AudioCodes Ltd. (AUDC): History, Ownership, Mission, How It Works & Makes Money

Do you know what it takes for a company like AudioCodes Ltd. (AUDC) to remain a critical, defintely relevant player in the hyper-competitive Unified Communications (UC) space?

The answer is a sharp pivot to AI-driven services, which fueled a massive 50% growth in their Conversational AI business in Q3 2025, even as they project full-year revenue to land between $244 million and $246 million.

This isn't just a hardware story anymore; it's about their Live managed services driving Annual Recurring Revenue (ARR) up 25% to $70 million and securing a 2025 CX Today Award for their Voca CIC solution.

We'll break down the history, the mission, and the mechanics of how this AI-first approach is generating cash and positioning AudioCodes for the next wave of enterprise voice modernization.

AudioCodes Ltd. (AUDC) History

You need a clear line of sight into how AudioCodes Ltd. (AUDC) moved from a niche hardware player to a key enabler of modern Unified Communications (UC) and AI-powered voice services. The direct takeaway is that the company's trajectory is defined by two major pivots: first, from chip design to system-level solutions like Session Border Controllers (SBCs), and second, from perpetual licenses to a cloud-first, recurring revenue model centered on its Live managed services and conversational AI offerings.

Given Company's Founding Timeline

Year established

AudioCodes Ltd. was established in 1993.

Original location

The company started in Lod, Israel, before eventually moving its headquarters to Or Yehuda, Israel.

Founding team members

The company was co-founded by Shabtai Adlersberg and Leon Bialik.

Initial capital/funding

The precise initial funding amount from 1993 is not widely disclosed public information, which is common for tech hardware ventures of that era.

Given Company's Evolution Milestones

The table below tracks the critical shifts, showing how AudioCodes moved up the value chain from components to complex software and services.

Given Company's Transformative Moments

The biggest transformative moment for AudioCodes was the deliberate shift from being a component supplier to a software and services vendor, especially in the Unified Communications as a Service (UCaaS) market.

This pivot was not easy, but it was defintely necessary to survive the commoditization of hardware.

• The Shift from Silicon to Session Control: Moving beyond Voice over Packet (VoP) chips to Session Border Controllers (SBCs) in the early 2000s was crucial. This positioned the company as an essential security and connectivity layer for enterprise VoIP networks, a much higher-margin business.
• Embracing the Cloud Ecosystem: Deep integration and certification with major platforms like Microsoft Teams and Zoom Phone solidified their role. This move is now driving their recurring revenue streams, with Q2 2025 revenues reaching $61.1 million, fueled by the expansion of Live managed services.
• The AI-First Strategy: The recent focus on conversational AI, exemplified by the Voca Conversational Interaction Center, is the latest transformative step. It positions AudioCodes to capitalize on the next wave of customer experience technology, moving beyond simply connecting calls to automating interactions.

For a deeper look at the financial health backing these strategic moves, you should check out Breaking Down AudioCodes Ltd. (AUDC) Financial Health: Key Insights for Investors. Looking ahead, the company's 2025 revenue guidance of $244 million to $246 million shows a realistic growth path, focusing on high-margin services, plus the company declared an annual dividend of $0.40 per share for 2025, which is a solid return for shareholders.

AudioCodes Ltd. (AUDC) Ownership Structure

AudioCodes Ltd. is controlled by a mix of institutional investors and company insiders, a structure that keeps a significant portion of shares in the hands of long-term financial entities and the executive team. This setup means the company's strategic direction is heavily influenced by a core group of stakeholders, including the co-founder who holds a substantial personal stake.

AudioCodes Ltd.'s Current Status

AudioCodes is a publicly traded company, dual-listed on the NASDAQ Global Select Market under the ticker AUDC and on the Tel Aviv Stock Exchange (TASE). This public status means the company is subject to rigorous financial reporting and governance standards in both the U.S. and Israel, providing a high degree of transparency for investors.

As of the 2025 fiscal year, the company's market capitalization stood at approximately $273.58 million, reflecting its position in the unified communications and VoiceAI market. Trading on two major exchanges ensures a solid public float (the number of shares available to the general public) and liquidity, but still, a large block of shares is held by institutions and insiders.

