AudioCodes Q3 Revenue Rises 4.2% as Conversational AI Grows 50%

AudioCodes Ltd. (NASDAQ: AUDC) reported third-quarter 2026 revenue of $64.1 million, up 4.2% from $61.5 million a year earlier, as strong growth in its conversational AI business and higher Live annual recurring revenue supported the top line. Profitability declined, however, with non-GAAP operating margin and earnings per share both below prior-year levels.

The provider of enterprise voice cloud services and conversational AI applications posted non-GAAP earnings of $0.16 per share, compared with $0.17 in the third quarter of 2025. Non-GAAP operating margin narrowed to 7.4% from 9.5%, while non-GAAP gross margin held steady at 65.8%.

Conversational AI leads business growth

Conversational AI revenue increased 50% year over year, making it the strongest growth area disclosed in the presentation. AudioCodes’ Microsoft Teams business grew 4%, while Live ARR rose 16% from a year earlier.

The company said it serves customers across 120 countries and had 992 employees as of September 30, 2026. Its customer base includes 65 Fortune 100 companies and nine of the 10 largest Fortune-ranked enterprises.

AudioCodes did not provide detailed forward guidance in the supplementary slides. Its forward-looking statements remain subject to global economic conditions, shifts in supply and demand, customer acceptance of new and existing products, competitive pricing, technology development, artificial intelligence-related changes and evolving regulation.

The company also identified financing requirements and covenant compliance, acquisition integration, public-health disruptions and hostilities involving Israel as potential risks. It noted that military-service obligations affecting personnel could disrupt operations, while regional conflict could limit its ability to produce and sell its solutions.