News

The stock of enterprise voice services company AudioCodes (NASDAQ: AUDC) had a banner trading session on Tuesday. Following the company's release of its latest quarterly earnings report, investors piled into its shares, sending their value up in excess of 14%. That made it quite the outperformer on a day when the S&P 500 index only inched up by 0.2%.

Fourth-quarter results published

For its fourth quarter, AudioCodes booked $63.6 million in revenue, which was down 10% on a year-over-year basis but represented 3% growth over the third-quarter tally. Non-GAAP (generally accepted accounting principles) adjusted net income was $8.9 million, or $0.28 per share. Again, that represented a decline (of 25%) from the year-ago period, but an increase (7%) over the previous quarter.

On average, analysts tracking AudioCodes stock were modeling only $0.24 per share for adjusted net income, although they were expecting a bit more on the top line -- their collective projection was nearly $63.9 million.

In its earnings release, AudioCodes attributed its sequential improvements to its Microsoft-related business; this grew by 5% at an annual clip, thanks in no small part to 10% growth in services within the big tech company's Teams collaborative software.

The company also benefited from its smaller customer experience and conversational artificial intelligence (AI) offerings, which posted double-digit growth figures. AudioCodes quoted CEO Shabtai Adlersberg as saying that the two have together "clearly emerged as a second major growth pillar in our business."

The future is AI

AudioCodes's bottom-line beat wasn't excessive, and it missed on revenue, but key segments for the company are clearly on the rise. Investors were likely most impressed by the sharp rise of the conversational AI products; this market is still very excited about the potential for AI to juice the performance of companies that harness the technology effectively.

Should you invest $1,000 in AudioCodes right now?

Before you buy stock in AudioCodes, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AudioCodes wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

*Stock Advisor returns as of February 6, 2024

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.