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spk08: Good morning, everyone, and welcome to the Audio Code's fourth quarter and full year 2023 earnings conference call. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions after the presentation. If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your hosts Mr. Roger Tuchin, Investor Relations. You may begin, Roger.
spk00: Thank you, Operator. Hosting the call today are Shabtai Adlersberg, President and Chief Executive Officer, and Niran Baruch, Vice President of Finance and Chief Financial Officer. Before we begin, I'd like to remind you that the information provided during this call may contain forward-looking statements relating to audio codes, business outlook, future economic performance, product introductions, plans, and objectives related thereto, and statements concerning assumptions made or expectations as to any future events, conditions, performance, or other matters are forward-looking statements as the term is defined under U.S. federal securities law. Forward-looking statements are subject to various risks and uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties, and factors include, but are not limited to, the effect of global economic conditions in general and conditions in AudioCode's industry and target markets in particular, shifts in supply and demand, market acceptance of new products and the demand for existing products, the impact of competitive products and pricing on AudioCodes and its customers' products and markets, timely product and technology development, upgrades, and the ability to manage changes in market conditions as needed, possible need for additional financing, the ability to satisfy covenants in the company's loan agreements, possible disruptions from the pandemic on a business and results of operations, the effects of the current terrorist attacks by Hamas, and the war and hostilities between Israel and Hamas and Israel and Hezbollah, as well as the possibility that this could develop into a broader regional conflict involving Israel with other parties may affect our operations and may limit our ability to produce and sell our solutions. Any disruptions in our operations by the obligations of our personnel to perform military service as a result of current or future military actions involving Israel and other factors detailed in audio codes filings with the U.S. Securities and Exchange Commission. Audio codes assumes no obligation to update this information. In addition, during the call, AudioCodes will refer to non-GAAP net income and net income per share. AudioCodes has provided a full reconciliation of the non-GAAP net income and net income per share to its net income and net income per share, according to GAAP in the press release that is posted on its website. Before I turn the call over to management, I'd like to remind everyone that this call is being recorded and archived webcasts will be made available on the investor relations section of the company's website at the conclusion of the call. With all that said, I'd like to turn the call over to Shabtai. Shabtai, please go ahead.
spk06: Thank you, Roger.
spk02: Good morning and good afternoon, everybody. I would like to welcome all to our fourth quarter and full year 2023 conference call. With me this morning is Niran Baruch, Chief Financial Officer and Vice President of Finance of Alicode. Niran will start off by presenting a financial overview of the core. I will then review the business highlights and summary for the core and discuss trends and developments in our business and industry. We will then turn it into the Q&A session.
spk06: Niran.
spk07: Thank you, Shabtai, and hello, everyone. Before I start my formal remarks, I would like to remind everyone that in conjunction with our earnings release this morning, We will post shortly on our investor relations website an early supplemental deck. On today's call, we will be referring to both GAAP and non-GAAP financial results. The earnings press release that we issued earlier this morning contains a reconciliation of the supplemental non-GAAP financial information that I will be discussing on this call. We will be comparing our fourth quarter 2023 results to the prior quarter as we believe it provides a better gauge of our financial performance. Revenues for the fourth quarter were $63.6 million, an increase of 3.2% over the $61.6 million reported in the third quarter of the current year. Full year 2023 revenues were $244.4 million a decrease of 11.2% over the 275.1 million reported in 2022. Services revenues for the fourth quarter were 30.9 million accounted for 48.6% of total revenues. On an annual basis, services revenues were 120.4 million an increase of 8.7% over the 110.8 million reported in 2022. The amount of deferred revenues as of December 31st, 2023 was 82.8 million compared to 77.8 million as of September 30th, 2023. Revenues by geographical region for the quarter were split as follows. North America, 44%, EMEA, 37%, Asia Pacific, 14%, and Central and Latin America, 5%. Our top 15 customers represented an aggregate of 61% of our revenues in the fourth quarter, of which 46% was attributed to our nine largest distributors. Gap results are as follows. Gross margin for the quarter was 66.7% compared to 66.5% in Q3 2023. Operating income for the fourth quarter was 7.2 million or 11.4% of revenues compared to 5.8 million or 9.4% of revenues in Q3 2023. Full year 2023 operating income was $14.4 million compared to operating income of $31.3 million in 2022. Net income for