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What changed in AUDIOCODES LTD's 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of AUDIOCODES LTD's 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+565 added−603 removedSource: 20-F (2026-03-30) vs 20-F (2025-03-26)

Top changes in AUDIOCODES LTD's 2025 20-F

565 paragraphs added · 603 removed · 355 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

102 edited+97 added−92 removed291 unchanged
Biggest changeThe list below is not exhaustive and, therefore, investors should read this “Risk Factors” section in its entirety: ● Adverse macroeconomic conditions, including inflationary pressures and potential recessionary conditions, as well as actions taken by central banks and regulators across the world (including the U.S. government’s debt ceiling policies and contemplated or actual budget and tax cuts) in an attempt to reduce, curtail and address such pressures and conditions; ● Our quarterly results of operations have fluctuated in the past and we expect these fluctuations to continue, any actual or anticipated fluctuations in our results of operations could require that we issue revised guidance, and the failure to meet the expectations of our investors or analysts could have a material and adverse impact on our share price; ● Our business will be harmed if Microsoft or our other contact center, unified communications and ALL-IP project partners abandon or fail to achieve the expected growth of solutions compatible with our products or if we are unable or unwilling to change our products when and as may be required in order to remain a certified partner; ● If our new products fail to generate anticipated demand, we will realize a lower-than-expected return from our investment in research and development; ● Rapid technological development in the communications equipment market necessitates that we effectively manage transition to the next generation of our products; ● The increased adoption of IP networks may adversely affect the demand for media gateway products; ● Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of artificial intelligence, or AI; ● New industry standards, the modification of our products to meet additional existing standards or the addition of features to our products may delay the introduction of our products or increase our costs; ● Because we sell most of our products and services to customers who function as intermediaries, such as original equipment manufacturers, or OEMs, network equipment providers, or NEPs, system integrators, carriers/service providers, resellers and distributors, rather than directly to end-users, we are heavily reliant on such intermediaries and have less control over the ultimate selection of products by end-users; ● The markets we serve are highly competitive and several of our competitors have competitive advantages over us, which may make it difficult for us to maintain profitability; ● We rely on (i) third-party subcontractors to assemble, and original design manufacturers, or ODMs, to design and manufacture, some of our products, and (ii) third-party suppliers to provide us with key components on a timely basis; ● We may need additional financing to operate or grow our business; - 2 - Table of Contents ● Uncertain economic conditions, macroeconomic changes and trade wars (such as the trade war between the U.S., on the one hand, and China, Mexico and Canada, on the other) may materially and adversely affect our business; ● The attack on Israel in October 2023 and the ensuing war with the Hamas terror organization, along with related conflicts with their supporters in Lebanon (with the Hezbollah terror organization), Yemen (with the Houthi movement), Syria and Iran, have led to an emergency call up of reserve army soldiers and caused disruption and uncertainty in Israel, including in terms of personal safety, damage to property, economic outlook, geopolitical tensions, the war effort and toll more generally, and any related ceasefires may not be sustained in the near- or long-term, if at all; ● Political, economic and military conditions in Israel directly affect our operations and we are subject to specific risks, such as (i) fluctuations in the value of the dollar against the NIS, and (ii) labor disputes and strikes; ● We are subject to ongoing costs, limitations and risks associated with complying with a wide range of rapidly changing and evolving laws and regulations in multiple jurisdictions, including with respect to intellectual property rights and protection, data privacy, AI and machine learning, the use of sustainable materials in our products, electronic waste disposal and the export control of encryption technology; ● Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI and machine learning, and any such new technology and/or products may cause us to become less competitive, and higher levels of capital expenditures may be necessary in order to remain competitive; ● We have a significant presence in international markets and plan to continue to expand our international operations, which exposes us to certain risks that could affect our future growth; ● The transition to a new presidential administration in the United States, including the potential use and effects of tariffs to address the administration’s policy goals, could materially impact the macroeconomic framework in which we operate; ● There are significant global shortages of critical components that we utilize in our products and therefore, we may not be able to manufacture sufficient quantities to meet market demand; and ● Our wage-related expenses in Israel have increased exponentially as a result of the ongoing shortage of skilled research and development, or R&D, employees in Israel, which is causing heightened competition to recruit new skilled R&D employees.
Biggest changeThe list below is not exhaustive and, therefore, investors should read this “Risk Factors” section in its entirety: ● Adverse macroeconomic conditions, including inflationary pressures and potential recessionary conditions, as well as actions taken by central banks and regulators across the world (including the U.S. government’s debt ceiling policies and contemplated or actual budget and tax cuts) in an attempt to reduce, curtail and address such pressures and conditions; ● Our quarterly results of operations have fluctuated in the past and we expect these fluctuations to continue, any actual or anticipated fluctuations in our results of operations could require that we issue revised guidance, and the failure to meet the expectations of our investors or analysts could have a material and adverse impact on our share price; ● Our business will be harmed if Microsoft or our other contact center, unified communications and ALL-IP project partners abandon or fail to achieve the expected growth of solutions compatible with our products or if we are unable or unwilling to change our products when and as may be required in order to remain a certified partner; ● If our new products fail to generate anticipated demand, we will realize a lower-than-expected return from our investment in research and development; ● Rapid technological development in the communications equipment market necessitates that we effectively manage transition to the next generation of our products; ● The increased adoption of IP networks may adversely affect the demand for media gateway products; ● New industry standards, the modification of our products to meet additional existing standards or the addition of features to our products may delay the introduction of our products or increase our costs; ● Because we sell most of our products and services to customers who function as intermediaries, such as original equipment manufacturers, or OEMs, network equipment providers, or NEPs, system integrators, carriers/service providers, resellers and distributors, rather than directly to end-users, we are heavily reliant on such intermediaries and have less control over the ultimate selection of products by end-users; ● The markets we serve are highly competitive and several of our competitors have competitive advantages over us, which may make it difficult for us to maintain profitability; ● We rely on (i) third-party subcontractors to assemble, and original design manufacturers, or ODMs, to design and manufacture, some of our products, and (ii) third-party suppliers to provide us with key components on a timely basis; and our reliance on this global supply chain exposes us to disruptions from geopolitical conflicts, which may increase our costs and delay product delivery . ● We may need additional financing to operate or grow our business; - 2 - Table of Contents ● Uncertain economic conditions, macroeconomic changes and trade wars (such as the trade war between the U.S., on the one hand, and China, Mexico and Canada, on the other) may materially and adversely affect our business; ● The attack on Israel in October 2023 and the ensuing war with the Hamas terror organization, along with related conflicts with their supporters in Lebanon (with the Hezbollah terror organization), Yemen (with the Houthi movement), Syria and Iran, have led to an emergency call up of reserve army soldiers and caused disruption and uncertainty in Israel, including in terms of personal safety, damage to property, economic outlook, geopolitical tensions, the war effort and toll more generally, and any related ceasefires may not be sustained in the near- or long-term, if at all; ● Some of our employees and independent contractors who reside in Israel are required to perform military reserve duty, which may disrupt their work for us; ● Political, economic and military conditions in Israel directly affect our operations and we are subject to specific risks, such as (i) fluctuations in the value of the dollar against the NIS, and (ii) labor disputes and strikes; ● We are subject to ongoing costs, limitations and risks associated with complying with a wide range of rapidly changing and evolving laws and regulations in multiple jurisdictions, including with respect to intellectual property rights and protection, data privacy, AI and machine learning, tax, the use of sustainable materials in our products, electronic waste disposal and export control; ● Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI and machine learning, and any such new technology and/or products may cause us to become less competitive, and higher levels of capital expenditures may be necessary in order to remain competitive; ● We have a significant presence in international markets and plan to continue to expand our international operations, which exposes us to certain risks that could affect our future growth; ● Changes in U.S. and other countries’ trade policies, including the imposition of tariffs and other trade restrictions, and uncertainty regarding future trade measures, could materially impact the macroeconomic framework in which we operate; ● There are significant global shortages of critical components that we utilize in our products and therefore, we may not be able to manufacture sufficient quantities to meet market demand; and ● Our wage-related expenses in Israel have increased exponentially as a result of the ongoing shortage of skilled and as a result of unfavorable exchange rate research and development, or R&D, employees in Israel, which is causing heightened competition to recruit new skilled R&D employees. ● We and our third-party providers are exposed to cybersecurity risks and incidents, which may result in damage to our brand and reputation, material financial penalties, and legal liability. ● Our use of artificial intelligence, including generative AI, may not prove to be successful and may subject us to new or heightened legal, regulatory, ethical, operational, and reputational risks.
Furthermore, the consideration available to our shareholders in a transaction involving the transfer outside of Israel of technology or know-how developed with the IIA funding (such as a merger or similar transaction) may be reduced by an amount of up to six times of the amounts of grants that we received from the IIA the plus interest, less any royalties that we already paid.
Furthermore, the consideration available to our shareholders in a transaction involving the transfer outside of Israel of technology or know-how developed with the IIA funding (such as a merger or similar transaction) may be reduced by an amount of up to six times of the amounts of grants that we received from the IIA plus interest, less any royalties that we already paid.
These include the Voca range of conversational AI-related solutions that incorporate voice recognition, AI and machine learning technologies, SmartTAP 360° Live, an intelligent, secure enterprise compliance recording solution, Meeting Insights, an innovative tool for easily capturing and organizing all meeting-generated content and Voice.AI Connect a cloud-based solution that simplifies the integration of any cognitive voice service and bot framework with any voice or telephony channel to deliver an enhanced customer service experience.
These include the Voca range of conversational AI-related solutions that incorporate voice recognition, AI and machine learning technologies, SmartTAP 360° Live, an intelligent, secure enterprise compliance recording solution, Meeting Insights, an innovative tool for easily capturing and organizing all meeting-generated content and VoiceAI Connect, a cloud-based solution that simplifies the integration of any cognitive voice service and bot framework with any voice or telephony channel to deliver an enhanced customer service experience.
Separately, enhanced climate-related disclosure requirements and obligations could lead to reputational or other harm with customers, regulators, investors or other stakeholders and could also increase our litigation risks relating to statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures we may make regarding reported emissions, particularly given the inherent approximations, estimations and uncertainties with respect to calculating, determining and reporting greenhouse gas emissions.
Separately, our climate-related disclosure requirements and obligations could lead to reputational or other harm with customers, regulators, investors or other stakeholders, and could also increase our litigation risks relating to statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures we may make regarding reported emissions, particularly given the inherent approximations, estimations and uncertainties with respect to calculating, determining and reporting greenhouse gas emissions.
It is not possible at this time to predict or determine the ultimate consequences of the conflict in Ukraine and the ongoing war with Hamas and its supporters, which could include, among other things, greater regional instability, geopolitical shifts and other material and adverse effects on macroeconomic conditions, currency exchange rates, supply chains and financial markets.
It is not possible at this time to predict or determine the ultimate consequences of the conflict in Ukraine and the ongoing war with Iran, Hamas and its supporters, which could include, among other things, greater regional instability, geopolitical shifts and other material and adverse effects on macroeconomic conditions, currency exchange rates, supply chains and financial markets.
This could result in, among other things, a delay in recognition or loss of revenues, loss of market share or failure to achieve market acceptance. We could also be subject to material claims by customers that are not covered by our insurance. Obtaining certification of our products by national regulators may be time-consuming and expensive.
This could result in, among other things, a delay in recognition or loss of revenues, loss of market share or failure to achieve market acceptance. We could also be subject to material claims by customers that are not covered or fully covered by our insurance. Obtaining certification of our products by national regulators may be time-consuming and expensive.
The requirements of the GDPR include, for example, expanded disclosures about how personal data is processed, mandatory data breach notification requirements, a strengthened data subject rights regime and higher standards for obtaining consent from individuals to process their personal data (including in certain circumstances for marketing), all of which involve significant ongoing expenditure.
The requirements of the GDPR include, for example, expanded disclosures about how Personal Information is processed, mandatory data breach notification requirements, a strengthened data subject rights regime and higher standards for obtaining consent from individuals to process their Personal Information (including in certain circumstances for marketing), all of which involve significant ongoing expenditure.
As we continue to expand our international sales and operations, we are subject to a number of risks, including the following: ● greater difficulty in enforcing contracts and accounts receivable collection, as well as longer collection periods; ● increased expenses incurred in establishing and maintaining office space and equipment for our international operations; ● fluctuations in exchange rates between the dollar and foreign currencies in markets where we do business; ● greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities; ● general economic and political conditions in these foreign markets (for example changes in oil prices and the global economy have affected growth and ultimately the demand for our products in China); ● economic uncertainty around the world; ● management communication and integration problems resulting from cultural and geographic dispersion; ● risks associated with trade restrictions and foreign legal requirements (such as privacy and cyber security), including the importation, certification, and localization of our solutions required in foreign countries, such as high import taxes in Brazil and other Latin American markets where we sell our products; ● greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; ● the uncertainty of protection for intellectual property rights in some countries; ● greater risk of a failure of employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S.
As we continue to expand our international sales, research and development facilities, and operations, we are subject to a number of risks, including the following: ● greater difficulty in enforcing contracts and accounts receivable collection, as well as longer collection periods; ● increased expenses incurred in establishing and maintaining office space and equipment for our international operations; ● fluctuations in exchange rates between the dollar and foreign currencies in markets where we do business; ● greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities; ● general economic and political conditions in these foreign markets (for example changes in oil prices and the global economy have affected growth and ultimately the demand for our products in China); ● economic uncertainty around the world; ● management communication and integration problems resulting from cultural and geographic dispersion; ● risks associated with trade restrictions and foreign legal requirements (such as privacy and cyber security), including the importation, certification, and localization of our solutions required in foreign countries, such as high import taxes in Brazil and other Latin American markets where we sell our products; ● greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; ● the uncertainty of protection for intellectual property rights in some countries; ● greater risk of a failure of employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S.
Conversely, even if we are successful in rapidly developing new products ahead of our competitors, if we do not cost-effectively manage our inventory levels of existing products when making the transition to new products, our financial results could be negatively affected by write-offs as a result of high levels of obsolete inventory.
Even if we are successful in rapidly developing new products ahead of our competitors, if we do not cost-effectively manage our inventory levels of existing products when making the transition to new products, our financial results could be negatively affected by write-offs as a result of high levels of obsolete inventory.
Additionally, governmental regulators, including the SEC, have also from time to time applied additional scrutiny to existing climate change-related assertions in public disclosures, increasing the potential for enforcement if any such governmental regulator were to allege that our climate change-related disclosures are misleading or deficient.
Additionally, governmental regulators, including the SEC, have from time to time applied additional scrutiny to existing climate change-related assertions in public disclosures, increasing the potential for enforcement if any such governmental regulator were to allege that our climate change-related disclosures are misleading or deficient.
Therefore, any devaluation in the local currencies of our customers relative to the dollar could cause customers to decrease or cancel orders or default on payment. Our sales to European customers denominated in Euros are increasing. Sales denominated in Euros could make our revenues subject to fluctuation in the Euro/dollar exchange rate.
Any devaluation in the local currencies of our customers relative to the dollar could cause customers to decrease or cancel orders or default on payment. Our sales to European customers denominated in Euros are increasing. Sales denominated in Euros could make our revenues subject to fluctuation in the Euro/dollar exchange rate.
Similarly, we have invested in the development of products and capabilities and achieving certifications for the solutions of other partners of ours, such as Genesys and Avaya contact centers, Zoom phone or BroadSoft’s BroadWorks and BroadCloud (acquired by Cisco).
Similarly, we have invested in the development of products and capabilities and achieving certifications for the solutions of other partners of ours, such as Genesys and Avaya contact centers, Cisco Webex, Zoom phone or BroadSoft’s BroadWorks and BroadCloud (acquired by Cisco).
Our principal competitors in the area of IP phones and meeting room devices are “best-of-breed” IP phone vendors and end-to-end IP telephony vendors. “Best of breed” IP phone vendors sell standards-based SIP phones that can be integrated into any standards-based IP-PBX or hosted IP telephony system. These competitors include HP, Yealink, Logitech, Crestron, Neat and many others.
Our principal competitors in the area of IP phones and meeting room devices are “best-of-breed” IP phone vendors and end-to-end IP telephony vendors. “Best of breed” IP phone vendors sell standards-based SIP phones that can be integrated into any standards-based IP-PBX or hosted IP telephony system. These competitors include HP Poly, Yealink, Logitech, Crestron, Neat and others.
Delays in the issuance of required licenses, or the inability to secure these licenses, could adversely affect our revenues and results of operations. Growth in the demand for security features may increase the use of encryption technology in our products. The use of encryption technology is generally regulated by governmental authorities and may require specific development, export or import licenses.
Delays in the issuance of required licenses, or the inability to secure these licenses, could adversely affect our revenues and results of operations. Growth in the demand for security features may increase the use of encryption technology in our products. The use of encryption technology is generally regulated by governmental authorities and may require specific export licenses.
The prices of our products may become less competitive due to foreign exchange fluctuations. Although we have operations throughout the world, the majority of our revenues and our operating costs in 2024 were denominated in, or linked to, the dollar. Accordingly, we consider the dollar to be our functional currency.
The prices of our products may become less competitive due to foreign exchange fluctuations. Although we have operations throughout the world, the majority of our revenues and our operating costs in 2025 were denominated in, or linked to, the dollar. Accordingly, we consider the dollar to be our functional currency.
Our success is dependent, in part, on the willingness of our customers to transition or migrate to new products, such as our (i) expanded offering of cloud session border controller products, (ii) multi-service business routers, or MSBRs, (iii) IP phones and meeting room solutions, (iv) management, (v) analytics and Voice.AI software solutions and value-added application products, (vi) services or (vii) expected future products.
Our success is dependent, in part, on the willingness of our customers to transition or migrate to new products, such as our (i) expanded offering of cloud session border controller products, (ii) multi-service business routers, or MSBRs, (iii) IP phones and meeting room solutions, (iv) management, (v) analytics and VoiceAI software solutions and value-added application products, (vi) services or (vii) expected future products.
Since we operate in the United States and deliver products and services to customers in the United States, the trade wars with China, Mexico and Canada could materially and adversely affect us, and especially if, when and to the extent escalated, may cause global economic turmoil and adversely impact the supply chain for our products, the cost of our products and the demand for our products and, thus, may have a material adverse effect on our business and results of operations.
Since we operate in the United States and deliver products and services to customers in the United States, any trade wars with China, Mexico, Canada and other jurisdictions could materially and adversely affect us, and especially if, when and to the extent escalated, may cause global economic turmoil and adversely impact the supply chain for our products, the cost of our products and the demand for our products and, thus, may have a material adverse effect on our business and results of operations.
Our competitors in the area of multi-service business routers are companies such as Cisco, Juniper, Adtran, One-Access (acquired by Ekinops), MicroTik and Huawei. - 7 - Table of Contents Our competitors in the area of VoiceAI Connect (connectivity solutions for Voice Conversational AI) include CPaaS companies, such as Twilio, open source projects, such as Jambonz, and integrated voice gateways from Conversational AI and Contact Center vendors, such as Cognigy, Genesys and Verint.
Our competitors in the area of multi-service business routers are companies such as Cisco, Juniper, Adtran and One-Access (acquired by Ekinops). - 7 - Table of Contents Our competitors in the area of VoiceAI Connect (connectivity solutions for Voice Conversational AI) include CPaaS companies, such as Twilio, open-source projects, such as Jambonz, and integrated voice gateways from Conversational AI and Contact Center vendors, such as Cognigy (acquired by NICE), Genesys and Verint.
We generate most of our revenues in dollars and, in 2024, a significant portion of our expenses, primarily salaries, related personnel expenses and the leases of our buildings in Israel, were incurred in NIS. We anticipate that a significant portion of our expenses will continue to be denominated in NIS.
We generate most of our revenues in dollars and, in 2025, a significant portion of our expenses, primarily salaries, related personnel expenses and the leases of our buildings in Israel, were incurred in NIS. We anticipate that a significant portion of our expenses will continue to be denominated in NIS.
There has been a significant amount of merger and acquisition activity, frequently involving major telecommunications equipment manufacturers acquiring smaller companies, as well as strategic alliances entered into by competitors. We expect that these activities will result in an increasing concentration of market share among these companies, many of whom are our customers.
There have been a significant amount of merger and acquisition activities, frequently involving major telecommunications equipment manufacturers acquiring smaller companies, as well as strategic alliances entered into by competitors. We expect that these activities will result in an increasing concentration of market share among these companies, many of whom are our customers.
Moreover, pro-Russian ransomware cybercriminals and gangs have previously publicly threatened to augment their hacking efforts in response to the implementation of sanctions and other responsive actions taken by western countries (and their allies).
Moreover, pro-Russian or pro-Iranian ransomware cybercriminals and gangs have previously publicly threatened to augment their hacking efforts in response to the implementation of sanctions and other responsive actions taken by western countries (and their allies).
Further, if a competitor develops a new, less expensive product using a different technological approach to delivering informational services over existing networks, our products would no longer be competitive.
Further, if a competitor develops a new, less expensive product using a different technological approach to deliver informational services over existing networks, our products would no longer be competitive.
Our use and handling of personally identifiable data is regulated at the international, federal and state levels, and we are subject to a variety of local and international privacy laws and regulations that govern the collection, use, retention, sharing, processing, export and security of personal information. The regulatory environment surrounding information security and privacy is increasingly demanding.
Our use and handling of Personal Information is regulated at the international, federal and state levels, and we are subject to a variety of local and international privacy laws and regulations that govern the collection, use, retention, sharing, processing, export and security of personal information. The regulatory environment surrounding information security and privacy is increasingly demanding.
We continue to monitor for these changes and their potential impact on our business, financial condition and industry at large, and seek to implement measures to comply with all such newly implemented requirements; however, given the rapidly changing nature of these rules, regulations, directives, initiatives and laws, and the heightened regulatory scrutiny being applied by governmental agencies across numerous jurisdictions, it is not possible to predict how such matters will ultimately impact our business or that of our critical counterparties at this time. ​ - 13 - Table of Contents Financial and Economic Risks High rates of global inflation and the occurrence of a recession could have a material and adverse impact on our business, results of operations and financial condition.
We continue to monitor for these changes and their potential impact on our business, financial condition and industry at large, and seek to implement measures to comply with all such newly implemented requirements; however, given the rapidly changing nature and potential for inconsistency of these rules, regulations, directives, initiatives and laws across jurisdictions, and the heightened regulatory scrutiny, it is not possible to predict how such matters will ultimately impact our business or that of our critical counterparties at this time. - 13 - Table of Contents Financial and Economic Risks High rates of global inflation and the occurrence of a recession could have a material and adverse impact on our business, results of operations and financial condition.
For example, on March 6, 2024, the SEC has sought to adopt rules requiring public companies to include certain climate-related disclosures in their respective registration statements and annual reports filed with the SEC, including climate-related financial statement metrics, greenhouse gas emissions and climate-related targets and goals, and management’s role in managing material climate-related risks.
For example, on March 6, 2024, the SEC adopted rules requiring public companies to include certain climate-related disclosures in their respective registration statements and annual reports filed with the SEC, including climate-related financial statement metrics, greenhouse gas emissions and climate-related targets and goals, and management’s role in managing material climate-related risks.
Over the last decade, AudioCodes has developed a range of software-based voice productivity solutions through our Voice.AI business line.
Over the last decade, AudioCodes has developed a range of software-based voice productivity solutions through our VoiceAI business line.
Likewise, the assaults launched by Hamas and its supporters, including Lebanon (with the Hezbollah terror organization) and Syria, has caused substantial regional instability and extreme volatility in the global markets at large.
Likewise, the assaults launched by Hamas and its supporters, including Iran, Lebanon (with the Hezbollah terror organization) and Syria, have caused substantial regional instability and extreme volatility in the global markets at large.
