RADCOM Ltd. Stock price
Is RADCOM Ltd. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
As a Free StocksGuide user, you can view scores for all 9,102 stocks worldwide.
StocksGuide Premium
StocksGuide Unlimited
Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $170.90m | Revenue (TTM) = $67.59m
Market Cap = $170.90m | Estimated Revenue = $59.74m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $61.20m | Revenue (TTM) = $67.59m
Enterprise Value = $61.20m | Forward Revenue = $59.74m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
RADCOM Ltd. Stock Analysis
Analyst Opinions
8 Analysts have issued a RADCOM Ltd. forecast:
Analyst Opinions
8 Analysts have issued a RADCOM Ltd. forecast:
RADCOM Ltd. Events
Past Events
|
AUG
12
Q2 2026 Earnings Call
2 months ago
|
|
MAY
19
Q1 2026 Earnings Call
5 months ago
|
|
FEB
11
Q4 2025 Earnings Call
8 months ago
|
|
NOV
12
Q3 2025 Earnings Call
11 months ago
|
StocksGuide Free
RADCOM Ltd. — Q2 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Ltd. Results Conference Call for the second quarter of 2026. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay on the company's website at www.radcom.com later today. On the call are Benny Eppstein, RADCOM's CEO; and Hod Cohen, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through the link in the Investors section of RADCOM's website at www.radcom.com/investor-relations.
Before we begin, I would like to review the safe harbor provision. This conference call will contain forward-looking statements. Forward-looking statements in the conference call involve known and unknown risks and uncertainties, including, but not limited to the company's statements about its momentum, strategic direction and goals, market position and trajectory, future execution and delivery of value to customers and stakeholders, expansion within its existing customer base and broader footprint, development and enhancement of strategic partnerships and the expected benefits and revenues from collaborations, the success and expected benefits of new technologies, including AI, RADCOM ACE, RADCOM Neura, RADCOM ADM and RADCOM RASE, including to enhance automation, opportunities and customer engagements and the timing thereof, demand for its product and solutions and the ability to address new customer segments and expand its market reach, trends in the telecom market, including the expected growth of 5G, AI, cloud-native deployments, network automation and autonomous networks.
The timing, scope and sequencing of customer deployment programs, the effects of server infrastructure costs and supply constraints, and the timing and extent to which deferred deployments may move forward or return to a normalized cadence, customer relationships, competitive position, sales pipeline, commercial discussions, conversion of opportunities and expansion within existing accounts, the anticipated scope, timing, implementation, benefits, customer transition and expansion potential of the company's contract with a European operator, expectations with respect to gross margins, research and development, sales and marketing expenses, cash flow, non-GAAP profitability, free cash flow positivity, full year 2026 revenue outlook, future growth, including double-digit percentage revenue growth in 2027, the impact of foreign exchange rates and hedging, resilience, long-term commitment and continued investments.
And the establishment, size, timing, initiation and implementation of the intended share repurchase program and the company's ability to return capital to shareholders while continuing to invest in its platform and AI road map. The company does not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements are outlined in today's press release and the company's SEC filings.
In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance. By excluding noncash stock-based compensation that has been expensed in accordance with ASC Topic 718, financial income expenses and amortization of intangible assets related to acquisitions, non-GAAP results provide information helpful in assessing RADCOM's core operating performance and evaluating and comparing the results of operations consistently from period to period.
The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the quarter's earnings release available on our website, www.radcom.com.
Now I would like to turn over the call to Benny. Please go ahead.
Thank you, operator, and thank you all for joining us today to review RADCOM's results for the second quarter of 2026. Please turn to Slide 7. On July 13, we announced our preliminary second quarter revenue expectations and revised our full year 2026 outlook. I would like to provide more specific context on what has changed within several customer deployment programs and why we remain confident in the underlying opportunities. The affected projects are primarily planned expansion phases with a limited number of existing Tier 1 customers. These customers continue to use RADCOM solution in their production networks, and the projects remain part of the longer-term deployment road map we have developed with them.
The delays do not reflect any weakening of our customer relationships, unhappiness with RADCOM's solutions or pricing, project cancellations or business lost to competitors. The main issue is cost. Across the industry, the price of server infrastructure needed for private cloud and on-premise deployment has risen sharply. In some cases, comparable server configurations now cost multiples of their previous levels, and this increase has occurred over several months, not several years.
A large deployment may require dozens of servers across multiple sites. So these increases can add up substantial infrastructure commitment for the customer. As a result, some customers are rethinking the timing, scope and order of their infrastructure investments. They may need to rebalance budgets, prepare additional sites or move portions of their expansion into a later budget period before approving the next deployment phase. RADCOM does not manufacturer these servers. Our strategic value and profitability are derived from our software, analytics and automated assurance capabilities. Still, our software must be deployed within an operating environment that is ready to support it. A project cannot move forward until the customer's infrastructure is prepared for installation. We have taken steps to reduce the risks within our control. For certain anticipated deployments, we have already secured hardware so that RADCOM can begin execution once the customer gives us the green light and the site is ready.
Any further delay simply reflects the time customers need to prepare their infrastructure before they can install our product. These effects are primarily concentrated in private cloud and on-premises deployments. Public cloud projects are less dependent on purchase, shipment and installation of physical infrastructure and therefore, have been less affected. Based on our current customer discussions and project road maps, we believe that the first quarter of 2027 is the first period in which deployment activity could begin returning to a more normal pace. One or more projects could potentially begin moving forward sooner, including during the fourth quarter of 2026.
Some customers are also working through their 2027 budgeting processes, which should provide greater clarity on the timing and order of these projects. We have already secured hardware to support part of this activity. So RADCOM will be ready to execute as soon as customers finish their infrastructure planning and give us the go ahead. The key point is that so far these projects have been delayed, not displaced. They remain associated with active customer relationships and established expansion road maps. However, customers must first fund and establish the underlying network and computing infrastructure on which our software will operate.
Our customer relationships remain strong. Our competitive position remains intact and we are not seeing customers move away from our solutions. As customers finish their infrastructure preparations and authorize these expansion phases, we believe deferred deployment activity should return. Together with long-term demand for AI-driven assurance, 5G visibility and network automation, we believe we will return to stronger growth in 2027. Furthermore, our sales pipeline and our medium- to long-term customer deployment plans remain unchanged. In fact, the pipeline continues to improve in quality and a number of opportunities are now advancing to commercial discussions.
We believe RADCOM will remain profitable on a non-GAAP basis in 2026. We also expect to return to double-digit growth in 2027. Please turn to Slide 8, our financial highlights. Total revenue of the second quarter of 2026 were $11.8 million. That is down 33.4% year-over-year from $17.7 million a year ago. Please turn to Slide 9. Our recent wins. A few weeks after the quarter ended, we secured 3 new contracts, 2 were new customers, and the third was a renewal at an existing customer. First, as announced yesterday, we expanded our European presence by winning multiyear contract with new customer, CETIN Networks, in Slovakia.
CETIN Network selected RADCOM to deploy end-to-end AI-driven assurance across its mobile network, from the radio access network to the core. CETIN is replacing its incumbent assurance provider with a single, subscriber-aware platform built on RADCOM ACE. We were selected following a competitive multi-vendor RFP. We believe that this selection is evidence of our technology's strength and the growing preference for our platform among European operators. CETIN is part of CETIN International and a wider e& PPF Telecom group. Together, they serve more than 12 million customers across 4 countries, which gives us a foundation to potentially expand across the broader group over time. Second, in Asia Pacific, we won a new customer through a competitive tender with a Tier 1 operator and replaced the long-time incumbent. The deal is small, but it is an important reference win. It puts us in a strong position to compete for a much larger, network-wide project with this operator.
Third, we renewed the contract with an existing European customer for RADCOM Network Visibility. All of these deals closed only a few weeks after the quarter ended. This shows the pattern behind our second quarter results. With operators, deal timing can shift. Demand for our solutions and our competitive position do not. Please turn to Slide 10, our strategy. Our priorities remain unchanged, expanding our Tier 1 footprint, deepening our installed base and advancing AI-native assurance for autonomous networks. And we will do all of this while keeping the operating discipline to support our profitability.
