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spk08: Good morning, everyone, and welcome to AudioCode's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode, and the floor will be open for questions after the presentation. If anyone should require operator assistance during the 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 host, Mr. Roger Tuchet. Roger, over to you.
spk04: Thank you, operator. Hosting the call today are Shabtai Allisburg, President and Chief Executive Officer, and Naran Baruch, Vice President of Finance and Chief National 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 effects of global economic conditions in general and conditions in audio codes 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 audio codes and its customers' products and markets, timely product and technology development, Upgrades in the ability to manage changes in market conditions as needed. Possible need for additional financing. The ability to satisfy commitments in the company's loan agreements. Possible disruptions from acquisitions. The ability of audio codes to successfully integrate the products and operations of acquired companies into audio codes business. Possible adverse impact of the COVID-19 pandemic on our 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 disruption 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 Odigo's violence with the U.S. Securities and Exchange Commission. AudioCodes 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 archive 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 Shata.
spk03: Shata, please go ahead. Thank you, Roger.
spk02: Good morning and good afternoon, everybody. I would like to welcome all to our first CORE 2024 conference call. With me this morning is Niran Baruch, Chief Financial Officer and Vice President of Finance of Audicodes. Niran will start off by presenting a financial overview of the Corps. I will then review the business highlights and summary for the Corps and discuss trends and developments in our business and industry. We will then turn it into the Q&A session. Niran?
spk01: 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 earnings 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. Revenues for the first quarter were $60.1 million, an increase of 1.5 percent over the $59.2 million reported in the first quarter of last year. Services revenues for the first quarter were $31.5 million, up 3.3 percent over the year-ago period. Services revenues in the first quarter accounted for 52.5 percent of total revenues. The amount of deferred revenues as of March 31, 2024, was 80.5 million, compared to 77.6 million as of March 31, 2023. Revenues by geographical region for the quarter were split as follows. North America, 43 percent. EMEA, 38 percent. Asia Pacific, 14%, and Central and Latin America, 5%. Our top 15 customers represented an aggregate of 50% of our revenues in the first quarter, of which 38% was attributed to our 11 largest distributors. Gap results are as follows. Gross margin for the quarter was 64.4%, compared to 61.7% in Q1, 2023. Operating income for the first quarter was 3.3 million or 5.5% of revenues compared to operating loss of 0.8 million or 1.4% of revenues in Q1, 2023. Net income for the quarter was 2.1 million or 7 cents per diluted share compared to net loss of 0.2 million or $0.01 per diluted share for Q1 2023. Non-GAAP results are as follows. Non-GAAP gross margin for the quarter was 65.2% compared to 62.1% in Q1 2023. Non-GAAP operating income for the first quarter was $6.3 million or 10.5% of revenues compared to 2.9 million or 4.9% of revenues in Q1 2023. Non-GAAP net income for the first quarter was 5.2 million or 17 cents per diluted share compared to 2.7 million or 8 cents per diluted share in Q1 2023. At the end of March 2024, cash, cash equivalents, bank deposits, marketable securities and financial investment total 106 million. Net cash provided by operating activities was 15 million for the first quarter of 2024. Purchase of property and equipment was 6.8 million in the quarter, significantly higher than historical periods related to this old improvements of our new corporate headquarter in Israel. We expect CapEx to remain elevated in the second quarter, after which we expect this line item to return to historical levels. Day sales outstanding as of March 31st, 2024 were 100 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. During the quarter, we acquired 302,000 of our ordinary shares for a total consideration of approximately 3.6 million. As of March 31st, 2024, we had 10.2 million available under the approval for the repurchase of shares and or declaration of cash dividends. On February 6th, 2024, we declared a cash dividend of 18 cents per share. The dividend in aggregate amount of approximately 5.5 million was paid on March 6th, 2024. We have recently embarked on the second phase of cost reduction plans that involves reduction our ad count by approximately 6%. This program is expected to result in $6 million annualized cost saving with full run rate expected in the beginning of the third quarter 2024. We are updating our guidance for full year 2024 as follows. We now expect revenues in the range of $240 million to $250 million, and non-GAAP diluted net income per share of $0.85 to $1. I will now turn the call back over to Shabdai.
spk03: Shabdai Shabdai Thank you, Niran.