The market price for our ordinary shares, as well as the prices of shares of other technology companies, has been volatile. Between January 1, 2018 and March 11, 2025, the trading price of our ordinary shares on Nasdaq has fluctuated from a low of $6.62 to a high of $44.94.
The market price for our ordinary shares, as well as the prices of shares of other technology companies, has been volatile. Between January 1, 2018 and March 10, 2026, the trading price of our ordinary shares on Nasdaq has fluctuated from a low of $6.62 to a high of $44.94.
We do not know what effect, if any, possible legislation or regulatory actions in the United States or elsewhere in the world may have on private telecommunication networks, the provision of VoIP services and purchases of our products. Use of encryption technology in our products is regulated by governmental authorities and may require special development, export or import licenses.
We do not know what effect, if any, possible legislation or regulatory actions in the United States or elsewhere in the world may have on private telecommunication networks, the provision of VoIP services and purchases of our products. Use of encryption technology in our products may be regulated by governmental authorities and may require export licenses.
If we cannot meet encryption standards, or secure required licenses for proprietary encryption technology, our revenues and results of operations could be adversely affected. - 22 - Table of Contents Our proprietary technology is difficult to protect, and our products may infringe on the intellectual property rights of third parties.
If we cannot meet export standards due to the use of certain encryption technology, or secure required export licenses, our revenues and results of operations could be adversely affected. - 22 - Table of Contents Our proprietary technology is difficult to protect, and our products may infringe on the intellectual property rights of third parties.
In addition to governmental entities, actors in the private sector, including, among others, tech firms, consumer brands and major manufacturers, have stopped, or previously announced that they intend to stop, operations in Russia and cease their partnerships with Russian firms, and shippers, insurance companies and refiners have similarly indicated that they will no longer purchase or ship crude oil from Russia.
In addition to governmental authorities, actors in the private sector, including, among others, technology firms, consumer brands and major manufacturers, have stopped, or previously announced that they intend to stop, operations in Russia and have ceased their partnerships with Russian firms, and shippers, insurance companies and refiners have similarly indicated that they will no longer purchase or ship crude oil from Russia.
We have invested significant resources in developing products compatible with Microsoft Skype for Business, Microsoft Teams and related solutions of our other partners.
We have invested significant resources in developing products compatible with Microsoft Teams (and Microsoft Skype for Business), Zoom and Cisco Webex and related solutions of our other partners.
Recently, there has been a growing concern and emphasis by governmental agencies regarding the effects of climate change on the environment and the need to make disclosures to investors regarding a company’s environmental footprint.
Recently, there has been growing concern and emphasis by certain governmental agencies regarding the effects of climate change on the environment and the need to make disclosures to investors regarding a company’s environmental risks and opportunities.
As a result of the foregoing, we currently face, and are likely to continue to face, increasing pressure regarding our ESG-related disclosures, practices, initiatives and sustainability performance in the near- and long-term.
As a result of the foregoing, we currently face, and are likely to continue to face, increased scrutiny regarding our ESG-related disclosures, practices, initiatives and sustainability performance in the near- and long-term.
For example, growing tensions between Russia and several western nations (and their respective allies) in connection with Russia’s invasion of Ukraine in February 2022, could result in retaliatory actions being undertaken by supporters of Russia, including in the form of espionage, phishing campaigns and other forms of cyber-attacks.
For example, growing tensions between Russia and several western nations (and their respective allies) in connection with Russia’s invasion of Ukraine in February 2022 and the military operations conducted in Iran in 2026, could result in retaliatory actions being undertaken by supporters of Russia or Iran, including in the form of espionage, phishing campaigns and other forms of cyber-attacks.
We did not maintain accounts with either bank. Furthermore, we and other parties with whom we conduct business and engage commercially may be unable to access critical funds in deposit accounts or other accounts held with a closed or failing financial institution or pursuant to lending arrangements with such financial institutions.
Furthermore, we and other parties with whom we conduct business and engage commercially may be unable to access critical funds in deposit accounts or other accounts held with a closed or failing financial institution or pursuant to lending arrangements with such financial institutions.
In the event that we were to become subject to any of the newly adopted climate change and/or ESG-related disclosure regimes, including in the United States, Europe and elsewhere, it could require us to, among other things, (i) restrict or limit our operating activities or other conduct, (ii) make material capital improvements and expend material capital resources in connection with such compliance efforts, and (iii) alter our business and operational strategy more generally.
In the event that we are or become subject to any climate change and/or ESG-related disclosure regimes, including in the United States, Europe and elsewhere, it could require us to, among other things, restrict or limit our operating activities or other conduct, make material capital improvements and expend material capital resources in connection with such compliance efforts, or alter our business and operational strategy more generally.
We may be unable to recover or adapt to such changes. - 12 - Table of Contents Growing emphasis by the investment community, regulators and other stakeholders on environmental, social and governance-related matters could impact our business and operations.
We may be unable to recover or adapt to such changes. - 12 - Table of Contents Evolving expectations of the investment community, regulators and other stakeholders on environmental, social and governance-related matters could impact our business and operations.
Political events in various countries in the Middle East, such as Syria, Iraq, Iran, Lebanon and Egypt, have weakened the stability of those countries, and have allowed extreme terrorists organizations, such as ISIS and Hamas, to operate in certain territories in the Middle East. This instability may lead to deterioration of the geo-political conditions in the Middle East.
Political events in various countries in the Middle East, such as Syria, Iraq, Iran, Lebanon and Egypt, have weakened the stability of those countries, and have allowed armed groups and terrorist organizations to operate in certain territories in the Middle East. This instability may lead to deterioration of the geo-political conditions in the Middle East.
Further, there can be no assurance that our use of AI will be successful in enhancing our business or operations or otherwise result in our intended outcomes, and our competitors may incorporate AI into their businesses or operations more quickly or more successfully than us.
Further, there can be no assurance that our use of AI will be successful in enhancing our business or operations or otherwise result in our intended outcomes, and our competitors may incorporate AI into their businesses or operations more quickly or more successfully than us. The regulatory framework for AI is rapidly evolving.
For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation, or the FDIC, was subsequently appointed as a receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each placed into receivership.
On March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation and the Federal Deposit Insurance Corporation, or the FDIC, was subsequently appointed as a receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each placed into receivership. We did not maintain accounts with either bank.
We have adapted some of our gateway products, IP phones, session border controllers, survivable branch applications, value added applications and professional services to operate in the Skype for Business and Teams environments.
We have adapted some of our gateway products, IP phones, session border controllers, survivable branch applications, value-added applications and professional services to operate in the Skype for Business and Teams environments. We depend on users of Skype for Business and Teams selecting our compatible products and purchasing them.
As of December 31, 2024, we have a contingent obligation to pay royalties in the amount of approximately $22.1 million, related to historical grants received by two of our subsidiaries.
As of December 31, 2025, we have a contingent obligation to pay royalties in the amount of approximately $23.8 million, related to historical grants received by two of our subsidiaries.
If there is a significant increase or fluctuation in our expenses, we may be required to increase the price of our products, which could make our products and services less competitive in the markets in which we operate. Currently, our international sales are denominated primarily in dollars.
If there is a significant increase or fluctuation in our expenses, we may be required to increase the price of our products, which could make our products and services less competitive in the markets in which we operate.
In 2023, the value of the dollar increased in relation to the NIS by 3.1% and the inflation rate in Israel was 3.0%. In 2022, the value of the dollar increased in relation to the NIS by 13.2% and the inflation rate in Israel was 5.3%.
In 2024, the value of the dollar increased in relation to the NIS by 0.6% and the inflation rate in Israel was 3.2%. In 2023, the value of the dollar increased in relation to the NIS by 3.1% and the inflation rate in Israel was 3.0%.
Any losses or damages incurred by us as a result of the current conflict in Israel, or any similar conflicts in the future, could have a material adverse effect on our business, financial conditions and results of operations. - 19 - Table of Contents Additionally, a number of countries and organizations continue to restrict or ban business with Israel or Israeli companies, or companies doing business with Israel or Israeli companies, which may limit our ability to make sales in those countries.
Any losses or damages incurred by us as a result of armed conflicts involving Israel and regional actors could have a material adverse effect on our business, financial condition and results of operations. - 19 - Table of Contents A number of countries and organizations continue to restrict or ban business with Israel or Israeli companies, or companies doing business with Israel or Israeli companies, which may limit our ability to make sales in those countries.
Our competitors in the area of Meeting Insights, which is focused on productivity enhancement, organization repository and sharing for meetings in the Microsoft Teams and Zoom, include, but are not limited to, Microsoft, Zoom, Avoma, Otter, Fireflies.AI and timeOS.
Our competitors in the area of Meeting Insights, which is focused on productivity enhancement, organization repository and sharing for meetings in Microsoft Teams, Zoom and Google Meet, include, but are not limited to, Microsoft Copilot for Teams, Zoom AI Companion and third party solutions such as Avoma, Otter, Fireflies.AI and timeOS.
Threats of trade barriers, customs and duties and other political considerations, including mass strikes, wars, escalating or outbreak of armed hostilities, including the ongoing Russo-Ukraine war and Israel-Hamas conflict, and other crises, are causing instability in the accepted world order and the stability of financial markets.
Threats of trade barriers, customs and duties and other political considerations, including mass strikes, wars, escalating or outbreak of armed hostilities, including the ongoing Russia-Ukraine war and Israel-Hamas conflict, the continuing political and economic instability in Venezuela which impacts the Latin American region and other crises, are causing instability in the accepted world order and the stability of financial markets.
The terms of the IIA grants and the law pursuant to which grants are made restrict our ability to manufacture products or transfer technologies outside of Israel if the IIA grants funded the development of the products or technology, without special approvals from the IIA.
The terms of the IIA grants and the law pursuant to which grants are made restrict our ability to manufacture products or transfer IIA funded know-how outside of Israel if the IIA grants funded the development of the know-how at the basis of or incorporated into those products or technology, without special approvals from the IIA.
We cannot predict the full impact of the war with Hamas and the related conditions on us in the future, particularly if emergency circumstances or geopolitical tensions continue, any aspect of which could have a material adverse effect on our business, financial position, operating results and cash flows.
We cannot predict the full impact of the ongoing wars with Iran and Hezbollah, or of any future escalation or regional conflict on us in the future, particularly if emergency circumstances or geopolitical tensions continue, any aspect of which could have a material adverse effect on our business, financial position, operating results and cash flows.
We cannot be assured that we will be successful in hiring, retaining, training and promoting our personnel at current wage rates given that we are currently operating in a highly competitive labor market and further increases in market compensation could adversely impact our business. - 33 - Table of Contents A data security or privacy breach could adversely affect our business and services.
We cannot be assured that we will be successful in hiring, retaining, training and promoting our personnel at current wage rates given that we are currently operating in a highly competitive labor market and further increases in market compensation could adversely impact our business.
Israel has not, as of the date of this Annual Report, imposed explicit sanctions on Russia or Belarus; however, it has publicly rejected Russia’s annexation of the four occupied regions of Ukraine and voiced support for Ukraine’s sovereignty and territorial integrity.
Israeli banks have elected to sever relationships with sanctioned Russian banks. Israel has not, as of the date of this Annual Report, imposed explicit sanctions on Russia or Belarus; however, it has publicly rejected Russia’s annexation of the occupied regions of Ukraine and voiced support for Ukraine’s sovereignty and territorial integrity.
The ongoing conflict in Ukraine, including the actual (or perceived threat of an) expansion or exacerbation of such conflict, and the actions undertaken by western nations (and their allies) in response to Russia’s actions, has resulted, and could continue to result in, significant impacts on the global markets for the foreseeable future.
The ongoing conflict in Ukraine, including the actual (or perceived threat of an) expansion or exacerbation of such conflict, and the actions undertaken by the United States, the European Union, the United Kingdom, and other governmental authorities in response to Russia’s actions, has resulted, and could continue to result in, significant impacts on the global markets for the foreseeable future.
During the years ended December 31, 2024 and 2023 we wrote off inventory in the aggregate amount of approximately $4.8 million and approximately $1.1 million, respectively. During the year ended December 31, 2022, our inventory write off was immaterial.
During the years ended December 31, 2025, 2024 and 2023, we wrote off inventory in the aggregate amount of approximately $3.3 million, $4.8 million and $1.1 million, respectively.
However, a significant portion of our operating costs in 2024 (including our cost of revenues) were incurred in NIS. During 2024, the NIS depreciated against the dollar, which resulted in a decrease in the dollar costs of our operations in Israel.
However, a significant portion of our operating costs in 2025 (including our cost of revenues) were incurred in NIS. During 2025, the NIS appreciated significantly against the dollar, which resulted in an increase in the dollar costs of our operations in Israel.
If the dollar appreciates against the Euro, we may be required to increase the prices of our products that are denominated in Euros. In 2024, the Euro depreciated against the dollar, which resulted in an increase in the prices of our products that are denominated in Euros.
If the dollar appreciates against the Euro, we may be required to increase the prices of our products that are denominated in Euros. In 2025, the Euro appreciated significantly against the dollar, which resulted in a decrease in the prices of our products that are denominated in Euros.
Moreover, the increased focus by regulators and other stakeholders on ESG-related practices and disclosures has created, and will likely create for the foreseeable future, increased pressure regarding the enhancement of, and modification to, our disclosure and governance practices.
Moreover, the evolving focus by regulators and other stakeholders on ESG-related practices and disclosures has created, and will likely maintain, for the foreseeable future, increased scrutiny regarding our disclosure and governance practices.
These losses may exceed our insurance coverage for such incidents. In addition, our employees and clients could lose confidence in our ability to protect their personal and proprietary information, which could cause them to terminate their relationships with us.
In addition, our employees and clients could lose confidence in our ability to protect their personal and proprietary information, which could cause them to terminate their relationships with us.
Furthermore, there continues to be a lack of consistent proposed climate change and ESG-related legislation, which creates regulatory and economic uncertainty.
Furthermore, there continues to be a lack of consistent climate change and ESG-related legislation, which creates regulatory and economic uncertainty, and we may be subject to conflicting requirements across jurisdictions.
Our NIS related costs, as expressed in dollars, are influenced by the exchange rate between the dollar and the NIS. During 2024 and 2023, the NIS depreciated against the dollar, which resulted in a decrease in the dollars cost of our operations in Israel.
Our NIS-related costs, as expressed in dollars, are influenced by the exchange rate between the dollar and the NIS. During 2025, the NIS appreciated significantly against the dollar, which resulted in an increase in the dollar cost of our operations in Israel.
In the future, we may also develop and introduce other products or services with new or additional telecommunications capabilities or services. As a result, we may compete directly with voice over-IP, or VoIP, companies, system integrators, value-added resellers, or VARs, and other telecommunications infrastructure and solution providers, some of which may be our current customers.
As a result, we may compete directly with voice over-IP, or VoIP, companies, system integrators, value-added resellers, or VARs, and other telecommunications infrastructure and solution providers, some of which may be our current customers. Additional competitors may include companies that currently provide communication software products and services.
The imposition of tariffs could increase costs of the end-user products we supply that we may not be able to pass on to our customers, which could in turn cause a decrease in the sales of our products and materially and adversely affect our business and results of operations.
There can be no assurance that any newly negotiated terms in the USMCA will not adversely affect the Company’s business and the business of its customers. - 16 - Table of Contents The imposition of tariffs could increase costs of the end-user products we supply that we may not be able to pass on to our customers, which could in turn cause a decrease in the sales of our products and materially and adversely affect our business and results of operations.
In the area of enterprise session border controllers, we compete with Oracle, Ribbon Communications, Alianza (acquired Metaswitch from Microsoft), TE-Systems and Ingate. In the area of low and mid-density digital gateways we face competition from companies such as Ribbon Communications, Cisco, Dialogic, NewRock, Patton, Ferrari and Sangoma.
In the area of enterprise session border controllers, we compete with Oracle, Ribbon Communications, and Cisco. In the area of analog, low and mid-density digital gateways, we face competition from companies such as Ribbon Communications,Cisco, Grandstream and Sangoma .
If we experience a significant data security breach, fail to detect and appropriately respond to a significant data security breach, or fail to comply with the various cybersecurity regulations, including the California Consumer Privacy Act and the California Privacy Rights Act in the United States, we could be exposed to government enforcement actions and private litigation.
If we experience a significant data security breach, fail to detect and appropriately respond to a significant data security breach, or fail to comply with the various cybersecurity regulations, including the CCPA in the United States, we could be exposed to government enforcement actions and private litigation. These losses may exceed our insurance coverage for such incidents.
We are incorporated under the laws of the State of Israel, and our principal executive offices and principal research and development facilities are located in the State of Israel. Political, economic and military conditions in Israel directly affect our operations.
We are incorporated under the laws of the State of Israel, and our principal executive offices and principal research and development facilities are located in the State of Israel. Political, economic and military conditions in Israel directly affect our operations. There has been a significant escalation in armed conflict and regional instability since October 2023.
Federal Income Tax Considerations” in this Annual Report and to consult their own tax advisors with respect to the U.S. federal income tax risks related to owning and disposing of our ordinary shares and the consequences of PFIC status.
Federal Income Tax Considerations” in this Annual Report and to consult their own tax advisors with respect to the U.S. federal income tax risks related to owning and disposing of our ordinary shares and the consequences of PFIC status. - 27 - Table of Contents We are subject to ongoing costs and risks associated with complying with extensive corporate governance and disclosure requirements.
As a result of these inflationary pressures, governments in many countries implemented tighter monetary policies (including in the form of higher interest rates), which could slow the growth rate of local economies and restrict the availability of credit and financing.
As of the most recent data available for November 2025, the year-over-year consumer price index (CPI) increase was 2.6%. As a result of these inflationary pressures, governments in many countries implemented tighter monetary policies (including in the form of higher interest rates), which could slow the growth rate of local economies and restrict the availability of credit and financing.
We are required to report to and are subject to local tax authorities in the countries in which we operate. In addition, our income that is derived from sales to customers in one country might also be subject to taxation in other countries.
In addition, our income that is derived from sales to customers in one country might also be subject to taxation in other countries. The amount of tax we may become obligated to pay in the countries in which we operate may be subject to uncertainty.
The protection of customer, employee and company data is critical to our business and operations. Customers and other stakeholders have a high expectation that we will adequately protect and safeguard their personal data or other information from cyberattack or other security breaches.
Customers and other stakeholders have a high expectation that we will adequately protect and safeguard their personal data or other information from cyberattack or other security breaches.
In 2024, 2023 and 2022, sales to Westcon Group, our largest customer in 2024, accounted for approximately 13.3%, 16.3%and 15.1%, respectively, of our total revenues, and sales to ScanSource Communications Group accounted for approximately 11.7%, 10.3% and 10.0%, respectively, of our total revenues.
In the years ended December 31, 2025, 2024 and 2023, sales to Westcon Group, or Westcon, our largest customer in the year ended December 31, 2025, accounted for approximately 13.8%, 13.3% and 16.3%, respectively, of our total revenues, and sales to ScanSource Communications Group, or ScanSource, accounted for approximately 9.3%, 11.7% and 10.3%, respectively, of our total revenues.
Based on the composition of our gross income, the composition and value of our gross assets and the amounts of our liabilities for each taxable year from 2006 through 2024, we do not believe that we were a passive foreign investment company, or PFIC, for U.S. federal income tax purposes during any of such tax years.
Based on the composition of our gross income, the composition and value of our gross assets and the amounts of our liabilities, we expect not to be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the current taxable year.
As a result of Russia’s invasion of Ukraine, the governments of several nations have implemented commercial and economic sanctions against Russia (as well as certain banks, companies, government officials, and other individuals in Russia and Belarus).
As a result of Russia’s invasion of Ukraine, various governmental authorities, including the United States, the European Union, and the United Kingdom, have implemented economic sanctions against Russia and Belarus (including against certain banks, companies, government officials, and other individuals in Russia and Belarus).
Additionally, voice, audio and other communications alternatives that compete with our products are constantly being introduced. Our competitors in the area of contact center include, but are not limited to, Anywhere365, Luware, Landis, ComputerTalk, Tendfor and other contact center vendors, primarily focused on the Microsoft Teams product.
Our competitors in the area of Contact Center as a Service, or CCaaS, include, but are not limited to, Anywhere365, Luware, Landis, ComputerTalk, Tendfor and other contact center vendors, primarily focused on the Microsoft Teams product.
Our competitors in the area of SmartTAP360 and Interaction Insights live, which focus mainly on compliance and quality recording in conjunction with Microsoft Teams, include, among others, ASC, Red Box (acquired by Uniphore), Dubber, CallCabinet, Numonix, NICE and Verint. Such competitors are currently listed in the certified list of Microsoft vendors although we mainly see their presence in mid-market projects.
Our competitors in the area of Interaction Insights, which focus mainly on compliance and quality recording in Microsoft Teams environments, include, among others, ASC, Red Box (acquired by Uniphore), Dubber, CallCabinet, Numonix, NICE and Verint.
Because exchange rates between the NIS and the dollar continually fluctuate, exchange rate fluctuations have an impact on our profitability and period-to-period comparisons of our results of operations. For example, in 2024, the value of the dollar increased in relation to the NIS by 0.6% and the inflation rate in Israel was 3.2%.
Because exchange rates between the NIS and the dollar continually fluctuate, exchange rate fluctuations have an impact on our profitability and period-to-period comparisons of our results of operations.
If implemented, such tariffs and countermeasures could increase the cost of raw materials and components that we transport, disrupt global supply chains and create additional operational challenges.
Supreme Court has invalidated certain tariffs, the U.S. government has and may impose additional new or different tariffs under different authority. If implemented or reimplemented, such tariffs and countermeasures could increase the cost of raw materials and components that we transport, disrupt global supply chains and create additional operational challenges.
We cannot be sure of the amount of tax we may become obligated to pay in the countries in which we operate. The tax authorities in the countries in which we operate may not agree with our tax position.
The tax authorities in the countries in which we operate may not agree with our tax position.
To the extent that the ongoing war with Hamas and conflicts with its supporters materially and adversely affects our business and financial results, such may also have the effect of heightening many of the other risks described in this Item 3.D, “Risk Factors .” ​ Epidemics, pandemics, global health crises, or other public health events, threats and concerns, including, but not limited to, any resurgence of COVID-19, could have a material adverse effect on our business, financial position, operating results and cash flows.
To the extent that the ongoing wars materially and adversely affect our business and financial results, such may also have the effect of heightening many of the other risks described in this Item 3.D, “Risk Factors .” - 4 - Table of Contents Epidemics, pandemics, global health crises, natural disasters, and other catastrophic events, whether due to climate change or otherwise, could have a material adverse effect on our business, financial position, operating results and cash flows.
Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific governance programs and comply with related disclosure regimes. - 28 - Table of Contents There remains increased focus from lawmakers and regulators on corporate ESG practices, including climate change and related ESG disclosure requirements.
Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific governance programs and comply with related disclosure regimes. - 28 - Table of Contents Risks Relating to the Ownership of our Ordinary Shares The price of our ordinary shares may fluctuate significantly.
Requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices. If we fail to comply with any of these laws and regulations, we could be subjected to legal risk and other adverse effects to our business and operations.
Requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeThe table below sets forth our principal capital expenditures incurred for the periods indicated (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Computers and peripheral equipment ​ $ 3,157 ​ $ 2,462 ​ $ 1,015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Office furniture and equipment ​ ​ 326 ​ 737 ​ 281 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leasehold improvements ​ ​ 16,082 ​ 5,572 ​ 191 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 19,565 ​ $ 8,771 ​ $ 1,487 ​ B.
Biggest changeThe table below sets forth our principal capital expenditures incurred for the periods indicated (amounts in thousands): Year Ended December 31, 2025 2024 2023 Computers and peripheral equipment $ 4,971 $ 3,157 $ 2,462 Office furniture and equipment 176 326 737 Leasehold improvements 430 16,082 5,572 Total $ 5,577 $ 19,565 $ 8,771 B.