the quarter was $3.7 million or $0.12 per diluted share compared to $4.3 million or $0.14 per diluted share for Q3 2023. The decrease was driven by $1.4 million in exchange rate differences expenses related to the revaluation of assets and liabilities denominated in non-dollar currencies compared to $767,000 in exchange rate differences income in the previous quarter. This shift in exchange rate differences resulted in a $0.07 negative impact on GAAP earnings per diluted share, quarter over quarter. Full year 2023 net income was $8.8 million, or $0.28 per diluted share, compared to $28.5 million, or $0.88 per diluted share, in 2022. Non-GAAP results are as follows. Long gap growth margin for the quarter was 67.6% compared to 67.3% in Q3 2023. Long gap operating income for the fourth quarter was 10.7 million or 16.9% of revenues compared to 9.6 million or 15.5% of revenues in Q3 2023. Full year 2023 non-GAAP operating income was $28.9 million compared to operating income of $47.2 million in 2022. Non-GAAP net income for the fourth quarter was $8.9 million, or $0.28 per diluted share, compared to $8.3 million, or $0.25 per diluted share, in Q3 2023. Full year 2023 non-GAAP net income was $25 million, 77 cents per diluted share compared to $45 million or $0.35 cents per diluted share in 2022. At the end of December 2023, cash, cash equivalents, bank deposits, marketable securities, and financial investments totaled $106.7 million. Net cash provided by operating activities was $9.3 million for the fourth quarter of 2023 and $14.9 million for the year 2023. Day sales outstanding as of December 31, 2023, were 98 days. In December 2023, we received court approval in Israel to purchase up to an aggregate amount of $20 million of additional ordinary shares. The court approval also permits us to declare a dividend of any part of this amount. The approval is valid through June 18, 2024. Earlier this morning, we also declared a cash dividend of 18 cents per share. The aggregate amount of the dividend is approximately $5.5 million. The dividend will be paid on March 6, 2024 to all of our shareholders of the record at the close of trading of February 2024. During the quarter, we acquired 595,000 of our ordinary shares for a total configuration of approximately $6.3 million. As of December 31st, 2023, we had $19.2 million available under the approval of the repurchase of shares and all declaration of cash dividends. Our guidance for the full year 2024 is as follows. We expect revenues in the range of $252 million to $267 million and non-GAAP diluted net income per share of $1 to $1.15. I will now turn the call back over to Shabtai.
spk02: Thank you, Niran. We are pleased to cap off 2023 with a solid four score results and with healthy growth in the strategic areas of our business, namely UCaaS and customer experience. At the same time, we've seen important accelerated development and a nice rise in opportunities relating to conversational AI, which grew more than 50% year over year and is quickly becoming a new growth engine for success in the areas of Microsoft Teams and CCaaS. Altogether, when we combine the progress in our operation in the UCaaS customer experience and conversational AI segments, it is clear that our focus on the enterprise space, where business reached a level of 90% of company revenues for the quarter and the full year, starts to bear fruit and drive continued business expansion in the enterprise space going forward. With continued focus in 2023 on shifting our business model into subscription in recurring sales and the shift to higher margin cloud software solutions and services, we are making significant progress in our transformation to become a software and services company. As in previous years, services revenue evolved to contribute about 50% of our business. We have built throughout the past four years a profitable managed services business exiting 2023 with 50% growth year-over-year, enriching a level of 48 million annual recurring revenues for our live business. We expect continued live business growth in 2024, which currently is planned to grow on the order of another 40%. As a result, we've made significant progress in our strategic initiative to increase our software and service revenue mix to nearly 70% in 2023, up from 60% in 2022. Shifting our focus in 2023 to AI-first voice-related software and application, and more so for 2024, we're now adding a new strong leg in form of software-as-a-service solution in the conversational AI space, which should further drive expansion for our business and profits in coming years. To recap on our success in the past 15 years, we've built a very strong voice mode position in the industry. Our partnership with leading application vendors such as Microsoft in the UCA space and Genesis in the customer experience market is a testament to our success. Said success has been focused in the past on voice network infrastructure, and we became top connectivity player in both the gateway space and the enterprise SBC market. We are now shifting our focus towards AI-first business voice application for the UCAS and CCAS markets, which represent both huge opportunity in terms of tents and ultimately hundreds of millions of seats to serve. Combining our assets and capabilities in the areas of telephony, voice networking, and infrastructure with the new emerging conversational AI solution, we believe we are creating a rather unique position in the industry which we believe would be hard to compete with and or replicate by competitors. In 2023, we have