Radcom Ltd (RDCM) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Limited results conference call for the second quarter of 2024. (Operator Instructions)

女士們先生們，謝謝你們的支持。歡迎參加 RADCOM Limited 2024 年第二季業績電話會議。（操作員說明）

As a reminder, this conference is being recorded and will be available for replay on the company's website at www.radcom.com later today.

謹此提醒，本次會議正在錄製中，並將於今天晚些時候在公司網站 www.radcom.com 上重播。

On the call are Hilik Itman, RADCOM's Interim CEO; and Hadar Rahav, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through the link in the investors of RADCOM's website at www.radcom.com/investor-relations.

RADCOM 臨時執行長 Hilik Itman 參加了電話會議；以及 RADCOM 財務長 Hadar Rahav。請注意，管理層已準備了一份簡報供您參考，供您在通話期間使用。如果您尚未下載，您可以透過 RADCOM 投資者網站 www.radcom.com/investor-relations 中的連結進行下載。

Before we begin, I would like to review the Safe Harbor provision. Forward-looking statements in the conference call involve several risks and uncertainties, including, but not limited to, the company's statements about 5G and launches, demand for the company's products and services, sales opportunities, sales cycles, and pipeline, momentum, maintaining and increasing profitability and growth, its ability to provide value to customers and shareholders, the company's expected growth, its expectations with respect to expenses and headcount, as well as grants from the Israel Innovation Authority, the company's expectations with respect to its relationships with its customers, the potential of the company's long-term vision and the use of artificial intelligence in its products, levels of gross margin, the company's revenue guidance, and the search for a permanent Chief Executive Officer.

在我們開始之前，我想回顧一下安全港條款。電話會議中的前瞻性陳述涉及多種風險和不確定性，包括但不限於公司有關 5G 和發布的陳述、對公司產品和服務的需求、銷售機會、銷售週期和管道、勢頭、維持和發展。獲利能力和成長的提高、為客戶和股東提供價值的能力、公司的預期成長、對費用和員工人數的預期、以及以色列創新局的資助、公司對與客戶關係的預期、公司長期願景的潛力以及人工智慧在其產品中的使用、毛利率水準、公司的收入指導以及尋找永久執行長的情況。

The company does not undertake to update forward-looking statements. The full Safe Harbor provisions, including risks that could cause actual results to differ from these forward-looking statements, are outlined in the presentation and the company's SEC filings. In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance.

該公司不承諾更新前瞻性陳述。簡報和公司向 SEC 提交的文件中概述了完整的安全港條款，包括可能導致實際結果與這些前瞻性陳述不同的風險。在本次電話會議中，管理階層將參考某些非公認會計準則財務指標，這些指標旨在增強使用者對公司財務表現的整體了解。

By excluding certain non-cash stock-based compensation expenses, non-GAAP results provide information helpful in assessing RADCOM's core operating performance and evaluating and comparing the results of operations consistently from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures included in the quarter's earnings release available on our website.

透過排除某些非現金股票補償費用，非公認會計準則績效提供了有助於評估 RADCOM 核心經營績效以及評估和比較不同期間經營績效的資訊。這些附加資訊的呈現並不意味著可以取代根據公認會計原則制定的相應財務措施。我們鼓勵投資者查看我們網站上發布的季度收益報告中包含的 GAAP 與非 GAAP 財務指標的調整表。

Now, I would like to turn over the call to Hilik. Please go ahead.

現在，我想把電話轉給希利克。請繼續。

Thanks, operator. Good morning, everyone, and thank you for joining us for our second-quarter 2024 earnings call. Before diving into our results, I want to provide an update on the CEO search process. The Board has engaged a top executive recruitment firm and established a committee to appoint the next CEO. Significant progress has been made, and the committee is now in the advanced stages of candidate selection.

謝謝，接線生。大家早安，感謝您參加我們的 2024 年第二季財報電話會議。在深入研究我們的結果之前，我想先介紹一下執行長搜尋流程的最新情況。董事會聘請了一家頂級高階主管招聘公司，並成立了一個委員會來任命下一任執行長。目前已經取得了重大進展，委員會目前正處於候選人遴選的後期階段。

The committee has evaluated candidates from Israel and abroad, particularly the US, who has the necessary leadership qualities, and experience to drive RADCOM's next phase of growth and success. I have full confidence in the Board's ability to appoint the right candidate. Hopefully, this process will be finalized soon.

該委員會對來自以色列和國外（尤其是美國）的候選人進行了評估，他們具有推動 RADCOM 下一階段的成長和成功所需的領導特質和經驗。我對董事會任命合適候選人的能力充滿信心。希望這個過程很快就能完成。

As the company's COO, I'll continue focusing on R&D, product innovation, and customer success. Then, I will be able to invest more time in driving innovation and taking the company to the next level of our growth journey alongside the new CEO.

作為公司的首席營運官，我將繼續專注於研發、產品創新和客戶成功。然後，我將能夠投入更多的時間來推動創新，並與新任執行長一起帶領公司進入新的發展階段。

Now, turning to the results. I'm excited to share our strong performance and execution in this quarter. Our results highlighted the benefits of our customers' trust and our ability to deliver value through our carrier-grade and innovative solutions. We achieved solid growth momentum in both our top and bottom lines. We reached record quarterly revenues of $14.8 million, up 20% from the second quarter of 2023.

現在，轉向結果。我很高興與大家分享我們在本季的強勁表現和執行力。我們的結果凸顯了客戶信任的好處以及我們透過營運商級創新解決方案提供價值的能力。我們的營收和利潤均實現了穩健的成長動能。我們的季度營收達到創紀錄的 1,480 萬美元，比 2023 年第二季成長 20%。

We generated a positive cash flow, hitting a new record of $86.1 million in cash, cash equivalents, and bank deposits. We achieved record half-year revenue and profitability for the first six months of 2024. Since the start of the year, we have secured over $50 million in new contracts, including several seven-digit contracts across various geographic markets, while maintaining significant recurring revenues.