Pursuant to the Or Yehuda Warehouse Lease, we leased from the landlord an approximately 1,128 square meter facility. The initial lease term under the Or Yehuda Lease is for six years, commencing upon the transfer of possession of the Premises (as defined in the Or Yehuda Lease).
Pursuant to the Or Yehuda Warehouse Lease, we leased from the landlord an approximately 1,128 square meter facility. The initial lease term under the Or Yehuda Warehouse Lease is for six years, commencing upon the transfer of possession of the Premises (as defined in the Or Yehuda Warehouse Lease).
Typically, these services allow the service provider to provide their customers with voice connectivity and integration with UC platforms, such as Microsoft Teams, Zoom Phone, Cisco Webex, contact center as a service, conversational AI recording and analytics.
Typically, these services allow the service provider to provide their customers with voice connectivity and integration with UC platforms, such as Microsoft Teams, Zoom Phone, Cisco Webex, contact center as a service, conversational AI, call recording and analytics.
PROPERTY, PLANTS AND EQUIPMENT In November 2022, we entered into new lease agreement in Park Naimi, which is located in Or Yehuda near Messubim Junction in Israel, or the New Lease Agreement. The New Lease Agreement replaced the previous lease agreement of our main offices in Israel.
PROPERTY, PLANTS AND EQUIPMENT In November 2022, we entered into a new lease agreement in Park Naimi, which is located in Or Yehuda near Messubim Junction in Israel, or the New Lease Agreement. The New Lease Agreement replaced the previous lease agreement of our main offices in Israel.
System integrators, VARs and service providers are able to leverage AudioCodes professional and managed services to complement their own, and are able to offer them under their own brand to the end customers. Expand our investments in conversational AI.
System integrators, VARs and service providers are able to leverage AudioCodes professional and managed services to complement their own offerings, and are able to offer them under their own brand to the end customers. Expand our investments in conversational AI.
In addition to patent protection, we seek to protect our proprietary rights through unregistered copyright protection and through restrictions on access to our trade secrets and other proprietary information which we impose through confidentiality agreements with our customers, suppliers, employees and consultants. - 51 - Table of Contents There are a number of companies besides us who hold or may acquire patents for various aspects of the technology incorporated in the ITU’s standards or other industry standards or proprietary standards, for example, in the fields of wireless and cable.
In addition to patent protection, we seek to protect our proprietary rights through unregistered copyright protection and through restrictions on access to our trade secrets and other proprietary information which we impose through confidentiality agreements with our customers, suppliers, employees and consultants. - 53 - Table of Contents There are a number of companies besides us who hold or may acquire patents for various aspects of the technology incorporated in the ITU’s standards or other industry standards or proprietary standards, for example, in the fields of wireless and cable.
See Item 3.D, “Key Information – Risk Factors – High rates of global inflation and the occurrence of a recession could have a material and adverse impact on our business, results of operations and financial condition .” Increased and Ongoing Geopolitical Uncertainty and Tensions – there was an increase in global geopolitical uncertainty during 2023, which continued into 2024.
See Item 3.D, “Key Information - Risk Factors - High rates of global inflation and the occurrence of a recession could have a material and adverse impact on our business, results of operations and financial condition .” Increased and Ongoing Geopolitical Uncertainty and Tensions - there was an increase in global geopolitical uncertainty during 2023, which continued into 2025.
We believe there are notable growth opportunities for our development and profitability with respect to the offering of a broad range of highly integrated services that leverage our voice expertise with AI and drive the convergence of unified communications and contact center as a service for our enterprise customers. - 42 - Table of Contents Expand and enhance our solution offering .
We believe there are notable growth opportunities for our development and profitability with respect to the offering of a broad range of highly integrated services that leverage our voice expertise with AI and drive the convergence of unified communications and contact center as a service for our enterprise customers. - 43 - Table of Contents Expand and enhance our solution offering .
Devices Our principal competitors in the area of IP phones and meeting room devices are “best-of-breed” IP phone vendors and end-to-end IP telephony vendors. “Best of breed” IP phone vendors sell standards-based SIP phones that can be integrated into any standards-based IP-PBX or hosted IP telephony system. These competitors include HP, Yealink, Logitech, Crestron, Neat and many others.
Devices Our principal competitors in the area of IP phones and meeting room devices are “best-of-breed” IP phone vendors and end-to-end IP telephony vendors. “Best of breed” IP phone vendors sell standards-based SIP phones that can be integrated into any standards-based IP-PBX or hosted IP telephony system. These competitors include HP Poly, Yealink, Logitech, Crestron, Neat and others.
Our media gateways serve as an efficient junction between VoIP networks, legacy TDM equipment, and the PSTN. - 44 - Table of Contents AudioCodes MediaPack 1xx and MediaPack 5xx analog VoIP gateways are cost-effective, stand-alone VoIP devices for connecting legacy telephones, fax machines and PBX systems with IP telephony networks and IP-based PBX systems.
Our media gateways serve as an efficient junction between VoIP networks, legacy TDM equipment and the PSTN. - 45 - Table of Contents AudioCodes MediaPack 1xx and MediaPack 5xx analog VoIP gateways are cost-effective, stand-alone VoIP devices for connecting legacy telephones, fax machines and PBX systems with IP telephony networks and IP-based PBX systems.
AudioCodes’ broad range of products, broad functionality and wide interoperability allow service providers to deploy our solutions in practically any third-party solution environment and for a wide range of customers. Our solutions have been sold to service provider customers in 100 countries. AudioCodes’ OEM customers include vendors that leverage AudioCodes’ technology and quality to deliver VoIP products and solutions.
AudioCodes’ broad range of products, advanced functionality and wide-ranging interoperability allow service providers to deploy our solutions in practically any third-party solution environment and for a wide range of customers. Our solutions have been sold to service provider customers in 100 countries. AudioCodes’ OEM customers include vendors that leverage AudioCodes’ technology and quality to deliver VoIP products and solutions.
Among the factors that have caused telecom operators to replace legacy networks are the traditional TDM switches reaching end-of-life, the need to free-up the real estate occupied by these switches, energy savings and the importance of competing with the growing numbers of alternative service providers.
Other factors that have caused telecom operators to replace legacy networks are the traditional TDM switches reaching end-of-life, the need to free-up the real estate occupied by these switches, energy savings and the importance of competing with the growing numbers of alternative service providers.
Additionally, we hold options under the New Lease Agreement to extend the lease term for additional periods of five years. In June 2023, we entered into a new lease agreement in Or Yehuda, or the Or Yehuda Warehouse Lease, which commenced in 2023. The Or Yehuda Lease replaces the current lease agreement of our warehouse in Israel.
Additionally, we hold options under the New Lease Agreement to extend the lease term for additional periods of five years. In June 2023, we entered into a new lease agreement in Or Yehuda, or the Or Yehuda Warehouse Lease, which commenced in 2023. The Or Yehuda Warehouse Lease replaces the previous lease agreement of our warehouse in Israel.
From automated recording and analytics of meetings to improve business intelligence and productivity, to compliant interaction recording and AI automation that simplifies the customer journey and improves customer service, AudioCodes is committed to helping enterprises gain practical benefits from AI.
From automated recording and analytics of meetings to improve business intelligence and productivity, to compliance interaction recording and AI automation that simplifies the customer journey and improves customer service, AudioCodes is committed to helping enterprises gain practical benefits from AI.
Pursuant to the New Lease Agreement, we lease from the landlord an approximately 10,500 square meters facility, or the Premises. The lease of the Premises commenced in July 2023. The initial lease term main office under the New Lease Agreement is for seven years.
Pursuant to the New Lease Agreement, we lease from the landlord an approximately 10,500 square meters facility, or the Premises. The lease of the Premises commenced in July 2023. The initial lease term under the New Lease Agreement is for seven years.
Voice.AI Business Line In the last few years, dramatic leaps forward in machine learning and AI have driven a revolution in the way enterprises boost engagement with their customers.
VoiceAI Business Line In the last few years, dramatic leaps forward in machine learning and AI have driven a revolution in the way enterprises boost engagement with their customers.
Our professional services portfolio delivers seamless integration, high availability, and vast scalability to meet business and network demands. Managed Services We offer a range of managed services enabling our customers to deploy complex solutions solely by relying on the knowledge of our voice experts.
Our professional services portfolio delivers seamless integration, high availability, and vast scalability to meet business and network demands. AudioCodes Live – Managed Service Solutions We offer a range of managed services enabling our customers to deploy complex solutions solely by relying on the knowledge of our voice experts.
Our competitors in the area of VoiceAI Connect (connectivity solutions for Voice Conversational AI) include CPaaS companies, such as Twilio, open source projects, such as Jambonz, and integrated voice gateways from Conversational AI and Contact Center vendors, such as Cognigy, Genesys and Verint.
Our competitors in the area of VoiceAI Connect (connectivity solutions for Voice Conversational AI) include CPaaS companies, such as Twilio, open-source projects, such as Jambonz, and integrated voice gateways from Conversational AI and Contact Center vendors, such as Cognigy (acquired by NICE), Genesys and Verint.
The latter offering is generally growing year-on-year as a proportion of our revenues and promised recurring revenues and profits over time. Our service provider customers include a range of tier 1, 2 and 3 service providers that deploy our solution as part of their voice, UC, SIP trunk or other offerings for their business customers.
The latter offering is generally growing year-on-year as a proportion of our revenues and is designed to generate recurring revenues and profits over time. Our service provider customers include a range of tier 1, 2 and 3 service providers that deploy our solution as part of their voice, UC, SIP trunk or other offerings for their business customers.
ORGANIZATIONAL STRUCTURE AudioCodes Ltd. is the parent company of a group that consists of AudioCodes Ltd. and over 20 subsidiaries worldwide. AudioCodes Inc., our wholly-owned U.S. subsidiary incorporated in Delaware, is a significant subsidiary based in Piscataway, New Jersey. D.
ORGANIZATIONAL STRUCTURE AudioCodes Ltd. is the parent company of a group that consists of AudioCodes Ltd. and 19 subsidiaries worldwide. AudioCodes Inc., our wholly-owned U.S. subsidiary incorporated in Delaware, is a significant subsidiary based in Piscataway, New Jersey. D.
Some public cloud providers offer technology and services that partially overlap with ours and several smaller startup companies are also developing competing solutions. - 50 - Table of Contents Our competitors in the area of SmartTAP360 and Interaction Insights live, which focus mainly on compliance and quality recording in conjunction with Microsoft Teams, include, among others, ASC, Red Box (acquired by Uniphore), Dubber, CallCabinet, Numonix, NICE and Verint.
Some public cloud providers offer technology and services that partially overlap with ours and several smaller startup companies are also developing competing solutions. - 52 - Table of Contents Our competitors in the area of Interaction Insights, which focus mainly on compliance and quality recording in Microsoft Teams environments, include, among others, ASC, Red Box (acquired by Uniphore), Dubber, CallCabinet, Numonix, NICE and Verint.
The assaults launched by Hamas and its supporters, including Lebanon (with the Hezbollah terror organization) and Syria, has caused substantial regional instability and extreme volatility in the global markets at large.
The assaults launched by Hamas and its supporters, including Iran, Lebanon (with the Hezbollah terror organization) and Syria, have caused substantial regional instability and extreme volatility in the global markets at large.
See Item 3.D, “Key Information – Risk Factors – Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI .” - 40 - Table of Contents Enterprise Unified Communications In 2024, the demand for cloud UC services continued to grow and there was a continued slowdown of on-premises UC and the PBX market.
See Item 3.D, “Key Information - Risk Factors - Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI .” Enterprise Unified Communications In 2025, the demand for cloud UC services continued to grow and there was a continued slowdown in the on-premises UC and PBX markets.
In addition, public carriers require that equipment connected to their networks comply with their own standards. Telecommunication-related policies and regulations are continuously reviewed by governmental and industry standards-setting organizations and are always subject to amendment or change.
In addition, public carriers require that equipment connected to their networks comply with their own standards. Telecommunication-related policies and regulations are continuously reviewed by governmental and industry standards-setting organizations and are always subject to amendments or changes.
Our telephone number is +972-3-976-4099. Our U.S. subsidiary, AudioCodes Inc., 80 Kingsbridge Road, Piscataway, New Jersey 08854, serves as our agent in the United States. Our website address is www.audiocodes.com. The information contained on or available through our website is not incorporated by reference into and should not be considered a part of this Annual Report.
Our U.S. subsidiary, AudioCodes Inc., 80 Kingsbridge Road, Piscataway, New Jersey 08854, serves as our agent in the United States. Our website address is www.audiocodes.com. The information contained on or available through our website is not incorporated by reference into and should not be considered a part of this Annual Report.
Aggregate non-cancellable obligations under these agreements as of December 31, 2024, were approximately $11 million. - 49 - Table of Contents Industry Standards and Government Regulations Our products must comply with industry standards relating to telecommunications equipment. Before completing sales in a country, our products must comply with local telecommunications standards, recommendations of quasi-regulatory authorities and recommendations of standards-setting committees.
Aggregate non-cancellable obligations under these agreements as of December 31, 2025 were approximately $15 million. - 51 - Table of Contents Industry Standards and Government Regulations Our products must comply with industry standards relating to telecommunications equipment. Before completing sales in a country, our products must comply with local telecommunications standards, recommendations of quasi-regulatory authorities and recommendations of standards-setting committees.
These significant advances mean that businesses can now utilize conversational AI technologies offered by various providers to automate their customer service departments and train bots to give callers a high level of service whenever they get in touch.
These significant advances mean that businesses can now utilize conversational AI technologies offered by various providers to automate their customer service departments and deploy Voice AI Agents to give callers a high level of service whenever they get in touch.
See Item 3.D, “Key Information – Risk Factors – The markets we serve are highly competitive and several of our competitors have competitive advantages over us, which may make it difficult for us to maintain profitability. ” The following sets forth a list of competing vendors and providers in each of our main product and service categories: Networking Solutions In the area of enterprise session border controllers, we compete with Oracle, Ribbon Communications, Alianza (acquired Metaswitch from Microsoft), TE-Systems and Ingate.
See Item 3.D, “Key Information - Risk Factors - The markets we serve are highly competitive and several of our competitors have competitive advantages over us, which may make it difficult for us to maintain profitability. ” The following sets forth a list of competing vendors and providers in each of our main product and service categories: Networking Solutions In the area of enterprise session border controllers, we compete with Oracle, Ribbon Communications, and Cisco.
We expect such trend to continue in 2025 and beyond, and consequently we plan to (x) focus on providing services and applications that add value to the uCaaS solutions, and (y) ensure a smooth migration to cloud-based UC while offering operational simplicity, high quality and reliability.
We expect such trend to continue in 2026 and beyond, and consequently we plan to (a) focus on providing services and applications that add value to UCaaS solutions, and (b) ensure a smooth migration to cloud-based UC while offering operational simplicity, high quality and reliability.
As voice is the most fundamental and intuitive method of conversation, we are focusing on enabling engagement of voice and telephony to various AI-based applications and implementing voice-based use cases, leveraging on the investment made in AI and voice applications. We began investing in these applications in 2018, and we believe opportunities will develop across various products.
As voice is the most fundamental and intuitive method of conversation, we are focusing on enabling engagement of voice and telephony to various AI-based applications and implementing voice-based use cases, leveraging the investment made in AI and voice applications. We began investing in these applications in 2018, and are now seeing significant opportunities developing across various products.
Accordingly, we anticipate that these applications will become a new growth engine for our business in the near- and long-term. Service Provider Business In the service provider market, our go-to-market strategy concentrates on outreach to small and medium sized businesses (SOHO, SMB, SME) with our VoIP gateways, SBCs and routers.
Accordingly, we anticipate that these applications will become a new growth engine for our business in the near- and long-term. Service Provider Business In the service provider market, our go-to-market strategy concentrates on outreach to small and medium-sized businesses (SOHO, SMB, SME) with our VoIP gateways, SBCs, Multi-Service Business Routers as well as Live Platform multi-UCaaS voice connectivity.
AudioCodes Inc. also leases offices in Morrisville, North Carolina, or the North Carolina Lease. The annual lease payments in 2023 (including management fees) for all our offices in the United States were approximately $467,000. We lease additional offices for our international offices; however, we do not believe the lease agreements for these offices are material.
AudioCodes Inc. also leases offices in Morrisville, North Carolina, or the North Carolina Lease. The annual lease payments in 2025 (including management fees) for all our offices in the United States were approximately $0.5 million. We lease additional offices for our international offices; however, we do not believe the lease agreements for these offices are material.
In the area of low and mid-density digital gateways we face competition from companies such as Ribbon Communications, Cisco, Dialogic, NewRock, Patton, Ferrari and Sangoma. Our competitors in the area of multi-service business routers are companies such as Cisco, Juniper, Adtran, One-Access (acquired by Ekinops), MicroTik, and Huawei.
In the area of analog, low and mid-density digital gateways, we face competition from companies such as Ribbon Communications,Cisco, Grandstream and Sangoma . Our competitors in the area of multi-service business routers are companies such as Cisco, Juniper, Adtran and One-Access (acquired by Ekinops).
Our voice solutions have evolved to be software-based and run natively in cloud environments, to comply with the industry trend of migrating to private and public clouds. We continue to invest heavily in putting voice and AI at the forefront of technological evolution in our industry. Strengthen and expand strategic relationships with key partners and customers .
Our voice solutions have evolved to be software-based and run natively in cloud environments, to comply with the industry trend of migrating to private and public clouds. We continue to invest heavily in voice and AI across our products and platforms offerings. Strengthen and expand strategic relationships with key partners and customers .
The annual lease payments in 2024 (including management fees) for Beer Sheva Lease was approximately $373,000. - 52 - Table of Contents Our U.S. subsidiary, AudioCodes Inc., leased an approximately 14,706 square foot facility in Piscataway, New Jersey, or the New Jersey Lease, on May 13, 2022.
The annual lease payments in 2025 (including management fees) for the Beer Sheva Lease was approximately $0.4 million. - 54 - Table of Contents Our U.S. subsidiary, AudioCodes Inc., leased an approximately 14,706 square foot facility in Piscataway, New Jersey, or the New Jersey Lease, on May 13, 2022.
Additional competitors may include companies that currently provide communication software products and services. The ability of some of our competitors to bundle other enhanced services or complete solutions with VoIP products could give these competitors an advantage over us. Intellectual Property and Proprietary Rights Our success is dependent in part upon proprietary technology.
The ability of some of our competitors to bundle other enhanced services or complete solutions with VoIP products could give these competitors an advantage over us. Intellectual Property and Proprietary Rights Our success is dependent in part upon proprietary technology.
We sell our products through, or in cooperation with, partners that can offer or certify our products as part of a complete solution to their customers. We expect to further develop our strategic partner relationships with solution providers in order to increase our customer base. Our strategic partners include companies such as Microsoft, Cisco, Zoom and Genesys.
Develop a network of strategic solution partners . We sell our products through, or in cooperation with, partners that can offer or certify our products as part of a complete solution to their customers. We expect to further develop our strategic partner relationships with solution providers in order to increase our customer base.
Our efforts in the uCaaS arena are focused on a number of key partnerships, predominantly with Microsoft, who reported substantial growth in the active users of their Teams UC and collaboration solution from 2020 through 2023.
Our efforts in the UCaaS arena are focused on a number of key partnerships, predominantly with Microsoft, who continue to report substantial growth in the active users of their Teams UC and collaboration solution through 2025.
We expect our certified support for Teams Direct Routing, our communications solutions (Voca Conversational Interaction Center, call recording and Meeting Insights productivity solution), and our growing offering of audio and video devices and meeting room solutions to continue to be focus areas for us as enterprises migrate to Microsoft Teams Phone. - 43 - Table of Contents We anticipate that our AudioCodes Live for Microsoft Teams offering will continue to gain traction as enterprises look to streamline their UC operations.
We expect our certified support for UCaaS PSTN connectivity (including Microsoft Teams Direct Routing and Operator Connect, Webex Calling Cloud Connect and Zoom Phone Provider Exchange), our voice AI communications solutions (Voca Conversational Interaction Center, Interaction Insights call recording and Meeting Insights productivity solution), and our growing offering of audio and video devices and meeting room solutions to continue to be focus areas for us as enterprises migrate to Microsoft Teams Phone, Webex Calling and Zoom Phone. - 44 - Table of Contents We anticipate that our AudioCodes Live managed solution will continue to gain traction as enterprises look to streamline their UC operations.
In 2001, we released an analog media gateway based on blade and chip technologies. This was followed by a family of VoIP media gateways combining analog and digital telephony interfaces. We then began developing high density VoIP media gateways and media servers.
In 2001, AudioCodes released an analog media gateway based on blade and chip technologies, followed by a family of VoIP media gateways combining analog and digital telephony interfaces. The Company then developed high-density VoIP media gateways and media servers.
This, in turn, is designed to increase demand, which we expect our business partners to fulfill based on their relationship with AudioCodes and the enterprise customers. Expand and enhance the development of highly integrated products and services .
Our ability to engage with these enterprises directly enhances our ability to influence solution design and procurement decisions. This, in turn, is designed to increase demand, which we expect our business partners to fulfill based on their relationship with AudioCodes and the enterprise customers. Expand and enhance the development of highly integrated products and services .
AudioCodes is recognized as a global leader in voice technologies. We intend to continue to capitalize on our voice expertise to drive new business opportunities, including through the application of AI, to add value to the employee and customer experience.
We intend to continue to capitalize on our voice expertise to drive new business opportunities, including through the application of AI, to add value to the employee and customer experience.
Customers Our customers consist of enterprises (with direct and indirect relationships), service providers (with direct and indirect relationships), and a small percentage of OEM customers. - 48 - Table of Contents Our enterprise customers include a range of Fortune 1000 organizations, Public Sector organizations (central and local government, healthcare and education) and smaller enterprises that use our equipment to primarily enable their UC or Contact Center solutions.
Customers Our customers consist of enterprises (with direct and indirect relationships), service providers (with direct and indirect relationships), and a small percentage of OEM customers. - 50 - Table of Contents Our enterprise customers include a range of Fortune 1000 organizations, Public Sector organizations (central and local government, healthcare and education) and smaller enterprises that use our solutions to support their unified communications and contact center environments and boost customer and employee experience with our voice AI services.
Customers and partners realize and appreciate the advantages our solutions offer, and we plan to keep expanding them with more products, management applications and enterprise productivity solutions. Build upon existing technologies to penetrate new markets, such as Contact Center .
Customers and partners realize and appreciate the advantages our solutions offer, and we plan to keep expanding them with more products, management applications and enterprise productivity solutions. Build upon existing technologies to penetrate new markets . We continue to leverage our expertise in voice and conversational AI to enter additional markets, including the Microsoft Teams contact center segment.
We believe that our knowledge of core technologies and our ability to combine them in the form of integrated cloud services enables us to offer better solutions that (i) are more comprehensive, (ii) are easier to consume (via subscription) and (iii) contain more features than those available in competitive alternatives.
We focus on combining voice infrastructure, cloud-based platforms and applications to deliver integrated solutions and believe that our knowledge of core technologies and our ability to provide such integrated offerings enables us to offer better solutions that (i) are more comprehensive, (ii) are easier to consume (via subscription) and (iii) contain more features than those available in competitive alternatives.
See Item 3.D, “Key Information – Risk Factors – The attack on Israel in October 2023, and the ensuing war with the Hamas terror organization and related conflicts with their supporters, could have a material adverse effect on our business, financial position, operating results and cash flows” and “-- Macroeconomic changes, including political disturbances, geopolitical instability, and trade wars, may adversely impact our business and operations.” The Emergence and Evolution of AI – AI evolved from a potential and theoretical future technology to a requirement now being demanded by many organizations to help them improve employee productivity and enhance their customer engagement experience, including through intelligent automation, natural language understanding and integration with other IT frameworks.