already seen good signs of growing fast in this space, which would further pave the future for business expansion. Another key accomplishment in 2023 relates to our growth in the customer experience market. We are now investing in two key areas. First one is taking advantage of our strong offering of voice infrastructure for the customer experience networks and deployed solutions. We saw much success working with leading CX vendors in helping to transform legacy on-prem solution, which are gradually becoming less efficient and progressing, to new evolving cloud-based modern CCaaS solutions. In this space, we saw much success in our live CX services and enjoyed growth of about 20% year-over-year for the full year. Secondly, we saw huge success related to the penetration of the customer experience market, winning new opportunities with our VOCA CAC product, our new leading initiative for AI-first, Azure-native CK solution for the Microsoft Teams environment. We saw initial large wins with enterprise customers in North America, among them with one of the largest universities in the U.S., and the second one Fortune 500 global manufacturer. In both cases, a VOCA CIC solution has displayed an incumbent team certified CCAS vendor, which serves both as proof points that VOCA CIC is ready for prime time. We expect this initiative to further increase CCAS market penetration in 2024 and beyond. All in all, we ended full score in the CX area with record business level of over 40% year-over-year and close to 20% for the full year. Exit 2023, customer experience revenue now represents more than 20% of our business going forward. As such, we have high confidence in the customer experience segment, emerging a second major growth spiel for our business in addition to our Microsoft Teams UC voice success. Now to UC. Within enterprise, our UCAS business continued to perform well. Business in the Microsoft UC grew 5% year-over-year in the full score. Full-year Microsoft UC business increased 7%. Microsoft Teams business grew 10% year-over-year for the core and 13% for the full year. At the end of 2023, Teams business is now more than 95% of the Microsoft business. SkySoft business revenue continued to decline in the full score by with related revenue declining above 40%. For the full year, they declined approximately 8 million or 55%. So exiting 2023, Skype for Business declined to less than 1 million in the full score, which means that Skype for Business revenue will no longer weigh on the markets of business going forward. And thus, we should see the full impact of Teams growth in terms of expansion. On the services side, we continue to experience continuous strong momentum for our LD Codes live managed services business, mainly in the Microsoft Teams environment, with annual recurring revenue growing 50% year-over-year, ending the core at $48 million, consistent with our expectations. On the SVC product line front, we enjoyed a very strong full score, ending above $35 million of revenue for the full year, We ended the year with revenue of close to $130 million. In December 2023, research firm Omdia ranked AdiCode as the market leader for enterprise SBCs for the third quarter of 2023 with a worldwide revenue share of 23.2% in its enterprise SBC and voice over IP gateway market tracker. Our MediantSBC line is key in winning Microsoft Teams direct route business. Again, getting back to where I stopped, our MediantSBC line is key in winning Microsoft Teams direct route business. connectivity in more market areas such as Zoom Phone, Genesis Cloud, CX, Microsoft Dynamics 365, and other leading UCS and CCS solutions. While growing nicely on the enterprise space, we have witnessed rather soft business in the service provider space. During the fourth quarter, business in this space declined above 50% year-over-year and over 40% for the full year. With economic slowdown across the board in 2023, The effect of growing inflation coupled with high interest rates has affected materially sales of hardware-related products, which in return had an impact on sales of equipment gear provided to service providers worldwide. It is important to understand that, though, the longer-term plans, and definitely with the shift we are making towards more software and services, this decline was anticipated to occur over the period of the next three to five years. Due to the accelerated economic slowdown in early 2023, we saw acceleration of this trend and thus have seen major impact already in 2023 which would have occurred anyway in coming years. As such, we believe that the pressure and impact on our growth from the decline in the service provider space early 2023 will be substantially relieved in 2024 and beyond. While visibility in this segment remains limited, Revenues did stabilize sequentially in the quarter, which may point to a better 2024. On the operations side, I'm glad to report solid progress in non-GAAP gross margin, which has recovered from early first quarter with 62.1% in 2023 to reach in fourth quarter 67.6%. Coupled with disciplined expense management, Non-GAAP operating margin has also improved dramatically from 4.9 earlier in the year to reach 16.9% in the core, which is in the range we define for our long-term financial model. With continued focus on shifting our business model into subscription and recurring sales and shift to higher margin cloud software solutions, we expect operation margin to keep inching forward in coming years. On the cash flow side, we have witnessed a very successful quarter. Operating cash flow