Our partner-led model works alongside NVIDIA, ServiceNow, AWS and leading system integrators. It efficiently extends our reach and meets operators whenever they are in their AI and cloud journey. A key advantage for us is the significant reduction in total cost of ownership or TCO that we offer. Our platform is fully cloud-native and highly efficient. So it delivers far lower TCO than legacy solutions. That means lower CapEx and OpEx than our competitors. Also, our software can run on incumbent hardware and deliver much more efficient performance per watt. This means it can be deployed on the very same hardware an operator already uses with the incumbent assurance vendor.
Reusing the same infrastructure means an easier migration with no costly rip-and-replace. It delivers real savings and better performance. Combining this with our TCO advantage and data that telco AI depends on, and we believe we are well positioned for long-term, profitable growth. We also remain financially strong with a solid cash position and no debt, enabling continued investment in our differentiated agentic AI capabilities and in the expansion of our strategic partnership throughout this period.
Please turn to Slide 11, the telecom market. Operators continue to transition to 5G standalone and cloud-native deployments. At the same time, they are embedding AI deeper into their networks to automate operations, enhance the subscriber experience and reduce operating costs. All of this is happening while data volumes and network complexity keep on growing. Yet a gap remains between AI ambition and AI readiness. Most operators still lack the reliable, subscriber level data that these AI use cases depend on.
We saw a shift in operator spending this quarter as some adjusted the timing and mix of their investments, which impacted our results. But near-term spending patterns can fluctuate without changing the market's underlying direction. The direction still points to what we provide, the data operators need to automate their networks and run them more efficiently. That gap is exactly where RADCOM adds value. As operators shift from proof-of-concept to commercial AI deployments, they demand unified, end-to-end intelligence. This trend only increases the need for cloud-native, AI-enabled service assurance solution such as RADCOM ACE and RADCOM Neura.
We believe our position as leading assurance provider for 5G will continue to drive positive returns. Please turn to Slide 12, our installed base. Alongside new opportunities, our installed base remain an important validation of our strategy and the durability of our technology in live, large-scale networks. Work with 1Global continues to progress as RADCOM ACE is deployed to monitor its 4G and 5G services.
We continue to support key accounts, including AT&T and Rakuten Mobile, where our assurance solutions remain embedded in production networks serving millions of subscribers. Taken together, these deployments indicate that demand among our existing customers remains strong and that expansion opportunities are progressing. And that is true even as operators work through longer infrastructure lead times across the market.
Please turn to Slide 13, the launch of RADCOM ADM. During the quarter, we also launched RADCOM ADM, the Analytics Designer Module, a new addition to the RADCOM ACE platform. It puts operators in control of their own analytics. What was once a months-long request to a vendor is now something their teams can do themselves in real time. As networks become more automated, that speed becomes essential and delivering it at scale requires engineering expertise that is hard to copy.
ADM also strengthens our AI strategy. It feeds real-time data directly into RADCOM Neura, our agentic AI layer, making those agents more accurate and reliable. ADM will be generally available to existing and new customers later this quarter. And we see it as a clear path to expand within existing accounts through new use cases and higher value tiers. Please turn to Slide 14, some more recent industry recognition. In February, we released RADCOM Neura, our suite of AI agents designed to work within the AI agent ecosystem. I'm pleased to share that RADCOM Neura has since earned industry recognition. RADCOM is a finalist in the 2026 Light Reading's Leading Lights Awards for Most Innovative Telco AI/ML product.
As operators embrace AI to manage increasingly complex networks, we are proud that RADCOM Neura has been recognized for helping transform real-time network intelligence into smarter, more proactive operations. That recognition extended to our collaborative work across the ecosystem. At Digital Transformation World, or DTW Ignite in Copenhagen, we were proud to be part of a winning team at the Catalyst Awards. Our catalyst was named Outstanding Catalyst in the AI and Automation category. It showed that multivendor AI agents can collaborate to accelerate fault resolution, improve the customer experience and advance level 4 autonomous networks.
RADCOM contributed AI-driven assurance agents that rank issues by real customer impact. We also contributed RADCOM Governance, our framework for managing how agents interact and for building trust through policy-based oversight. Please turn to Slide 15, our go-to-market activity. From a go-to-market perspective, we also remain highly active throughout the quarter. We participated in DTW Ignite in Copenhagen, FutureNet World in London and Network X Americas in Dallas, where we showcased our AI-native assurance solutions and AI agent capabilities.
Our executives also took the stage at these events, sharing our perspective on how operators can use AI, automation and network data to build demand-driven networks. They also spoke to the opportunity that Agentic AI now presents. Customer and partner responses to our AI agent capabilities and AI-native assurance solutions were very encouraging. We also held productive meeting with operators and ecosystem partners that we believe could translate into additional sales opportunities over time.
Please turn to Slide 16, our pipeline. As I mentioned, we are actively engaged across a healthy set of opportunities, several of which advanced during the quarter from technical evaluation and proof of concept to commercial discussions. The pipeline is steady, healthy and progressing. We remain confident in our ability to convert this pipeline into both new business and continued expansion within our existing customer base.
Please turn to Slide 17, my closing summary. To summarize, while our second quarter results and our revised full year guidance were disappointing, our long-term fundamentals remain solid and our strategy is unchanged. We offer a lower cost of ownership and operators can run our software on hardware they already own. In a tighter spending environment, that makes us an easier decision. Our customer relationships are strong, and our pipeline is broad and progressing. Several opportunities advanced to commercial discussions during the quarter. A few weeks after the quarter ended, we won 3 new deals. We also launched RADCOM ADM and earned industry recognition for RADCOM Neura. Financially, we remain debt-free, and we expect to remain profitable on a non-GAAP basis in 2026. We also continue to invest in the AI capabilities operators need to run their network efficiently.
Please turn to Slide 18. Before I hand over to Hod, a word on capital allocation. We remain confident in the company's long-term prospects and live that repurchasing our shares represent a compelling use of capital at the current valuation levels. So the Board and management have decided to move forward. We will take the required steps to establish a share repurchase program of $20 million to $25 million. We have already started this process and plan to finish it as fast as the applicable rules allow. Once the required steps are done, we will start the buyback.
With that, I'll now hand the call over to our CFO, Hod Cohen to review the financial results in detail.
Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will refer to non-GAAP results. Reconciliations between GAAP and non-GAAP measures are provided in our press release and presentation. All comparisons are year-over-year.
Please turn to Slide 20, our quarterly financial highlights. Revenues for the second quarter were $11.8 million, down 33.4% year-over-year from $17.7 million. Gross margin in the second quarter was 76.3%. We recorded an operating loss of $2.2 million or negative 18.5% of revenue. Net loss was $1.5 million or $0.09 per diluted share. That compares with net income of $4.2 million or $0.25 per diluted share in the same quarter last year. The decline was driven primarily by lower revenue in the second quarter of 2026.
In the first half of 2026, operating income was $1.6 million or 5.1% of revenue, and we expect to remain profitable on a non-GAAP basis for the full year. Please turn to Slide 21. Our net R&D expenses for the second quarter totaled $5.3 million, up 15.9% year-over-year. This growth reflects 2 things. First, our continued investment in R&D to drive innovation and expand our product portfolio. Second, currency headwinds from the shekel-dollar exchange rate. To reduce currency exposure, RADCOM initiated a short-term hedging program of shekel expenses through the end of 2026. We plan to continue our strategic R&D investments to deliver advanced intelligent solutions. The focus is on agent-to-agent and multi-model workflows while supporting our strategic partnerships and bringing new features to market.
Sales and marketing expenses for the second quarter totaled around $4.7 million, an 8.8% year-over-year increase, mainly due to FX headwinds. We continue to invest in our sales capabilities to support pipeline growth and expansion in high-value regions. On a GAAP basis, as shown on Slide 22, our net loss for the second quarter of 2026 was $3.1 million compared with net income of $2.4 million in the same quarter last year. GAAP loss per diluted share was $0.18 compared with earnings of $0.15 per diluted share a year ago.
The year-over-year move from GAAP net income to a GAAP net loss is driven by the lower revenue in the quarter. It also reflects our continued investment in R&D and in sales and marketing. We ended the second quarter of 2026 with 331 employees.