我們產生了正現金流，現金、現金等價物和銀行存款達到 8,610 萬美元的新紀錄。2024 年前六個月，我們實現了創紀錄的半年收入和獲利能力。自今年年初以來，我們已經獲得了超過 5000 萬美元的新合同，其中包括跨不同地域市場的幾份七位數合同，同時保持了可觀的經常性收入。

This shows the demand for our leading solutions and boosts our revenues as operators transition to 5G. Our entire organization remains committed to delivering profitable growth, increasing our market share, and driving ongoing technology innovation as we look to provide long-term value to our customers and shareholders.

這顯示了對我們領先解決方案的需求，並隨著營運商向 5G 過渡而增加了我們的收入。我們整個組織仍然致力於實現獲利成長、增加市場份額並推動持續的技術創新，因為我們希望為客戶和股東提供長期價值。

Turning to the telecom market. Customer interest and sales activities are noticeably increasing in the US and other regions. This upturn is evident in the number of opportunities our teams are currently pursuing and the 5G tenders issued by operators.

轉向電信市場。美國和其他地區的客戶興趣和銷售活動顯著增加。這種好轉從我們團隊目前正在尋求的機會數量以及運營商發布的 5G 招標中可見一斑。

As the interim CEO, my primary focus is driving existing sales activities. In this role, I provide executive level support for our sales efforts and spearhead future innovations. The heightened interest in automated assurance and intelligent analytics results from several key factors. First, most US operators are progressing in their transition to 5G standalone networks, requiring the adoption of cloud-based automated assurance and intelligent analytics solutions. Additionally, as legacy assurance systems age or reach the end of life, operators must replace outdated equipment as part of the natural upgrade cycle.

作為臨時首席執行官，我的主要工作重點是推動現有的銷售活動。在此職位上，我為我們的銷售工作提供行政級別的支持，並引領未來的創新。對自動化保證和智慧分析的興趣日益濃厚源自於幾個關鍵因素。首先，大多數美國營運商正在向 5G 獨立網路過渡，需要採用基於雲端的自動化保障和智慧分析解決方案。此外，隨著遺留保障系統老化或達到使用壽命，營運商必須更換過時的設備作為自然升級週期的一部分。

Additionally, some competitors have not developed a cloud-native automated assurance and intelligent analytics solution, which requires significant R&D investment, an investment that RADCOM has made. This process leads operators to conduct thorough due diligence, evaluating the available options in the market to identify new best-in-class automated assurance and intelligent analytics solutions. Given these market factors, we see significant opportunities to increase our market share in the US and other regions, driving sustainable and continued growth while delivering more value to our shareholders.

此外，一些競爭對手尚未開發出雲端原生自動化保證和智慧分析解決方案，這需要大量的研發投資，而 RADCOM 已經進行了這項投資。此流程引導營運商進行徹底的盡職調查，評估市場上的可用選項，以確定新的一流的自動化保證和智慧分析解決方案。考慮到這些市場因素，我們看到了增加我們在美國和其他地區市場份額的重大機會，推動永續和持續成長，同時為我們的股東帶來更多價值。

Turning to the cloud. Adopting a cloud architecture is part of operators' transition to more efficient and dynamic software centric network operations. We continue to see increasing cloud adoption, with operators replacing legacy with modern cloud-based networks. Our solution helps operators manage this transition efficiently and with a customer-centric focus by gathering all the analytics across the cloud networks.

轉向雲。採用雲端架構是營運商向更有效率、更動態的以軟體為中心的網路營運過渡的一部分。我們繼續看到雲端的採用不斷增加，營運商用基於雲端的現代網路取代傳統網路。我們的解決方案透過收集雲端網路中的所有分析，幫助營運商以客戶為中心，高效管理這項轉變。

In previous calls, we mentioned the importance of gen AI and that all the leading public cloud providers or hyperscalers are emerging as having a pivotal role in the gen AI ecosystem. During the second quarter, we announced that RADCOM NetTalk, our generative artificial intelligence application, was now available on AWS.

在先前的電話會議中，我們提到了 gen AI 的重要性，並且所有領先的公有雲供應商或超大規模供應商都在 gen AI 生態系統中發揮關鍵作用。在第二季度，我們宣布我們的生成式人工智慧應用 RADCOM NetTalk 現已在 AWS 上推出。

Although gen AI is in the innovation stage, customers see our innovation and thought leadership in this space, which can be a door opener that leads to sales opportunities. As demonstrated in our support for Gen-AI on AWS and the contract win to offer our solution as SaaS in the US, we continue engaging with operators and the cloud-based ecosystem.

儘管gen AI正處於創新階段，但客戶看到了我們在這個領域的創新和思想領導力，這可以成為帶來銷售機會的大門。正如我們對 AWS 上的 Gen-AI 的支援以及在美國贏得以 SaaS 形式提供解決方案的合約所證明的那樣，我們將繼續與營運商和基於雲端的生態系統進行合作。

As a reminder, we offer potential customers integration with all three leading public cloud providers: Amazon Web Services, Microsoft Azure, and Google Cloud. And we believe our integration into cloud providers will help generate additional opportunities.

提醒一下，我們為潛在客戶提供與所有三個領先公有雲供應商的整合：Amazon Web Services、Microsoft Azure 和 Google Cloud。我們相信，我們與雲端提供者的整合將有助於創造更多機會。

Turning to the pipeline. We see positive market momentum that can drive growth, increase sales engagements, and lead to additional multi-year contracts. The more robust demand for cloud-based automated assurance and intelligent analytics technology is reflected in our increased pipeline as we engage with multiple prospects across various sales cycle stages.