grew to $9.3 million per quarter and $14.9 million for the full year. Regarding edge count, all in all, we are fully disciplined in hiring, mainly in our networking business. However, we are adding a select position in the growing areas of customer experience and conversational AI. We ended the full score with 950 employees compared to 938 employees in the previous score. As for the guidance that Neuron provided earlier, we are initiating 2024 revenue guidance of 252 to 267 million for the full year. We anticipate mid-range revenue growth of about 6% compared to 2023. Non-GAAP EPS guidance of $1 to $1.15, that anticipating mid-range earning growth of about 40%. The top-line outlook builds in continued conservative enterprise spending environment and assumes modest growth in networking and high double-digit percentage growth in concession AI backed by ongoing healthy pipeline funnel. As the key wins in the core, We've signed a 36-month live contract with one of the world's largest PBX companies, enabling the vendor to use Audicode as a defector solution when provisioning its end customers with Microsoft Teams Voice. We've signed a 36-month contract with one of the largest U.S. universities, providing VOCA CAC, Azure Native Teams Certified Contact Center solution, and Smart App Compliance Recording, as competitive displacement of a team's CKF incumbent. We also signed a 60-month contract with Fortune 500 Global Manufacturer, providing VOCA CAC, Azure Native Team Certified Contact Center solution, and SmartTab compliance recording. Again, it's a competitive displacement of a team's CKF incumbent. To wrap up my introduction, we had 34 score and strengths across the board in strategic areas of our business, having navigated well in an ongoing difficult market conditions. We are gaining market share against our primary competitors, having scored multiple landmark deals in both the UC and the CX space, which serves as validation of the successful execution of our land and expense strategy. This sector of capital with core business leading indicators such as SpotLine remaining robust gives us conviction that we have the right strategy in place and on the right path to execute on our commitment of returning to revenue growth and driving operating margin improvement in 2024. With increased focus and investments in technologies and services for the UCAS customer experience and concession AI markets, backed by strong live booking mainly in the Teams Live CX and VOCA CAC, we believe we are on the right path to execute on our plan to achieve revenue growth and drive improved profitability in 2024. And with that, I've concluded my introduction. I'd like to move over to the operator.
spk08: Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please hold a moment while we poll for questions. Thank you. Your first question is coming from Ryan McWilliams of Barclays. Ryan, your line is live.
spk05: Hey, guys. This is Damon Cobbin on for Ryan McWilliams. Thanks for taking the question. How does your pipeline visibility now compare to what it was in 3Q? Were there any green shoots that you could point to for improving demand trends leaving the quarter?
spk06: Ryan, this is Shep. I'm sorry.
spk02: You know, it was hard to hear. Can you please repeat the question?
spk05: There's just a question on your pipeline visibility, how that compares now to the end of 3Q at the last earnings call, and just if you were seeing any green shoots leaving the quarter.
spk02: Yeah, well, largely I would say that there's not much difference, although I must point out that usually full score is the strongest score in the year. I think that in 2023 that phenomena has kind of, you know, been emphasized because budgets were less used earlier in the year due to the slowdown and delay of projects. So I think we enjoyed a strong fourth quarter. I therefore expect that, you know, first quarter will be just like in many previous years, will be probably down like two or three percent. But all in all, the pipeline looks good. We have, I didn't mention that, but we had a very high score of bookings done in 2023 compared to 2022. So all in all, we believe we're fairly effective. I would also add one more point, which I have not mentioned in my introduction, that we do intend to add in the first half of 2023 new software as a service additions, new cloud multi-tenant solutions recording services in the form of compliance recording and meeting space. And we believe that our live platform will become substantially more competitive. We do not see any close competitors with such capabilities. All in all, we believe that pipeline and visibility for 24 should be good.
spk05: Thank you. And then how did CCAS demand fare in the quarter and are you seeing increased attention for buyers on Boys AI? Thanks.
spk02: Yes, definitely. Actually, we do see a rise in number of opportunities in the CCAS space for our VocalCIC product. We actually, as I've mentioned, won two large deals, one that's close to a million, one that's you know, above half a million in North America, we have a range of more opportunity coming up. Also, we'll have we'll have a and we plan on an analyst day in about a month from today or more six weeks from today, dedicated primarily to vocal CAC. And obviously, we will present that at Enterprise Connect in March. So a lot of activity in the CX space.
spk05: Got it. Thanks, Chetai. I'll go back in the queue. Thank you, Ryan.
spk08: Thank you very much. Our next question is coming from Greg Burns of Sidoti & Company. Greg, your line is live.