To understand the forces driving the stock's price, you should look deeper into the major holders. Exploring AudioCodes Ltd. (AUDC) Investor Profile: Who's Buying and Why?

AudioCodes Ltd.'s Ownership Breakdown

The ownership structure is typical for a mid-cap technology company, with institutional investors holding the largest share, but insider ownership is notably high. This high insider stake, at over one-fifth of the company, aligns management's interests defintely with shareholder returns.

Here's the quick math: with 42.26% held by institutions and 23.08% by insiders, nearly two-thirds of the company's stock is controlled by a concentrated group. This concentration can lead to less volatility but also means major strategic decisions can be influenced by a few large players.

AudioCodes Ltd.'s Leadership

The company is steered by a seasoned management team, many of whom have been with AudioCodes for over a decade, providing critical continuity and deep industry knowledge. The average tenure for the management team is approximately 9.3 years, and the board's average tenure is even longer at 12.3 years, which is a sign of stability in a fast-moving tech sector.

• Shabtai Adlersberg: Co-Founder, President, and Chief Executive Officer. He has been in his role for over three decades, holding a direct ownership stake of 16.05% of the shares.
• Doron Nevo: Chairman of the Board, providing oversight and strategic direction.
• Niran Baruch: Chief Financial Officer (CFO) and VP of Finance, managing the company's financials and reporting, including the Q3 2025 revenue of $61.5 million.
• Ofer Nimtsovich: Chief Operating Officer (COO), responsible for the day-to-day execution of the company's strategy.
• Lior Aldema: Executive VP & Chief Business Officer, focusing on market growth and business development.

The leadership's long tenure is a double-edged sword: it offers stability and expertise, but you must still watch for their ability to pivot quickly to new trends, like the current push into Conversational AI, which they project to grow by 40% to 50% in 2025.

AudioCodes Ltd. (AUDC) Mission and Values

AudioCodes Ltd.'s core purpose transcends selling hardware; it is about transforming enterprise communication into a strategic asset, focusing heavily on AI-powered voice services to enhance both customer and employee experiences.

Given Company's Core Purpose

The company's cultural DNA is built on a foundation of innovation, collaboration, and trust, guiding its shift toward a high-growth, AI-driven hybrid cloud software and services model. This strategic focus is critical as the company expects full-year 2025 revenues to be in the range of $244 million to $246 million, driven by its Unified Communications as a Service (UCaaS) and Conversational AI segments. You can see how this strategy plays out by Exploring AudioCodes Ltd. (AUDC) Investor Profile: Who's Buying and Why?

Official mission statement

AudioCodes Ltd. aims to empower enterprises and service providers to build and operate state-of-the-art voice networks, unified communications platforms, and AI-driven productivity tools. The mission is centered on leveraging its decades of voice expertise to make communication intelligent and effortless.

• Power enterprise communication, turning every conversation into a strategic asset.
• Enable customers to improve their customer experience (CX) and employee experience (EX) through enhanced collaboration.
• Lead with innovative solutions that enable flexible, scalable, AI-powered cloud communications.

Vision statement

While a single, formal vision statement is not public, the company's actions and strategic investments clearly point to a vision of being the essential enabler of the AI-powered digital workplace. This means leading the market in seamless, secure, and interoperable voice solutions.

• Lead the market as an AI-driven hybrid cloud software and services company.
• Provide comprehensive, innovative, and reliable communication solutions globally.
• Achieve sustained growth by putting Voice AI front and center in operations.

For example, the Live managed services, a key part of this vision, reached an Annual Recurring Revenue (ARR) of $70 million by the end of Q2 2025, defintely showing traction in recurring, cloud-based revenue.

Given Company slogan/tagline

AudioCodes uses a few powerful phrases that distill its market position and customer commitment, often highlighting its focus on the future of voice technology.

• The Future Runs on VoiceAI.
• We measure our success based on the success of our customers. Nothing else.

AudioCodes Ltd. (AUDC) How It Works

AudioCodes Ltd. operates as a critical bridge, providing the voice connectivity and intelligent software that allows enterprises to seamlessly integrate their communication systems with major cloud platforms like Microsoft Teams and Zoom Phone.

The company is rapidly transforming into an AI-driven hybrid cloud software and services provider, moving beyond its traditional hardware roots to focus on high-growth areas like Unified Communications as a Service (UCaaS) and Conversational AI, which is expected to grow by 40% to 50% in the 2025 fiscal year.