Please turn to Slide 25, our balance sheet. We closed the quarter with total $109.7 million in cash, cash equivalents and short-term bank deposits, reflecting positive cash flow of $1.3 million for the quarter. For the second half of 2026 as a whole, we aim to remain free cash flow positive. As Benny mentioned, we are confident in RADCOM's long-term outlook. So we view a buyback at current levels as an attractive use of capital through a share repurchase program of $20 million to $25 million. That process is already underway, and we expect to complete it as quickly as the applicable rules permit. Once the required steps are done, we will start the buyback. We are reaffirming our revised full year 2026 revenue outlook of $57 million to $63 million with a midpoint of $60 million as announced on July 30, 2026.
That concludes our prepared remarks. Thank you. We'll now hand the call back to the operator for your questions.
[Operator Instructions].
2. Question Answer
Can you hear me?
I can't hear anything if you can hear me. I can hear something now.
Okay. That's great. Well, thank you for the new style of coal being able to say something by Zoom. I've got 2 of them. Well, first would be the bad results of second quarter, they came quite surprising, and we had no clue after the Q1 call. So probably it came quite surprising for you as well. I'd just like to know, is there more visibility for third and fourth quarter? Or might that happen again.
I can't hear you again.
Well, if you can hear me. I just tried to say -- to tell my other question. So you get them on record. So I'd like to know more about the share buyback process. Will you buy them at a stock exchange or what stock exchange might that be? And -- Or will you make like a direct offer because it's going to be quite hard to buy that many shares, won't it be? So how do you think about that process? That would be my second question. I still can't hear you. I've been told that other people experienced the same issue. So it would be great if you find a solution. Maybe people can hear us by phone, I don't know, but not via Zoom.
RADCOM Ltd. — Q2 2026 Earnings Call
RADCOM Ltd. — Q1 2026 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Ltd results conference call for the first quarter of 2026. [Operator Instructions] As a reminder this conference is being recorded and will be available for replay on the company's website at www.radcom.com/mailtome. On the call are Benny Eppstein, RADCOM'S CEO and Hod Cohen, RADCOM's CFO. Please note this management has prepared the presentation for your reference that will be used during the call. If you have not downloaded it, you may do so through the link in the investor's section of RADCOM's website at www.radcom.com/investor-relation.
Before we begin, I would like to review the safe harbor provision. This conference call will contain forward-looking statements. Forward-looking statements in the conference call involve several risks and uncertainties including, but not limited to, company's statements about its momentum, strategic direction and goals, market position and trajectory, future execution and delivery of value to customers and stakeholders, expansion within its existing customer base and expansion of its footprint, development of an enhancing strategic partnership and expected benefits and revenues from collaborations, the success of new technologies, including AI to, among other things, enhance automation and efficiencies pipeline, opportunities and customer engagements and the timing thereof, the launch and reception of RADCOM Neura and its integration into agentic AI ecosystems, demand for its products and solutions and the ability to address new customer segments and expand its market reach, trends in the market, the expected benefits of its AI-driven assurance and other solutions, its expectation with respect to research and development and sales and marketing expenses, expectations regarding the growth of 5G and AI and related spending and its full year 2026 revenue guidance, future growth and profitability.
The company does not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements are outlined in today's press release and the company's SEC filings. In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance.
By excluding noncash stock-based compensation that has been expensed in accordance with ASC Topic 718 financial income, expenses related to acquisitions and amortization of intangible assets related to acquisitions. Non-GAAP results provide information helpful in assessing RADCOM's core operation performance and evaluating and comparing the results of operations consistently from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with the generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures included in the quarterly earnings release available on our website, www.radcom.com.
Now I would like to turn over the call to Benny. Please go ahead.
Thank you, operator and good morning, everyone. Please turn to Slide 7. The first quarter marked a strong start to 2026. We sustained financial and operating momentum. We delivered revenue of $18.6 million representing 12% year-over-year growth and extending the positive trajectory we have built over the past several quarters. Profitability also strengthened with non-GAAP operating income increasing to $3.7 million and operating margin expanding to 20.1%, up from 19% in the first quarter of 2025.
This performance reflects our operating discipline and our ability to efficiently convert top line growth into higher profitability, while investing in innovation and long-term initiatives. Based on our current visibility, we are reaffirming our full year 2026 revenue guidance of 8% to 12% year-over-year growth.
Now to Slide 8. From an execution standpoint, we delivered financially and continue to strengthen our position within evolving AI-native telecom ecosystem. During the quarter, we signed a multiyear renewal with one of our Tier 1 customers, expanding the deployment of RADCOM ACE into additional AI-driven use cases focused on automated data-driven network operations.
The extended scope includes enhanced automation capabilities designed to improve service assurance workflows, accelerate issue identification and resolution and provide deeper real-time network insight across increasingly complex 5G environments. This renewal not only confirms the strategic nature of our relationship with this operator but also reflects growing confidence in the measurable value we deliver, lower operating costs, faster issue resolution and stronger service quality in 5G networks.
During the quarter, we also launched RADCOM Neura, our AI agent suite designed specifically for Agentic telecom ecosystem. Neura represents an important milestone in our AI strategy and product roadmap. This suite turns real-time network and subscriber data into autonomous intelligence that identifies issues, analyze user behavior and automates workflows across assurance, network operations and customer care.
Neura integrates directly with existing service management system, including ServiceNow, letting operators embed telecom intelligence into their broader IT and support environment. As we broaden our strategic offering, our AI strategy is receiving positive feedback from operators, ecosystem partners and industry publications. Last quarter, our predictive complaint resolution agent received the Best AI/ML Innovation award at the Global Connectivity Awards in London, highlighting growing industry recognition for our AI-native assurance capabilities.
Turning to Slide 9. In March, we launched our second certified connector on the ServiceNow store, RADCOM network case validation and verification, which extends deeper network intelligence directly into service management workflow. The solution lets operators detect, validate, prioritize and resolve network issues faster without leaving the ServiceNow platform, cutting manual work and improving efficiency.
These releases demonstrate our ability to rapidly translate AI road map into deployable capabilities that operators can implement today.
AI is reshaping how operators run their networks and the value it delivers will be defined by the quality of the data it receives. In telecom, the data that matters most is the data that reveals the real subscriber experience on the live network. That is precisely what RADCOM produces. We capture data, correlate it, and transform it into subscriber level insights that drive the AI use cases our customers need to deliver real-time benefits and fuel network automation.
If data is the new oil, RADCOM operates the refinery, the point where raw telecom data becomes the subscriber level intelligence that AI use cases actually need.
Turning to Slide 10. This is also the value we bring to our work with key ecosystem partners, including NVIDIA, ServiceNow, AWS, a leading global system integrator such as Infosys, with whom we have recently partnered to develop telco-specific AI agents and network use cases. These partnerships are increasingly important as operators seek AI solution built specifically for telecom environments rather than on generalized AI platforms that lack telecom domain expertise.
For us, these partnerships amplify our reach putting our technology in front of operators we might not have reached directly, carried by trusted implementation partner. The right partner relationships don't just expand our reach, but they accelerate the sales cycle and lower the barrier to adoption.
Turning to Slide 11. This partner leverage model is also why we can scale the pipeline efficiently, by extending our reach through trusted system integrators and ecosystem partners rather than through proportional growth in direct sales and marketing investment. RADCOM has spent more than 3 decades inside Tier 1 operator networks, generating intelligence from live subscriber and service data, the edge cases, protocol expertise and operational workloads that emerge only at scale. It's what general purpose AI can't replicate.
A useful analogy is that of a fluent speaker versus a native speaker. General purpose AI applied to telecom may understand the language, but it lack the context to understand edge cases and service impacting events. Combining AI with telecom native expertise and product innovation is what turns automation into real customer outcome, and that is what we bring.
Turn to slide 12. Beyond AI capabilities, our technology also stands out for operators focused on lowering total cost of ownership. During the quarter, ACG Research a leading telecom research firm independently reviewed our total cost of ownership against competing solutions. It found that RADCOM can lower an operator's total cost of ownership by up to 70%, even when run on the same hardware as competing solutions.
These savings come from our patented cloud distributed architecture, which requires fewer servers, use less data center space, consume less power and handle large-scale network datasets more efficiently. Exact savings vary by deployment, workload and network setup, but the cost advantage held up across every customer environment ACG reviewed.