See Item 3.D, “Key Information - Risk Factors - Political, economic and military instability in Israel or the Middle East may adversely affect our business” and “-- Macroeconomic changes, including political disturbances, geopolitical instability, and trade wars, may adversely impact our business and operations.” The Emergence and Evolution of AI – In recent years, AI has evolved from a potential and theoretical future technology to a requirement now being demanded by many organizations to help them improve employee productivity and enhance their customer engagement experience, including through intelligent automation, natural language understanding and integration with other IT frameworks.
Consumed on a monthly subscription basis, AudioCodes Live for Microsoft Teams enables enterprises to benefit from Teams voice calling services and add-on applications without having to make capital investments in hardware and software, and without the need for specialized, in-house technical expertise.
Consumed on a monthly subscription basis, AudioCodes Live enables enterprises to benefit from UCaaS voice calling services and add-on applications without having to make capital investments in hardware and software, and without the need for specialized, in-house technical expertise. Contact Centers The contact center industry is accelerating migration from on-premises to cloud-based Contact Center as a Service, or CCaaS.
Engage enterprise customers in direct touch sales effort. We are pursuing a strategy of engaging large enterprise customers on a global level, as part of the AudioCodes product fit within leading enterprise solutions, mainly with Microsoft and Genesys. Our ability to engage with these enterprises directly enhances our ability to influence solution design and procurement decisions.
Our strategic partners include companies such as Microsoft, Cisco, Zoom and Genesys. Engage enterprise customers in direct touch sales effort. We are pursuing a strategy of engaging large enterprise customers on a global level, as part of the AudioCodes product fit within leading enterprise solutions, mainly with Microsoft and Genesys.
The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.
The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
In the future, we may also develop and introduce other products or services with new or additional telecommunications capabilities or services. As a result, we may compete directly with VoIP companies, system integrators, VARs and other telecommunications infrastructure and solution providers, some of which may be our current customers.
As a result, we may compete directly with VoIP companies, system integrators, VARs and other telecommunications infrastructure and solution providers, some of which may be our current customers. Additional competitors may include companies that currently provide communication software products and services.
The ongoing development and integration cycles frequently result in close working relationships with our customers and partners. By focusing on leading solution vendors, system integrators and channels with large volume potential, we believe that we reach a substantial segment of our potential customer base while controlling the cost and complexity of our marketing efforts.
By focusing on leading solution vendors, system integrators and channels with large volume potential, we believe that we reach a substantial segment of our potential customer base while managing the cost and complexity of our marketing efforts. We continue to invest in local operations in key regions to support our partners and customers.
AUDIOCODES SOLUTIONS, PRODUCTS AND SERVICES Solutions Enterprise Business Unified Communications Our enterprise business is driven primarily by our solutions for UC environments. Beginning in 2020, we noted a clear shift towards uCaaS solutions as enterprises continue to migrate their IT infrastructure, in general, and UC solutions, in particular, to the cloud.
Beginning in 2020, we noted a clear shift towards UCaaS solutions as enterprises continue to migrate their IT infrastructure, in general, and UC solutions, in particular, to the cloud.
In addition to SBCs and Voice.AI solutions, our varied software offerings include the One Voice Operations Center, or OVOC, for network and device configuration, monitoring and management, the Device Manager for administering business phones and meeting room solutions, and the AudioCodes Routing Manager, or ARM, for handling call routing in complex VoIP networks.
AudioCodes also offers voice network and service management tools, including the One Voice Operations Center (OVOC) for network and device configuration, monitoring and management; Device Manager for administering and monitoring business phones and meeting room solutions; and AudioCodes Routing Manager (ARM) for call routing management in complex VoIP networks.
Additionally, voice, audio and other communications alternatives that compete with our products are constantly being introduced. Our competitors in the area of contact center include, but are not limited to, Anywhere365, Luware, Landis, ComputerTalk, Tendfor and other contact center vendors, primarily focused on the Microsoft Teams product.
Applications Our competitors in the area of Contact Center as a Service (CCaaS) include, but are not limited to, Anywhere365, Luware, Landis, ComputerTalk, Tendfor and other contact center vendors, primarily focused on the Microsoft Teams product.
Live Platform enables AudioCodes to deliver managed services to its direct customers as well as empowering partners to offer UC calling and contact center services simply and efficiently. Our principal executive offices are located at 6 Ofra Haza Street, Park Naimi Building A, Or Yehuda 6032303, Israel. Our registration number with the Israeli Registrar of Companies is 520044132.
Live Platform is used by AudioCodes and its global network of channel partners to deliver managed services to enterprise and service provider customers. Our principal executive offices are located at 6 Ofra Haza Street, Park Naimi Building A, Or Yehuda 6032303, Israel. Our registration number with the Israeli Registrar of Companies is 520044132. Our telephone number is +972-3-976-4099.
We comply with ISO9001, ISO14001, ISO45001, ISO27001 and the European Union’s Restriction of Hazardous Substances Directive (under certain exemptions) that requires telecommunication equipment suppliers to not use some materials that are not environmentally friendly.
We comply with ISO9001, ISO14001, ISO45001, ISO27001 and the European Union’s Restriction of Hazardous Substances Directive (under certain exemptions) that requires telecommunication equipment suppliers to not use some materials that are not environmentally friendly. These materials include Cadmium, Hexavalent chromium, Lead, Mercury, Polybrominated biphenyls, Polybrominatel diphenyl ethers Bis (2-ethylhexyl) phthalate, benzyl butyl phthalate, Dibutyl phthalate and Diisobutyl phthalate.
Such competitors are currently listed in the certified list of Microsoft vendors although we mainly see their presence in mid-market projects. Our competitors in the area of Meeting Insights, which is focused on productivity enhancement, organization repository and sharing for meetings in the Microsoft Teams and Zoom, include, but are not limited to, Microsoft, Zoom, Avoma, Otter, Fireflies.AI and timeOS.
Our competitors in the area of Meeting Insights, which is focused on productivity enhancement, organization repository and sharing for meetings in Microsoft Teams, Zoom and Google Meet, include, but are not limited to, Microsoft Copilot for Teams, Zoom AI Companion and third party solutions such as Avoma, Otter, Fireflies.AI and timeOS.
As the decade progressed, we expanded our product portfolio with session border controllers (2006), multi-service business routers and gateways (2008) and IP phones (2011), complemented in recent years by Microsoft Teams meeting rooms solutions. Over the last decade, AudioCodes has developed a range of software-based voice productivity solutions through our Voice.AI business line.
AudioCodes further expanded its product portfolio with the introduction of session border controllers (2006), multi-service business routers and gateways (2008) and IP phones (2011). Beginning in 2020, AudioCodes added Microsoft Teams meeting room solutions to complement its communications device portfolio. Since approximately 2015, AudioCodes has developed a range of software-based voice productivity solutions through our Voice AI business line.
AudioCodes solutions and subscription services enable enterprises to smoothly migrate their communications infrastructure to cloud-based UC solutions that have emerged to dominate the market in recent years, such as Microsoft Teams as well as cloud-based contact center as a service offering.
AudioCodes solutions and subscription services enable enterprises to smoothly migrate their communications infrastructure to cloud-based UC solutions, such as Microsoft Teams, Cisco Webex and Zoom, as well as cloud-based contact center as a service offerings (e.g., Genesys Cloud).
AudioCodes Live Platform provides the voice connectivity infrastructure, customer onboarding automation, user lifecycle management and tools for monitoring, reporting and analytics, to help get the service up and running expeditiously and effectively, with the service provider supplying the data connectivity and SIP trunk minutes. - 47 - Table of Contents Sales and Marketing Our sales and marketing strategy is focused on two primary go-to market strategies.
AudioCodes Live Platform provides the voice connectivity infrastructure, customer onboarding automation, user lifecycle management and tools for monitoring, reporting and analytics, to help service providers and partners to get services up and running rapidly and efficiently, with the service provider supplying the data connectivity and SIP trunk minutes.
Other components are generic in nature, and we believe they can be obtained from multiple suppliers. We have not entered into any long-term supply agreements. However, we have worked for years in several countries with established global manufacturing leaders such as Flex and have had significant experience with their level of commitment and ability to deliver.
However, we have worked for years in several countries with established global manufacturing leaders such as Flex and have had significant experience with their level of commitment and ability to deliver.
These platforms are designed for managed data, SIP trunking, hosted PBX, and cloud-based communications services, and allow service providers to deploy flexible and cost-effective solutions. Applications AudioCodes offers a wide range of value-added voice applications to boost productivity and ensure a superior user experience.
These platforms are designed for managed data, SIP trunking, hosted PBX, and cloud-based communications services, and allow service providers to deploy flexible and cost-effective solutions. Devices AudioCodes offers a portfolio of IP phones and meeting room solutions designed to support enterprise unified communications environments.
Our competitors in content delivery or connectivity platform, as well as Operator Connect Accelerate, Zoom exchange providers and WebEx enablement, include: (i) SIPPIO; (ii) DSTNY Group; (iii) Nuwave; and (iv) CallTower. Some of our competitors are also customers of our products and technologies.
Additionally, voice, audio and other communications alternatives that compete with our products are constantly being introduced. Our competitors in content delivery or connectivity platforms, as well as Operator Connect Accelerator, Zoom Exchange providers and WebEx Cloud Connect Enablement, include: (i) SIPPIO; (ii) DSTNY Group; (iii) Nuwave; and (iv) CallTower.
SBCs are deployed at the border between the enterprise and the service provider, as well as between the networks of different service providers.
Our software SBCs are cloud-native and deliver elasticity and high scale on all current major cloud platforms. SBCs are deployed at the border between the enterprise and the service provider, as well as between the networks of different service providers.
Our competitors currently sell products that provide similar benefits to those that we sell. There has been a significant amount of merger and acquisition activity, frequently involving major telecommunications equipment manufacturers acquiring smaller companies, as well as strategic alliances entered into by competitors.
There has been a significant amount of merger and acquisition activity, frequently involving major telecommunications equipment manufacturers acquiring smaller companies, as well as strategic alliances entered into by competitors. We expect that these activities will result in an increasing concentration of market share among these companies, many of whom are our customers.
AudioCodes helps enterprises to migrate and modernizes their voice infrastructure to the cloud, especially when such enterprises use a large and distributed Contact Center. We are providing voice managed services that complement the cCaaS OPEX model.
AudioCodes helps enterprises to migrate and modernize their voice infrastructure to the cloud, especially when such enterprises use a large and distributed Contact Center. We provide managed voice managed solutions and add-on voice applications that complement the CCaaS OPEX model, including Bring Your Own Carrier (BYOC) connectivity for CCaaS platforms and AI-based voice solutions.
The platform comprises AudioCodes products such as our virtualized SBC, AudioCodes Routing Manager, network management and monitoring, and Teams user management. It also includes self-developed and third-party solutions that together enable network connectivity, service automation, service monitoring, CPE management, high availability and much more for seamless service delivery.
Live Platform incorporates AudioCodes products and technology such as our virtualized session border controller, AudioCodes Routing Manager, network management and monitoring tools, device management and Microsoft Teams user management. It also integrates internally developed and third-party solutions that together enable network connectivity, service automation, service monitoring, customer premises equipment management, high availability and other capabilities required for seamless service delivery.
Cloud and AI Driven Convergence of Unified Communications and Contact Center Markets While Unified Communications (UC) and Contact Center (CC) markets have unique attributes and trends, the broader IT trend towards deploying cloud-based applications and services, plus the emergence of conversational AI, are accelerating the convergence of UC and CC technologies.
AudioCodes’ experience in voice networking and lifecycle management enable us to support customers in reducing migration risk, improving operational efficiency and establishing a scalable foundation for future voice and AI-enabled contact center initiatives Cloud and AI Driven Convergence of Unified Communications and Contact Center Markets While UC and Contact Center (CC) markets have unique attributes and trends, the broader IT trend towards deploying cloud-based applications and services, plus the emergence of conversational AI, are accelerating the convergence of UC and CC technologies.
Applications emerged for the practical use of AI, including recording meetings as a key source of business intelligence, connecting chatbots to voice and simplifying the automation of customer journeys through a contact center. This rapidly growing and evolving trend to adopt AI as a core business communications tool is likely to continue in the near-term.
Applications have emerged for the practical use of AI, including those that form the basis for AudioCodes’ voice AI solution portfolio: recording meetings as a key source of business intelligence, connecting chatbots to voice and simplifying the automation of customer journeys through a contact center.
ITEM 4. INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY AudioCodes Ltd. was incorporated in 1992 under the laws of the State of Israel. We initially concentrated on low-bit-rate speech compression technology, later moving into voice over packet, or VoP, chips, VoIP communication modules, blades and boards.
These layers are designed to operate together to support enterprise and service provider communication environments. AudioCodes Ltd. was incorporated in 1992 as a company limited by shares organized under the laws of the State of Israel. The Company initially concentrated on low-bit-rate speech compression technology, subsequently expanding into voice over packet (VoP) chips, VoIP communication modules, blades and boards.
We sell our products and solutions to service providers and enterprises worldwide, leading enterprise channels, regional and global system integrators, global equipment manufacturers and VARs, in the telecommunications and networking industries and establish and maintain long-term working relationships with them. We work closely with our customers to deliver products, solutions and services that meet their specific needs.
We sell our products and solutions to service providers and enterprises worldwide, including through enterprise channels, system integrators, global equipment manufacturers and value-added resellers. We work closely with our customers to deliver products, solutions and services that meet their requirements.
We generally enter into non-exclusive sales representation/distribution agreements with channel partners in each of the major countries in which we do business. Typical product agreements are for renewable 12-month terms or are terminable at will by us upon 90 days’ notice, and do not commit the customer to inventory or to any minimum sales of our products to third parties.
Typical product agreements are for renewable 12-month terms or are terminable at will by us upon 90 days’ notice, and do not commit the customer to inventory or to any minimum sales of our products to third parties. Some of our customers have the ability to return some of the products they have previously purchased and purchase more up-to-date models.
Our RX products are certified under the MTR program which adds Teams to meeting rooms. Services Professional Services We provide a modular portfolio of professional services to our partners and customers by delivering a complete voice network lifecycle model that is based on the three basic phases of Plan, Implement and Operate.
The solution provides seamless voice connectivity with telephony systems and contact centers using AudioCodes SBC technology. Services Professional Services We provide a modular portfolio of professional services to our partners and customers around the world by delivering a complete voice network lifecycle model that is based on the three basic phases of Plan, Implement and Operate.
Applications Our competitors in the area of call recording, compliance recording and convenient include companies such as Verint, NICE, ACS, Red Box (acquired by Uniphore), Teleware and Dubber. Our competitors in the area of Conversational IVR, Speech Attendants include, but are not limited to, Nuance, Parlance and other contact center vendors which provide IVR solutions.
Our competitors in the area of call recording, compliance recording and convenience include companies such as Verint, NICE, ACS, Red Box (acquired by Uniphore), Teleware and Dubber.
UC functions are easily deployed through cloud services, along with access to continual updates and improvements and with native support for work-from-anywhere. The shift to cloud-based UC or uCaaS has been driven by companies like Microsoft, Zoom and Cisco.
With the transition to unified communications as a service (UCaaS), UC functions are easily deployed via cloud services, along with access to continual updates and improvements and with native support for work-from-anywhere and hybrid workplaces.
Based on a best-of-breed approach, VoiceAI Connect allows contact centers to pick the best providers for building and integrating Voice Conversational AI solutions for automating and increasing productivity of their business operations. VoiceAI Connect is available as a fully managed service (Enterprise Edition) and as a self-service SaaS solution (LiveHub) to support any deployment, integration or regulatory needs.
These solutions are available as a fully managed service (Voice AI Connect Enterprise Edition) and as a self-service SaaS solution (LiveHub) to support any deployment, integration or regulatory needs.
During 2024, we further extended the integration and support of leading bot development platforms and cognitive speech services solutions as well as adding support for LLM engines such as OpenAI to enable Gen-AI based conversational AI. Additionally, we implemented value added services, such as after call summarization and real-time translations ready for integration with leading contact center solutions.
During 2025, we further extended the integration and support of leading CAIPs and cognitive speech services solutions as well as support for LLM engines to enable best-of-breed Gen-AI based voice conversational AI.
Our Mediant SBCs include hardware and software platforms that offer cost-efficient, scalable SBC and hybrid SBC-MGW functionality (SIP to TDM, SIP to SIP) for enterprises, service providers and cloud deployments. Our software SBCs are cloud-native and deliver elasticity and high scale on all current major cloud platforms.
Products Networking Our Mediant family of SBCs, media gateways (MGWs), and multi-service business routers (MSBRs) includes a range of versatile IP communications platforms that deliver seamless VoIP connectivity. Our Mediant SBCs include hardware and software platforms that offer cost-efficient, scalable SBC and hybrid SBC-MGW functionality (SIP to TDM, SIP to SIP) for enterprises, service providers and cloud deployments.
We also added video support for our WebRTC Gateway for Click-to-Call use case. - 38 - Table of Contents IP Phones and Meeting Room Solutions During 2022 and 2023, we continued developing our range of IP phone devices and Room Experience, or RX, meeting room suite offering for Microsoft Teams environments.
Product and Technology Developments SBC Developments During 2025, we continued to enhance our SBCs’ security and support for the latest technology developments in virtual and public cloud environments. - 39 - Table of Contents IP Phones and Meeting Room Solutions During 2025, we continued developing our range of IP phone devices and Room Experience (RX) meeting room suite offering for Microsoft Teams and other UCaaS environments.
We plan to continue designing, developing and introducing new product lines, product features and services that address the increasingly sophisticated needs of our customers while additionally helping them leverage new technologies (such as AI).
We plan to continue designing, developing and introducing new product lines, product features and services that address evolving customer requirements and incorporate new technologies, including AI.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTo the extent that the ongoing war with Hamas and conflicts with its supporters materially and adversely affects our business and financial results, such may also have the effect of heightening many of the other risks described in Item 3.D , “ Key Information – Risk Factors .” - 60 - Table of Contents Results of Operations The following table sets forth the results of operations in dollars and as a percentage of total revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 ​ 2023 ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ Amount ​ Revenues ​ Amount ​ Revenues ​ Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ $ 111,966 ​ 46.2 % $ 123,991 ​ 50.7 % Services ​ ​ 130,210 ​ 53.8 ​ ​ 120,392 ​ 49.3 ​ Total revenues ​ ​ 242,176 ​ 100.0 ​ ​ 244,383 ​ 100.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Products ​ ​ 44,448 ​ 18.4 ​ ​ 47,964 ​ 19.6 ​ Services ​ ​ 39,567 ​ 16.3 ​ ​ 38,070 ​ 15.6 ​ Total cost of revenues ​ ​ 84,015 ​ 34.7 ​ ​ 86,034 ​ 35.2 ​ Gross profit ​ ​ 158,161 ​ 65.3 ​ ​ 158,349 ​ 64.8 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development, net ​ ​ 52,125 ​ 21.5 ​ ​ 57,169 ​ 23.4 ​ Selling and marketing ​ ​ 71,167 ​ 29.4 ​ ​ 70,243 ​ 28.7 ​ General and administrative ​ ​ 17,678 ​ 7.3 ​ ​ 16,513 ​ 6.8 ​ Total operating expenses ​ ​ 140,970 ​ 58.2 ​ ​ 143,925 ​ 58.9 ​ Operating income ​ ​ 17,191 ​ 7.1 ​ ​ 14,424 ​ 5.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial income (expenses), net ​ ​ (2,095) ​ (0.9) ​ ​ (52) ​ - ​ Income before taxes on income ​ ​ 15,096 ​ 6.2 ​ ​ 14,372 ​ 5.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxes on income ​ ​ 215 ​ 0.1 ​ ​ (5,592) ​ (2.3) ​ Net income ​ $ 15,311 ​ 6.3 % $ 8,780 ​ 3.6 % ​ Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues .
Biggest changeTo the extent that the ongoing wars materially and adversely affect our business and financial results, such may also have the effect of heightening many of the other risks described in Item 3.D , “ Key Information - Risk Factors .” - 59 - Table of Contents Results of Operations The following table sets forth the results of operations in dollars and as a percentage of total revenues for the periods indicated: Year ended December 31, 2025 2024 % of % of Amount Revenues Amount Revenues Revenues: Products $ 114,911 46.8 % $ 111,966 46.2 % Services 130,693 53.2 130,210 53.8 Total revenues 245,604 100.0 242,176 100.0 ​ ​ Cost of revenues: ​ ​ Products 44,197 18.0 44,448 18.4 Services 41,775 17.0 39,567 16.3 Total cost of revenues 85,972 35.0 84,015 34.7 Gross profit 159,632 65.0 158,161 65.3 Operating expenses: ​ ​ Research and development, net 52,591 21.4 52,125 21.5 Selling and marketing 77,242 31.4 71,167 29.4 General and administrative 15,760 6.4 17,678 7.3 Total operating expenses 145,593 59.3 140,970 58.2 Operating income 14,039 5.7 17,191 7.1 ​ ​ Financial expenses, net (461 ) (0.19 ) (2,095 ) (0.9 ) Income before taxes on income 13,578 5.5 15,096 6.2 ​ ​ Tax benefits (Taxes on income) (4,623 ) 1.9 215 0.1 Net income $ 8,955 3.6 % $ 15,311 6.3 % Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenues .
We grant to certain customers a right of return or the ability over a limited period to exchange for other products a specific percentage of the total price paid for products they have purchased.
We grant certain customers a right of return or the ability over a limited period to exchange for other products a specific percentage of the total price paid for products they have purchased.
Based on these evaluations, inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued product lines and market prices lower than cost. During the years ended December 31, 2024 and 2023, we wrote off inventory in the aggregate amount of approximately $4.8 and approximately $1.1 million, respectively.
Based on these evaluations, inventory write-offs are provided to cover risks arising from slow-moving items, technological obsolescence, excess inventories, discontinued product lines and market prices lower than cost. During the years ended December 31, 2025, 2024 and 2023, we wrote off inventory in the aggregate amount of approximately $3.3 million, $4.8 million and $1.1 million, respectively.
Research and development expenses, net, consist primarily of salaries and related costs of employees engaged in ongoing research and development activities, development-related raw materials and the cost of subcontractors, less grants from the IIA.
Research and development expenses, net, consist primarily of salaries and related costs of employees engaged in ongoing research and development activities, development-related raw materials, cost of subcontractors and rent, less grants from the IIA.
All transaction gains and losses from the premeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statement of operations as financial income or expenses, as appropriate. The demand for VoIP technology has increased during recent years. In recent years, the shift from traditional circuit-switched networks to next generation packet-switched networks continued to gain momentum.
All transaction gains and losses from the remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statement of operations as financial income or expenses, as appropriate. The demand for VoIP technology has increased during recent years. In recent years, the shift from traditional circuit-switched networks to next generation packet-switched networks continued to gain momentum.
In the year ended December 31, 2024, our investment activities provided cash in the amount of $17.8 million, as compared to the cash provided by investing activities in the amount of $20.0 million in the year ended December 31, 2023.
In the year ended December 31, 2024, our investing activities provided cash in the amount of $17.8 million, as compared to the cash provided by investing activities in the amount of $20.0 million in the year ended December 31, 2023.
We maintain a provision for product returns and exchanges and other incentives, based on our experience with historical sales returns, analysis of credit memo data and other known factors, all in accordance with ASC 606. This provision is deducted from revenues and amounted to approximately $1.7 million and $2.1 million as of December 31, 2024 and 2023, respectively.
We maintain a provision for product returns and exchanges and other incentives, based on our experience with historical sales returns, analysis of credit memo data and other known factors, all in accordance with ASC 606. This provision is deducted from revenues and amounted to approximately $2.2 million and $1.7 million as of December 31, 2025 and 2024, respectively.
The growth in sales of professional services was attributable to offering more managed services with larger contract value as part of our AudioCodes Live offering and a broader portfolio of professional services offered by us and an increase in demand for such services in the Enterprise UC market (mainly Microsoft Teams). - 61 - Table of Contents Cost of Revenues and Gross Profit .
