The dual technology company
Audiocodes
-5.55%
Base:11,180
opening:11,500
Tall:12,010
low:10,500
change:45,890,241
Page Quote News Graphs Company Profile Recommendations
More articles on the subject:
It beat analysts’ forecasts for the last quarter of 2020 in reports it published for the quarter and for the entire year. With growth of about 10% in the top tier and 60% in the bottom line in the past year, Audiocodes expects revenues to rise by 13% in 2021 and profits to rise by 17%. The company marks the collaboration with Microsoft Teams as an engine of growth, as well as the field of transcription and summary of meetings in the workplace, and for this, as well as the results of Audiocodes, the company’s CEO and founder Saturn Adlersberg in a conversation with BizPortal.
Audiocodes, which provides advanced voice networks and media processing solutions for a digital work environment, predicts that by 2021 its revenue will total $ 240-250 million and earnings per share on a non-GAAP basis will be between $ 1.45-1.65. In 2020, the company posted a non-GAAP net income of $ 46.7 million, or $ 1.41 per fully diluted share, up 60% from $ 27.8 million, or 89 cents per fully diluted share in the same period last year.
Audiocodes’ revenue was $ 220.8 million, compared to $ 200.3 million in 2019. Although these were in the range of the original forecast published by the company in early 2020, which stood at $ 214-222 million, the forecast was given even before the corona crisis and the move to work from home, to which the company attributes a large part of the increase in revenue this year. On the face of it, it was to be expected that as a result of this trend Audiocodes in general would break out of its original proposition. Adlersberg explains why this did not happen:
“In the field of communications operators we experienced a decline, when because of the corona projects where they had to send teams for installations did not materialize,” he says. “Fortunately, this sector accounted for only 19% of revenue during the year. On the other hand, the main area in which we operate is the enterprise, which accounted for 78% of revenue, and grew by 18% in 2020. Besides, we actually broke forecasts.”
Throughout the crisis, the general public used more zoom than Microsoft’s Times. Wouldn’t collaborating with Zoom help you more?
“We operate in the field of sound, not video, and Zoom is a smaller player in it. Only about two weeks ago they reached a number of million users in Zoom-Von, at Microsoft we estimate an estimated 10 million users. Microsoft also focuses on huge companies with tens or hundreds of thousands Employees, while Zoom Zoom works with businesses the size of tens or hundreds of individual employees. ”
It can be said that at the end the list of giant companies will end, and you will also have to turn to the smaller companies.
“It should be remembered that Microsoft entered the field in 2005, and then the two companies that dominated the dome were Cisco and Avia, which were very strong against the big organizations. Microsoft’s initial goal was to beat them, only after that did it really start now turning to companies with thousands of employees. It will have hundreds of employees and even more later smaller businesses. ”
You have income from both products and services, how does the model actually work?
“Until a year or two ago, we sold a product license and also a contract for annual maintenance amounting to about 20% of the software price. Since the penetration of cloud storage technology, the Saas model (Software as a Service – AP) began, meaning the product is software but the customer pays for it. “As a service every month. Around the beginning of 2020, we aligned ourselves with the whims of the market, and we estimate that in another 5 years we will no longer be sold in the model of a software license.”
Another engine of your growth is automated transcripts and what you define as “meeting summaries.” Is your technology today mature enough to provide a 100% accurate transcript that a human eye does not have to go through?
“In the transcripts of the recordings we made with us, I usually understand what was said, and where there is an exotic terminology that is unique to us, I correct myself. For example, our CFO is called Niran, and in transcripts through Google’s service, for example, we pick his name as Liran. I know I do not have such an employee, and our technology is based on artificial intelligence and Mash Lerning and manages to change that. That is, after I manually correct the final product, the software already learns to recognize the correct name at the time of the recording itself.
“Today the cloud giants, Amazon, Microsoft and Google, offer transcription services in 40/50 languages. They realized 5 years ago that as the world progresses all conversations will become recorded. Whether you want to talk to your gardener or the accountant. We focus. Especially in English, because there is no company of our size that will develop such a large variety of languages, one has to be dumb for it and we will not stand for it neither financially nor in any other way.
“Where is our advantage after all? We have set up a team that specializes in customization. If you take sentences recorded in the theater or in the news or on a sports field, Microsoft’s cloud transcript will work everyone flat, and performance will be average. In basketball, for example, there is a certain jargon. Data that focuses on it, and so on in different companies that can be our customers.That is, we are building another layer on the transcription capabilities in the cloud of the big technology companies.
“In addition, in my experience, the transcripts you receive today from Amazon, Google, etc. will look like a block of text that you will not find your hands and feet in. We introduce punctuation technologies, and break this block into sentences according to the pauses in the conversation, and identify the speakers.”
Mashin-Lerning’s field of speech recognition brought Apple to court because of sound samples from Siri users that were preserved and infringed on their privacy, the same as for Amazon’s Alexa. How do you resolve the issue of privacy?
“By and large this is a field that is very gray, but we generally work in the organizational field and not in the private field, and I do not see a problem in the workplace using transcripts of meetings to improve the recording ability. Of course you have to announce at the beginning of each meeting that it is recorded. “By the way, every organizational system should have privacy. I as CEO do not have automatic access to recordings of others in my organization, if I know there was a meeting that interests me I can only ask that I be shared in the file as well.”
I can imagine that this technology can also serve security bodies for the purposes of covert balance. Are you active in these areas?
“We work with the defense industry and explicitly do projects there, but I do not define it as a growth engine. A growth engine should be a product or application that I sell all over the world and although in Hebrew transcripts we have a lot to contribute, the Israeli market is very small.”
Do you have a permit from the Defense Export Control?
“Yes but it is given specifically on products. I can tell you that in principle these certifications are very accessible. It used to be a story, but today there are a lot of standards of encryption so it is rare that they block you. It is quite open unless you have far-reaching technology, but That’s not what we’re talking about, after all. ”
I will ask at the end about your double listing: the stock exchange is more or less begging for Israeli women on Wall Street to list for trading in Israel as well, but some say it gives them nothing. What was behind your listing on the Tel Aviv Stock Exchange?
“Our case is a private case. We issued in 1999 on NASDAQ and in 2002 there was an effort by the TASE to encourage companies to also register for trading in Israel, and as part of this they offered the major Israeli shareholders a benefit according to which the determining price for tax purposes will be linked to the closing day. commercialize. We then traded quite at the bottom, at a price of two dollars per share and that suited us very well in terms of taxation and pushed the matter. ”
This benefit still exists but, so it just does not speak to companies that can trade at a higher value on Wall Street?
“For anyone who is at the very beginning, or alternatively can issue at the value of Unicorn it is of course irrelevant. The picture today is more complicated, in the past there was a desire to wink at Israeli investors but from the beginning today they are themselves on the Nasdaq, looking for the more sophisticated market. While the trading volume in the country is about 70,000 shares a day, there it is over 300,000. ”