This combination of AI native capabilities, telecom domain expertise and cost efficiency is shaping conversation with operators globally and is driving activity across our pipeline. Growing our Tier 1 footprint remains a top priority and we are actively engaged in multiple sales opportunities, several of which are advancing through technical evaluation and proof-of-concept stages.
Ultimately, adoption of next-generation assurance moves at the pace of each operator's tech stack, checked by a variety of variables from cloud maturity to AI readiness. That variability is why our pipeline is broad and multiyear by design and why our partner leverage model is built to meet operators wherever they are on that curve.
Turning to Slide 13. Alongside new opportunities, our installed base remains an important validation of our strategy and technology. During the quarter, we advanced deployment work with 1GLOBAL following its selection of RADCOM ACE to monitor 4G and 5G services, supporting around 43 million subscribers. We also expanded our relationship with a leading European operator through Rakuten Symphony for our network visibility solution, thereby enhancing visibility and real-time insights across virtualized and cloud native network environments. Both deployments are progressing well and further show how our solutions perform in large-scale production networks. We also continue to support AT&T and Rakuten Mobile, where our assurance solutions remain embedded in production networks supporting millions of subscribers.
Turning to Slide 14. Stepping back, the broader market landscape is evolving in ways that align closely with our strength. According to a recent Omdia report, 5G core spending increased 83% in the fourth quarter of 2025 as operators accelerated 5G standalone deployments, extended cloud-native architectures and prioritized AI-driven efficiency initiatives.
Operators are increasingly focused on automating their networks, improving subscriber experience and lowering operating costs while managing rapidly growing data consumption and network complexity. We believe these industry priorities directly drive demand for cloud-native AI-enabled service assurance and network intelligence solutions such as RADCOM ACE and RADCOM Neura.
Looking ahead, the FIFA World Cup in June will push operator's networks to increase capacity with traffic levels as much as 5x normal around event stadiums. High-density, high-stress events like this are where real-time assurance, subscriber analytics and automated workforce matter most. And, our solutions like RADCOM ACE delivered the clearest value.
Turn to Slide 15. From a go-to-market perspective, we also remain highly active during the quarter. We participated in NVIDIA GTC, the TM Forum Tour Tokyo and Mobile World Congress, Barcelona showcasing solutions in collaboration with ServiceNow, AWS, and Infosys. Customer partner responses to our AI agent capabilities and AI native assurance solutions were very encouraging, and we held productive meetings with operators and ecosystem partners that we believe can translate into additional sales opportunities over time.
Turning to Slide 16. Overall, this was a strong start to the year. Revenue grew 12%. Operating margin expanded to 20.1%, and we reaffirm our full year guidance of 8% to 12% revenue growth. The market is moving toward AI-native operations, and RADCOM produces the network and subscriber data that Telco AI needs to run on. We remain focused on disciplined execution, deepening our installed base, growing our Tier 1 footprint and advancing AI-driven assurance for autonomous networks.
Looking ahead to the rest of 2026, we expect to expand the Neura agent suite with additional use cases across assurance, customer care and network operations and to continue translating our AI road map into deployment capabilities that our customer can run today. With that, I'll turn the call over to Hod.
Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will refer to non-GAAP results. Reconciliations between GAAP and non-GAAP measures are provided in our press release and presentation. Additionally, all comparisons are year-over-year unless otherwise noted.
Please turn to Slide 18 for our quarterly financial highlights. We grew revenue 12% year-over-year to $18.6 million and managed expenses effectively even as we increased strategic R&D investments, resulting in improved margins and profitability. Gross margin in the first quarter was 76.5%, operating income reached $3.7 million, and the operating margin was 20.1%. Net income was $4.7 million or $0.28 per diluted share compared with $4.1 million or $0.25 per diluted share last year.
As shown on Slide 19, our gross R&D expenses for the first quarter totaled $5.1 million, up 19.7% year-over-year. This growth reflects our focus on strengthening collaboration, fostering innovation and expanding our product portfolio. We plan to continue strategic R&D investment to deliver advanced intelligent solutions with a focus on agent-to-agent and multi-modal workflow while supporting our strategic partnership and productization efforts.
Sales and marketing expenses for the first quarter totaled $4.3 million, a 1.4% year-over-year increase. We continue to invest in our sales capabilities to support pipeline growth and expansion in high value regions.
On a GAAP basis, as shown on Slide 20, our net income for the first quarter of 2026 was $3.1 million, a 26.1% year-over-year increase. GAAP earnings per diluted share were $0.18 compared with $0.15 last year.
We ended the first quarter of 2026 with 328 employees. Turning to the balance sheet on Slide 23. We closed the quarter with $108.4 million in cash, cash equivalents and short-term bank deposits, reflecting a $1.5 million negative cash flow, mainly due to annual bonuses payment. Thank you. We will now pass the call back to the operator for any questions.
[Operator Instructions] The first question is from Arjun Bhatia from William Blair. Please go ahead.
2. Question Answer
Yes. Perfect. Thank you so much, you're kind of talking to a lot of Tier 1 operators you're engaged in sort of several opportunities at various stages. And so it sounds like the pipeline is strong, and I'm curious if you can just touch on how -- where you are in these deals when you expect they might convert?
And is that growth opportunity '26 better? Or is it further out in '27 and '28?
Hi Arjun. thanks for the question. I believe that at least part of it will translate into revenue in the second half of 2026, definitely -- or at least what I believe in is Q4 definitely will reflect some of the general new customer that currently we are engaging with.
Okay. Got it. Perfect. And then on your new AI offering Neura, what -- is that a new sort of monetization motion? Is it going to be like an add-on pricing or some premium pricing? How do you think about sort of layering that into your contracts with customers and prospects.
I believe it's the right and the idea is to orchestrate different AI agents within the Agentic ecosystem as a whole. And it will definitely be monetized based on the number of use cases at the agents, AI agent that you'll acquire from us, but it would be also part of a larger bundle and also part of partnership play that we mentioned today with Infosys or others. So it's very dependent on the requirement and very specific to customer endpoints. I can put it like that.
[Operator Instructions]
The next question is from Ryan Koontz from Needham & Company.
Want to maybe ask about your partnerships here, your ecosystem partners with ServiceNow and maybe AWS to a lesser degree. But can you update us maybe on your joint sales motion there and how that's playing out for you? What's been working so far and maybe what you think about where and how that relationship evolves in the future.
Sure, absolutely. Yes, we have the number of existing customers and new prospects that we are working together. We are actually experiencing some of the geographical reach due to that. We're making good progress. And as you know, telco sales cycle is a bit long, but we are seeing good and positive response from our customers looking into it and also kind of extending leverage and their platforms with our capabilities, bringing a lot of value to our end customers. So definitely good prospects and here, I do hope to get something in production by end of the year or early 2027.
Great. Maybe a follow-up on a similar vein, but thinking about from a technological perspective, as you see 5G stand-alone cores, we're hearing a lot more about that momentum picking up out there. How does that affect your opportunities out there for your customer base with regards to the proliferation of stand-alone.
We see a lot of need to move to a cloud-native architecture. We see some struggle with our competitors and the ability to providing those abilities. And I think with us, we already know how to work with each and every cloud provider also to support the private cloud solutions. So overall, I think it's pushing the customer towards more innovative and current technology-based solution versus legacy.
So definitely helping us combine with the new and the AI agent that we're putting into the ecosystem is definitely something that promoting our business globally.
That's great, Benny. I appreciate the insights.
Thank you so much.
There are no further questions at this time. This concludes the RADCOM Ltd First Quarter 2026 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
RADCOM Ltd. — Q1 2026 Earnings Call
RADCOM Ltd. — Q4 2025 Earnings Call
1. Management Discussion
Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Limited Results Conference Call for the Fourth Quarter and Full Year of 2025. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay on the company's website at www.radcom.com later today. On the call are Benny Eppstein, RADCOM's CEO; and Hod Cohen, RADCOM's CFO.
Please note that management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through the link in the Investors section of RADCOM's website at www.radcom.com/investor-relations.
