hey there, pat.
am i too late to the party too?
valuation aside, AudioCodes looks compelling. congrats for being tuned in (at least in the "hey-day").
fwiw, i've got a couple other companies in my 'folio with "approved enterprise status" from Israel. for AUDC, that translates to a 2% tax rate (although it was nil in Q1). i think management has indicated an rate in the 2-5% range going forward. (by comparison, Comverse Technology, a much more mature business, has had an effective tax rate of around 8% for several years.)
revs are growing sequentially at quite a clip and accelerated significantly this quarter.
sequential sequential
qtr GMs change revenues growth
Q2 FY00 61.0% -0.02% $16,532 30.0% +5.3
Q1 FY00 61.2 -0.07 12,720 24.7 +1.9
Q4 FY99 61.9 +0.00 10,201 22.8 +2.7
Q3 FY99 61.9 +0.04 8,310 20.1 +0.2
Q2 FY99 61.5 -0.04 6,920 19.9 -
Q1 FY99 61.9 - 5,772 -
i'd be a bit more pleased if gross and operating margins were expanding as the former appears to have been shaved by 90 basis points over the past two quarters. again, i believe management has guided GMs to the high 50s in light of larger volume shipments and competition. on the other hand, the bottom line (net profit margins) has soared from 30% to 37% YoY (peaking at 40% in Q4 FY99).
speaking of competition, who do you see out there?
on comm boards, main rivals appear to be Natural Microsystems (NMSS), Analog (ALOG), BrookTrout (BRKT), and Dialogic (now part of Intel); according to Forward Concepts, "a leading market forecaster for DSPs," AUDC had a 42% market share in VoIP gateways in 1999, followed by NMSS (19%), ALOG (15%), BRKT (8%), and Dialogic (5%).
on the signal software processing side, two significant competitors are Telogy (Texas Instruments) and HotHaus (Broadcom). currently, however, Telogy and HotHaus provide only the software apps to the OEMs who then use them together with DSPs. in contrast, AUDC buys its silicon (from TI, for example) and embeds the software onto the DSPs and sells the full solution.
in addition, they're eyeing the VoATM (VoDSL) market. some snooping about tells me there will be a need for a VoIP/VoATM interworking function (AAL-2 based Loop Emulation Service [LES] and VoIP have different packetization schemes). this article doesn't specifically cited AUDC, but if you're still intrigued, it may be worth a gander:
icd.pennwellnet.com
personally, i got intrigued by AUDC when PMCS took out the other 85% of voice-over-packet specialist Malleable.
i'd be interested in a customer concentration breakout if anyone's sharing. absent SEC filings, all i have is a list, no numbers: Alcatel, Adtran (for access devices), Clarent, Carrier Access, Cisco (for Selsius IP PBX), HyperCom, Lucent, Mockingbird Networks, Motorola, Siemens, and VocalTec.
-chris. |