轉向管道。我們看到積極的市場動能可以推動成長、增加銷售參與度並帶來更多的多年期合約。隨著我們在各個銷售週期階段與多個潛在客戶接觸，我們不斷增加的管道反映了對基於雲端的自動化保證和智慧分析技術的更強勁的需求。

While these sales processes can take time and are unpredictable, we believe our solutions align with operators' needs, deliver unique value, and address critical network challenges. This sets the stage for future business growth. In today's telecom macroeconomic landscape, operators seek solutions that help them reduce significant costs while ensuring a seamless transition to 5G cloud network infrastructure and technologies. These are essential use cases for assurance and network analytics. This presents a significant opportunity for RADCOM, and we believe our position as an innovative automated assurance and intelligent analytics provider will continue to drive positive returns.

雖然這些銷售流程可能需要時間且不可預測，但我們相信我們的解決方案符合營運商的需求，提供獨特的價值並解決關鍵的網路挑戰。這為未來的業務成長奠定了基礎。在當今的電信宏觀經濟格局中，營運商尋求能夠幫助他們大幅降低成本的解決方案，同時確保無縫過渡到 5G 雲端網路基礎設施和技術。這些是保障和網路分析的重要用例。這為 RADCOM 提供了一個重要的機會，我們相信我們作為創新的自動化保證和智慧分析提供者的地位將繼續帶來積極的回報。

Turning to our installed base. AT&T and DISH remain key strategic customers, and we believe our business with these operators will remain strong. We continue to provide software enhancements and new releases to help them manage their networks.

轉向我們的安裝基礎。AT&T 和 DISH 仍然是主要策略客戶，我們相信我們與這些營運商的業務將保持強勁。我們繼續提供軟體增強功能和新版本，以幫助他們管理網路。

In the second quarter, we were selected to provide a SaaS Service Assurance Solution on AWS in the US for an existing customer. Deploying RADCOM ACE on AWS will enable this operator to achieve high levels of automation and flexibility when using their automated assurance and intelligent analytics solution to gain real-time insights and analytics into the network. This allows the operator to adapt quickly to network capacity changes, ensuring excellent customer experiences and delivering top-quality services.

第二季度，我們被選中在美國的 AWS 上為現有客戶提供 SaaS 服務保障解決方案。在 AWS 上部署 RADCOM ACE 將使該營運商在使用其自動化保證和智慧分析解決方案獲得網路的即時洞察和分析時實現高水準的自動化和靈活性。這使得營運商能夠快速適應網路容量變化，確保卓越的客戶體驗並提供最優質的服務。

We also announced that our collaboration with Rakuten Mobile in Japan has been extended due to our strong long-term performance and support. So business with Rakuten Mobile remains robust following the renewal of our multi-year contract.

我們也宣布，由於我們強大的長期業績和支持，我們與日本樂天移動的合作已經延長。因此，在我們續簽多年合約後，與樂天移動的業務仍然強勁。

We have achieved high satisfaction levels within our install base by offering a robust and innovative product and focusing on customer requirements and needs, driving growth and recurring revenue. We continue to invest in sales and marketing to capitalize on the rising demand on our solutions.

透過提供強大和創新的產品並專注於客戶的要求和需求，推動成長和經常性收入，我們在安裝基礎上實現了很高的滿意度。我們繼續投資於銷售和行銷，以利用對我們解決方案不斷增長的需求。

We have expanded our sales team to seize these opportunities by recognizing significant growth potential in our pipeline. We expanded our sales channels during the quarter, particularly in Europe and South America, by strengthening our partnerships with local agencies and distributors. This approach allows us to address potential sales activities and effectively meet growing demand.

我們認識到我們的產品線具有巨大的成長潛力，因此擴大了我們的銷售團隊，以抓住這些機會。我們在本季透過加強與當地代理商和分銷商的合作夥伴關係擴大了銷售管道，特別是在歐洲和南美洲。這種方法使我們能夠處理潛在的銷售活動並有效滿足不斷增長的需求。

Our combined indirect and direct sales teams ensure an increased presence on the ground from a sales perspective. We are also actively participating in numerous industry events worldwide, where the sales team's engagement creates interest in our automated and intelligent analytics.

我們的間接和直接銷售團隊結合，確保從銷售角度增加在當地的影響力。我們也積極參與全球眾多產業活動，銷售團隊的參與引起了人們對我們的自動化和智慧分析的興趣。

Our executive team frequently speaks at these events, further enhancing interest in our solutions, and solidifying our thought leadership in the 5G assurance and analytics space. These interactions have led to many promising discussions, including significant interest in our new generative AI applications, which could translate into future sales opportunities. We believe we have a differentiated solution aligned with key market trends and are well positioned to address telecom operators' needs.

我們的執行團隊經常在這些活動中發表演講，進一步增強了人們對我們解決方案的興趣，並鞏固了我們在 5G 保障和分析領域的思想領導地位。這些互動引發了許多有希望的討論，包括對我們新的生成式人工智慧應用程式的濃厚興趣，這可能轉化為未來的銷售機會。我們相信，我們擁有符合主要市場趨勢的差異化解決方案，並且能夠很好地滿足電信業者的需求。

We continue to enhance our software with additional automation, intelligence, and AI-based capabilities to add value and expand our customer use cases. We announced generative AI application support for Amazon Web Services so operators can roll out new services fast on AWS while improving operational efficiencies using RADCOM ACE enhanced by generative AI.

我們繼續透過額外的自動化、智慧和基於人工智慧的功能來增強我們的軟體，以增加價值並擴展我們的客戶用例。我們宣佈為 Amazon Web Services 提供生成式 AI 應用程式支持，以便營運商可以在 AWS 上快速推出新服務，同時使用生成式 AI 增強的 RADCOM ACE 提高營運效率。

RADCOM is a company with many years of expertise in the telco space. We know how to analyze data and deliver valuable insights to telecom operators. So we approach all our product innovation from this unique perspective, starting from a foundation of good data and telco-domain knowledge.