Before we begin, I would like to review the safe harbor provision. This conference call will contain forward-looking statements. Forward-looking statements in the conference call involve several risks and uncertainties, including, but are not limited to, the company's statements about its momentum, strategic direction and goals, market position and trajectory, future execution and delivery of values to customers and stakeholders, expansion within its existing customer base and expansion of its footprint, development of and enhancing strategic partnerships and expected benefits and revenue from collaborations, the success of new technologies, including AI, to, among other things, enhanced automation, pipeline, opportunities and customer engagements and the timing thereof, demand for its products and solutions and the ability to address new customer segments and expand its market reach, trends in the market, the expected benefits of its AI-driven assurance and other solutions, its expectations with respect to gross margins, research and development and sales and marketing expenses, expectations regarding the growth of 5G and AI and its full year 2026 revenue guidance, future growth and profitability, resilience and long-term commitment. The company does not undertake to update forward-looking statements.
The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements are outlined in today's press release and the company's SEC filings.
In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance. By excluding noncash stock-based compensation that has been expensed in accordance with ASC Topic 718, financial income expenses related to acquisitions and amortization of intangible assets related to acquisitions, non-GAAP results provide information helpful in assessing RADCOM's core operation performance and evaluating and comparing the results of operations consistently from period to period.
The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with the generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures included in the quarter's earnings release available on our website, www.radcom.com.
Now I would like to turn over the call to Benny. Please go ahead.
Thank you, operator, and good morning, everyone. Please turn to Slide 7 for our financial highlights. RADCOM delivered its sixth consecutive year of growth with a record $71.5 million in revenue, representing 17.2% year-over-year growth above the midpoint of our most recent revenue guidance of 15% to 18%.
GAAP earnings per share increased by just over 65% year-over-year, and we achieved the highest cash and short-term deposit balances in the company's history of $109.9 million, with no debt. In terms of profitability, RADCOM reached record results across multiple KPIs, including earning and operating margin, demonstrating tight cost control, strong operational efficiency and scalable business model.
As shown on Slide 8, we delivered another strong fourth quarter, with revenue up 16% year-over-year and $18 million. Our strong results demonstrate the solid foundation we have established for RADCOM. RADCOM continues to deliver profitability, supported by our technology advantage, a top-tier customer base and an exceptional team. Our focus now is to expand our customer base, specifically adding new Tier 1 customers to our roster to enable our next phase of profitable growth.
Expanding our Tier 1 customer footprint remains a key priority, and we are actively engaged across a set of meaningful new prospects. We continue to see a healthy set of opportunities and demand remains strong. As is common with Tier 1 customers, timing can shift as engagement move from technical evaluation to proof-of-concept to closing. Given this momentum, we expect revenue to grow by 8% to 12% in 2026, way above the service assurance market growth. Achieving this outlook will require both new business and continued expansion within our existing customer base, and we remain confident in our ability to execute.
Looking forward, our strong balance sheet is a strategic advantage, signaling to Tier 1 customers our resilience and long-term commitment. This also allows us to continue our product innovation and R&D investments and over time, expand our footprint, all while maintaining disciplined financial management and profitability.
Our performance also validates the growing market value of our industry-leading solutions. We remain firmly committed to enabling exceptional user and subscriber experiences while addressing our customers' evolving operational and business needs. Our results and improved profitability are a direct result of our focused execution of strategy and the ongoing value we offer to our customers, all driven by our highly skilled team. The continued advancement of our technology leadership position us for accelerated scalable growth.
Heading into 2026, we expect to maintain a disciplined focus on technology advancement, including in our 5G service assurance offering and agentic AI capabilities. We will continue to support operators in optimizing their network operations, reducing costs and driving network automation. We see continued and growing opportunities to build on our existing customer base and support sustainable long-term growth.
Turning to Slide 9. We will look more broadly at the market environment. Telcos are approaching a key inflection point driven by AI adoption. A recent GSMA survey conducted in partnership with RADCOM found that 71% of operators plan to implement agentic AI this year, yet only 41% report having an end-to-end data architecture that integrates information across the organization.
This gap between AI ambition and data readiness presents a clear opportunity for RADCOM to add value by enabling operators to access reliable subscriber-focused data. This data supports multiple agentic AI use cases and broader efforts to deliver consistently high-quality customer experiences.
AI-driven demand continues to reshape network priorities. Operators are increasingly integrating AI across network layers to optimize capacity and efficiency as they continue to transformation to 5G. As we have seen, many have already moved from proof-of-concept initiatives to commercial deployment in 2025.
In the area of agentic AI, operator demand is increasingly shifting towards unified end-to-end platforms. In our recent survey, the majority of operators indicated that they are interested in deploying integrated end-to-end systems. RADCOM is well positioned to address this need with a comprehensive solution that integrates smoothly with business and service management systems for customer support, care and automation of operational workflows. This aligns well with industry shift towards more streamlined data-driven operations.
Moving on to Slide 10, our product innovations. We continue to see growing customer interest in our advanced, high-capacity data capture solution, which enables telecom operators to analyze massive amounts of data to understand the real customer experience at scale while significantly reducing infrastructure costs. We believe this solution can reduce the total cost of ownership by up to 75% compared to competing solutions, enabling broader visibility into the customer experience.
As highlighted in our survey, operators are exploring agentic AI across targeted use cases. Our focus is on developing telco-specific AI agents that deliver high accuracy, faster decision-making and measurable operational improvements across specific domains. This capability not only enhance the value of our existing platform, but also position RADCOM to address new customer segments and expand our market reach.
Turning to Slide 11, our new contract wins. In the fourth quarter, RADCOM announced a new customer win, 1Global, which selected RADCOM ACE to deliver next-generation AI-powered assurance across both subscribers and IoT, enabling 4G and 5G monitoring at scale for 43 million subscribers. We also expanded within existing customer, a leading European operator via Rakuten Symphony to supply our network visibility solution. The solution will deliver accurate intelligent data collection across its network end-to-end.
Regarding our installed base, Slide 12. RADCOM continues to support AT&T as it sustains leading network performance across the industry. In 2025, the mobility service revenues increased, reflecting ongoing customer demand and operational strength. AT&T finished the year with 120 million subscribers. One industry analyst noted that AT&T's network remains robust and is widely regarded as most reliable network option in rural area across the U.S.
Within its fully virtualized cloud-native network, Rakuten Mobile continues to utilize RADCOM assurance solutions to deliver high-performance, reliable network quality that supports scalable growth. The operator passed 10 million subscribers in December 2025 and ranked first in the 2025 Oricon Customer Satisfaction survey.
Turning to Slide 13, we focus on our partners. We are continuing our partnership strategy with NVIDIA and ServiceNow. Our high-capacity user analytics solution is powered by NVIDIA data processing units. In field trials, it has reduced operational costs by up to 75%, while maintaining full real-time visibility, making it strong enabler of scalable 5G assurance and AIOps. We believe this partnership will start contributing initial wins over the course of 2026.
Turning to ServiceNow on Slide 14. We continue to deepen our partnership and will showcase multiple joint demos at Mobile World Congress in March. Our RADCOM AIM AIOps solution is now fully integrated, certified and available as a connector in the ServiceNow store, enabling real-time network monitoring and advanced automation use cases. We expect this collaboration to begin delivering initial wins during 2026.
Go-to-market activities, Slide 15. In 2025, we strengthened our market presence by participating in key industry events, including Fyuz in Dublin and Network X in Paris during Q4. We are preparing for upcoming high-impact engagement, including Mobile World Congress 2026 and NVIDIA GTC in March, to showcase our solutions, expand strategic relationships and drive momentum.
RADCOM's technology leadership continued to gain global recognition. Named to The Fast Mode 100 for 2025, RADCOM was recognized as one of the solution providers shaping the future of telecom and digital infrastructure. We were also finalist in the Fierce Network Award for Best Network Test and Measurement and received the Best AI/ML Innovation Award at the 2025 Global Connectivity Awards in London. These accolades validate our industry-leading solutions, reinforce our competitive differentiation and highlight the value we deliver to customers and stakeholders worldwide.
