes (NASDAQ:AUDC)
AudioCodes Ltd. (NASDAQ: AUDC) is an Israeli provider of advanced voice and communications technologies for enterprises, service providers and telecommunications operators. The company develops solutions that enable organizations to deploy, manage and optimize business voice services across private, public and hybrid communications networks.
Its portfolio includes session border controllers, media gateways, voice network products, professional services and cloud-based communications solutions.