The growth in sales of professional services was attributable to offering more managed services with larger contract value as part of our AudioCodes Live offering and a broader portfolio of professional services offered by us and an increase in demand for such services in the Enterprise UC market, mainly Microsoft Teams. - 60 - Table of Contents Cost of Revenues and Gross Profit .
Cash Flows from Operating Activities Our operating activities are driven by sales of our products and services, less costs and expenses, primarily payroll and related expenses, and adjusted for certain non-cash items, mainly depreciation and amortization, stock-based compensation, amortization of deferred commissions, non-cash operating lease costs, amortization of premium and accretion of discount on marketable securities, and changes in operating assets and liabilities.
Cash Flows from Operating Activities Our operating activities are driven by sales of our products and services, less costs and expenses, primarily payroll and related expenses, and adjusted for certain non-cash items, mainly depreciation and amortization, share-based compensation, amortization of deferred commissions, non-cash operating lease costs, amortization of premium and accretion of discount on marketable securities, and changes in operating assets and liabilities.
These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Our management has reviewed our critical accounting policies and related disclosures with our Audit Committee.
These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the years presented. Our management has reviewed our critical accounting policies and related disclosures with our Audit Committee.
There were no changes to our overall strategy with respect to our customer collections, vendor payments and inventory management for the periods discussed. Our collections are dependent on the magnitude of our revenues and the payment terms we grant to our customers from time to time.
There were no changes to our overall strategy with respect to our customer collections, vendor payments, and inventory management for the years discussed. Our collections are dependent on the magnitude of our revenues and the payment terms we grant to our customers from time to time.
More specifically, the changes to cash used in our financing activities in the year ended December 31, 2023, as compared to the year ended December 31, 2022, was principally the result of notably lower repurchases of our ordinary shares in terms of overall cash spent.
More specifically, the changes to cash used in our financing activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, was principally the result of notably lower repurchases of our ordinary shares in terms of overall cash spent.
Accordingly, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply certain of our significant accounting policies. Revenue Recognition and Allowance for Sales Returns We generate our revenues primarily from the sale of software licenses, equipment, and related services through a direct sales force and sales representatives.
Accordingly, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply certain of our significant accounting policies. Revenue Recognition We generate our revenues primarily from the sale of software licenses, equipment, and related services through a direct sales force and sales representatives.
Information with respect to Liquidity and Capital Resources as of December 31, 2024 and for the year then ended is contained under the heading “Liquidity and Capital Resources” in Item 5 of our 2023 Form 20-F. - 66 - Table of Contents C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC .
Information with respect to Liquidity and Capital Resources as of December 31, 2024 and for the year then ended is contained under the heading “Liquidity and Capital Resources” in Item 5 of our 2024 Form 20-F. - 65 - Table of Contents C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC .
Our top five customers accounted for approximately 38.2%, 39.2%, 38.2% of our revenues in the years ended December 31, 2024, 2023 and 2022, respectively. If we lose a large customer and fail to add new customers to replace the associated lost revenue, or the revenue derived from any such customers materially decreases, our operating results may be materially adversely affected.
Our top five customers accounted for approximately 36.1%, 38.2%, 39.2% of our revenues in the years ended December 31, 2025, 2024 and 2023, respectively. If we lose a large customer and fail to add new customers to replace the associated lost revenue, or the revenue derived from any such customers materially decreases, our operating results may be materially adversely affected.
Revenues, based on the location of our customers for the last three fiscal years, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 2022 Americas, principally the United States ​ 51.7 % 51.7 % 50.7 % Eastern Asia ​ 13.5 ​ 14.5 15.3 ​ Europe ​ 31.6 ​ 32.3 31.9 ​ Israel ​ 3.2 ​ 1.5 2.1 ​ Total ​ 100.0 % 100.0 % 100.0 % ​ Beyond repeated business from distributors and service providers, we believe that prospective customers are generally required to make a significant commitment of resources to test and evaluate our products and to integrate them into their larger systems.
Revenues, based on the location of our customers for the last three fiscal years, are as follows: Year Ended December 31, 2025 2024 2023 Americas, principally the United States 52.1 % 51.7 % 51.7 % Eastern Asia 13.9 13.5 14.5 Europe 31.8 31.6 32.3 Israel 2.2 3.2 1.5 Total 100.0 % 100.0 % 100.0 % Beyond repeated business from distributors and service providers, we believe that prospective customers are generally required to make a significant commitment of resources to test and evaluate our products and to integrate them into their larger systems.
The amounts provided by investment activities in the year ended December 31, 2024 were primarily as a result of proceeds of $42.6 million derived from the sale and redemption of marketable securities, which was offset by a $24.3 million purchase of property and equipment.
The amounts provided by investing activities in the year ended December 31, 2024, were primarily as a result of proceeds of $42.6 million derived from the sale and redemption of marketable securities, which was partially offset by a $24.3 million purchase of property and equipment.
We are also further developing our SaaS offers with solutions like SmartTAP, Meeting Insights, Voice.AI Connect, Live platform and Voca. We are developing productivity solutions, and specialized appliances and applications for Microsoft Teams such as Direct Routing Survivable Branch Appliances (SBA).
We are also further developing our SaaS offers with solutions like SmartTAP, Meeting Insights, VoiceAI Connect, Live platform and Voca. We are developing productivity solutions, and specialized appliances and applications for Microsoft Teams such as Direct Routing Survivable Branch Appliances (SBA).
Our platforms are expected to feature increased session capacity, new functionalities, enhanced signaling software and compliance with new protocols, as well as new management and productivity applications. As of December 31, 2024, 320 of our employees were engaged primarily in research and development on a full-time basis.
Our platforms are expected to feature increased session capacity, new functionalities, enhanced signaling software and compliance with new protocols, as well as new management and productivity applications. As of December 31, 2025, 331 of our employees were engaged primarily in research and development on a full-time basis.
Gross profit as a percentage of total revenues was 65.3% in the year ended December 31, 2024, compared to 64.8% in the year ended December 31, 2023. Expenses included in cost of revenues related to share-based compensation were $0.4 million in each of the years ended December 31, 2024 and 2023.
Gross profit as a percentage of total revenues was 65.0% in the year ended December 31, 2025, compared to 65.3% in the year ended December 31, 2024. Expenses included in cost of revenues related to share-based compensation were $0.4 million in each of the years ended December 31, 2025 and 2024.
IIA grants recognized were $0.1 million in the year ended December 31, 2024, compared to $0.7 million in the year ended December 31, 2023. Selling and Marketing Expenses . Selling and marketing expenses consist primarily of salaries and related costs (including sales commissions) of sales and marketing personnel, as well as exhibition, travel and related expenses.
IIA grants recognized were $0.0 million in the year ended December 31, 2025, compared to $0.1 million in the year ended December 31, 2024. Selling and Marketing Expenses . Selling and marketing expenses consist primarily of salaries and related costs (including sales commissions) of sales and marketing personnel, as well as exhibition, rent, travel and related expenses.
Share Repurchase Program and Cash Dividends In January, June and December 2023 and in July and December 2024, we received court approval to purchase up to $25.0 million, $25.0 million, $20.0 million, $20.0 million and $20.0 million of our ordinary shares, respectively. The most recent court approvals allowed us to use the approved amounts for share repurchases or cash dividends.
Share Repurchase Program and Cash Dividends In July 2024, December 2024, July 2025 and October 2025, we received court approval to purchase up to $20.0 million, $20.0 million, $20.0 million and $25.0 million of our ordinary shares, respectively. The most recent court approvals allowed us to use the approved amounts for share repurchases or cash dividends.
LIQUIDITY AND CAPITAL RESOURCES We have financed our operations for the last three years primarily from our cash and cash equivalents, bank deposits and cash from operations. Our cash requirements have principally been for working capital and capital expenditures. Historically, we have financed our working capital requirements, primarily from sales of our products and services.
LIQUIDITY AND CAPITAL RESOURCES We have financed our operations for the last three years primarily from our cash and cash equivalents, bank deposits and cash generated by operating activities. Our cash requirements have principally been for working capital and capital expenditures. Historically, we have financed our working capital requirements, primarily from sales of our products and services.
We are experiencing decreasing demand for our technology products from customers who previously manufactured network equipment products based on our enabling technology. These customers are migrating from our enabling technology products to diverse integrated comprehensive solutions and, as a result, the demand for our technology products is being adversely affected. E.
We are experiencing decreasing demand for our technology products from customers who previously manufactured network equipment products based on our enabling technology. These customers are migrating from our enabling technology products to diverse integrated comprehensive solutions and, as a result, the demand for our technology products is being adversely affected. - 67 - Table of Contents
Our net research and development expenses were approximately $52.1 million in the year ended December 31, 2024, compared to $57.2 million in the year ended December 31, 2023, and $59.8 million in the year ended December 31, 2022. From time to time, we have received grants from the IIA.
Our net research and development expenses were approximately $52.6 million in the year ended December 31, 2025, compared to $52.1 million in the year ended December 31, 2024, and $57.2 million in the year ended December 31, 2023. From time to time, we have received grants from the IIA.
The following table presents information about the rate of inflation in Israel, the rate of devaluation of the NIS against the dollar, and the rate of inflation in Israel adjusted for the devaluation: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Israeli ​ ​ ​ ​ ​ ​ inflation ​ ​ Israeli ​ NIS devaluation ​ adjusted for ​ ​ inflation ​ or appreciation ​ devaluation or Year Ended ​ rate ​ rate ​ appreciation December 31, % % % 2024 ​ 3.2 ​ 0.6 ​ (2.7) 2023 3.0 3.1 0.1 2022 5.3 13.2 7.9 ​ B.
The following table presents information about the rate of inflation in Israel, the rate of devaluation of the NIS against the dollar, and the rate of inflation in Israel adjusted for the devaluation: Israeli inflation NIS devaluation or (appreciation) Israeli inflation adjusted for devaluation or rate rate (appreciation) Year Ended December 31, % % % 2025 2.6 (12.5 ) (15.2 ) 2024 3.2 0.6 (2.7 ) 2023 3.0 3.1 0.1 B.
Financial expense, net, in the year ended December 31, 2024 was $2.1 million, compared to $0.1 million in the year ended December 31, 2023. The increase in financial expenses, net in the year ended December 31, 2024 was primarily due to exchange rate fluctuations. Taxes on Income (tax benefit).
Financial expense, net, in the year ended December 31, 2025 was $0.5 million, compared to $2.1 million in the year ended December 31, 2024. The decrease in financial expenses, net in the year ended December 31, 2025 was primarily due to exchange rate fluctuations. (Taxes on Income) Tax Benefit.
The changes to cash provided by our operating activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, were principally the result of (i) the period-over-period change in the amount of inventory, which decreased by $12.3 million in the year ended December 31, 2024, as compared to an increase of $7.8 million in the year ended December 31, 2023, which was the result of less inventory purchases undertaken by us due to an easing in supply chain conditions during the year ended December 31, 2024, (ii) the period-over-period change in other payables and accrued expenses which increased overall by $3.2 million in the year ended December 31, 2024, as compared to a decrease of $6.2 million in the year ended December 31, 2023, due to a reduction in outstanding liabilities in the year ended December 31, 2024, and (iii) net income in the amount of $15.3 million for the year ended December 31, 2024, as compared to $8.8 million in the year ended December 31, 2023, due in large part to the factors listed in “Operating Activities” above, which was offset by (x) the period-over-period change in trade receivables, which increased by $3.8 million in the year ended December 31, 2024, as compared to a decrease of $1.6 million in the year ended December 31, 2023, which was the result of entering into several contracts with customers close to the date of the reporting period, and (y) the period-over-period change in deferred tax assets, net which increased overall by of $4.5 million in the year ended December 2024, as compared to a decrease of $1.4 million in the year ended December 2023, due to the creation of deferred tax assets, and (z) the period-over-period change in other receivables and prepaid expenses which increased overall by of $3.6 million in the year ended December 2024, as compared to a decrease of $0.6 million in the year ended December 2023, due to the changes in the fair value of derivative instruments.
In addition, our inventory purchases are generally dependent upon global supply and demand trends with respect to the components we need for our products. - 63 - Table of Contents Our operating activities provided cash in the amount of $35.3 million in the year ended December 31, 2024, as compared to the amount of $14.9 million in the year ended December 31, 2023 The changes to cash provided by our operating activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, were principally the result of (i) the year-over-year change in the amount of inventory, which decreased by $12.3 million in the year ended December 31, 2024, as compared to an increase of $7.8 million in the year ended December 31, 2023, which was the result of less inventory purchases undertaken by us due to an easing in supply chain conditions during the year ended December 31, 2024; (ii) the year-over-year change in other payables and accrued expenses which increased overall by $3.2 million in the year ended December 31, 2024, as compared to a decrease of $6.2 million in the year ended December 31, 2023, due to a reduction in outstanding liabilities in the year ended December 31, 2024; and (iii) net income in the amount of $15.3 million in the year ended December 31, 2024, as compared to $8.8 million in the year ended December 31, 2023, due in large part to the factors listed in “Operating Activities” above, which was offset by (x) the year-over-year change in trade receivables, which increased by $3.8 million in the year ended December 31, 2024, as compared to a decrease of $1.6 million in the year ended December 31, 2023, which was the result of entering into several contracts with customers close to the date of the reporting year, (y) the year-over-year change in deferred tax assets, net which increased overall by $4.5 million in the year ended December 31, 2024, as compared to a decrease of $1.4 million in the year ended December 31, 2023, due to the creation of deferred tax assets, and (z) the year-over-year change in other receivables and prepaid expenses which increased overall by of $3.6 million in the year ended December 31, 2024, as compared to a decrease of $0.6 million in the year ended December 31, 2023, due to the changes in the fair value of derivative instruments.
In addition, in the year ended December 31, 2024, expenses included in general and administrative expenses related to share-based compensation were $2.8 million compared to $4.0 million in the year ended December 31, 2023. Financial Expenses, Net.
In addition, in the year ended December 31, 2025, expenses included in general and administrative expenses related to share-based compensation were $2.3 million compared to $2.8 million in the year ended December 31, 2024. Financial Expenses, Net.
In the year ended December 31, 2023, we used $28.9 million of cash in financing activities, as compared to $48.6 million in the year ended December 31, 2022, primarily as a result of $18.3 million used to repurchase our ordinary shares and $11.4 million used to pay cash dividends to our shareholders, partially offset by $0.8 million of proceeds from the issuance of shares upon exercise of stock options (which stock options were exercised in the ordinary course by our option holders).
In the year ended December 31, 2024, we used $24.9 million of cash in financing activities, as compared to $28.9 million in the year ended December 31, 2023, primarily as a result of $14.3 million used to repurchase our ordinary shares and $10.9 million used to pay cash dividends to our shareholders, partially offset by $0.4 million of proceeds from the issuance of our ordinary shares upon exercise of stock options (which stock options were exercised in the ordinary course by our option holders).
Our revenues from sales of services in the year ended December 31, 2024 increased by 8.2% to $130.2 million, or 53.8% of total revenues, from $120.4 million, or 49.3% of total revenues, in the year ended December 31, 2023. The increase in revenues from sales of services was primarily driven by the growth of our professional and managed services offerings.
Our revenues from sales of services in the year ended December 31, 2025 increased by 0.4% to $130.7 million, or 53.2% of total revenues, from $130.2 million, or 53.8% of total revenues, in the year ended December 31, 2024. The increase in revenues from sales of services was primarily driven by the growth of our professional and managed services offerings.
Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the “weighted average cost” method for raw materials and finished products with the addition of direct manufacturing cost. We periodically evaluate the quantities on hand relative to current and historical selling prices and historical and projected sales volume and technological obsolescence.
Cost is determined using the “weighted average cost” method for raw materials and finished products with the addition of direct manufacturing cost. We periodically evaluate the quantities on hand relative to current and historical selling prices and historical and projected sales volume and technological obsolescence.
As of December 31, 2024, our Israeli subsidiaries have a contingent obligation to pay royalties in the amount of approximately $22.1 million. D. TREND INFORMATION There is a growing global trend of use of AI and machine learning, and we have started implementing these capabilities in our Voice.AI products.
As of December 31, 2025, our Israeli subsidiaries have a contingent obligation to pay royalties in the amount of approximately $23.8 million. D. TREND INFORMATION There is a growing global trend of use of AI and machine learning, and we have started implementing these capabilities in our VoiceAI products.
Westcon Group, our largest customer, accounted for approximately 13.3%, 16.3% and 15.1% of our revenues in the years ended December 31, 2024, 2023 and 2022, respectively. In addition, ScanSource Communications Group accounted for approximately 11.7%, 10.3% and 10.0%, of our revenues in the years ended December 31, 2024, 2023 and 2022, respectively.
Westcon Group, our largest customer, accounted for approximately 13.8%, 13.3% and 16.3% of our revenues in the years ended December 31, 2025, 2024 and 2023, respectively. In addition, ScanSource Communications Group accounted for approximately 9.3%, 11.7% and 10.3%, of our revenues in the years ended December 31, 2025, 2024 and 2023, respectively.
Another ongoing trend is the global migration to All-IP, which continues to impact our business as it has done for several years, with the shift from traditional communications systems to IP communications and unified communications.
Another ongoing trend is the global migration to All-IP, which continues to impact our business and has resulted in a decline in our revenues from our media gateway products as it has done for several years, with the shift from traditional communications systems to IP communications and unified communications.
We cannot predict the full impact of the war with Hamas and the related conditions on us in the future, particularly if emergency circumstances or geopolitical tensions continue, any aspect of which could have a material adverse effect on our business, financial position, operating results and cash flows.
We cannot predict the full impact of the various wars in which Israeli is engaged on us in the future, particularly if emergency circumstances or geopolitical tensions continue, any aspect of which could have a material adverse effect on our business, financial position, operating results and cash flows.
Revenue is recognized net of any taxes collected from customers which are subsequently remitted to the tax authorities. We elected to account for shipping and handling activities as fulfillment activities. Shipping and handling activities are classified as part of the cost of revenues.
The payment terms vary, mainly with terms of 60 days or fewer. Revenue is recognized net of any taxes collected from customers which are subsequently remitted to the tax authorities. We elected to account for shipping and handling activities as fulfillment activities. Shipping and handling activities are classified as part of the cost of revenues.
Management believes the significant accounting policies that affect its more significant judgments and estimates used in the preparation of its consolidated financial statements and are the most critical to aid in fully understanding and evaluating AudioCodes’ reported financial results include the following: ● Revenue recognition and allowance for sales returns; ● Allowance for credit losses; ● Inventories; ● Intangible assets; ● Goodwill; ● Income taxes and valuation allowance; ● Share-based compensation; and ● Contingent liabilities. - 53 - Table of Contents The extent of the impact of current macroeconomic conditions, including, but not limited to, rising inflation, an overall global economic slowdown and the ongoing conflicts in Ukraine and in the Middle East, on our business, financial condition and results of operations will depend on future developments, which are highly uncertain at this time.
Management believes the significant accounting policies that affect its more significant judgments and estimates used in the preparation of its consolidated financial statements and are the most critical to aid in fully understanding and evaluating our reported financial results include the following: ● Revenue recognition; ● Inventories; - 55 - Table of Contents The extent of the impact of current macroeconomic conditions, including, but not limited to, rising inflation, an overall global economic slowdown and the ongoing conflicts in Ukraine, the Middle East and Iran, on our business, financial condition and results of operations will depend on future developments, which are highly uncertain at this time.
Our operating activities provided cash in the amount of $35.3 million in the year ended December 31, 2024, as compared to the amount of $14.9 million in the year ended December 31, 2023.
Our operating activities provided cash in the amount of $29.4 million in the year ended December 31, 2025, as compared to the amount of $35.3 million in the year ended December 31, 2024.
Cost of revenues related to sales of products decreased by 7.3% to $44.4 million in the year ended December 31, 2024, from $48.0 million in the year ended December 31, 2023. Gross margin percentage from products was 60.3% in the year ended December 31, 2024 and 61.3% in the year ended December 31, 2023.
Cost of revenues related to sales of products decreased by 0.6% to $44.2 million in the year ended December 31, 2025, from $44.4 million in the year ended December 31, 2024. Gross margin percentage from products was 61.5% in the year ended December 31, 2025, compared to 60.3% in the year ended December 31, 2024.
The increase on an absolute basis is primarily due to depreciation expenses and a one-time, non-recurring expense attributable to a settlement agreement entered into with the landlord of our prior headquarters in connection with the termination of the related lease agreement.
The decrease on an absolute basis is primarily due to a one-time, non-recurring expense attributable to a settlement agreement entered into with the landlord of our prior headquarters in the year ended December 31, 2024 in connection with the termination of the related lease agreement.
Cost of revenues includes the cost of hardware, quality assurance, overhead related to professional and support customer services, overhead related to manufacturing activity, technology licensing and royalty fees payable to third parties and to the IIA. Gross profit decreased to $158.2 million in the year ended December 31, 2024, from $158.3 million in the year ended December 31, 2023.
Cost of revenues includes the cost of hardware and associated tariff costs, quality assurance, rent, overhead related to professional and support customer services, overhead related to manufacturing activity, technology licensing and royalty fees payable to third parties. Gross profit increased to $159.6 million in the year ended December 31, 2025, from $158.2 million in the year ended December 31, 2024.
The decrease on an absolute basis is primarily due to a decrease in payroll expenses. In addition, in the year ended December 31, 2024, expenses included in research and development expenses related to share-based compensation were $2.1 million, compared to $2.7 million in the year ended December 31, 2023.
The increase on an absolute basis is primarily due to an increase in cloud expenses. In the year ended December 31, 2025, expenses included in research and development expenses related to share-based compensation were $1.5 million, compared to $2.1 million in the year ended December 31, 2024.
As compared to the year ended December 31, 2023, the overall decrease in our cash and cash equivalents, short-term bank deposits, short-term and long-term marketable securities, and long-term financial investments, was principally driven by repurchases of our ordinary shares in the amount of $14.3 million, cash dividends paid in the aggregate amount of $10.9 million, and purchases of property and equipment in the amount of $24.3 million, which was offset by cash generated by operating activities in the amount of $35.3 million. - 63 - Table of Contents Our material cash requirements from known contractual and other obligations include our lease commitments and purchase commitments.
As compared to December 31, 2024, the overall decrease in our cash and cash equivalents, short-term bank deposits, short-term and long-term marketable securities in the year ended December 31, 2025, was principally driven by repurchases of our ordinary shares in the aggregate amount of $30.6 million, cash dividends paid in the aggregate amount of $10.9 million, which was partially offset by cash generated by operating activities in the amount of $29.4 million. - 62 - Table of Contents Our material cash requirements from known contractual and other obligations include our lease commitments and purchase commitments.
Some of our employees live within conflict area territories and may be forced to stay at home instead of reporting to work. If many of our employees are called for active duty, or forced to stay at home, our operations in Israel and our business may be materially and adversely affected.
If many of our employees are called for active duty, or forced to stay at home, our operations in Israel and our business may be materially and adversely affected.
During the year ended December 31, 2024, we acquired an aggregate of 1,385,632 of our ordinary shares for approximately $14.3 million, and declared and paid cash dividends in the aggregate amount of $10.9 million.
During the year ended December 31, 2024, we acquired an aggregate of 1,385,632 of our ordinary shares for approximately $14.3 million, and declared and paid a cash dividend in the aggregate amount of $10.9 million. In February 2026, we declared a cash dividend in the aggregate amount of approximately $5.3 million which was paid on March 6, 2026.
Research and development expenses decreased by 8.8% in the year ended December 31, 2024 to $52.1 million, from $57.2 million in the year ended December 31, 2023. As a percentage of total revenues, research and development expenses, net decreased to 21.5% in the year ended December 31, 2024, from 23.4% in the year ended December 31, 2023.