Before I wrap up, I want to briefly address the governance update. The Board of Directors has appointed Board member, Rami Schwartz, as Chairman, effective February 8, 2026, succeeding Sami Totah. Rami has served on RADCOM's Board since 2019 and brings deep experience in strategy, leadership, governance and scaling technology businesses. I've spent meaningful time with Rami over the last year at RADCOM and previous roles, and I'm confident in his ability to support the team as we remain focused on our growth strategy.
I would like also to thank Sami for his support during my first year as CEO. Importantly, Sami will continue to serve on the Board. From my perspective, the Board provides the oversight and support our team needs. We are aligned on our strategy, priorities and execution plan as we enter 2026, and we remain focused on expanding our Tier 1 customer footprint, advancing our technology road map and delivering profitable growth.
In summary, turning to Slide 16. 2025 was a solid year, defined by strong growth, disciplined operational and financial execution and continued market momentum. We strengthened strategic partnerships with NVIDIA and ServiceNow while initiating discussion with additional collaborations. We secured a new customer, expanded our service offerings, advanced agentic AI solutions and launched our high-capacity data capture solution.
Turning to 2026. We remain focused on driving innovation, particularly in agentic AI use cases and delivering solutions that reduce the total cost of ownership for operators. With a robust pipeline of opportunities, we anticipate another year of double-digit revenue growth, reinforcing our leadership in 5G assurance. The company is committed to sustaining profitability, maintaining expense discipline and leveraging its solid financial foundation to support long-term value creation.
Our near-term focus is to continue to deliver strong operational and financial execution, converting a growing pipeline of opportunities into revenue while further expanding our presence within our existing customer base. We have established key strategic partnerships and expect to deepen these relationships to scale our business and expand our addressable market.
AI remains a strong catalyst for our business, and we are investing in AI and automation to maintain our leadership in real-time network intelligence. Our customers recognize both the opportunities and challenges of AI, and RADCOM has proven its ability to deliver a total cost of ownership advantage over our peers' solutions.
Operationally, we remain committed to delivering consistent profitability and cash flow while maintaining flexibility as we continue to scale organically.
In conclusion, we entered 2026 with momentum and a clear set of goals. We have proven our business model and established a sound foundation for profitable growth.
With that, I'll now turn the call over to our CFO, Hod Cohen, to review the financial results in detail.
Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will refer to non-GAAP results. Reconciliation between GAAP and non-GAAP measures are provided in our press release and presentation. Additionally, all comparisons are year-over-year unless otherwise noted.
Please turn to Slide 17 for our quarterly financial highlights. We are pleased with how our team closed the year, delivering growth in both revenue and profitability. RADCOM delivered another quarterly revenue record with total revenue of $18.9 million, up 16% year-over-year. At the same time, we continue to manage expenses effectively while increasing strategic investments in research and development. As a result, we delivered significant improvements in margins and record profitability.
Gross margin in the fourth quarter was 77.6%, the highest since 2018. Please note that our gross margin may vary depending on the revenue mix. Operating income reached $4.3 million, surpassing the third-quarter record with an operating margin of 23%, the highest in 8 years. Net income was $5.2 million, or $0.31 per diluted share, compared to $3.8 million, or $0.23 per diluted share last year.
As shown in Slide 18, our gross R&D expenses for the fourth quarter were $4.9 million, an increase of 16.2% year-over-year. This growth reflects our focus on strengthening collaboration, fostering innovation and expanding our portfolio. We plan to continue strategic investment in R&D to deliver advanced intelligent solution with a focus on agent-to-agent and multimodal workflows, while supporting our strategic partnership and productization efforts.
Sales and marketing expenses for the fourth quarter were $4.2 million, a 1.4% year-over-year increase. We continue to invest in our sales capability and anticipate that sales and marketing expenses will gradually rise in the coming quarters to support pipeline growth and expansion in high-value regions. On a GAAP basis, as shown on Slide 19, our net income for the fourth quarter of 2025 was $3.6 million, a 62% year-over-year increase. GAAP earnings per share were $0.21 per diluted share compared to $0.14 per share last year. We ended the fourth quarter of 2025 with 325 employees.
Now let's review Slide 20, which presents the full year results. In line with our full year guidance, we finished 2025 with a record revenue of $71.5 million, an increase of 17.2% from 2024, above the midpoint of our projected 15% to 18% growth range. Our gross margin was 76.8% in 2025, up from 75.2% in 2024. Operating income increased by 55% in 2025, reaching an all-time high of $14.8 million, or 20.6% of revenue, compared to $9.5 million, or 15.6% in 2024.
Net income for 2025 reached a record $18.4 million, accounting for 25.8% of revenue, or $1.09 per diluted share. This compares to a net income of $13.5 million, or 22.1% million of revenue, equating to $0.83 per diluted share in 2024. As shown on Slide 18, our gross R&D expenses in 2025 were $18.5 million, an increase of $1.9 million from 2024, reflecting 11.1% year-over-year growth.
Looking ahead to 2026, we plan to increase our R&D investment to further develop automation and AI capabilities and support our strategic partnership and productization goals. We received a total of $0.4 million in grants from the Israel Innovation Authority during the year. To support our growth, sales and marketing expenses in 2025 were $17.3 million, up 10.5% from $15.7 million in 2024. G&A expenses for 2025 were $4.8 million, a decrease of $11,000 year-over-year.
On a GAAP basis, as shown on Slide 19, our net income for 2025 reached a new high of $12 million, or 16.8% of revenue, or $0.71 per diluted share, compared to $7 million, or 11.4% of revenue, or $0.43 per diluted share in 2024.
Turning to the balance sheet on Slide 21. We closed quarter 4 with a record $109.9 million in cash, cash equivalents and short-term bank deposits, reflecting positive cash flow of $3.2 million in the quarter and $15.2 million for the year, driven by our strong results.
That concludes our prepared remarks. Thank you, and we will now pass the call back to the operator for your questions.
[Operator Instructions] The first question is from Alinda Li of William Blair.
2. Question Answer
Benny, with $199 million in the balance sheet and no debt, how should we think about capital allocation in 2026, especially relates to M&A?
Alinda, thanks for the question. Our first priority remains to look into M&A, and this is our first priority, and this is what we are trying to accelerate, and this is what we're prioritizing. So I answered your question.
Okay. And any changes in the guidance philosophy? And what are some of the assumptions in the 2026 guide?
Sure. We believe we are basically at the second half of our sales cycle. It's hard to pinpoint exactly where we're going to close, and this is why we left the guidance 8% to 12%, and we're assuming that we will close it in the first half of the year -- some of the strategic opportunities.
[Operator Instructions] The next question is from Ryan Koontz of Needham & Company.
I wanted to ask about -- you've got a great run rate there with your large customer, AT&T. And looking at your Land and Expand strategy, what are some of the key drivers for expanding your business with existing customers there? Is it their deployments of the 5G stand-alone core? Is it adoption of agentic AI? Or what are some of the key drivers we should think about for you to be able to grow the size of new accounts?
Thanks, Ryan. We still believe we have lots of opportunities within our existing customers, including AT&T. Agentic is driving a lot of opportunities. Our unique data set that we bring to the table is helping AT&T and other customers to promote their own agentic platform and promote their own efficiencies within operations. So this is still the main target to support our biggest customers.
Got it. And I could certainly see how the analytics angle is an easy entry point for AI for RADCOM. The agentic element here, how critical is that to you breaking into an account today? Or is that really kind of a latter sale, kind of upsell for your basic capabilities?
I think it's a combination of both, Ryan. So it is -- our analytic capabilities is driving lots of opportunities, including in North America and in EMEA, by the way, while promoting our own core business, pushing our ACE product within new customers and prospects. But definitely, the AI and the unique data set is critical ingredient from our value proposition.
Got it. And with regards to your data collection, I assume these are on hardware NICs for the network equipment. The NVIDIA BlueField, where is that in terms of introduction? And what sort of architecture do you use if you're not using an NVIDIA-based product? FPGA-based?
We're actually using both NVIDIA-based standard server and cloud-native solution in all fronts. And we still believe that our product, our software is the most efficient one out there comparing to our peer competition.
There are no further questions at this time. This concludes the RADCOM Ltd. Fourth Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
RADCOM Ltd. — Q4 2025 Earnings Call
RADCOM Ltd. — Q3 2025 Earnings Call
1. Management Discussion
Welcome to the RADCOM Limited Results Conference Call for the Third Quarter of 2025. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay at the company's website at www.radcom.com later today.