AudioCodes Ltd.'s Product/Service Portfolio

AudioCodes Ltd.'s Operational Framework

The company's operational framework is built on a dual-engine model, balancing resilient core connectivity products with high-growth software and services. This model is evident in its revenue mix, where services revenue reached $30.9 million in Q3 2025, accounting for 50.3% of total revenues.

• Develop Core Hardware: Design and manufacture Session Border Controllers (SBCs), Media Gateways, and IP Phones that ensure high-quality, secure Voice-over-IP (VoIP) communication.
• Enable Cloud Migration: Provide software and services to help enterprises seamlessly connect their existing phone systems (PBXs) to cloud UC platforms like Microsoft Teams Phone, a business segment that grew 6.5% year-over-year in Q2 2025.
• Drive Recurring Revenue: Deliver the Live family of managed services, which provides ongoing support, monitoring, and management for UCaaS and Customer Experience (CX) deployments, securing predictable cash flow.
• Innovate with AI: Invest heavily in the Conversational AI division, developing applications like Meeting Insights On-Prem (Mia OP) to generate new, high-margin software revenue streams by leveraging voice data for business intelligence.

Here's the quick math: The company expects full-year 2025 revenues to be between $244 million and $246 million, a defintely modest increase, but one driven by a strategic shift to higher-value services. For a deeper dive into the numbers, you should check out Breaking Down AudioCodes Ltd. (AUDC) Financial Health: Key Insights for Investors.

AudioCodes Ltd.'s Strategic Advantages

AudioCodes Ltd.'s market success hinges on its deep specialization and agnostic approach to the Unified Communications (UC) landscape, which allows it to serve a diverse customer base.

• Platform Agnosticism: Offer seamless interoperability with all major UCaaS and Contact Center as a Service (CCaaS) platforms, including Microsoft Teams, Zoom, Webex, and Genesys, making them a vendor-neutral choice for complex enterprise environments.
• Niche Market Leadership: Maintain a competitive edge in the communication equipment industry through a specialized focus on VoIP technology and data networking solutions, which larger competitors often treat as a secondary concern.
• Hybrid Cloud Expertise: Provide solutions for both cloud and on-premise (on-prem) deployments, such as the Meeting Insights On-Prem solution, which is crucial for regulated industries and government entities seeking maximum security and data privacy.
• Channel Partner Network: Leverage a global community of certified resellers, integrators, and service providers to achieve market reach, including a recent Live Platform agreement with a global Tier 1 system integrator that will substantially expand their market footprint.

The focus on services and AI applications, which carry a higher gross margin-non-GAAP gross margin was 65.8% in Q3 2025-is the clearest signal of their value creation strategy.

AudioCodes Ltd. (AUDC) How It Makes Money

AudioCodes Ltd. primarily makes money by selling a mix of hardware products and software-centric services that facilitate enterprise voice communications, particularly for unified communications (UC) and contact center solutions. The business is fundamentally shifting its revenue mix toward high-margin software and services, especially those tied to conversational artificial intelligence (AI).

AudioCodes Ltd.'s Revenue Breakdown

The company's revenue streams are split almost evenly between its tangible products and its recurring services, with the latter being the strategic growth focus. Based on the Q3 2025 results, the total quarterly revenue was $61.5 million, marking a modest 2.2% year-over-year increase.

Here's the quick math: Services revenue came in at $30.9 million in Q3 2025. This stream actually saw a decrease of 4.8% year-over-year, which is a headwind. This means the Products segment, which accounted for the remaining $30.6 million, had to grow by over 10% to deliver the overall 2.2% revenue increase. That's a strong signal about hardware demand.

Business Economics

The core of AudioCodes' economic model is the deployment of its voice infrastructure products, like Session Border Controllers (SBCs), which then create a long-term, high-margin revenue stream through associated maintenance and professional services. The company is actively transitioning to a subscription-based model, which is visible in its Annual Recurring Revenue (ARR) reaching $70 million in Q2 2025, a jump of 25% year-over-year.

