AudioCodes (AUDC) Q2 FY26 earnings call: guidance

AudioCodes is making steady progress in its strategic initiative to transform into an AI-driven cloud and edge software and services company. This shift is fueled by two primary growth engines: Live Managed Services and Voice AI. These units collectively contributed $84 million in Annual Recurring Revenue (ARR) exiting Q2 FY26, marking a 20% year-over-year increase and highlighting the growing contribution of high-quality recurring revenue to the business model. ARR has doubled over the last three years, providing a strong foundation for future growth.

The Microsoft Teams Phone business demonstrated solid performance, achieving 5% year-over-year revenue growth in Q2 FY26, with first-half growth reaching 5.6%. This puts the company on track for approximately $170 million in Microsoft-related revenue by year-end, representing about 66% of total planned revenue. Pipeline momentum was encouraging, with new opportunities growing 14% year-over-year and Total Contract Value (TCV) tied to Microsoft Teams activity rising 73% year-over-year to over $20 million. A significant $10 million+ opportunity with a U.S. channel partner has also entered production, expected to add several million dollars in connectivity revenue annually for the next three years.

The Voice AI business continues its strong growth trajectory, delivering over 50% year-over-year revenue growth in Q2 FY26, with first-half 2026 revenue nearly doubling compared to first-half 2025. This performance keeps AudioCodes on track to achieve its full-year 2026 target of 40% to 50% growth for the Voice AI segment, with a long-term goal of reaching $50 million by the end of 2028. The company is increasing investments in this area, driven by new opportunities, emerging applications, and a belief that voice is becoming the preferred medium for human interaction with AI models.

VoiceAI Connect and Live Hub areas achieved a record-breaking quarter, driven by strong growth in VoiceAI Connect solutions and the Live Hub self-service cloud platform. This momentum was broad-based, supported by an accelerating pipeline, new logo wins, and significant expansion among existing customers. Growth was primarily driven by substantial capacity expansion from existing clients, including a Tier 1 healthcare provider that more than doubled its existing capability. Sales cycles for new opportunities have shortened to approximately 6 months, indicating increasing market maturity.

AudioCodes' AI-first contact center solution for Microsoft Teams, Voca CIC, experienced strong operational momentum. It secured a competitive win with a leading Asian bank, replacing a legacy incumbent, and saw existing customers expand their engagement by adding AI capabilities, such as agent insights and omnichannel features. Voca CIC also became the first solution listed under Microsoft's new Teams Voice Agent certification program, holding certifications for both a Microsoft Teams contact center and an AI voice agent. This dual certification, along with its multi-platform AI Receptionist, extends AudioCodes' leadership in the Microsoft Teams customer experience category.

Meeting Insight Cloud Edition maintained strong momentum, with meeting volume doubling year-over-year, Monthly Recurring Revenue (MRR) growing nearly 150%, and active users increasing by 50%. The company plans to expand sales activity into more markets beyond the current 2-3 countries. MIA Edge, the next-generation on-premise solution, provides secured meeting analysis for regulated customers (government, defense, healthcare, finance) who cannot use public clouds for AI. It supports various deployment models and has over 25 active accounts, with 10 in production.