spk03: Morning. The growth rates from Microsoft have slowed a little bit from where they were maybe a year ago. Can you just talk about what's driving that? Is it mix with live, um, getting greater traction or is it macro? Because it seems like in the CX market, you're still posting solid, um, solid growth. They are a little stronger than what you're seeing on the UCAS side of the business. Thank you.
spk06: Right. Yeah.
spk02: I think your observation is correct. Well, I think that the, the, the moderate of growth results partly, A, as we all know from the slowdown in global economics, so projects have been pushed, etc. However, our specific business in the space relates directly to the success of what we call Microsoft Teams Phone, which is the connection of the enterprises to the public network. Now, we believe that up to now, there was limited access a benefit from adding the phone functionality over other functionalities of Microsoft Teams such as chat, presence, conferences, etc. We do believe that in 2003 we started to see the impact of conversational AI on the use of Teams phone. We have seen obviously generative AI technology being put to work Our solutions, including meeting insights, is making use of generative AI, which in order to provide benefits in the Microsoft phone space, you really need to have a Teams phone license. Similar, you know, the introduction of Microsoft of Copilot and Teams Premium, and you can see a lot of more applications. So once there will be new business voice applications that will provide value, on top of the team's phone license we will start to see increase um in our business and we believe that we've already seen sense for it at the end of 23 and we believe that going forward with the um uh i would say uh emerging um adoption of um meeting insights uh recording of meetings um you know co-pilot uh we will see definitely arise so so we believe that that's kind of a belly in 2023, but we should see and expect to see growth coming back in 2024 and beyond.
spk03: Okay, so what are the penetration rates of voice licensing in the Teams environment now? Is it still less than 15% or 10%?
spk02: Yeah, well, the last numbers that, you know, I remember being caught were that around July of 2023, I believe the number that was quoted was about 17 or 18 million PSN breakouts. That's just, I mentioned 17 or 18 million. The runaway is obviously substantially larger, right? Microsoft 365 paid licenses are close to 400 million. Teams as a whole, you know, without the phone is nowadays quoted to be at least $80 million. So there's a huge, huge runway expected. So, again, when there will be more applications that drive value on top of the Teams phone license, I think you'll see, you know, increase in number of seats using Teams phone.
spk03: Okay. And, Niran, the cash conversion for this year, do you expect it to be than what has been the last two years?
spk06: Yes.
spk07: You saw the operating cash flow at the fourth quarter, which was close to $10 million, an improvement from previous few quarters, and we believe the operating cash flow for 2024 will be better than in 2023. Okay, great. Thank you.
spk08: Thank you very much. Your next question is coming from Ryan Koontz of Needham and Company. Ryan, your line is live.
spk04: Thanks for the question, and nice quarter on the margins, particularly there. Really great to see that. I hope we can circle back to Contact Center and your CX there. You talk about a really nice inflection to 40% growth. Can we drill in there? What's behind that? Is it product improvements? Is it you know, focus on go-to-market? Is it, you know, some of your key partners seeing inflection on sales growth? Any of those would be helpful. And just a quick follow-up. Can you clarify what those wins were again? The audio was breaking up a little bit on the, I think, the two CX wins you mentioned. Thank you.
spk06: Right. Thank you, Ryan.
spk02: So, on the CX space, as I've mentioned, there are two key activities. One which is, you know, supporting in deployment of voice networks. The world of contact center is moving from on-prem to cloud. There's a need to basically shift from the old networks to new networks which are global in nature, different architecture. So we are providing usually SBC gear and managed services and more components in order to enable the transition from on-prem to CCaaS. The large growth in CX is related to participating in several such large deployments of large CX vendors. So take a leader in CX who now wins against an incumbent that's kind of legacy and less powerful. When you move from an old you know, supplier architecture that's on-prem to a new cloud-based vendor. There's a whole huge network. You're talking about hundreds of locations around the world. And in order to achieve that with high quality, you know, high security and efficiency, you know, our SBCs and managed services like CX come into play. So that explains, you know, the success we enjoy. And it's The trend of moving from on-prem to cloud continues. I believe that we will continue to win such projects. As to the two wins that I've mentioned, so the first one is, you know, a very large university in the U.S. who used our VOCA CAC in our compliance recording, you know, to replace, you know, incumbent's solution at that time. that specific transaction was close to a million in booking. Second one with a large manufacturer or one of the S&P 500 companies who again chose to use our Vocal CAC and replace an incumbent certified solution in the Microsoft Teams space.