• Pricing Strategy: AudioCodes has a value-based pricing model for its hardware and software, often tied to the number of users or sessions. They have also had to raise prices to mitigate the impact of new US tariffs on imported components, a necessary move to protect their gross margins.
• Conversational AI: This is the key growth engine, targeted to grow between 40% to 50% for the full year 2025. This segment leverages the existing voice infrastructure to sell higher-value, AI-powered applications, like those on their Live platform, which integrates unified communications and customer success capabilities.
• Cost Pressures: A major near-term risk is the increased cost from new tariffs on US imports, which is expected to add an estimated $3 million to $4 million in annual costs for 2025. This directly erodes profitability, making the shift to higher-margin software and services defintely crucial.

You can see the strategic focus on high-value software and services in their Mission Statement, Vision, & Core Values of AudioCodes Ltd. (AUDC).

AudioCodes Ltd.'s Financial Performance

The company's financial health, as of Q3 2025, shows a business navigating cost headwinds while strategically investing in future growth areas like AI. They are managing to maintain strong gross margins, which is a good sign.

• Gross Margin: The Non-GAAP gross margin for Q3 2025 was a healthy 65.8%. This indicates a strong control over the cost of goods sold, even with tariff challenges.
• Profitability: Non-GAAP net income for Q3 2025 was $4.9 million, or $0.17 per diluted share, which was an earnings beat. However, the GAAP net income was lower at $2.7 million, showing the impact of non-cash and one-off items.
• Operating Cash Flow: Net cash provided by operating activities in Q3 2025 was $4.1 million, demonstrating the business is generating cash from its core operations.
• Full-Year Outlook: Management guided for 2025 revenues between $244 million and $246 million and Non-GAAP earnings per share (EPS) in the range of $0.60 to $0.64.

The company's focus on its Live platform and conversational AI services is a clear action to drive sustained revenue growth in the medium term. You need to watch the gross margin trend closely; if the tariffs and R&D costs continue to pressure it, that 65% plus margin could be at risk.

AudioCodes Ltd. (AUDC) Market Position & Future Outlook

AudioCodes is successfully navigating the shift from hardware-centric VoIP to an AI-driven hybrid cloud software and services company, positioning itself as a leader in enterprise voice enablement for Unified Communications as a Service (UCaaS) and Customer Experience (CX) platforms. The company projects full-year 2025 revenue between $244 million and $246 million, driven by its fast-growing Conversational AI business.

That revenue guidance, while modest, reflects a strategic pivot where services now account for over 53% of total revenue, generating more predictable, higher-margin cash flow. Honestly, the AI segment is the real growth engine here, targeting a 40% to 50% annual growth rate for 2025. You can see their commitment in the projected Annual Recurring Revenue (ARR) target of $78 million to $82 million by year-end.

Competitive Landscape

In the core Enterprise Session Border Controller (eSBC) market, which secures and manages voice traffic, AudioCodes holds a leading position, but it's a tight race with major enterprise technology giants and telecom specialists. The market share data below reflects the Enterprise SBC segment for the first half of 2025 (1H25) revenue.

Opportunities & Challenges

The biggest opportunity for AudioCodes is leveraging its established connectivity base to cross-sell its new AI-powered applications. But still, they have to manage significant geopolitical and tariff-related cost headwinds.

Industry Position

AudioCodes is a critical enabler in the enterprise voice ecosystem, not just a hardware vendor. They are the clear number one partner for enabling Microsoft Teams Phone deployments, which is a massive, sticky market. This focus has allowed them to lead the Enterprise SBC market in the first half of 2025, with a 29.8% revenue share. Their move into AI is a smart pivot, transforming them from a pure-play connectivity provider to a software and services specialist.

Here's the quick math: with over 90% of their revenue now tied to UCaaS and CCaaS connectivity, they have a massive installed base to sell their new AI applications into. That's a strong foundation. However, the overall eSBC market is mature and declining slowly, so future growth is defintely dependent on the success of their new AI-driven product lines like Voca CIC and the Live platform.

• Lead Enterprise SBCs: Hold the top spot in the eSBC segment (1H25).
• Microsoft Teams Dominance: A certified, go-to provider for Direct Routing.
• Services Transition: Services revenue is now the majority, driving recurring revenue.
• AI Focus: Conversational AI is the highest-growth segment, targeting up to 50% growth.

For a deeper dive into the company's foundational strategy, check out their Mission Statement, Vision, & Core Values of AudioCodes Ltd. (AUDC).