RADCOM Ltd. Q4 FY2024 earnings call

• 2024 was a record-breaking year with fifth consecutive year of growth, exceeding full year revenue guidance midpoint, and significant profitability improvement. EPS surged over 75% GAAP. - Secured multi-year contract with Norlys, replacing incumbent assurance vendor, leveraging RADCOM ACE for 5G and 4G network monitoring. - Collaborating with ServiceNow to automate service and complaint resolution for telecom operators, integrating AI Ops for network efficiencies. - Productizing RADCOM ACE for mid-tier operators, creating scalable packages. - Rakuten Mobile and Boost Mobile received industry recognition, with RADCOM contributing to their success. - Focus on innovation, GenAI, and automation, investing in R&D for 5G assurance and network intelligence.

In the fourth quarter of 2024, RADCOM achieved a record revenue of $16.3 million, up 16.1% year-over-year. Gross margin for the fourth quarter was 75%. For the full year 2024, revenue reached a record $61 million, up 82% from 2023. Gross margin in 2024 was 75%. Net income for 2024 was a record $13.5 million (non-GAAP) or $7 million (GAAP). Cash and short-term deposit balances were $94.7 million at year-end 2024.

• Anticipate full year 2025 revenue growth of 12% to 15% with midpoint of $69.2 million, a 13.5% increase from 2024. - Plan to increase R&D investment in 2025 to develop automation and GenAI capabilities. - Expect dollar-shekel ratio to stabilize at current levels, no need for hedging.

• Forward-looking statements involve uncertainties like innovation, business expansion, collaborations, productization, R&D investments, dollar-shekel ratio, grants, and revenue guidance. - Risks of actual results differing from forward-looking statements outlined in press release and SEC filings.

Q: Can you give more color on the Norlys deal and geographic market expansion?

A: Norlys is important for entering European market with 5G domain and GenAI capabilities, expected to lead to more wins in Europe and open mid-tier markets.

Q: How do you feel about current sales capacity and plans to expand?

A: Looking to expand, including partnerships like with ServiceNow, and will demonstrate at MWC Barcelona.

Q: Thinking about driving operating leverage vs investing in business?

A: Aim to keep same level of profitability while investing in R&D for new GenAI capabilities.

Q: Exploring acquisitions or interesting market segments?

A: Looking at different options carefully to expand addressable market, evaluating candidates.

Q: Initial focus for driving continued growth?

A: Leveraging partners like ServiceNow, expanding into care domain to improve customer experience through unique data set and GenAI.