RADCOM 是一家在電信領域擁有多年專業知識的公司。我們知道如何分析數據並向電信業者提供有價值的見解。因此，我們以良好的數據和電信領域知識為基礎，從這個獨特的角度來處理我們所有的產品創新。

We will continue creating value for our customers and shareholders by building upon our strategic position as the leading automated assurance and intelligent analytics platform for 5G and the cloud. Innovative technologies empower our solutions through significant product investments made over the years. We continue investing in R&D because we believe it is a crucial enabler for future business.

我們將鞏固我們作為 5G 和雲端領域領先的自動化保障和智慧分析平台的策略地位，繼續為客戶和股東創造價值。透過多年來大量的產品投資，創新技術為我們的解決方案提供了支持。我們繼續投資研發，因為我們相信它是未來業務的關鍵推動因素。

We serve as the operators' smart co-pilot to help navigate 5G network complexity. This means continually evolving our automated assurance and intelligent analytics solution, adding new AI-powered capabilities and use cases to maintain our 5G assurance leadership.

我們充當營運商的智慧副駕駛，幫助應對 5G 網路的複雜性。這意味著不斷發展我們的自動化保障和智慧分析解決方案，添加新的人工智慧驅動的功能和用例，以保持我們的 5G 保障領先地位。

I am excited to announce that the company received industry recognition. We were recently named a finalist for a 2024 Leading Lights Award. This telecom-focused program recognizes the industry's top companies' achievements in next-generation communications technology and innovation during the year.

我很高興地宣布該公司獲得了行業認可。我們最近入圍 2024 年領軍人物獎決賽。這項以電信為重點的計畫旨在表彰業界頂尖公司在這一年中在下一代通訊技術和創新方面所取得的成就。

To summarize, our strong results demonstrate that our team is executing effectively. Our performance in the second quarter and consistent achievements across multiple quarters position us for a successful 2024. Our business strategy yields positive outcomes. As evidenced by our profitable growth and consistent positive cash flow, our momentum remains strong, and we believe the best is yet to come as we aim to elevate the company's evolution and enhance shareholder value.

總而言之，我們的強勁業績顯示我們的團隊正在有效執行。我們第二季的表現以及多個季度的持續成就使我們在 2024 年取得成功。我們的業務策略產生了積極的成果。正如我們的獲利成長和持續的正現金流所證明的那樣，我們的勢頭仍然強勁，我們相信最好的時刻尚未到來，因為我們的目標是促進公司發展並提高股東價值。

We are experiencing increasing demand for our innovative assurance and analytics solutions across multiple regions. This growing interest is evident in our expanding sales pipeline, which has the potential to drive further growth.

多個地區對我們的創新保障和分析解決方案的需求不斷增長。這種日益增長的興趣在我們不斷擴大的銷售管道中顯而易見，這有可能推動進一步的成長。

Our R&D team is continuously innovating and supporting our customers' needs. Therefore, we remain confident we can deliver a fifth consecutive year of revenue growth and increased profitability. This gives us the confidence to raise our 2024 revenue guidance to a range of $58 million to $61 million up from the previous range of $57 million to $60 million.

我們的研發團隊不斷創新並支持客戶的需求。因此，我們仍然有信心能夠實現連續第五年的收入成長和獲利能力的提高。這使我們有信心將 2024 年的收入指引從先前的 5,700 萬美元至 6,000 萬美元提高到 5,800 萬美元至 6,100 萬美元。

With that, I would like to turn the call over to Hadar Rahav, our CFO, who will discuss the financial results in detail.

說到這裡，我想將電話轉給我們的財務長哈達爾·拉哈夫 (Hadar Rahav)，他將詳細討論財務表現。

Thank you, Hilik, and everyone, for joining us today. Let's turn to the results. While the slides contain GAAP and non-GAAP results to review our financial performance, I will mainly refer to non-GAAP numbers, excluding stock-based compensation, acquisition-related expenses, and amortization of intangible assets related to acquisitions.

感謝 Hilik 和大家今天加入我們。讓我們看看結果。雖然幻燈片包含 GAAP 和非 GAAP 業績來回顧我們的財務業績，但我將主要參考非 GAAP 數據，不包括股票薪酬、收購相關費用以及與收購相關的無形資產攤銷。

As noted earlier in the call, since the beginning of the year, we have secured over $50 million in new contracts, including several seven-digit contracts across various geographic markets. Most of these revenues will be recognized in 2025 and beyond. This influx of contracts underscores the robust demand for our leading solutions and positions us well to capitalize on the industry's transition to 5G, significantly boosting our revenues.

正如電話會議早些時候指出的，自今年年初以來，我們已經獲得了超過 5000 萬美元的新合同，其中包括跨不同地域市場的幾份七位數合同。其中大部分收入將在 2025 年及以後確認。合約的大量湧入凸顯了對我們領先解決方案的強勁需求，並使我們能夠充分利用行業向 5G 的過渡，從而顯著提高我們的收入。

Now, please turn to slide 5 for our financial highlights. Second-quarter revenue grew by 20%, reaching a new record of $14.8 million. Our positive start to the year is driven by strong team execution, which has led to good financial performance, revenue and profitable growth, and measurable improvements to our bottom line. Non-GAAP net income for the second quarter was $3.1 million, and the non-GAAP net margin was 21%, which grew by 4% compared to the second quarter of 2023.

