Key Highlights

• Q3 2026 revenues increased 4.2% year over year to $64.1 million, with services revenues up 19.9% to $37.1 million

• VoiceAI Business grew 50% in the first three quarters of 2026 year over year

• Combined ARR for Live managed services and VoiceAI reached $87 million, up 16% year over year

• Share repurchases totaled $15.1 million during the quarter, with 1,517,568 shares bought back

AudioCodes Ltd.(NASDAQ:AUDC), a provider of enterprise voice and VoiceAI business solutions, reported financial results for the third quarter ended September 30, 2026. Revenues rose 4.2% year over year to $64.1 million, up from $61.5 million in Q3 2025. The company posted GAAP Net Income of $3.6 million, or $0.15 per diluted share, compared to $2.7 million, or $0.10, in the year-ago quarter. Non-GAAP net income was $4.0 million, or $0.16 per diluted share, compared to $4.9 million, or $0.17, a year earlier.

Services Revenue Drives Growth

A standout element of the quarter was the 19.9% year-over-year increase in services revenues to $37.1 million, underscoring the company's ongoing shift toward Recurring Revenue streams. GAAP gross Margin for the quarter was 65.7%, with non-GAAP gross margin at 65.8%. GAAP Operating Margin was 5.3%, while non-GAAP operating margin came in at 7.4%. Net cash provided by Operating Activities was $4.1 million for the quarter. Cash, short-term bank deposits, short-term marketable securities, and long-term financial investments totaled $47.1 million as of September 30, 2026, down from $75.7 million at the end of 2025. The decline was primarily attributable to the company's share repurchase program and Dividend payments, partially offset by operating cash flow.

VoiceAI and Managed Services Momentum

AudioCodes' two key growth pillars — the Live suite of managed services for UCaaS and CX, and the VoiceAI business — continued to gain traction. Combined annual recurring revenue for these segments reached $87 million, a 16% increase year over year. The VoiceAI business grew 50% in the first three quarters of 2026 compared to the same period a year ago, reflecting broad-based Demand across the portfolio. VoiceAI Connect and Live Hub achieved record bookings during Q3, supported by a growing pipeline, new customer wins, and expansion among existing customers. Revenue from Voca CIC, AudioCodes' Microsoft Teams-certified contact center solution, grew more than 40% year over year during the quarter. Meeting Insights and Mia Edge, the company's meeting intelligence solutions for cloud and on-premises environments, saw revenue grow more than 100% compared to Q3 2025. The company's Microsoft Teams business continued to expand, growing 4% year over year, with UCaaS and CX connectivity now accounting for more than 85% of the overall business.

Capital Returns and Shareholder Activity

During the quarter, AudioCodes repurchased 1,517,568 of its ordinary shares at an aggregate cost of $15.1 million. On August 4, 2026, the company declared a cash dividend, continuing its pattern of returning Capital to shareholders alongside its buyback program. The share repurchase program and dividend payments were the primary drivers of the decline in the company's cash position from $75.7 million at the end of 2025 to $47.1 million as of September 30, 2026.

What It All Means

AudioCodes' Q3 2026 results illustrate the progress of its strategic pivot from a traditional enterprise voice infrastructure company to a VoiceAI-driven cloud software and services business. Services revenue now makes up a growing share of total revenue, and the company's VoiceAI products are delivering triple-digit and double-digit growth rates across several product lines. With combined ARR for its growth segments at $87 million and the UCaaS and CX connectivity business representing over 85% of operations, AudioCodes has materially shifted its revenue mix. The company indicated it is on track with its operational and financial targets for the quarter and sees favorable positioning for continued growth through the rest of 2026 and into 2027.