Research and development expenses increased by 0.9% in the year ended December 31, 2025 to $52.6 million, from $52.1 million in the year ended December 31, 2024. As a percentage of total revenues, research and development expenses, net decreased to 21.4% in the year ended December 31, 2025, from 21.5% in the year ended December 31, 2024.
Selling and marketing expenses increased by 1.3% in the year ended December 31, 2024 to $71.2 million, from $70.2 million in the year ended December 31, 2023. As a percentage of total revenues, selling and marketing expenses increased to 29.4% in the year ended December 31, 2024, from 28.7% in the year ended December 31, 2023.
Selling and marketing expenses increased by 8.5% in the year ended December 31, 2025 to $77.2 million, from $71.2 million in the year ended December 31, 2024. As a percentage of total revenues, selling and marketing expenses increased to 31.4% in the year ended December 31, 2025, from 29.4% in the year ended December 31, 2024.
Our products are delivered to our customers, which include original equipment manufacturers, or OEMs, network equipment providers, systems integrators, enterprises, carriers and distributors in the telecommunications and networking industries, all of whom are considered end-users. Revenues are recognized in accordance with Accounting Standards Codification, or ASC, 606, “ Revenue from Contracts with Customers ”.
Our products are delivered to our customers, which include original equipment manufacturers, or OEMs, network equipment providers, systems integrators, enterprises, carriers and distributors in the telecommunications and networking industries, all of whom are considered end-users.
Financial expenses, net consists primarily of interest earned on cash and cash equivalents, marketable securities and bank deposits, gains from financial investments, net of interest on our bank loans and bank charges, exchange rate differences and linkage differences to the Israeli consumer price Index, or Israeli CPI, and amortization of marketable securities premiums and accretion of discounts, net.
Financial expenses, net consists primarily of bank charges, exchange rate differences, and amortization of marketable securities premiums and accretion of discounts, net, net of interest earned on cash and cash equivalents, marketable securities and bank deposits and gains from financial investments.
As of March 11, 2025, we had approximately $10.6 million available for share repurchases or dividends under the most recent court approval granted in December 2024. The current approval is valid through June 14, 2025.
As of March 10, 2026, we had approximately $5.5 million available for share repurchases or dividends under the most recent court approval granted in October 2025. The current approval is valid through April 27, 2026.
General and administrative expenses increase by 7.1% to $17.7 million in the year ended December 31, 2024, from $16.5 million in the year ended December 31, 2023. As a percentage of total revenues, general and administrative expenses increased to 7.3% in the year ended December 31, 2024, from 6.8% in the year ended December 31, 2023.
General and administrative expenses decreased by 10.8% to $15.8 million in the year ended December 31, 2025, from $17.7 million in the year ended December 31, 2024. As a percentage of total revenues, general and administrative expenses decreased to 6.4% in the year ended December 31, 2024, from 7.3% in the year ended December 31, 2024.
Our revenues from sales of products in the year ended December 31, 2024 decreased by 9.7% to $112.0 million, or 46.2% of total revenues, from $124.0 million, or 50.7% of total revenues, in the year ended December 31, 2023.
Our revenues from sales of products in the year ended December 31, 2025 increased by 2.6% to $114.9 million, or 46.8% of total revenues, from $112.0 million, or 46.2% of total revenues, in the year ended December 31, 2024.
No provision was recorded as of December 31, 2024. - 56 - Table of Contents Recently Issued and Adopted Accounting Pronouncements See Note 2ab to our Consolidated Financial Statements included elsewhere in this Annual Report. New Accounting Pronouncements Not Yet Effective See Note 2ac to our Consolidated Financial Statements included elsewhere in this Annual Report. A.
Recently Issued and Adopted Accounting Pronouncements See Note 2ab to our consolidated financial statements included elsewhere in this Annual Report. New Accounting Pronouncements Not Yet Effective See Note 2ac to our consolidated financial statements included elsewhere in this Annual Report. A.
Know-how from research and development which is used to produce products may not be transferred to third parties without the approval of the IIA and may require significant payments. The IIA approval is not required for the export of any products resulting from such research or development.
Know-how arising out of research and development which is used to produce products may not be transferred to third parties without the approval of the IIA and may require significant payments if such transfer is to any entity or person outside of Israel.
Through December 31, 2024, we had obtained grants from the IIA aggregating approximately $7.3 million for certain of our research and development projects related to our other Israeli subsidiaries.
The IIA approval is not required for the export of any products resulting from such research or development. Through December 31, 2025, we had obtained grants from the IIA aggregating approximately $7.3 million for certain of our research and development projects related to our Israeli subsidiaries.
As such, we identify a contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to each performance obligation in the contract and recognize revenues when (or as) we satisfy its performance obligations.
Revenues are recognized in accordance with Accounting Standards Codification, or ASC, 606, “ Revenue from Contracts with Customers .” As such, we identify a contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to each performance obligation in the contract and recognize revenues when (or as) we satisfy its performance obligations.
In the year ended December 31, 2024, expenses included in selling and marketing expenses related to share-based compensation were $3.0 million, compared to $4.3 million in the year ended December 31, 2023. General and Administrative Expenses.
The increase on an absolute basis is primarily due to an increase in payroll expenses. In the year ended December 31, 2025, expenses included in selling and marketing expenses related to share-based compensation were $2.3 million, compared to $3.0 million in the year ended December 31, 2024. General and Administrative Expenses.
The income tax benefit in the year ended December 31, 2024 reflects the effect of the tax benefit associated with the creation of deferred tax assets. - 62 - Table of Contents A discussion with respect to a comparison of the results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022 is contained under the heading “Results of Operations” in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2023, or the 2023 Form 20-F.
The tax benefit reflected the release of a valuation allowance in 2024, resulting in a significantly lower income tax expense in 2024 compared to 2025. - 61 - Table of Contents A discussion with respect to a comparison of the results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023 is contained under the heading “Results of Operations” in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2024, or the 2024 Form 20-F, filed with the SEC on March 26, 2025.
The amounts provided by investment activities in the year ended December 31, 2023 were primarily as a result of proceeds of $14.1 million derived from the redemption of our financial investments, proceeds of $6.9 million from the sale and redemption of our marketable securities, and proceeds of $5.0 million derived from our short-term and restricted bank deposits, which was offset by a $6.0 million purchase of property and equipment.
The amounts used by investing activities in the year ended December 31, 2025 were primarily as a result of purchase of property and equipment in the amount of $6.5 million, which was partially offset by a proceeds of $5.5 million derived from the redemption of marketable securities and of financial investments.
As of December 31, 2024, we had $93.9 million in cash and cash equivalents, short-term bank deposits, short-term and long-term marketable securities and long-term financial investments, a decrease of $12.7 million from $106.7 million as of December 31, 2023.
As of December 31, 2025, we had $72.9 million in cash and cash equivalents, short-term bank deposits, short-term marketable securities, a decrease of $18.0 million from $90.9 million as of December 31, 2024.
Revenues from professional services, maintenance and support services are generally recognized ratably over the term of the contract, as the services have a consistent continuous pattern of transfer to the customer during the contract period. As we generally do not sell the products separately on a standalone basis, the standalone selling prices are not directly observable.
Revenues from maintenance and support services are generally recognized ratably over the term of the contract, as the services have a consistent pattern of transfer to the customer during the contract period.
Therefore, we make estimates, based on reasonably available information. The estimated selling price is established considering multiple factors such as historical selling prices, internal pricing practices, gross margin objectives and discount policy. We typically bill customers based on actual delivery. The payment terms vary, mainly with terms of 60 days or fewer.
If the standalone selling price is not observable, we estimate the standalone selling price taking into account reasonably available information. The estimated selling price is established considering multiple factors such as historical selling prices, internal pricing practices, gross margin objectives and discount policy. We typically bill customers based on actual delivery.
Cost of revenues related to sales of services in the year ended December 31, 2024 increased by 3.9% to $39.6 million, from $38.1 million in the year ended December 31, 2023. This increase is primarily attributable to higher support personnel expenses associated with providing services and implementation of our products with service providers as well as enterprise customers.
This increase is primarily attributable to higher support personnel expenses associated with providing services and implementation of our products with service providers as well as enterprise customers. In the year ended December 31, 2025, the gross margin percentage from sales of services decreased to 68.0%, from 69.6% in the year ended December 31, 2024. Research and Development Expenses, Net .
Revenues decreased by 0.9% to $242.2 million in the year ended December 31, 2024, from $244.4 million in the year ended December 31, 2023.
Revenues increase by 1.4% to $245.6 million in the year ended December 31, 2025, from $242.2 million in the year ended December 31, 2024.
More specifically, the change to cash provided by our investing activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, were principally the result of proceeds from sale of marketable securities, offset by an increase of purchase of property and equipment related to the transition to our new headquarters and production facility and decrease of financial investments.
More specifically, the change to cash used by our investing activities in the year ended December 31, 2025, as compared to the year ended December 31, 2024, was principally the result of decrease in sale of marketable securities in the year ended December 31, 2025 compared to the prior year, partially offset by decrease in purchase of property and equipment compared to the year ended December 31, 2024.
Financing Activities In the year ended December 31, 2024, we used $24.9 million of cash in financing activities, as compared to $28.9 million in the year ended December 31, 2023, primarily as a result of $14.3 million used to repurchase our ordinary shares and $10.9 million used to pay cash dividends to our shareholders, partially offset by $0.4 million of proceeds from the issuance of our ordinary shares upon exercise of stock options (which stock options were exercised in the ordinary course by our option holders). - 65 - Table of Contents More specifically, the changes to cash used in our financing activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, was principally the result of notably lower repurchases of our ordinary shares in terms of overall cash spent.
More specifically, the change to cash provided by our investing activities in the year ended December 31, 2024, as compared to the year ended December 31, 2023, were principally the result of proceeds from sale of marketable securities, partially offset by an increase of purchase of property and equipment related to the transition to our new headquarters and production facility and decrease of financial investments. - 64 - Table of Contents Financing Activities In the year ended December 31, 2025, we used $41.3 million of cash in financing activities, as compared to $24.9 million in the year ended December 31, 2024, primarily as a result of $30.6 million used to repurchase our ordinary shares and $10.9 million used to pay cash dividends to our shareholders, partially offset by $0.3 million of proceeds from the issuance of our ordinary shares upon exercise of stock options (which stock options were exercised in the ordinary course by our option holders).
We cannot be certain that we will be able to obtain, if required, additional financing on acceptable terms or at all. See Item 3.D , “ Key Information – Risk Factors ” with respect to risks, conditions and circumstances that could adversely impact our liquidity and capital resources.
See Item 3.D , “ Key Information - Risk Factors ” with respect to risks, conditions and circumstances that could adversely impact our liquidity and capital resources.
During the year ended December 31, 2023, we acquired an aggregate of 1,794,931 of our ordinary shares for approximately $18.3 million, and declared and paid a cash dividend in the aggregate amount of $11.4 million. In February 2025, we declared a cash dividend in the aggregate amount of $5.3 million.
During the year ended December 31, 2025, we acquired an aggregate of 3,150,361 of our ordinary shares for approximately $30.6 million, and declared and paid cash dividends in the aggregate amount of $10.9 million.
To the extent negotiations between Russia and Ukraine are ultimately unsuccessful, the conflict in Ukraine could have a lasting impact in the near- and long-term on the financial condition, business and operations of our business (and the businesses of the counterparties with whom we engage), and the global economy at large. - 59 - Table of Contents Ongoing War in Gaza and Regional Hostilities On October 7, 2023, terrorists from Hamas and other terrorist organizations infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets, including widespread killings and kidnappings.
To the extent negotiations between Russia and Ukraine are ultimately unsuccessful, the conflict in Ukraine could have a lasting impact in the near- and long-term on the financial condition, business, and operations of our business (and the businesses of the counterparties with whom we engage), and the global economy at large.
Deferred revenues include amounts invoiced to customers for which revenue has not yet been recognized. Deferred revenues are recognized as (or when) we perform the performance obligations under the contract. - 54 - Table of Contents Allowance for Credit Losses Our trade receivables are derived from sales to customers located primarily in the Americas, Europe, Eastern Asia and Israel.
Deferred revenues include amounts invoiced to customers for which revenue has not yet been recognized. Deferred revenues are recognized as (or when) we perform the performance obligations under the contract. - 56 - Table of Contents Inventories Inventories are stated at the lower of cost and net realizable value.
We believe that our current working capital is sufficient to meet our operating cash requirements for at least the next twelve months. Part of our strategy is to pursue acquisition opportunities. If we do not have available sufficient cash to finance our operations and the completion of additional acquisitions, we may be required to obtain additional debt or equity financing.
Financing Needs We anticipate that our operating expenses will be a material use of our cash resources for the foreseeable future. We believe that our current working capital is sufficient to meet our operating cash requirements for at least the next twelve months and beyond. Part of our strategy is to pursue acquisition opportunities.
Some of the latest trends in conversational AI include: ● Multimodal Conversational AI: Conversational AI is moving beyond text and voice to include other forms of interactions, such as images, videos and augmented reality.
Using content gathering within organizations for AI analysis has several benefits, including: ● Improved decision-making; ● Cost savings; ● Increased accuracy; ● Scalability; and ● Competitive advantage. - 66 - Table of Contents Some of the latest trends in conversational AI include: ● Multimodal Conversational AI: Conversational AI is moving beyond text and voice to include other forms of interactions, such as images, videos and augmented reality.
Cash Flows from Investing Activities Our investment activities consist primarily of the purchase of property and equipment, including leasehold improvements, purchase and sale of deposits and changes in our marketable securities. In the future, we expect to continue to incur capital expenditures to support our expanding operations.
There were no changes to our overall strategy with respect to our customer collections, vendor payments and inventory management for the years discussed. Cash Flows from Investing Activities Our investing activities consist primarily of the purchase of property and equipment, including leasehold improvements, purchase and sale of deposits and changes in our marketable securities.
We received an income tax benefit of $0.2 million in the year ended December 31, 2024, compared to income tax expenses of $5.6 million in the year ended December 31, 2023.
Taxes on income in the year ended December 31, 2025 were $4.6 million, compared to tax benefit of $0.2 million in the year ended December 31, 2024. The income tax expenses in 2025 were primarily driven by a decrease in deferred tax assets, as well as an increase in taxable income of certain subsidiaries.
In the year ended December 31, 2023, our investment activities provided cash in the amount of $20.0 million, as compared to the cash used by investing activities in the amount of $19.7 million in the year ended December 31, 2022.
In the future, we expect to continue to incur capital expenditures to support our expanding operations. In the year ended December 31, 2025, our investing activities used cash in the amount of $1.5 million, as compared to the cash provided by investing activities in the amount of $17.8 million in the year ended December 31, 2024.
The changes to cash provided by operating activities in the year ended December 31, 2023, as compared to the year ended December 31, 2022, were principally the result of (i) the period over period change in trade receivables, which decreased by $1.6 million in the year ended December 31, 2023, as compared to an increase of $20.6 million in the year ended December 31, 2022, which was the result of more effective collections in the year ended December 31, 2023, and (ii) the period over period change in the amount of inventory, which increased by $7.8 million in the year ended December 31, 2023 as compared to $12.6 million in the year ended December 31, 2022, which was the result of less inventory purchases undertaken by us due to an easing in supply chain conditions during the year ended December 31, 2023, which was offset by (x) the period over period change in trade payables which decrease overall in the amount of $3.8 million in the year ended December 31, 2023, as compared to an increase of $3.5 million in the year ended December 31, 2022, due to less inventory purchases in the year ended December 31, 2023 (as explained above in this paragraph), and (y) net income in the amount of $8.8 million for the year ended December 31, 2023, as compared to $28.5 million in the year ended December 31, 2022, due in large part to the factors listed in “ Operating Activities ” above.
The changes to cash provided by our operating activities in the year ended December 31, 2025, as compared to the year ended December 31, 2024, were principally the result of (i) the period-over-period change in the amount of inventory, which decreased by $9.3 million in the year ended December 31, 2025, as compared to a decrease of $12.3 million in the year ended December 31, 2024, mainly attributable to inventory allowance related to obsolete inventory; however, the level of write-downs recorded in the year ended December 31, 2025 was lower than those recognized in the year ended December 31, 2024; (ii) the year-over-year change in trade receivables, which increased by $8.7 million in the year ended December 31, 2025, as compared to $3.8 million in the year ended December 31, 2024, which was the result of entering into several contracts with customers close to the date of the reporting year; (iii) net income in the amount of $9.0 million in the year ended December 31, 2025, as compared to $15.3 million in the year ended December 31, 2024, due in large part to the factors listed in “Operating Activities” above; and (iv) the year-over-year change in other receivables and prepaid expenses, which increased overall by $6.1 million in the year ended December 31, 2025, as compared to $3.6 million in the year ended December 31, 2024, due to the changes in the fair value of derivative instruments, which was offset by (x) the year-over-year change in other payables and accrued expenses which increased overall by $9.5 million in the year ended December 31, 2025, as compared to $3.2 million in the year ended December 31, 2024, due to a reduction in outstanding liabilities in the year ended December 31, 2024 and (y) the year-over-year change in deferred tax assets, net which decreased overall by of $1.7 million in the year ended December 31, 2025, as compared to an increase of $4.5 million in the year ended December 31, 2024, mainly due to the utilization of net operating loss carryforwards and changes in temporary differences.
The Voice.AI product suite is focusing on content gathering and providing insights and predictions based on the content by using AI and machine learning. Using content gathering within organizations for AI analysis has several benefits, including: ● Improved decision-making; ● Cost savings; ● Increased accuracy; ● Scalability; and - 67 - Table of Contents ● Competitive advantage.
The VoiceAI product suite is focusing on content gathering and providing insights and predictions based on the content by using AI and machine learning.
Our Israeli facilities are based in central Israel, in an area that to date has seen minor disruptions from rocket attacks. To date, none of our facilities or infrastructure have been damaged nor have our supply chains been significantly impacted since the war commenced in October 2023.
Additionally, both Iran and the Houthis have launched attacks on marine vessels traversing international waterways, affecting international shipping. In 2025, sales to customers in Israel accounted for less than 3% of our total revenues. To date, none of our main facilities or infrastructure in Israel have been damaged nor has our supply chains been significantly impacted since October 2023.
Israel may not be able to defend effectively against such attacks and such attacks could have a material and adverse impact on our business, operations and financial condition.
Iran and the terrorist organizations it sponsors have utilized, and are continuing to use, terror, rocket and drone attacks, which target locations throughout Israel and cause substantial disruption and damage. Such attacks could have a material and adverse impact on our business, operations and financial condition.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeWe refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” For purposes of the table and the summary below, “compensation” includes base salary, discretionary and non-equity incentive bonuses, share-based compensation, payments accrued or paid in connection with retirement or termination of employment, and personal benefits and perquisites such as car, phone and social benefits paid to or earned by each Covered Executive during the year ended December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share-Based ​ All Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Compensation ​ Compensation ​ ​ ​ Name and Principal Position ​ Salary ​ Bonus (1) ​ (2) ​ (3) ​ Total Shabtai Adlersberg – President and CEO $ 357,926 $ 561,320 $ 1,237,216 $ 185,224 $ 2,341,686 Lior Aldema – CBO ​ $ 254,307 ​ $ 138,454 ​ $ 655,778 ​ $ 98,743 ​ $ 1,147,282 Ofer Nimtsovich – COO ​ $ 214,755 ​ $ 89,753 ​ $ 472,403 ​ $ 93,967 ​ $ 870,878 Niran Baruch – VP Finance and CFO ​ $ 217,358 ​ $ 138,454 ​ $ 428,683 ​ $ 82,253 ​ $ 866,748 Yair Hevdeli– VP R&D ​ $ 195,232 ​ $ 44,415 ​ $ 369,207 ​ $ 86,640 ​ $ 695,495 (1) Amounts reported in this column represent annual incentive bonuses granted to the Covered Executives based on performance-metric formulas set forth in their respective employment agreements.
Biggest changeWe refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” For purposes of the table and the summary below, “compensation” includes base salary, discretionary and non-equity incentive bonuses, share-based compensation, payments accrued or paid in connection with retirement or termination of employment, and personal benefits and perquisites such as car, phone and social benefits paid to or earned by each Covered Executive during the year ended December 31, 2025.
Adlersberg holds a M.Sc. in Electronics and Computer Engineering from Tel Aviv University and a B.Sc. in Electrical Engineering from the Technion-Israel Institute of Technology, or the Technion. Niran Baruch has served as our Vice President Finance and Chief Financial Officer since July 2016 after serving as our Vice President Finance and Chief Accounting Officer since May 2015.
Adlersberg holds an M.Sc. in Electronics and Computer Engineering from Tel Aviv University and a B.Sc. in Electrical Engineering from the Technion-Israel Institute of Technology, or the Technion. Niran Baruch has served as our Vice President Finance and Chief Financial Officer since July 2016 after serving as our Vice President Finance and Chief Accounting Officer since May 2015.
Mr. Frishberg holds a B.Sc. in Industrial Engineering from Tel Aviv University and an M.B.A. from Ben-Gurion University of the Negev. Yehuda Herscovici has served as our Vice President, Products, overseeing Product Management and Product Marketing since 2010. From 2003 till 2010, Mr. Herscovici served as our Vice President, Systems Group since 2003. From 2001 to 2003, Mr.
Mr. Frishberg holds a B.Sc. in Industrial Engineering from Tel Aviv University and an M.B.A. from Ben-Gurion University of the Negev. Yehuda Herscovici has served as our Vice President, Products, overseeing Product Management and Product Marketing since 2010. From 2003 to 2010, Mr. Herscovici served as our Vice President, Systems Group. From 2001 to 2003, Mr.
Fayans Birenbaum held the position of COO and CMO of Microsoft Israel (NASDAQ: MSTF) leading Digital Transformation, and in 2021 to 2022 held the position of President Global of CYMPIRE lTD. Ms. Fayans Birenbaum has extensive experience in Executive C Level positions in her previous roles. Ms.
Fayans Birenbaum held the position of COO and CMO of Microsoft Israel (NASDAQ: MSTF), leading Digital Transformation, and from 2021 to 2022 held the position of President Global of CYMPIRE LTD. Ms. Fayans Birenbaum has extensive experience in Executive C Level positions in her previous roles. Ms.
From 1987 to 1990, Mr. Adlersberg served as the Vice President of Engineering of DSP Group, and from 1990 to 1992, he served as Vice President of Advanced Technology. As Vice President of Engineering, Mr. Adlersberg established a research and development team for digital cellular communication which was spun-off in 1992 as DSP Communications. Mr.
Adlersberg served as the Vice President of Engineering of DSP Group, and from 1990 to 1992, he served as Vice President of Advanced Technology. As Vice President of Engineering, Mr. Adlersberg established a research and development team for digital cellular communication which was spun-off in 1992 as DSP Communications. Mr.
However, such other persons (controlling shareholders and consultants) will not enjoy the tax benefits provided by Section 102. The total number of ordinary shares that were originally available for grant under the 2008 Plan was 2,009,122, which was increased to 4,009,122 in 2010, 6,009,122 in 2013, 8,009,122 in 2016, 10,009,122 in 2019 and 12,009,122 in 2022.
However, such other persons (controlling shareholders and consultants) will not enjoy the tax benefits provided by Section 102. The total number of ordinary shares that were originally available for grant under the 2008 Equity Incentive Plan was 2,009,122, which was increased to 4,009,122 in 2010, 6,009,122 in 2013, 8,009,122 in 2016, 10,009,122 in 2019 and 12,009,122 in 2022.
Ms. Dor holds a B.A. in Psychology, from Ben-Gurion University of the Negev and an M.A. in Psychology from Tel Aviv University. - 70 - Table of Contents Shaul Weissman has served as our Vice President, Business Development since January 2014. Mr. Weissman has been with AudioCodes since 1994, serving in various positions. From 2007 until 2014, Mr.