現在，請翻到投影片 5 了解我們的財務亮點。第二季營收成長 20%，達到 1,480 萬美元的新紀錄。我們今年的良好開局得益於強大的團隊執行力，這帶來了良好的財務表現、收入和利潤成長，以及我們的利潤的顯著改善。第二季非 GAAP 淨利潤為 310 萬美元，非 GAAP 淨利率為 21%，較 2023 年第二季成長 4%。

GAAP net income for the second quarter doubled to $1.7 million, and EPS was up by 120% compared to the second quarter of 2023. Our gross margin on a non-GAAP basis in the second quarter of 2024 grew to 75%. Note that our gross margin can vary slightly from quarter to quarter, depending on the revenue mix. We expect that the third quarter will remain at a similar level.

第二季 GAAP 淨利翻了一番，達到 170 萬美元，每股收益較 2023 年第二季成長 120%。2024 年第二季度，我們以非公認會計準則計算的毛利率成長至 75%。請注意，我們的毛利率每季可能略有不同，具體取決於收入組合。我們預計第三季將保持類似水平。

Regarding R&D investment, the company's strategy is to continue investing at a similar level as in 2023 to enhance our RADCOM ACE solution, increase our 5G capabilities, expand our AI-driven insights, and seamlessly integrate our solution into the cloud.

關於研發投資，該公司的策略是繼續以與2023 年類似的水平進行投資，以增強我們的RADCOM ACE 解決方案、增強我們的5G 能力、擴展我們的人工智慧驅動的洞察力，並將我們的解決方案無縫整合到雲端。

Our investment in research and development is vital to extending our technological leadership. This is a key enabler for our future business. We believe that R&D as a percentage of revenue will decrease along with revenue increase.

我們對研發的投資對於擴大我們的技術領先地位至關重要。這是我們未來業務的關鍵推動因素。我們認為研發佔收入的比例將隨著收入的增加而下降。

On a non-GAAP basis, our gross R&D expenses for the second quarter of 2024 were $4.1 million. Excluding any impact from exchange rates, we expect that our R&D expenses will remain similar in the next quarter.

根據非公認會計原則，我們 2024 年第二季的總研發費用為 410 萬美元。排除匯率的影響，我們預計下個季度的研發費用將保持相似。

During the quarter, we received a grant of $180,000 from the Israel Innovation Authority, the same as in 2023. We expect the Israel Innovation Authority grant to remain at a similar level in the third quarter.

本季度，我們從以色列創新局獲得了 18 萬美元的撥款，與 2023 年相同。我們預計以色列創新局的撥款在第三季將維持在類似水準。

As Hilik mentioned, the transition to 5G presents attractive growth opportunities. We are excited about this potential and will continue to invest incrementally in sales and marketing, mainly by expanding the global sales team. Additionally, in the last quarter, we expanded our sales channels by partnering with new local agents and distributors, allowing us to capture more opportunities.

正如 Hilik 所提到的，向 5G 的過渡帶來了誘人的成長機會。我們對這一潛力感到興奮，並將繼續增加對銷售和行銷的投資，主要是擴大全球銷售團隊。此外，在上個季度，我們透過與新的當地代理商和經銷商合作擴大了銷售管道，使我們能夠抓住更多機會。

In the second quarter of 2024, sales and marketing expenses reached $3.8 million on a non-GAAP basis, an increase of 27% compared to the second quarter of 2023. In the following quarters, we expect a gradual increase in sales and marketing expenses to support an increasing pipeline of opportunities. G&A expenses for the second quarter of 2024 were $1.2 million on a non-GAAP basis, an increase of $230,000 from the second quarter of 2023. This increase was mainly due to special expenses incurred for the CEO search.

2024年第二季度，以非公認會計準則計算，銷售和行銷費用達380萬美元，較2023年第二季成長27%。在接下來的幾個季度中，我們預計銷售和行銷費用將逐步增加，以支持不斷增加的機會。以非公認會計準則計算，2024 年第二季的一般管理費用為 120 萬美元，比 2023 年第二季增加了 23 萬美元。這一增長主要是由於尋找首席執行官所產生的特殊費用。

Turning to the company's profitability. Due to higher revenues and careful expense management, operating profit on a non-GAAP basis reached $2.3 million, growing by 170% or $1.4 million from the second quarter of 2023. Our non-GAAP operating margin was 15.4%, doubling our operating margin in the second quarter of 2023.

轉向公司的獲利能力。由於收入增加和謹慎的費用管理，非 GAAP 基礎上的營業利潤達到 230 萬美元，較 2023 年第二季度增長 170%，即 140 萬美元。我們的非 GAAP 營業利潤率的兩倍。

Net income on a non-GAAP basis was $3.1 million, growing approximately 50% by more than $1 million compared to the second quarter of 2023. Diluted EPS for the second quarter was $0.20, growing $0.07 from the second quarter of 2023.

非 GAAP 淨利潤為 310 萬美元，與 2023 年第二季相比成長約 50%，成長超過 100 萬美元。第二季稀釋後每股收益為 0.20 美元，較 2023 年第二季成長 0.07 美元。

As shown in slide 7, our GAAP net income for the second quarter of 2024 was $1.7 million. Diluted EPS was $0.11, growing $0.06 from the second quarter of 2023.

如投影片 7 所示，我們 2024 年第二季的 GAAP 淨利潤為 170 萬美元。稀釋後每股收益為 0.11 美元，較 2023 年第二季成長 0.06 美元。

Turning to the balance sheet. As shown on slide 11, we continued generating cash and ended the second quarter with $86.1 million in cash, cash equivalents, and short-term bank deposits. Our headcount was 307 at the end of the second quarter of 2024. We expect our headcount to remain similar in the third quarter.

轉向資產負債表。如投影片 11 所示，我們繼續產生現金，第二季末現金、現金等價物和短期銀行存款為 8,610 萬美元。截至 2024 年第二季末，我們的員工人數為 307 人。我們預計第三季的員工人數將保持相似。

That ends our prepared remarks. I will now turn the call back to the operator for your questions.