On the call are Benny Eppstein, RADCOM's CEO; and Hadar Rahav, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through the link in the Investors section of RADCOM's website at www.radcom.com/investor-relations.
Before we begin, I would like to review the safe harbor provision. This conference call will contain forward-looking statements. Forward-looking statements in the conference call involve several risks and uncertainties, including, but not limited to, the company's statement about its commitment to deliver solutions that are transforming the assurance landscape, continued adoption and investment in AI and 5G as well as other favorable market trends, the resilience of the company's operating model and the value of its AI-driven assurance solution, providing lowering total cost of ownership and enabling comprehensive observability across customer networks, converting the company's robust pipeline into revenue, expanding the company's current installed base, levels of investment and advancing the company's strategic partnerships, expectation for initial revenue from certain partnerships and timing thereof as well as its full year 2025 revenue guidance, expectation with respect to margin and expenses and future growth, momentum opportunities and profitability.
The company does not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from those forward-looking statements are outlined in today's press release and the company's SEC filings. In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance by excluding noncash stock-based compensation that has been expensed in accordance with ASC Topic 718 financial income, expenses related to acquisitions and amortization of intangible assets related to acquisitions, non-GAAP results provide information helpful in assessing RADCOM's core operating performance and evaluating and comparing the results of operations consistently from period to period.
The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in the accordance with the generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures, including the quarterly earnings release available on our website.
Now I would like to turn over the call to Benny. Please go ahead.
Thank you, operator, and good morning, everyone. The third quarter was a record quarter for RADCOM, marked by strong growth and further evidence of our scalable and profitable business model. We are deepening deployments with existing customers while continuing to develop new opportunities in the market. Operators are increasing their investment in 5G stand-alone networks and AI operation, AIOps to enhance efficiencies, improve the customer experiences and reduce costs. As the market evolves, RADCOM holds strong competitive edge with our field-proven next-generation assurance platform, RADCOM ACE.
Turning to Slide 7. I'd like to give a brief overview of the Q3 results. For the third quarter of 2025, RADCOM achieved record revenue of $18.4 million, representing 16.2% year-over-year growth with continued profitability, expanding profit margins and positive cash generation. We achieved record non-GAAP operating income of $3.8 million, representing 20.9% of revenue. This is the highest since 2017, reflecting both the scalability of our model and the disciplined execution across our operations.
Our results demonstrate a strong balance between growth and profitability as evidenced by significant margin expansion. Importantly, we generated a positive cash flow of $5.1 million and ended the quarter with cash balance of $106.7 million and no debt. Our strong balance sheet positions us well for continued investment and strategic flexibility as we pursue both profitable organic expansion and targeted inorganic growth.
Turning to Slide 8. At the broader market level, RADCOM is well positioned to capitalize on the strong and durable tailwinds driving telecom spending. AI native network are rapidly evolving, enabling operators to deliver superior customer experiences. At the same time, they offer new opportunities to improve operational efficiency. To capture this value, operators need trusted data and deep telecom domain expertise to power AI use cases and ensure end-to-end network observability. These dynamics give us a distinct advantage built on years of investment in assurance innovation, telco domain AI and strong ecosystem partnerships. It's aligned perfectly with our strategic and product road map.
As AI innovation accelerates, a second major shift is taking hold across the telecom landscape. Operators are doubling down on customer experience as a core driver of retention, reduced churn and long-term revenue growth. To compete effectively, they need real-time visibility across network operations, enabling them to detect issues and anomalies before they impact subscribers proactively. These trends align directly with our value proposition to deliver end-to-end intelligent cloud-native solutions that provide granular insights into users and services at highly cost-effective rate. These capabilities offer significant savings compared to competing solutions. We believe this positions us strongly for new opportunities to demand for customer experience insights and intelligent service assurance continues to rise.
Turning to Slide 9. Let me speak to our partnership strategy. The third quarter performance underscore the continued success of our strategy. We are deepening our strategic partnership with NVIDIA, ServiceNow and system integrators. This helps strengthen our technology leadership, expand our market reach and enhance customer retention. We are focusing on developing an Agentic AI-powered automation layer with our partner systems, which will enable networks to communicate autonomously and complete complex workflows and business processes. We anticipate initial revenue contributions from these partnerships in 2026.
In the third quarter, we also completed the integration of RADCOM AIM, our AIOps solutions with ServiceNow service operation management platform. Our solution is now certified and available as a connector in the ServiceNow store. This enables continuous real-time network monitoring and supports advanced use cases such as intelligent anomaly detection and complaint validation. It also offers a comprehensive 360-degree view of network data for automated workflows, enhancing service quality and operational performance.
Turning to Slide 10. We recently launched our next-generation high-capacity user analytics solution powered by NVIDIA BlueField-3 data processing units or DPUs. RADCOM is the first network assurance vendor to capture speeds up to 400 gigabyte per second on a single server. This solution demonstrated a reduction of up to 75% in operational costs in field trials compared to traditional network probes. Furthermore, it provides complete visibility without requiring any compromises due to cost constraints. In essence, the solution delivers real-time analytics at a fraction of the cost, a key enabler for 5G assurance and AIOps. This innovative DPU-based solution is seamlessly integrated into our comprehensive automated service assurance platform and Agentic AI framework, which drives business processes across care, service management and network orchestration.
This empowers operators to capture and process massive volumes of network traffic efficiently, bridging the gap between engineering and customer-facing teams. Our NVIDIA DPU-powered high-capacity user analytics solution is now in the lab and field trials with key customers, showing promising momentum. RADCOM is also advancing its Argentic AI solution with accelerated computing to provide telecom operators with real-time actionable customer and service insights. These innovations enable telecom operators to automate network for enhanced efficiency, superior service quality and sustained long-term value.
Our Agentic AI architecture enable us to expand our addressable market by reaching operators at a time when demand for proactive analytics-based network visibility is rising. In our customer engagements, we're seeing a clear industry shift, particularly in Europe, but also across other regions. Some operators are accelerating their network modernization plans, recognizing the strategic importance of moving from legacy monolithic solutions to advanced cloud-native platform that leverage AI to automate operations. We've seen this trend firsthand with customers such as Norlys and more recently, 1Global. This positive momentum reflects the growing demand for innovative future-ready assurance solution, further solidifying RADCOM's position as trusted partner for operators seeking to enhance network performance, efficiency and competitive advantage.
As noted on Slide 11, we recently announced a new partnership with 1Global to deploy RADCOM ACE, enhancing customer experiences across Europe, North America and Asia and supporting more than 43 million connections. RADCOM ACE will provide voice and data monitoring, enabling precise and highly efficient troubleshooting across all required protocols. We also secured a business expansion with one of our existing customers. This progress underscore our land and expand strategy. As we demonstrate our value proposition, we are well positioned to grow as our customers expand their network and manage increased network traffic.
Let me now speak to our installed base. Turning to Slide 12. AT&T continues to add subscribers and RADCOM continues to support their net add gains, providing real-time assurance for service quality and user experience. Rakuten Mobile continues to expand its 5G footprint, surpassing 9 million subscribers in Japan and demonstrating increasing momentum in one of the world's most mature mobile markets. The operators continues to rely on RADCOM assurance solution as part of its effort to deliver scalable, reliable, high-quality performance across its fully virtualized cloud-native network.
Across our customer base, we're seeing broader deployments and deeper integration of our AI-powered capabilities. These solutions are enabling operators to achieve new level of automation, performance and efficiency.
Go-to-market activities. As noted in Slide 13, we attended many key industry events in Q3, including DT Campus, Innovate Americas, Network X and others, where we met with potential and current customers and business partners. Our cutting-edge solution continued to receive strong recognition from leading industry bodies. Most recently, our Argentic AI solution, RADCOM Predictive Complaint Resolution was honored with Best AI/ML Innovation Award at the Global Connectivity Award in London. The prestigious awards saw us outperform prominent global vendors and operators. Such industry validation underscores our technology leadership and reinforces the differentiated value we deliver to our customers and stakeholders.