spk04: All right, great. Thanks. That's somewhat helpful. I guess prem to cloud is not really a new trend. It's been going up for many years. So any commentary on why you're specifically seeing this inflection of growth for audio codes in terms of your efforts in that market, which has been humming along pretty healthy for years?
spk02: Yeah, it's definitely a healthy market, and we've actually seen expansion in that market. segment actually you know we just discussed you know prospect for the first quarter of 2024 it seems that you know it continues I believe that with probably with you know more maturity and reliability of contact center operation from the cloud that may become an incentive for end users to move also I would add that usually we're talking about contracts that last several years and usually when such a contract is becoming to an end, this is the time when transition from on-prem to cloud will occur. So that is an ongoing process and as the world of CKS matures and becoming more successful, we believe that we'll see more projects like this.
spk04: Great. That's real helpful. Just a quick follow-up. You haven't talked about Zoom phone in a while. Any quick commentary on Zoom in terms of their progress and with their with their phone product and your selling opportunity? Are you seeing much traction with live there?
spk02: Well, we do continue to work with them. We had enjoyed, you know, few opportunities, but at this stage, I would not say that we believe zoom will become a growth engine for us in the UK space.
spk04: All right, I'll pass it on. Thank you. Thank you.
spk06: Sure.
spk08: Thank you very much. Your next question is coming from Samad Samana from Jefferies. Samad, your line is live.
spk01: Hey, guys. This is Billy Fitzsimmons on for Samad. Maybe backing up and taking a higher level view here, can you guys remind us what you're seeing on the macro front? How did things like lead times and close rates evolve over the course of 2023, and did they get better or worse in the fourth quarter? any customer verticals looking particularly strong or weak at this point? And then I want to double click on what's kind of assumed on macro in terms of the 2024 guide?
spk02: Right, actually, it's a great question for CEOs and CFOs. You know, 2024 is still, you know, kind of foggy. We have not seen any any dramatic change from the end of 2023. We've seen, you know, good pipeline, as I've mentioned before, Q4 was strong, but it's, you know, the last quarter in a year, so that's kind of expected. So no change. At this stage, it's hard to make a call as to, you know, whether 2024 will be substantially better or better than 2023. But all in all, I think, you know, for us as a company, you know, while we have put aside the whole issue of service providers, which has impacted our operations early 2023, we're glad to focus on contact center, which is growing conversational AI, which is very fast growing these days, other properties and also your cats, which again, we believe that conversational AI will contribute to the growth of our business. So all in all, we believe enterprise space will be good and no other indication at this stage.
spk01: Got it. And then it's probably still early, but on the strong conversational AI bookings demand, can you relay some of the initial feedback you're seeing and hearing from customers? Any color on the initial wins? And how should we think about the materialization of that offering on the revenue line going forward?
spk02: Right. So we do focus, again, I mean we live in a world where on one end there are some very strong, big technology providers such as Microsoft, Google and AWS on one end. So lots of technology out there in the cloud. On the other end you have every company, every successful enterprise company you know, adopting fast, you know, AI to improve its, you know, operation productivity. So in the middle, you need solutions that will tunnel the AI gear to those end users. Usually that's done by applications such as, you know, you can take Copilot, you can take Salesforce, you can take other unknown Google application. But then there are, you know, specific applications implementation which required a combination of a lot of those technologies. So I'll give you an example. We have implemented a very important solution for an emergency service that needs to pick up cars in real time, you know, record them, transcribe them, derive insights from them, and act upon. apply automation on top of it and display it and send alerts. So you're basically talking here about a new breed of applications that will be AI-first enabled and which combine a lot of areas, including telephony, networking, and cognitive services. And this is where we shine. When we bring a combination of all of these technologies that we have, developed around the years, right? There's another, you know, these days with hostility everywhere in the world, there's a need, increased need to understand, you know, what's being said, where, for what purpose, and act upon it. That is a rising application in many areas, and that is something that has budgets for. So those are the type of solutions that we see currently.
spk06: Perfect. Thanks, guys.
spk08: Thank you very much. We appear to have reached the end of our question and answer session. I will now hand back over to Shabtai for any closing comments.
spk06: Thank you, operator.
spk02: I would like to thank everyone who attended our conference call today. On the heels of recovery in our business in the second half of 2023, We have high confidence in our ability to successfully expand our business in 2024 and the following years. We look forward to your participation in our next public conference call. Thank you very much. Have a nice day. Bye-bye.
spk08: Thank you very much, everyone. This does conclude today's conference. You may disconnect your phone lines at this time. Have a wonderful day. Thank you for your participation.
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