我們準備好的演講到此結束。我現在將把電話轉回給接線員詢問您的問題。

(Operator Instructions)

（操作員說明）

Bhatia Arjun, William Blair.

巴蒂亞·阿瓊，威廉·布萊爾。

Yes, Arjun here. Congrats on the momentum and the strong execution here. Look, it sounds like you're getting some pretty good adoption from 5G contracts. I think you cited $50 million in new 5G contract signs from the start of the year. What is driving that in your view?

是的，阿瓊在這裡。祝賀這裡的勢頭和強大的執行力。聽著，聽起來 5G 合約的採用率相當不錯。我認為您提到了從今年年初開始簽訂的 5000 萬美元新 5G 合約。您認為是什麼推動了這個趨勢？

Is it just where we are in the 5G cycle and build-out? Or is there some other catalysts that you think is driving momentum with some of these contracts here?

這就是我們目前所處的 5G 週期和建設階段嗎？或者您認為還有其他一些催化劑正在推動其中一些合約的發展勢頭嗎？

So I think that the momentum is positive. It's not was expected three years ago in the 5G. But in this -- at least in the last 6 or 10 months, we see changing with the momentum and there is much more opportunity of 5G transition. I think that it's related that -- as I said, I think also in the previously in the last quarter. Nobody can stop it, stop this trend.

所以我認為勢頭是積極的。這在三年前的 5G 中是沒有預料到的。但至少在過去 6 或 10 個月裡，我們看到勢頭正在發生變化，並且 5G 過渡的機會更多。我認為這與 - 正如我所說，我認為也與上個季度之前有關。沒有人可以阻止它，阻止這個趨勢。

The strategy is happening, and it's connecting very tight to cloud transition also. And RADCOM is well positioned with our product and technology and experience. So we're not even for the last year from a -- to address these requirements. So this is the momentum that I see.

該戰略正在實施，並且它與雲端轉型也緊密相連。RADCOM 憑藉我們的產品、技術和經驗處於有利地位。因此，我們甚至在去年都沒有滿足這些要求。這就是我看到的勢頭。

I would add that in general, we are still confident in the market evolving into 5G. And we still see a demand for our products. And as we executed well this quarter, we are expecting we have a more journey to continue. And we do see that 5G is the strategic two top operators, and they are still focusing with the 5G program, and they continue to spend into evolve into 5G stand-alone and by that, creating the demand for our products. I think that operators, we can divide them into two growths.

我想補充一點，總的來說，我們對市場向 5G 的發展仍然充滿信心。我們仍然看到對我們產品的需求。由於我們本季表現良好，我們預計我們將有更多的旅程要繼續。我們確實看到 5G 是戰略上的兩家頂級運營商，他們仍然專注於 5G 計劃，他們繼續投入資金發展到 5G 獨立，從而創造了對我們產品的需求。我覺得對於營運商來說，我們可以把他們分成兩個成長。

Those who are excited with (inaudible) and the alternative solutions that will invest more strategically in the transition to 5G and those who are more conservative with less in the beginning to increase the investment in moderate space. And we at RADCOM definitely support is to model as we believe in the long-term relationship and it all depends on the customer level of confidence and the 5G strategy.

那些對（聽不清楚）和替代解決方案感到興奮的人將在向 5G 過渡時進行更具策略性的投資，而那些較為保守的人則在開始時較少增加對適度空間的投資。我們 RADCOM 絕對支持建模，因為我們相信長期關係，這一切都取決於客戶的信心程度和 5G 策略。

Perfect. Very helpful. And then one, if I can, on AWS. It sounds like you had one existing customer transition to your SaaS solution. When you think out over the next couple of years, is this something you anticipate that most operators and most of your customers will shift to the SaaS model -- your SaaS model over time? And as that happens, how are your economics, whether it's pricing or gross margins different for SaaS versus your kind of original offering?

完美的。非常有幫助。如果可以的話，然後在 AWS 上進行一個。聽起來您有一位現有客戶已過渡到您的 SaaS 解決方案。當您考慮未來幾年時，您是否預期大多數營運商和您的大多數客戶將隨著時間的推移轉向 SaaS 模式——您的 SaaS 模式？當這種情況發生時，SaaS 與您的原始產品相比，您的經濟狀況（無論是定價還是毛利率）有何不同？

First to say that most of the operator will do the transition to cloud. Part of them will do it on private part of them are going to do that on public cloud. And then the option of SaaS is valid for us. And it's a big opportunity for the company to implement our product in more operator with SaaS because the advantage is clear of SaaS deployment. So yes, I think that it will happen. We saw it this year. And we have an engagement with more customer in this area. So it's very positive.

首先要說的是，大多數運營商都會做向雲端的過渡。他們中的一部分將在私有雲上進行，一部分將在公有雲上進行。那麼SaaS的選擇對我們來說是有效的。對於公司來說，透過SaaS在更多運營商中實施我們的產品是一個很好的機會，因為SaaS部署的優勢是顯而易見的。所以是的，我認為這會發生。我們今年就看到了。我們在這領域與更多客戶進行了合作。所以這是非常積極的。

And is there -- maybe just one is for Hadar, but is there anything that we should think about just from an economics perspective, margin impact from more SaaS adoption? Or is it too early to tell at this point?

有沒有－也許只有一個是針對 Hadar 的，但我們是否應該從經濟學角度考慮更多 SaaS 採用對利潤率的影響？還是現在說還太早？

Yes. So the advantage is very clear on SaaS because it's the installation, it's much more easy and the technology options are more advanced in this area. It's very attractive for -- mainly for medium and small customers that they don't need to buy some equipment or rent the cloud providers. So economical perspective is very attractive because it will be -- help us to get much more operators compared to cost solution or public cloud or compared to private cloud or cost solution.

