RADCOM Ltd. Q4 FY2025 earnings call

Financial Highlights: 2025 was a solid year with strong growth, disciplined operational and financial execution, and continued market momentum. Revenue reached a record $71.5 million with 17.2% y-o-y growth. GAAP EPS up over 65% y-o-y, and cash balances at historic high. ### Market Environment: Telcos at key inflection point driven by AI adoption. 71% of operators plan to implement AgenTiK AI in 2025, but gap exists between AI ambition and data readiness. ### Product Innovations: Growing customer interest in advanced high-capacity data capture solution. Focus on developing telco-specific AI agents for improved accuracy and operational improvements. ### New Contract Wins: In Q4, new customer One Global selected RADCOM AS for next-gen AI-powered assurance; expanded with existing European operator via Rakuten and Symphony. ### Partners: Continuing partnerships with NVIDIA and ServiceNow. Partnership with NVIDIA powers high-capacity user analytics solution; partnership with ServiceNow has RADCOM AIM AIOps solution integrated in ServiceNow store. ### Market Activities: Strengthened market presence by participating in key industry events in 2025; preparing for upcoming high-impact engagements in 2026. ### Governance Update: Board appointed Rami Schwartz as chairman effective February 8, 2026, succeeding Sami Tota.

In 2025, RADCOM delivered a record revenue of $71.5 million, representing 17.2% year-over-year growth. GAAP earnings per share increased by just over 65% year over year, and cash and short-term deposit balances reached a history-high of $109.9 million with no debt. For the fourth quarter, revenue was $18.9 million, up 16% year over year. Gross margin in the fourth quarter was 77.6%, the highest since 2018. Operating income reached $4.3 million with an operating margin of 23%, the highest in eight years. In 2025, full-year revenue was $71.5 million, up 17.2% from 2024. Gross margin was 76.8%, operating income increased by 55% to $14.8 million, and net income reached a record $18.4 million.

2026 Revenue Guidance: Expect revenue to grow by 8% to 12% in 2026, way above the service assurance market growth. ### R&D Investment: Plan to increase R&D in 2026 to further develop automation and AI capabilities and support strategic partnership and productization goals.

Risks: Include market trends, success of new technologies like AI, demand for products, ability to address new customer segments, and expansion of market reach. For example, trends in the market could impact demand, and the success of AI-driven solutions is uncertain.

Q: Alinda Li of William Blair asked about capital allocation in 2026, especially regarding M&A.

A: Benny Eppstein said M&A is the first priority.

Q: Ryan Koontz of Needham and Company asked about drivers for expanding business with existing customers, the importance of AgenTiK, and data collection hardware.

A: Benny Eppstein said there are lots of opportunities within existing customers with AgenTiK driving many opportunities, and the company uses both NVIDIA based and cloud-native solutions, with its software being efficient compared to peers.