Ms. Dor holds a B.A. in Psychology from Ben-Gurion University of the Negev and an M.A. in Psychology from Tel Aviv University. - 69 - Table of Contents Shaul Weissman has served as our Vice President, Business Development since January 2014. Mr. Weissman has been with AudioCodes since 1994, serving in various positions. From 2007 until 2014, Mr.
Prior to joining AudioCodes, Mr. Weissman served as Captain in the Israeli Air Force. Mr. Weissman holds an M.Sc. and a B.Sc., from the Technion, both in the area of Telecommunications. Hilit Fishman has served as our Vice President, Marketing since joining us in January 2025. Before joining AudioCodes, Ms.
Prior to joining AudioCodes, Mr. Weissman served as Captain in the Israeli Air Force. Mr. Weissman holds an M.Sc. and a B.Sc., from the Technion, both in the area of Telecommunications. Hilit Fishman has served as our Vice President, Marketing since January 2025. Prior to joining AudioCodes, Ms.
Oren Grupi of KPMG Somekh Chaikin, Israel has been our internal auditor since July 2018. - 75 - Table of Contents Board Classes Pursuant to our articles of association, our directors are classified into three classes (classes I, II and III).
Oren Grupi of KPMG Somekh Chaikin, Israel has been our internal auditor since July 2018. - 74 - Table of Contents Board Classes Pursuant to our articles of association, our directors are classified into three classes (classes I, II and III).
Directors are generally eligible to exercise his or her vested options within twelve months from the date the director ceases to serve on the board of directors. The holders of options under all of the plans are responsible for all personal tax consequences relating to the options.
Directors are generally eligible to exercise his or her vested options within twelve months from the date the director ceases to serve on the Board of Directors. The holders of options are responsible for all personal tax consequences relating to the options.
Restricted shares, restricted share units and options granted under the 2008 Plan will vest over four years from the grant date or in accordance with the alternative vesting schedule applicable to the specific grant.
Restricted shares, restricted share units and options granted under the 2008 Equity Incentive Plan will vest over four years from the grant date or in accordance with the alternative vesting schedule applicable to the specific grant.
Fayans Birenbaum has 25 years of experience as a Board Member and Chairwoman serving in all committees in publicly traded companies such as technology, investment houses, banks, insurance, real estate, manufacturers, semiconductor and educational institutions, in companies such as DSGP, POMVOM, ION Acquisition Corp and Anan Datacenters. In the years 2014-2019, Ms.
Fayans Birenbaum has 25 years of experience as a Board Member and Chairwoman serving in all committees in publicly traded companies such as technology, investment houses, banks, insurance, real estate, manufacturers, semiconductor and educational institutions, in companies such as DSGP, POMVOM, ION Acquisition Corp and Anan Datacenters. From 2014 to the end of 2019, Ms.
Under the Companies Law, the audit committee also is required to monitor deficiencies in the administration of our company, including by consulting with the internal auditor and independent accountants, to review, classify and approve related party transactions and extraordinary transactions, to review the internal auditor’s audit plan and to establish and monitor whistleblower procedures. - 74 - Table of Contents Nominating Committee Nasdaq rules require that director nominees be selected or recommended for the board’s selection either by a committee composed solely of independent directors or by a majority of independent directors.
Under the Companies Law, the audit committee also is required to monitor deficiencies in the administration of our company, including by consulting with the internal auditor and independent accountants, to review, classify and approve related party transactions and extraordinary transactions, to review the internal auditor’s audit plan and to establish and monitor whistleblower procedures. - 73 - Table of Contents Nominating Committee Nasdaq rules require that director nominees be selected or recommended for the board’s selection either by a committee composed solely of independent directors or by a majority of independent directors in a vote in which only independent directors participate.
Doron Nevo, Shai Levy, Zehava Simon, Stanley Stern, Joseph Tenne and Shira Fayans Birenbaum qualify as independent directors under the applicable SEC and Nasdaq rules, as well as under the Companies Law. - 73 - Table of Contents Pursuant to the SEC’s and Nasdaq’s requirements, at least one of the independent directors appointed by a publicly traded company must have “financial and accounting expertise.” Joseph Tenne is designated as the “audit committee financial expert” as that term is defined in the rules promulgated by the SEC and Nasdaq.
Doron Nevo, Itay Makov, Zehava Simon, Stanley Stern, Joseph Tenne and Shira Fayans Birenbaum qualify as independent directors under the applicable SEC and Nasdaq rules, as well as under the Companies Law. - 72 - Table of Contents Pursuant to the SEC’s and Nasdaq’s requirements, at least one of the independent directors appointed by a publicly traded company must have “financial and accounting expertise.” Joseph Tenne is designated as the “audit committee financial expert” as that term is defined in the rules promulgated by the SEC and Nasdaq.
(2) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2024, with respect to share-based compensation granted to the Covered Executive. (3) Amounts reported in this column include personal benefits and perquisites, including those mandated by applicable law.
(2) Amounts reported in this column represent the expense recorded in our financial statements for the year ended December 31, 2025, with respect to share-based compensation granted to the Covered Executives. (3) Amounts reported in this column include personal benefits and perquisites, including those mandated by applicable law.
Options to purchase our ordinary shares granted under our 2008 Equity Incentive Plan to persons who served in the capacity of director or executive officer are generally exercisable at the fair market value at the date of grant and expire seven years from the date of grant.
Options to purchase our ordinary shares granted under our 2008 Equity Incentive Plan, as amended (the “2008 Equity Incentive Plan”), to persons who served in the capacity of director or executive officer are generally exercisable at the fair market value at the date of grant and expire seven years from the date of grant.
NKO designed and developed a full scale, carrier grade, IP telephony system platform and established its own IP network. From 1992 to 1996, Mr. Nevo was President and CEO of Clalcom Ltd. Mr. Nevo established Clalcom in 1992 as a telecom service provider in Israel.
Nevo established NKO in early 1995 as a startup subsidiary of Clalcom Ltd. NKO designed and developed a full-scale, carrier-grade, IP telephony system platform and established its own IP network. From 1992 to 1996, Mr. Nevo was President and CEO of Clalcom Ltd. Mr. Nevo established Clalcom in 1992 as a telecom service provider in Israel.
The audit committee consists of: Doron Nevo, Shai Levy, Joseph Tenne and Shira Fayans Birenbaum with Doron Nevo serving as the chairman of the audit committee.
The audit committee consists of: Joseph Tenne, Doron Nevo, and Shira Fayans Birenbaum with Joseph Tenne serving as the chairman of the audit committee.
Upon election or reelection to the board of directors for a term of three years, each non-employee director is granted 7,500 restricted share units, or RSUs, each year that vest over a three-year period from the grant date.
Upon election or reelection to the Board of Directors for a term of three years, each non-employee director is granted 10,000 restricted share units, or RSUs, each year that vest over a three-year period from the grant date.
Fayans Birenbaum holds an MBA and BA both from Tel Aviv University and Marketing management certification studies from The College of Management Academic Studies. B. COMPENSATION The table and summary below outline the compensation granted to our five most highly compensated office holders during or with respect to the year ended December 31, 2024.
Fayans Birenbaum holds an M.B.A. and B.A. both from Tel Aviv University and marketing management certification studies from The College of Management Academic Studies. B. COMPENSATION The table and summary below outline the compensation granted to our five most highly compensated office holders during or with respect to the year ended December 31, 2025.
The compensation amounts do not include amounts expended by us for automobiles made available to our officers, expenses (including business, travel, professional and business association dues and expenses) reimbursed to officers and other fringe benefits commonly reimbursed or paid by companies in Israel. - 72 - Table of Contents We currently pay each of our non-employee directors an annual fee of approximately $40,700 and a fee of $1,220 for each board meeting or committee meeting attended.
The compensation amounts do not include amounts expended by us for automobiles made available to our officers, expenses (including business, travel, professional and business association dues and expenses) reimbursed to officers and other fringe benefits commonly reimbursed or paid by companies in Israel. - 71 - Table of Contents We currently pay each of our non-employee directors an annual fee of approximately $48,000 and a fee of $1,440 for each board meeting or committee meeting attended.
All amounts reported in the table represent incremental cost to us. The aggregate direct remuneration paid during the year ended December 31, 2024 to the 15 persons who served in the capacity of director, senior executive officer or key employee during 2024 was approximately $4.3 million, including approximately $0.5 million which was set aside for pension and retirement benefits.
All amounts reported in the table represent incremental cost to us. The aggregate direct remuneration paid during the year ended December 31, 2025 to the 17 persons who served in the capacity of director, senior executive officer or key employee during 2025 was approximately $4.8 million, including approximately $0.6 million which was set aside for pension and retirement benefits.
The members of each class of directors and the expiration of his or her current term of office are as follows: Zehava Simon Class I 2025 Shai Levy ​ Class I ​ 2025 Shira Fayans Birenbaum ​ Class II ​ 2026 Joseph Tenne Class II 2026 Shabtai Adlersberg Class III 2027 Stanley B.
The members of each class of directors and the expiration of his or her current term of office are as follows: Zehava Simon Class I 2028 Itay Makov Class I 2028 Shira Fayans Birenbaum Class II 2026 Joseph Tenne Class II 2026 Shabtai Adlersberg Class III 2027 Stanley B.
He also serves as a director of Hadasit Bio-Holdings (TASE: HBL) and of several private companies. Mr. Nevo holds a B.Sc. in Electrical Engineering from the Technion – Israel Institute of Technology and an M.Sc. in Telecommunications Management from Brooklyn Polytechnic. Zehava Simon was appointed as a director in February 2014. Ms.
He also serves as a director of Hadasit Bio-Holdings (TASE: HBL) and of several private companies. Mr. Nevo holds a B.Sc. in Electrical Engineering from the Technion - Israel Institute of Technology and an M.Sc. in Telecommunications Management from Brooklyn Polytechnic.
Only directors who are not officers receive compensation for serving as directors. Our director, Mr. Adlersberg, who also serves as our President and Chief Executive Officer do not receive board meeting fees. Instead, Mr. Shabtai Adlersberg receives compensation in accordance with the terms of his respective employment agreement.
Adlersberg, who also serves as our President and Chief Executive Officer do not receive board meeting fees. Instead, Mr. Shabtai Adlersberg receives compensation in accordance with the terms of his respective employment agreement.
Our board of directors has determined that Joseph Tenne is an “audit committee financial expert” as defined in SEC rules and that all members of the audit committee are independent under the applicable SEC rules, Nasdaq rules and provisions of the Companies Law.
Our Board of Directors has determined that Joseph Tenne is an “audit committee financial expert” as defined in SEC rules and that all members of the audit committee are independent under the applicable SEC and Nasdaq rules. The Companies Law contains additional provisions as to who must, and who may not, serve on the audit committee.
A summary of our stock option and RSU activity and related information for the years ended December 31, 2024, 2023 and 2022 for the persons who served in the capacity of director, senior executive or key employee officer during those years is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ ​ Number ​ Weighted ​ Number ​ Weighted ​ Number ​ Weighted ​ ​ of ​ Average ​ of ​ Average ​ of ​ Average ​ ​ Options and ​ Exercise ​ Options and ​ Exercise ​ Options and ​ Exercise ​ ​ RSUs ​ Price ​ RSUs ​ Price ​ RSUs ​ Price Outstanding at the beginning of the year 814,510 $ 2.09 894,897 $ 2.69 984,838 $ 3.17 Granted 310,000 ​ $ 0.88 287,500 ​ $ 0.00 315,150 ​ $ 0.00 Cancelled ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercised / RSUs vested (337,009) ​ $ 1.73 (367,887) ​ $ 1.91 (405,091) ​ $ 3.19 Outstanding at the end of the year 787,501 ​ $ 1.77 814,510 ​ $ 2.09 894,897 ​ $ 2.69 ​ As of December 31, 2024, options to purchase 106,250 ordinary shares were exercisable by the 15 persons who served as an officer or director during the year ended December 31, 2024 at an average exercise price of $13.00 per share.
A summary of our stock option and RSU activity and related information for the years ended December 31, 2025, 2024 and 2023 for the persons who served in the capacity of director, senior executive or key employee officer during those years is as follows: Year Ended December 31, 2025 2024 2023 Number Weighted Number Weighted Number Weighted of Average of Average of Average Options and Exercise Options and Exercise Options and Exercise RSUs Price RSUs Price RSUs Price Outstanding at the beginning of the year 787,501 $ 1.77 814,510 $ 2.09 894,897 $ 2.69 Granted 370,000 $ 0.00 310,000 $ 0.88 287,500 $ 0.00 Cancelled - Options exercised / RSUs vested (320,625 ) $ 0.46 (337,009 ) $ 1.73 (367,887 ) $ 1.91 Outstanding at the end of the year 836,876 $ 1.91 787,501 $ 1.77 814,510 $ 2.09 As of December 31, 2025, options to purchase 63,123 ordinary shares were exercisable by the 16 persons who served as an officer or director during the year ended December 31, 2025 at an average exercise price of $14.00 per share.
Adlersberg as of March 11, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ Exercise ​ ​ ​ ​ ​ ​ ​ ​ Options Grant Date Price Exercised Cancelled Vesting Expiration Date 15,000 ​ June 14, 2018 ​ $ 7.33 — — 4 years ​ June 14, 2025 15,000 ​ September 14, 2018 ​ $ 10.59 — — 4 years ​ September 14, 2025 15,000 ​ December 14, 2018 ​ $ 10.66 — — 4 years ​ December 14, 2025 15,000 ​ March 14, 2019 ​ $ 13.27 — — 4 years ​ March 14, 2026 15,000 ​ June 14, 2019 ​ $ 15.93 — — 4 years ​ June 14, 2026 ​ The following table sets forth information with respect to the RSUs granted to Mr.
Adlersberg as of March 10, 2026. Number of Exercise Options Grant Date Price Exercised Cancelled Vesting Expiration Date 15,000 June 14, 2019 $ 15.93 - - 4 years June 14, 2026 The following table sets forth information with respect to the RSUs granted to Mr. Adlersberg as of March 10, 2026.
Tenne served as the Vice President Finance and Chief Financial Officer of Itamar Medical Ltd. From March 2005 until April 2013, Mr. Tenne served as the Chief Financial Officer of Ormat Technologies, Inc. (NYSE and TASE: ORA). From 2003 to 2005, Mr. Tenne was the Chief Financial Officer of Treofan Germany GmbH & Co. KG, a German company.
Tenne served as the Chief Financial Officer of Ormat Technologies, Inc. (NYSE and TASE: ORA). From 2003 to 2005, Mr. Tenne was the Chief Financial Officer of Treofan Germany GmbH & Co. KG, a German company. From 1997 until 2003, Mr.
BOARD PRACTICES Corporate Governance Practices We are incorporated in Israel and therefore are subject to various corporate governance practices under the Companies Law, relating to such matters as the audit committee, the compensation committee, the internal auditor and approvals of interested party transactions and of compensation of officers and directors.
BOARD PRACTICES Corporate Governance Practices We are incorporated in Israel and therefore are subject to various corporate governance practices under the Companies Law, relating to such matters as the composition of our Board of Directors, audit committee and compensation committee.
(chairman), Polypid Ltd., Odimo, Inc, and Ekso Bionics Holdings, Inc. (lead Independent director). Shabtai Adlersberg co-founded AudioCodes in 1993, and has served as our President, Chief Executive Officer and a director since inception. Until December 2012, Mr. Adlersberg also served as the Chairman of our Board of Directors. Mr. Adlersberg co-founded DSP Group, a semiconductor company, in 1987.
Shabtai Adlersberg co-founded AudioCodes in 1993, and has served as our President, Chief Executive Officer and a director since inception. Until December 2012, Mr. Adlersberg also served as the Chairman of our Board of Directors. Mr. Adlersberg co-founded DSP Group, a semiconductor company, in 1987. From 1987 to 1990, Mr.
Stern has served as chairman of the board of directors of AudioCodes, Ltd. (Nasdaq: AUDC), a U.S. public company, since 2012, and serves as a member of the board of directors of the following U.S. public and private companies: Tigo Energy, Inc. (Nasdaq: TIGO) since 2015 and Radware Ltd. (Nasdaq: RDWR) since September 2020. Mr.
Stern has served as a member of the board of directors of the following U.S. public and private companies: Ormat Technologies, Inc. (NYSE: ORA) since 2015, Tigo Energy, Inc. (Nasdaq: TIGO) since 2015 and Radware Ltd. (Nasdaq: RDWR) since September 2020. Mr.
Stanley B. Stern is our chairman of the board and Shabtai Adlersberg is our President and Chief Executive Officer. D.
Doron Nevo is our Chairman of the Board and Shabtai Adlersberg is our President and Chief Executive Officer. D.
As of December 31, 2024, the 15 persons who served as an officer, director or key employee during the year ended December 31, 2024 held an aggregate of 608,751 RSUs. C.
As of December 31, 2025, the 16 persons who served as an officer, director or key employee during the year ended December 31, 2025 held an aggregate of 716,877 RSUs. C.
Our nominating committee assists the board of directors in its selection of individuals as nominees for election to the board of directors and/or to fill any vacancies or newly created directorships on the board of directors.
Our nominating committee assists the Board of Directors in its selection of individuals as nominees for election to the Board of Directors and/or to fill any vacancies or newly created directorships on the Board of Directors. The nominating committee consists of Doron Nevo, Joseph Tenne and Zehava Simon, with Doron Nevo serving as the chairman of the nominating committee.
These RSUs vest quarterly over a four-year period from the date of grant, subject to his continuing service to us. ​ ​ ​ ​ ​ Number of ​ RSUs ​ Grant Date ​ Issued 80,000 ​ September 14, 2021 70,000 80,000 ​ September 14, 2022 50,000 80,000 ​ September 14, 2023 ​ 30,000 80,000 ​ September 14, 2024 10,000 ​ Employee Share Plans We have an Equity Incentive Plan for the granting of options, RSUs and restricted shares to our employees, officers, directors and consultants.
Number of RSUs Grant Date Issued 80,000 September 14, 2022 70,000 80,000 September 14, 2023 50,000 80,000 September 14, 2024 30,000 80,000 September 14, 2025 10,000 Employee Share Plans We have an equity incentive plan for the granting of options, RSUs and restricted shares to our employees, officers, directors and consultants.
As of December 31, 2024, there are 306,200 options to purchase ordinary shares and 1,206,444 restricted share units outstanding under the plan. - 78 - Table of Contents The Israel Tax Authority approved the 2008 Plan under the capital gains tax track of Section 102.
As of December 31, 2025, there are 228,213 options to purchase ordinary shares and 1,221,063 restricted share units outstanding under the plan. - 77 - Table of Contents The Israel Tax Authority approved the 2008 Equity Incentive Plan under the capital gains tax track of Section 102.
Our officers and directors have the same voting rights as our other shareholders. - 77 - Table of Contents The following table sets forth information with respect to the options to purchase our ordinary shares held by Mr.
Stern * * * Zehava Simon * * * Shira Fayans Birenbaum * * * * Represented less than one percent. Our officers and directors have the same voting rights as our other shareholders. - 76 - Table of Contents The following table sets forth information with respect to the options to purchase our ordinary shares held by Mr.
From 1997 until 2003, Mr. Tenne was a partner in Kesselman & Kesselman, Certified Public Accountants in Israel (PwC Israel) and a member of PricewaterhouseCoopers International Limited. Mr. Tenne holds a B.A. in Accounting and Economics and an M.B.A. from Tel Aviv University. Mr. Tenne is also a Certified Public Accountant in Israel.
Tenne was a partner in Kesselman & Kesselman, Certified Public Accountants in Israel (PwC Israel) and a member of PricewaterhouseCoopers International Limited. Mr. Tenne holds a B.A. in Accounting and Economics and an M.B.A. from Tel Aviv University. Mr. Tenne is also a Certified Public Accountant in Israel. Itay Makov has served as one of our directors since September 2025.
(NASDAQ: NVMI) and NICE Ltd. (NASDAQ: NICE). Ms. Simon holds a bachelor’s degree in Social Sciences from the Hebrew University, a law degree (LL.B.) from the Interdisciplinary Center in Herzlia and a master’s degree in Business and Management from Boston University. - 71 - Table of Contents Shira Fayans Birenbaum was appointed as a director in March 2022. Ms.
Simon holds a bachelor’s degree in Social Sciences from the Hebrew University, a law degree (LL.B.) from the Interdisciplinary Center in Herzlia and a master’s degree in Business and Management from Boston University. - 70 - Table of Contents Shira Fayans Birenbaum has served as one of our directors since March 2022. Ms.
This number is reduced by one share for each equity grant we make under the 2008 Plan. During 2024, options to purchase 87,650 ordinary shares and 512,424 restricted share units were granted under the 2008 Plan. As of December 31, 2024, 1,155,071 ordinary shares remained available for grant under the 2008 Plan.
This number is reduced by one share for each equity grant we make under the 2008 Equity Incentive Plan. During 2025, options to purchase 11,750 ordinary shares and 562,435 restricted share units were granted under the 2008 Equity Incentive Plan. As of December 31, 2025, 639,574 ordinary shares remained available for grant under the 2008 Equity Incentive Plan.
All members of the compensation committee are independent under the applicable SEC rules, Nasdaq rules and provisions of the Companies Law. Internal Auditor Under the Companies Law, our board of directors is also required to appoint an internal auditor proposed by the audit committee.
All members of the nominating committee are independent under the applicable Nasdaq rules and provisions of the Companies Law. Compensation Committee Under the applicable Nasdaq requirements, our Board of Directors is required to appoint a compensation committee.
Mr. Stern is the Managing Partner of Alnitak Capital, which he founded in 2013 to provide board level strategic advisory services and merchant banking services, primarily to companies in technology-related industries.
Stanley Stern has served as one of our directors since 2012 and served as our Chairman of the Board from December 2012 to April 2025. Mr. Stern is the Managing Partner of Alnitak Capital, which he founded in 2013 to provide board level strategic advisory services and merchant banking services, primarily to companies in technology-related industries.
The nominating committee consists of Doron Nevo, Shai Levy, Joseph Tenne and Zehava Simon, with Doron Nevo serving as the chairman of the nominating committee. All members of the nominating committee are independent under the applicable Nasdaq rules and provisions of the Companies Law.
The compensation committee consists of Doron Nevo, Joseph Tenne and Zehava Simon, with Doron Nevo serving as the chairman of the compensation committee All members of the compensation committee are independent under the applicable Nasdaq rules. The Companies Law contains additional provisions as to who must, and who may not, serve on the compensation committee.
In her last position at Intel, she led Finance and Operations and Business Development for Intel in Israel. Ms. Simon has served as a board member of various companies, including Tower Semiconductor from 1999-2004, M-Systems from 2005-2006, InSightec from 2005-2012 and Amiad Water System Ltd. from 2014-2020. Ms. Simon is also a board member at Nova Measuring Instruments Ltd.
Simon has served as a board member of various companies, including Tower Semiconductor from 1999-2004, M-Systems from 2005-2006, InSightec from 2005-2012 and Amiad Water System Ltd. from 2014-2020. Ms. Simon is also a board member at Nova Ltd. (NASDAQ: NVMI) and NICE Ltd. (NASDAQ: NICE). Ms.
Previously, he served as our Vice President, Product Management from 2002 until 2009, as well as our Vice President Marketing from February 2003 until 2009. He has been employed by us since 1998, when he was team leader and later headed our System Software Group in our research and development department. Prior to 1998, Mr.
He has been employed by us since 1998, when he was a team leader and later headed our System Software Group in our research and development department. Prior to 1998, Mr.
Baruch has 20 years of experience with Nasdaq traded public companies, and is a Certified Public Accountant (CPA) with a B.A. in Business Management and Accounting. - 69 - Table of Contents Lior Aldema has served as Chief Business Officer (CBO) since January 2018, previously served as a director from July 2018 through September 2022, and as our Chief Operating Officer and Head of Global Sales from April 2012 to December 2017.