是的。因此，SaaS 的優勢非常明顯，因為它的安裝更加簡單，而且該領域的技術選項也更加先進。這對於主要是中小型客戶來說非常有吸引力，他們不需要購買一些設備或租用雲端供應商。因此，經濟角度非常有吸引力，因為與成本解決方案或公有雲相比，或與私有雲或成本解決方案相比，它將幫助我們獲得更多的營運商。

And I would like to add that the SaaS model may improve our gross margin, the more operators transition to this model. The SaaS model is a win-win situation.

我想補充一點，SaaS 模式可能會提高我們的毛利率，越多的營運商轉向這種模式。SaaS模式是雙贏的。

On the one hand, the operator, take course and doesn't need to invest additional cost on the infrastructure. And for RADCOM, the marginal cost will decrease while the revenue will increase, but they will improve our gross margin.

一方面，營運商順其自然，不需要在基礎設施上投入額外的成本。對於 RADCOM 來說，邊際成本會下降，收入會增加，但它們會提高我們的毛利率。

Alex Henderson.

亞歷克斯·亨德森。

So you've obviously produced some very strong numbers over an extended period here. And there is obviously also some lumpiness in this business, which can have an impact in any given quarter. So as I'm looking forward into the September quarter, seasonally, that's a little bit softer quarter. Should we anticipate that the business is a little bit more skewed to the December quarter and that the September quarter might be down here sequentially from the June quarter? Or should we assume that the 14.8% is at least attainable again in the September quarter here?

因此，很明顯，您在很長一段時間內在這裡產生了一些非常強勁的數字。顯然，這項業務也存在一些不穩定因素，這可能會在任何特定季度產生影響。因此，當我展望九月季度時，從季節性角度來看，這是一個稍微疲軟的季度。我們是否應該預期該業務與 12 月季度相比會更加傾斜，並且 9 月季度可能會比 6 月季度連續下降？或者我們應該假設 9 月季度至少可以再次達到 14.8%？

So I will take it. Alex, we are very excited with the results. And obviously, our consistent execution is driving the order growth. We did better than expected, and we are encouraged by our momentum and see a long runway of growth. We expect this to continue and remain on pace to meet our guidance.

所以我會接受它。亞歷克斯，我們對結果感到非常興奮。顯然，我們一貫的執行力正在推動訂單成長。我們的表現比預期要好，我們對我們的勢頭感到鼓舞，並看到了長期的成長。我們預計這種情況將繼續下去，並繼續保持符合我們指導的速度。

And actually, we have a very good visibility for 2024. And this is why we increased our guidance. And if you look on the guidance, you see that we are likely to have a higher second half of the year. And if you look on the higher range of our guidance, it would be around 18% year-over-year revenue growth, which is the fullest elevation to what we deliver in 2023. I believe that this growth will be reflected in each of the next two quarters. And that we will see a linear of growth.

事實上，我們對 2024 年的前景非常樂觀。這就是我們增加指導的原因。如果你看一下指導，你會發現今年下半年我們的業績可能會更高。如果您查看我們指導的較高範圍，您會發現收入同比增長約為 18%，這是我們在 2023 年實現的目標的最大提升。我相信這種成長將在接下來的兩個季度中得到體現。我們將看到線性成長。

So this is in terms of the revenue. And if you change in the (inaudible), we expect a similar trend on the bottom line. As we stated in the call, we would like to maintain a similar level on R&D expenses and expect a gradual increase in sales and marketing. So as I say, except any false impact of profit, we believe that our profit -- and our profit as a percentage from revenue will be improved.

所以這是就收入而言。如果你改變（聽不清楚），我們預期底線會出現類似的趨勢。正如我們在電話會議中所說，我們希望保持類似的研發費用水平，並期望銷售和行銷逐步增加。因此，正如我所說，除了利潤的任何虛假影響之外，我們相信我們的利潤以及我們的利潤佔收入的百分比將會得到改善。

Second question is kind of on the same general trajectory. There's been an extremely large amount of volatility around the yen -- one of your anchor customers Rakuten is based out of Japan. Does that have any impact on your business?

第二個問題有點類似。日圓的波動非常大—您的主要客戶之一樂天就來自日本。這對您的業務有影響嗎？

No.

不。

And then relatively speaking, the R&D is expected to be fairly flat sequentially. I'm assuming in June to September, is the NRE also fairly flat?

相對而言，研發預計將環比持平。我假設在 6 月到 9 月期間，NRE 也相當平坦嗎？

We believe that in the third quarter, the NRE will be at a similar level and expect that on the first quarter, we will see decrease in NRE due to conclusion of existing programs.

我們認為，第三季度的 NRE 將處於類似水平，並預計第一季度，由於現有計劃的結束，我們將看到 NRE 下降。

I see. And then just broadly speaking, I would assume that there is some upward bias to the OpEx as a total in the third quarter. Is it reasonable to think that you're fairly flat sequentially on the revenues and therefore, a little bit of our bias that the EPS in the third quarter ought to be maybe a (inaudible) below the $0.20 number?

我懂了。從廣義上講，我認為第三季的營運支出總額存在一些向上的偏差。是否有理由認為您的收入連續持平，因此我們有一點偏見認為第三季度的每股收益應該（聽不清楚）低於 0.20 美元？

Yes.

是的。

Okay. Great. Wanted to go back to the commentary that you made on the call regarding end of life of competitive products in the field that are more appliance-based in nature. Obviously, the transition to 5G is a decision point for most companies. But is that causing an acceleration in that adoption rate that's meaningful? How large an EOL event is that for your competitors?

好的。偉大的。我想回顧一下您在電話中就本質上更多基於設備的領域中競爭產品的生命週期結束發表的評論。顯然，向5G過渡是大多數公司的決策點。但這是否會導致採用率的加速有意義呢？對於您的競爭對手來說，停產事件有多大？

Yes. So first of all, the end of life is not only related to 5G, but its most of the time it's rated. But also I want to emphasize that we see that also the -- our competitors' systems start to be end of life and connecting with the 5G is a real compelling for transition to our system. And we see that a lot of customers, also Tier 1 customer that's struggling with that -- with all the service assurance platform. And it's true that they try to manage, but it's eventually -- it's not working for them.