Turning to Slide 14. As we look ahead, we believe that the current trends, combined with improving capital conditions will drive sustained investment across our customer base, continuing to fuel growth opportunities for RADCOM. Our focus remains on: one, converting a strong pipeline into revenue and looking to expand our current customer base even further; two, deepening strategic partnerships to drive innovation and expand our addressable market opportunity; three, investing in AI and automation to maintain our leadership, driving lower total cost of ownership for real-time network intelligence; and four, delivering consistent profitability and cash generation as we expand our global footprint.
In conclusion, the third quarter marked another milestone for RADCOM, achieving record results, strong execution and expanding opportunities across the AI-driven telecom ecosystem. We entered the final quarter of 2025 with strong momentum and clear visibility toward our full year outlook of 15% to 18% revenue growth, underpinned by disciplined execution, technology leadership and growing customer adoption. We will provide full year 2026 guidance when we release our fourth quarter results.
Before I hand the call over to our CFO, Hadar Rahav, to review the financial results in detail, I'd like to take a moment to share an update. As announced last week, Hadar will be leaving RADCOM after supporting the transition to our incoming CFO, Hod Cohen, during the first quarter. On behalf of the entire company, I want to thank Hadar for her outstanding leadership and many contributions over the year that helped strengthen RADCOM financial foundation and growth. We're grateful for her dedication and wish her the very best in the next chapter. We are also pleased to welcome Hod, a highly accomplished finance executive with deep experience in the telecom industry. We're confident he will build on this strong foundation and help drive our continued success.
Hadar, over to you.
Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will discuss non-GAAP results. Reconciliations between GAAP and non-GAAP measures are provided in our press release and presentation. Additionally, all comparisons are on a year-over-year basis unless otherwise noted.
Please turn to Slide 16 for our financial highlights. RADCOM delivered another quarterly record in revenues with total revenue of $18.4 million, up 16.2% year-over-year. Simultaneously, we continue to effectively manage expenses while growing our strategic investment in sales and marketing. As a result, we delivered significant improvements in margins and record profitability. The gross margin in the quarter was just over 77%. Please note that our gross margin may vary based on the revenue mix. Our strong gross margin reflects a more favorable revenue mix with a lower proportion of third-party cost elements. We believe this level of gross margin will be sustained in the fourth quarter.
Our non-GAAP gross R&D expenses for the third quarter were $4.7 million, up 11.6% year-over-year. This increase reflects our focus on deepen collaborations, driving innovation and expanding our portfolio. We plan to continue our strategic R&D investments to deliver advanced intelligent solutions with an emphasis on agent-to-agent and multi-model workflows while supporting our strategic partnerships and productization plans.
During the quarter, we received a grant of $189,000 from the Israel Innovation Authority, consistent with the same quarter last year. Of this amount, approximately $130,000 is related to programs from the prior years. As a result, we expect the grant in the fourth quarter to be approximately $50,000. Our net R&D expenses for the third quarter of 2025 were $4.5 million, an increase of $483,000 compared to the third quarter of 2024. Sales and marketing expenses were $4.6 million, an increase of 15.4% compared to the third quarter last year, reflecting our intentional investment to grow our sales presence. We expect a gradual increase in sales and marketing in the coming quarters to support a growing pipeline and expand our presence in high-value regions.
Non-GAAP operating margin was $3.8 million, beating the record we achieved in the second quarter with an operating margin of 20.9%. Non-GAAP net income was $4.9 million or $0.29 per diluted share, the highest in the company's history compared to $3.7 million or $0.23 per diluted share last year. On a GAAP basis, as shown on Slide 19, our net income for the third quarter of 2025 was $3.5 million, an increase of 54% year-over-year. GAAP earnings per share were $0.21 per diluted share compared to $0.14 per share last year. We ended the third quarter of 2025 with 319 employees.
Turning to the balance sheet on Slide 23. We closed the quarter with record cash, cash equivalents and short-term bank deposits of $106.7 million, supported by a $5.1 million positive cash flow in the third quarter, driven by our strong operating performance.
That concludes our prepared remarks. Thank you, and I will now turn the call back to the operator for your questions.
[Operator Instructions]
The first question is from Arjun Bhatia of William Blair.
2. Question Answer
For the newly launched high-capacity user analytics solution, what are the early feedback from customers so far? And what are you most excited about?
Thanks for the question. We're super excited about it. It's currently in a couple of field trials. We see great performances, and we see targeting this to materialize in 2026. But so far, we are very happy with the performance we see in the field.
All right. Helpful. And in terms of -- you mentioned expansion within existing customers this quarter. What trends are you seeing overall in terms of expansion within your existing customers? And in particular, what are the specific expansion efforts from these customers are you seeing in terms of adding to their existing stack?
Are you talking specifically about the NVIDIA piece or generally speaking?
I think both. So if you could kind of narrow down first and then broader picture, overall, what trends you're seeing, that would be great.
Sure. Overall, we see pretty good buildup of a solid pipeline through the year right now, also building towards the end of this year. We're still targeting a double-digit growth, and we still see more and more opportunities coming up until 2026.
[Operator Instructions] The next question is from Ryan Koontz of Needham.
I wanted to ask about your visibility as it relates kind of looking into next year. It sounds like you're feeling a little more confident. Can you give any color there around visibility? And as you look ahead into next year, any major renewals or anything coming up that would make you concerned about maintaining your current run rate of revenue into '26?
We're still targeting -- thanks, Ryan. But we're still targeting double-digit growth for next year. We do see a lot of new opportunities coming up in the market for us specifically to the move the cloud native and the 5G stand-alone piece is driving a lot of transformation on the customer side. And then obviously, the line of spend, we still see some activities within our customers that need to consolidate certain applications, and we're going to support that. So overall, I think we can continue to support the double-digit growth also in 2026.
That's great. Great to hear. In terms of earnings leverage next year, it sounds like you're planning to spend a little more on the sales and marketing line. Any other puts and takes you'd point out on leverage, '26?
Yes, marketing and R&D, yes, that's right.
Great. And maybe last one, just a macro question about 5G core. It certainly sounds like we're starting to see some real deployments out there, at least in the U.S. Can you validate that view? And also any updated thoughts on the other kind of geographies in APAC or EMEA around 5G core deployments stand-alone?
Absolutely. We see good momentum on 5G core stand-alone Open RAN as well through U.S., Europe and some areas in Japan and Asia. And it is driving a lot of the activities, as I mentioned earlier, moving -- having a cloud-native application to support the troubleshooting and customer experience. The NVIDIA piece is really driving full user population visibility, and this is also driving a lot of excitement on the customer side.
This concludes the RADCOM Ltd. Third Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.
RADCOM Ltd. — Q3 2025 Earnings Call
Financial data from RADCOM Ltd.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 68 68 |
2%
2%
100%
|
|
| - Direct Costs | 16 16 |
3%
3%
24%
|
|
| Gross Profit | 51 51 |
99%
99%
76%
|
|
| - Selling and Administrative Expenses | 26 26 |
5%
5%
39%
|
|
| - Research and Development Expense | 22 22 |
126%
126%
32%
|
|
| EBITDA | 3.64 3.64 |
37%
37%
5%
|
|
| - Depreciation and Amortization | 0.12 0.12 |
33%
33%
0%
|
|
| EBIT (Operating Income) EBIT | 3.52 3.52 |
38%
38%
5%
|
|
| Net Profit | 7.08 7.08 |
25%
25%
10%
|
|
In millions USD.
Don't miss a Thing! We will send you all news about RADCOM Ltd. directly to your mailbox free of charge.
If you wish, we will send you an e-mail every morning with news on stocks of your portfolios.
RADCOM Ltd. Stock News
Company Profile
RADCOM Ltd. engages in the development, manufacture, marketing, and support of innovative network test and service monitoring solutions for communications service providers and equipment vendors. Its products and services includes Service Assurance, Roaming & Interconnection, Customer Experience Management and Protocol Analyzers. The company was founded by Yehuda Zisapel, Zohar Zisapel, and Nava Zisapel on July 5, 1985 and is headquartered in Tel Aviv, Israel.
StocksGuide Premium
| Head office | Israel |
| CEO | Mr. Eppstein |
| Employees | 325 |
| Founded | 1985 |
| Website | www.radcom.com |