Baruch has 25 years of experience with Nasdaq-traded public companies, and is a Certified Public Accountant (CPA) with a B.A. in Business Management and Accounting. - 68 - Table of Contents Lior Aldema has served as our Chief Business Officer since January 2018.
Audit Committee Under the Companies Law and the requirements for listing on the Nasdaq Global Select Market, our board of directors is required to appoint an audit committee. Our audit committee must be comprised of at least three directors, and a majority of the committee members must comply with the director independence requirements prescribed by the Companies Law.
Audit Committee Under the applicable SEC and Nasdaq requirements, our Board of Directors is required to appoint an audit committee. Our audit committee must be comprised of at least three directors, and the committee members must comply with specified director independence requirements and knowledge of financial matters.
In the event that a director attends a meeting by phone, or a resolution is adopted by written consent, then the fee is reduced to 60% and 50% of the regular meeting fee, respectively. Such fees are in accordance with the rates prescribed by the Israeli Companies Law Regulation for fees of outside directors.
In the event that a director attends a meeting by phone, or a resolution is adopted by written consent, then the fee is reduced to 60% and 50% of the regular meeting fee, respectively. Only directors who are not officers receive compensation for serving as directors. Our director, Mr.
These matters are in addition to the ongoing listing conditions of the Nasdaq Global Select Market and other relevant provisions of U.S. securities laws.
The Companies Law also prescribes requirements relating to the appointment of an internal auditor, and approvals of interested party transactions and compensation of officers and directors. These matters are in addition to the ongoing listing conditions of the Nasdaq Global Select Market and other relevant provisions of U.S. securities laws.
Simon served as a Vice President of BMC Software Inc. from 2000 until September 2013, most recently as Vice President, Corporate Development. From 2002 to 2011, Ms. Simon served as Vice President and General Manager of BMC Software in Israel. Prior to joining BMC Software, Ms. Simon held a number of executive positions at Intel Corporation.
Simon served as Vice President and General Manager of BMC Software in Israel. Prior to joining BMC Software, Ms. Simon held a number of executive positions at Intel Corporation. In her last position at Intel, she led Finance and Operations and Business Development for Intel in Israel. Ms.
From 1999 to 2001, Mr. Nevo was involved in fund raising activities for Israeli-based startup companies. From 1996 to 1999, Mr. Nevo served as President and CEO of NKO, Inc. Mr. Nevo established NKO in early 1995 as a startup subsidiary of Clalcom Ltd.
Nevo was co-Founder and CEO of MultiVu, a 3D imaging company, from 2019 to 2023. From 2001 to 2018, Mr. Nevo was co-Founder, President and CEO of KiloLambda Technologies. From 1999 to 2001, Mr. Nevo was involved in fundraising activities for Israeli-based startup companies. From 1996 to 1999, Mr. Nevo served as President and CEO of NKO, Inc. Mr.
EMPLOYEES We had the following number of employees as of December 31, 2024, 2023 and 2022 in the departments set forth in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 ​ 2023 2022 Research and development 320 ​ 330 339 Sales and marketing, technical service and support 494 ​ 489 495 Operations 84 ​ 86 88 Management and administration 48 ​ 45 44 ​ 946 ​ 950 966 ​ Our employees were located in the following areas as of December 31, 2024, 2023 and 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ 2024 ​ 2023 2022 Israel 494 ​ 489 491 United States 182 ​ 188 200 Europe 108 ​ 103 108 Eastern Asia 140 ​ 140 136 Latin America 22 ​ 30 31 ​ 946 ​ 950 966 ​ - 76 - Table of Contents Israeli labor laws and regulations are applicable to our employees in Israel.
EMPLOYEES We had the following number of employees as of December 31, 2025, 2024 and 2023 in the departments set forth in the table below: As of December 31, 2025 2024 2023 Research and development 331 320 330 Sales and marketing, technical service and support 514 494 489 Operations 88 84 86 Management and administration 48 48 45 981 946 950 Our employees were located in the following areas as of December 31, 2025, 2024 and 2023.
SHARE OWNERSHIP The following table sets forth the share ownership of our directors and officers as of March 11, 2025, and the outstanding number of options and RSUs held by them that vest within 60 days of March 11, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Percentage ​ ​ ​ ​ Shares ​ of ​ Number of ​ Beneficially Ordinary Options and Name ​ Owned ​ Shares ​ RSUs ​ ​ ​ ​ ​ ​ ​ Shabtai Adlersberg 4,712,253 16.0 % 80,000 Stanley B.
SHARE OWNERSHIP The following table sets forth the share ownership of our directors and officers as of March 10, 2026, and the outstanding number of options and RSUs held by them that vest within 60 days of March 10, 2026.
(NASDAQ: MNDO), OPC Energy Ltd. (TASE: OPCE), Sapir Corp Ltd. (TASE: SPIR), Electreon Wireless Ltd. (TASE: ELWS) and Tarya Israel Ltd. (TASE: TRA). Mr. Tenne served as a financial executive at Itamar Medical Ltd. (NASDAQ and TASE: ITMR, (until December 2021)) from May 2017 to August 2023. From August 2014 to April 2017, Mr.
Tenne served as a financial executive at Itamar Medical Ltd. (NASDAQ and TASE: ITMR, (until December 2021)) from May 2017 until August 2023. From August 2014 until April 2017, Mr. Tenne served as the Vice President Finance and Chief Financial Officer of Itamar Medical Ltd. From March 2005 to April 2013, Mr.
Stern 67 Chairman of the Board of Directors Shabtai Adlersberg 72 President, Chief Executive Officer and Director Niran Baruch 54 Vice President Finance and Chief Financial Officer Lior Aldema 59 Chief Business Officer Ofer Nimtsovich 55 Chief Operating Officer Yair Hevdeli 59 Vice President, Research and Development Eyal Frishberg 66 Vice President, Operations Yehuda Herscovici 58 Vice President, Products Tal Dor 55 Vice President, Human Resources Shaul Weissman 58 Vice President, Business Development Hilit Fishman ​ 50 ​ Vice President, Marketing Joseph Tenne(1)(2)(3) 69 Director Shai Levy(1)(2)(3) 60 Director Doron Nevo(1)(2)(3) 69 Director Zehava Simon (2) (3) 66 Director Shira Fayans Birenbaum (1) ​ 60 ​ Director (1) Member of Audit Committee (2) Member of Nominating Committee (3) Member of Compensation Committee Stanley Stern became a director and our Chairman of the Board in December 2012.
DIRECTORS AND SENIOR MANAGEMENT The following table sets forth certain information with respect to our directors, senior executive officers and key employees at March 30, 2026: Name Age Position Doron Nevo (1)(2)(3) 70 Chairman of the Board of Directors Shabtai Adlersberg 73 President, Chief Executive Officer and Director Niran Baruch 55 Vice President Finance and Chief Financial Officer Lior Aldema 60 Chief Business Officer Ofer Nimtsovich 57 Chief Operating Officer Yair Hevdeli 60 Vice President, Research and Development Eyal Frishberg 67 Vice President, Operations Yehuda Herscovici 58 Vice President, Products Tal Dor 56 Vice President, Human Resources Shaul Weissman 59 Vice President, Business Development Hilit Fishman 51 Vice President, Marketing Joseph Tenne(1)(2)(3) 70 Director Itay Makov 58 Director Stanley B.
Shira Fayans Birenbaum currently holds the position of a board member at several publicly traded and private international companies including Cofix Group Ltd. (TASE: CFX) and AnyVision Interactive (OOSTO) Ltd. Ms.
Fayans Birenbaum currently serves as a board member at several publicly traded and private international companies including Marriott Vacation Club International Thailand. Ms.
Fishman held senior leadership roles at Amdocs, Microsoft Israel and Check Point, where she built high-impact marketing organizations. She holds an MBA in Marketing and a Bachelor’s degree in Business Administration both from Ono Academic College. Joseph Tenne has served as one of our directors since June 2003. Mr. Tenne serves as a director of MIND CTI Ltd.
Fishman held senior marketing leadership roles at leading global technology companies, including Amdocs, Microsoft Israel, and Check Point Software Technologies, where she built and led high-impact marketing organizations across enterprise, cloud, and telecommunications markets. Ms. Fishman holds an M.B.A. in Marketing and a B.A. in Business Administration from Ono Academic College.
For information regarding the compensation policy for executives, see Item 10.B, “Additional Information – Memorandum and Articles of Association – Compensation of Executive Officers and Directors; Executive Compensation Policy.” The compensation committee consists of Doron Nevo, Shai Levy, Joseph Tenne and Zehava Simon, with Doron Nevo serving as the chairman of the compensation committee.
For information regarding the compensation policy for executives, see Item 10.B, “Additional Information - Memorandum and Articles of Association - Compensation of Executive Officers and Directors; Executive Compensation Policy.” Internal Auditor Under the Companies Law, our Board of Directors is also required to appoint an internal auditor proposed by the audit committee.
Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must consist of at least three directors and a majority of the committee members must comply with the director independence requirements prescribed by the Companies Law.
Our compensation committee must be comprised of at least three directors under the committee’s charter (even though Nasdaq requires only two members), and the committee members must comply with specified director independence requirements.
Pursuant to the related regulations, directors who comply with the independence requirements of the Nasdaq and SEC regulations are deemed to comply with the independence requirements of the Companies Law. We have not included such a provision in our articles of association since our board of directors complies with the independence requirements of the Nasdaq and SEC regulations described above.
In accordance with applicable regulations under the Companies Law, we have opted out of the external director requirements, and instead comply with the requirements under the Exchange Act and the Nasdaq Listing Rules regarding the composition of our Board of Directors and its committees. Therefore, we are not subject to the Companies Law rules regarding audit committees.
Removed
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following table sets forth certain information with respect to our directors, senior executive officers and key employees at March 11, 2025: Name Age Position Stanley B.
Added
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A.
Removed
Shai Levy has served as one of our directors since October 2023. Mr. Levy holds the position of AT&T Division President. Prior to holding such position, Shai served as a Business Executive responsible for worldwide Strategic Business development, and as Amdocs Israel Chief Executive Officer, as well as several other roles with the Amdocs group (NYSE: DOX). Mr.
Added
Stern 68 Director Zehava Simon (2)(3) 67 Director Shira Fayans Birenbaum (1) 61 Director (1) Member of Audit Committee (2) Member of Nominating Committee (3) Member of Compensation Committee Doron Nevo has served as one of our directors since 2000 and as Chairman of the Board since April 2025. Mr.
Removed
Levy has over 23 years of experience in the telecommunications industry. At Amdocs, Mr. Levy held multiple positions, ranging from General Manager of Amdocs Israel, managing customers and customer division in North America, Amdocs competency centers, Amdocs managed service division and more. Prior to joining Amdocs, Mr. Levy held the position of CFO and controller in several Israeli based companies.
Added
He previously served as one of our directors from July 2018 through September 2022 and as our Chief Operating Officer and Head of Global Sales from April 2012 to December 2017. Before that, he served as our Vice President, Product Management from 2002 until 2009, as well as our Vice President Marketing from February 2003 until 2009.
Removed
Mr. Levy holds an M.B.A., B.A. in economics and an additional B.A. in accounting, all from Tel Aviv University. Doron Nevo has served as one of our directors since 2000. Mr. Nevo was co-Founder and CEO of MultiVu, a 3D imaging company, from 2019 to 2023. From 2001 to 2018, Mr. Nevo was co-Founder, President and CEO of KiloLambda Technologies.
Added
Joseph Tenne has served as one of our directors since June 2003. Mr. Tenne serves as a director of MIND CTI Ltd. (NASDAQ: MNDO), OPC Energy Ltd. (TASE: OPCE), Electreon Wireless Ltd. (TASE: ELWS),Luzon Credit and Finance Ltd. (formerly known as Tarya Israel Ltd.) (TASE: LUZC) and Gauzy Ltd. (NASDAQ: GAUZ). Mr.
Removed
Pursuant to the Companies Law, an Israeli company whose shares are publicly traded may elect to adopt a provision in its articles of association pursuant to which a majority of its board of directors (or a third of its board of directors in case the company has a controlling shareholder) will constitute individuals complying with certain independence criteria prescribed by the Companies Law.
Added
Until September 2025, Mr. Makov served as Head of Investment Banking at Citigroup Israel, a position he has held since 2006. He joined Citigroup in 1995 and had held various senior roles over his 30-year career with the bank. Mr.
Removed
In any event, as described above, a majority of our board of directors and all members of our audit committee are directors who comply with the independence criteria prescribed by the Companies Law.
Added
Makov has advised Israeli and international companies and investors on mergers and acquisitions, equity transactions, and debt issuances across a wide range of industries. From 2009 to 2021, Mr. Makov also led Citigroup’s Corporate Banking business in Israel, managing key client relationships. He began his career at Citigroup as an Equity Research Analyst in London before transitioning to Investment Banking.
Removed
The audit committee may not include the chairman of the board, or any director employed by us, by a controlling shareholder or by any entity controlled by a controlling shareholder, or any director providing services to us, to a controlling shareholder or to any entity controlled by a controlling shareholder on a regular basis, or any director whose income is primarily dependent on a controlling shareholder, and may not include a controlling shareholder or any relatives of a controlling shareholder.
Added
Mr. Makov is the vice chairman of Electreon Wireless (TASE: ELWS) and serves on the boards of Michpal Technologies (TASE: MCPL) as well as OPC Energy (TASE: OPCE). Mr. Makov holds an M.B.A. from Columbia Business School and a B.A. in Accounting and Economics from Tel Aviv University. Mr. Makov is also a Certified Public Accountant in Israel.
Removed
Individuals who are not permitted to be audit committee members may not participate in the committee’s meetings other than to present a particular issue.
Added
(chairman), Polypid Ltd., Odimo, Inc., and Ekso Bionics Holdings, Inc. (lead Independent director). Zehava Simon has served as one of our directors since February 2014. Ms. Simon served as a Vice President of BMC Software Inc. from 2000 until September 2013, most recently as Vice President, Corporate Development. From 2002 to 2011, Ms.
Removed
However, an employee who is not a controlling shareholder or relative may participate in the committee’s discussions but not in any vote, and the company’s legal counsel and corporate secretary may participate in the committee’s discussions and votes if requested by the committee.
Added
Share-Based All Other Compensation Compensation Name and Principal Position Salary Bonus (1) (2) (3) Total Shabtai Adlersberg - President and CEO $ 385,083 $ 454,630 $ 944,156 $ 197,941 $ 1,981,810 Lior Aldema - CBO $ 270,433 $ 130,782 $ 503,265 $ 109,209 $ 1,013,689 Ofer Nimtsovich - COO $ 231,050 $ 99,687 $ 373,581 $ 104,009 $ 808,327 Niran Baruch - VP Finance and CFO $ 212,752 $ 105,095 $ 373,449 $ 103,324 $ 794,620 Yair Hevdeli- VP R&D $ 215,880 $ 47,091 $ 326,235 $ 97,112 $ 686,318 (1) Amounts reported in this column represent annual incentive bonuses granted to the Covered Executives based on performance-metric formulas set forth in their respective employment agreements.
Removed
Similar to the rules that apply to the audit committee, the compensation committee may not include the chairman of the board, or any director employed by us, by a controlling shareholder or by any entity controlled by a controlling shareholder, or any director providing services to us, to a controlling shareholder or to any entity controlled by a controlling shareholder on a regular basis, or any director whose primary income is dependent on a controlling shareholder, and may not include a controlling shareholder or any of its relatives.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

13 edited+3 added−5 removed2 unchanged
Biggest changeThe following table sets forth, as of March 11, 2025, the number of our ordinary shares, which constitute our only outstanding voting securities, beneficially owned by (i) all shareholders known to us to own more than 5% of our outstanding ordinary shares, and (ii) all of our directors and senior executive officers as a group. ​ ​ ​ ​ ​ ​ Identity of Person or Amount Percent of Group ​ Owned ​ Class(8) Shabtai Adlersberg(1) 4,712,253 16.0 % Senvest Management, LLC(2) 2,543,368 8.6 % Value Base Ltd.(3) 2,458,674 8.3 % Leon Bialik(4) ​ 2,287,956 ​ 7.8 % Copeland Capital Management, LLC(5) ​ 1,653,376 ​ 5.6 % Morgan Stanley Capital Services LLC and Morgan Stanley(6) ​ 1,536,371 ​ 5.2 % William Blair Investment Management, LLC(7) ​ 1,536,371 ​ 5.2 % All directors and senior executive officers as a group (15 persons)(8) ​ 5,098,628 ​ 17.3 % (1) The information is derived from a statement on Schedule 13G/A of Shabtai Adlersberg filed with the SEC on February 11, 2025.
Biggest changeIdentity of Person or Amount Percent of Group Owned Class(7) Shabtai Adlersberg(1) 4,762,253 18.4 % Value Base Ltd.(2) 2,790,432 10.8 % Leon Bialik(3) 2,263,019 8.7 % Copeland Capital Management, LLC(4) 1,653,376 6.4 % William Blair Investment Management, LLC(5) 1,536,371 5.9 % All directors and senior executive officers as a group (16 persons)(6) 5,198,932 20.1 % (1) The information is derived from a statement on Schedule 13G/A of Shabtai Adlersberg filed with the SEC on February 12, 2026.
Copeland Capital Management, LLC did not file a statement on Schedule 13G/A (with respect to its ownership in the Company) for the years ended December 31, 2024, December 31, 2023, and December 31, 2022.
Copeland Capital Management, LLC did not file a statement on Schedule 13G/A (with respect to its ownership in the Company) for the years ended December 31, 2025, December 31, 2024, and December 31, 2023.
William Blair did not file a statement on Schedule 13G (with respect to its ownership in the Company) for the years ended December 31, 2024.
William Blair did not file a statement on Schedule 13G (with respect to its ownership in the Company) for the years ended December 31, 2025 and December 31, 2024.
RELATED PARTY TRANSACTIONS Not applicable. C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
RELATED PARTY TRANSACTIONS None. C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
William Blair Investment Management, LLC held approximately 5.2% of our ordinary shares as of December 31, 2024, as compared to 5.0% of our ordinary shares as of December 31, 2023, and 5.2% of our ordinary shares as of December 31, 2022.
William Blair Investment Management, LLC held approximately 5.7% of our ordinary shares as of December 31, 2025, as compared to 5.2% of our ordinary shares as of December 31, 2024, and 5.0% of our ordinary shares as of December 31, 2023.
Bialik held approximately 7.7% of our ordinary shares as of December 31, 2024, as compared to 7.6% of our ordinary shares as of December 31, 2023, and 7.4% of our ordinary shares as of December 31, 2022.
Bialik held approximately 8.4% of our ordinary shares as of December 31, 2025, as compared to 7.7% of our ordinary shares as of December 31, 2024, and 7.6% of our ordinary shares as of December 31, 2023.
Value Base Ltd. held approximately 8.3% of our ordinary shares as of December 31, 2024. Value Base Ltd. did not file a statement on Schedule 13G (with respect to its ownership in the Company) for the years ended December 31, 2023 or December 31, 2022. Mr.
Value Base Ltd. held approximately 10.3% of our ordinary shares as of December 31, 2025, as compared to 8.3% of our ordinary shares as of December 31, 2024. Value Base Ltd. did not file a statement on Schedule 13G (with respect to its ownership in the Company) for the year ended December 31, 2023. Mr.
As of March 11, 2025 there were approximately four holders of record of our ordinary shares in the United States, although we believe that the number of beneficial owners of the ordinary shares is significantly greater.
As of March 10, 2026, there were approximately three holders of record of our ordinary shares in the United States, although we believe that the number of beneficial owners of the ordinary shares is significantly greater.
Adlersberg held approximately 15.8% of our ordinary shares as of December 31, 2024, as compared to 15.0% of our ordinary shares as of December 31, 2023, and 14.0% of our ordinary shares as of December 31, 2022.
Adlersberg held approximately 17.5% of our ordinary shares as of December 31, 2025, as compared to 15.8% of our ordinary shares as of December 31, 2024, and 15.0% of our ordinary shares as of December 31, 2023.
(5) The information is derived from a statement on Schedule 13G of Copeland Capital Management, LLC filed with the SEC on January 26 2022.
(4) The information is derived from a statement on Schedule 13G of Copeland Capital Management, LLC filed with the SEC on January 26, 2022. (5) The information is derived from a statement on Schedule 13G/A of William Blair Investment Management, LLC filed with the SEC on February 12, 2024.
(8) Includes 106,250 ordinary shares which may be purchased pursuant to options exercisable within 60 days following March 11, 2025, and 48,749 ordinary shares issuable pursuant to restricted share units that vest within 60 days of March 11, 2025.
(6) Includes 61,248 ordinary shares which may be purchased pursuant to options exercisable within 60 days following March 10, 2026, and 55,931 ordinary shares issuable pursuant to restricted share units that vest within 60 days of March 10, 2026.
(9) This percentage calculation is rounded to the nearest tenth and based on 29,473,093 outstanding ordinary shares as of March 11, 2025 (which does not include treasury shares outstanding as of March 11, 2025). Mr.
(7) This percentage calculation is rounded to the nearest tenth and based on 25,887,104 outstanding ordinary shares as of March 10, 2026 (which does not include treasury shares outstanding as of March 10, 2026). - 78 - Table of Contents Mr.
(3) The information is derived from a statement on Schedule 13G/A of Value Base, Ltd filed with the SEC on January 22, 2025. (4) The information is derived from a statement on Schedule 13G/A of Leon Bialik filed with the SEC on February 4, 2025.
Pursuant to the Schedule 13G/A, each of Value Base Ltd., Victor Shamrich, Ido Nouberger and Value Base Fund Management has shared voting power over 2,790,432 shares and shared dispositive power over 2,790,432 shares. (3) The information is derived from a statement on Schedule 13G/A of Leon Bialik filed with the SEC on February 10, 2026.
Removed
Includes options to purchase 80,000 ordinary shares exercisable within 60 days of March 11, 2025. (2) The information is derived from a statement on Schedule 13G/A of Senvest Management, LLC filed with the SEC on February 9, 2024.
Added
The following table sets forth, as of March 10, 2026, the number of our ordinary shares, which constitute our only outstanding voting securities, beneficially owned by (i) all shareholders known to us to own more than 5% of our outstanding ordinary shares, and (ii) all of our directors and senior executive officers as a group.
Removed
(6) The information is derived from a statement on Schedule 13G of Morgan Stanley Capital Services LLC and Morgan Stanley filed with the SEC on November 6, 2024. - 79 - Table of Contents (7) The information is derived from a statement on Schedule 13G/A of William Blair Investment Management, LLC filed with the SEC on February 12, 2024.
Added
Includes restricted share units and options to purchase 50,000 ordinary shares exercisable within 60 days of December 31, 2025.
Removed
Senvest Management, LLC held approximately 8.6% of our ordinary shares as of December 31, 2024, as compared to 8.3% of our ordinary shares as of December 31, 2023. Senvest Management, LLC did not file a statement on Schedule 13G (with respect to its ownership in the Company) for the year ended December 31, 2024 or December 31, 2022.
Added
(2) The information is derived from a statement on Schedule 13G/A of Value Base, Ltd., Victor Shamrich, Ido Nouberger and Value Base Fund Management Ltd. for Value Base Fund General Partner Ltd., acting as the general partner to Value Base Fund Limited Partnership (“Value Base Fund Management”) filed with the SEC on February 5, 2026.
Removed
Morgan Stanley and Morgan Stanley Capital Services LLC collectively held 7.6% of our ordinary shares as of December 31, 2024, as compared to 6.2% of our ordinary shares as of December 31, 2023.
Removed
Neither Morgan Stanley nor Morgan Stanley Capital Services LLC filed a statement on Schedule 13G/A (with respect to its ownership in the Company) for the year ended December 31, 2022.