是的。所以首先，壽命的終結不僅與5G有關，而且大部分時候都是對其進行評級的。但我還想強調的是，我們也看到，我們競爭對手的系統也開始報廢，而與 5G 的連接對於過渡到我們的系統來說是一個真正引人注目的因素。我們看到很多客戶，包括一級客戶，都在與所有服務保證平台作鬥爭。確實，他們試圖進行管理，但最終——這對他們不起作用。

So sure, it will not work for -- forever and not reason for the next few years. So I think it's remarkably going to help us take more and more new customers in the logo.

所以可以肯定的是，它不會永遠有效，也不會在未來幾年內有效。所以我認為這將顯著幫助我們在商標中吸引越來越多的新客戶。

I would think that the installed base of those appliance-based systems are multiples of your revenue in terms of your share as being fairly low in the historical 4G base that the magnitude of that upgrade cycle could be very substantial over the next two to three years. Is that a fair way to look at this -- this transition?

我認為這些基於設備的系統的安裝基數是您收入的倍數，因為您的份額在歷史 4G 基數中相當低，因此在未來兩到三年內升級週期的規模可能非常大。這是看待這項轉變的公平方式嗎？

Yes, sure. So we've seen it. And again, our solution that is totally software based, cloud negative based. It's totally in line with this transition and address all the customer needs in this turnaround and I saw it myself a few times during the last quarter, these will be customers.

是的，當然。所以我們已經看到了。再說一遍，我們的解決方案完全基於軟體、基於雲端負數。它完全符合這種轉變，並解決了這次轉變中的所有客戶需求，我在上個季度親眼目睹了幾次，這些將是客戶。

Two last questions, and then I'll see the floor. The $50 million in orders that you announced -- previously announced in the first half. Do you think that the order rate in the back half of the year is likely to be similar? Or do you think that was a spike in wins and that there's more of a lull here short term?

最後兩個問題，然後我將見發言。你們之前宣布的 5000 萬美元訂單是在上半年宣布的。您認為下半年的訂單率可能會類似嗎？還是你認為這是勝利的激增，短期內更多的是平靜？

So Alex, as you know, during the second quarter, we renewed our eight-figure contract with Rakuten. And this is thanks to our strong incumbent relationship with them. And except Rakuten, we won a new deals, including 5G deals, the competitive interest that we secured then due to our strong (inaudible) performance, differentiated technology and established a relationship.

所以亞歷克斯，如你所知，在第二季度，我們與樂天續簽了八位數的合約。這要歸功於我們與他們之間牢固的現有關係。除了樂天之外，我們還贏得了新的交易，包括 5G 交易，由於我們強大的（聽不清楚）性能、差異化技術和建立的關係，我們當時獲得了競爭利益。

We remain focused on a profitable growth, and we are going to continue to push the pedal on it, because we believe that we are uniquely positioned to do it well. And we are confident that our differentiated solution is aligned with the key technology trends and we're well positioned to address our customers' needs. But it's very early to predict what will be the level of bookings during the next -- second half of the year.

我們仍然專注於獲利成長，並將繼續加大力度，因為我們相信我們擁有獨特的優勢，可以做好這方面的工作。我們相信，我們的差異化解決方案符合關鍵技術趨勢，我們有能力滿足客戶的需求。但現在預測明年下半年的預訂水準還為時過早。

So suffice to say, you've got a strengthening pipeline, but the exact closure dates are always difficult. I get it. Just wanted to go back to NetTalk for a moment -- what do you see is the trajectory of that business in terms of delivering incremental orders and backlog?

可以這麼說，你已經有了一條加強管道，但確切的關閉日期總是很困難。我得到它。只是想暫時回到 NetTalk — 您認為該業務在交付增量訂單和積壓訂單方面的發展軌跡如何？

Yes. So first, I think the network is based on gen AI. And as you know, gen AI today is very -- there's a big hype around the gen AI. You see it's not only in our areas but in all the areas of the industry today. And we think that we have unique value here, mainly the synthesis between our data and all the knowledge of network and new site that we synthesize together, I think that when we plan to new operator, (inaudible) and also on current customer, they want to see our vision and our cost leadership.

是的。首先，我認為該網路是基於人工智慧時代的。如你所知，今天的人工智慧非常——圍繞著人工智慧進行了大肆宣傳。您會看到，這不僅存在於我們的領域，而且存在於當今行業的所有領域。我們認為我們在這裡具有獨特的價值，主要是我們的數據以及我們綜合在一起的網絡和新站點的所有知識之間的綜合，我認為當我們計劃新的運營商（聽不清楚）以及當前的客戶時，他們希望看到我們的願景和成本領先優勢。

And I think that it's really advancing progressors in the sales because nobody will go and -- this new service assurance system without a new total leadership on AI and gen AI, mainly because all the information transition that telecom is going to -- mainly to cost money -- to save costs. So I think it will influence on our performance. For sure today, it's helped us in the new logos engagement. So I see it very, very important for us.

我認為這確實在銷售方面取得了進步，因為沒有人會去，而且這種新的服務保證系統如果沒有人工智慧和新一代人工智慧的新的全面領導，主要是因為電信將要進行的所有資訊轉換主要是為了成本錢——節省成本。所以我認為這會影響我們的表現。毫無疑問，今天它對我們的新標誌參與度有所幫助。所以我認為這對我們來說非常非常重要。

This concludes the RADCOM Limited second-quarter 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.

RADCOM Limited 2024 年第二季業績電話會議至此結束。感謝您的參與。您可以繼續並斷開連線。