spk02: Our first quarter 2024 results were highlighted by healthy revenue growth of 1.5% year-over-year, and executing on our strategic plan to evolve the company to become a leader in voice services in the UCaaS and CCaaS markets. We continue the transition of our business to a recurring revenue model and transformation from a network equipment vendor to software and services company. On the other end, while growing nicely in strategic business lines such as Microsoft Teams, the customer experience market, and conversational AI applications, we saw continued decline in our legacy gateway networking business in the first quarter, 24, similar to trends seen in 2023. As reported by other communication equipment vendors, we believe that the high interest rate environment continues to have an impact on muted business spending, especially when it relates to hardware products. These two factors, transitioned to a recurring business model, enlarged an earlier-than-anticipated decline in legacy gateway business of above 25% year-over-year, led to sequential quarterly revenue decline of 5.5%, about 2.5% lower than anticipated earlier in the year. Coming back to discuss the positive developments in the quarter, We enjoyed a very substantial positive cash flow from operations, 15 million, and strengths in our live managed services operation in which annual recurring revenue grew 45% in the core. We have also enjoyed increased services backlog. These developments in the core provide us with a conviction about our gross prospects and puts us solidly on a track to successfully transform efforts to focus on software and services in our markets. In terms of key growth areas, our first quarter Microsoft and Teams business grew 8% and 9.6% respectively year-over-year. Customer experience business grew 15% year-over-year and conversational AI bookings grew around 50% year-over-year. Another sign of continued strength in core areas where we focus is the market increase in our pipeline or created opportunities. For example, within Microsoft ecosystem, which makes up close to 60% of our business, our pipeline reached an all-time record, up over 30% year-over-year and over 20% sequentially. We believe the secular trend of unified communication and customer experience convergence is cementing our already strong competitive moat in UC Voice, and driving additional opportunities in customer experience within the Microsoft Teams ecosystem. We are now the leading Microsoft Teams phone partner to lead a, quote unquote, complete Microsoft Teams calling and contact center combined offering. A lot of you already know that we are the number one Microsoft Teams phone partner, enabling a significant share of the current 20 million plus Teams phone PSTN seats. What makes it less clear I'm sorry, what may be less clear is that VOCA CAC, our Teams-based contact center as a service platform, is now recognized to be best in class, having recently been awarded the best Microsoft Teams contact center solution by CX today, based on majority votes of customer experience industry experts. Our unique Teams-based UCCX offering is increasingly getting more market awareness. It's evidenced by the buzz we received about our complete Microsoft Teams calling and contact center offering at Enterprise Connect in March 2024, one of the largest UCCX industry trade show events. Regarding the weakness in top line in the core and why we believe it is short-term in nature, I'd like to know the following. Ongoing software spending due to macro uncertainty and continued elevated interest rates likely caused enterprises and service providers to underspend in the context of annual budget in the early part of the year. The software spending impacted mainly legacy and hardware portions of our business, where sales of legacy products such as gateways declined above 25% year over year. We believe that this is a similar phenomenon to what we So in 2023, in which our first quarter, 2023 gateway business will slow out of the gate with stronger spending to come over the course of the year as customers look to put unallocated annual budget to work. As discussed, growth in strategic major business such as Microsoft, customer experience, and conversational AI continue to be healthy. We believe that our growth in software and services and then conversational AI related solution, which grew again above 50% year-over-year, should fully offset declines in legacy pieces of the business starting in 2025. I should point out that 2024 is the year in which we are continuing strong growth in our live minutes for Microsoft Teams, which grew around 45% year-over-year in the core. In addition, with our new VocaCIC solution, enabling us to be the first in the industry to offer a complete Microsoft Teams calling and contact center combined offering. We're looking to proactively cross-sell our subscription-based Vocal CAC Teams certified CCaaS to already significant Microsoft Teams installed base of customers. The other factor contributing to muted growth at this stage is the shift in our revenue model, which trends increasingly towards recurring revenue growth. in the historical CAPEX model. This obviously impacts our new-term revenue growth and creates headwinds. I should mention, though, that this shift is clearly accretive to our long-term top-line growth. Shifting gears to services, services revenue overall accounted for 52.5% of revenues and grew 3% year-over-year on top of strong services revenue generation in the year-ago period. Importantly, our professional services booking remains strong and up 24% year-over-year, which portends re-acceleration of services growth over the balance of the year. What has fueled our ongoing momentum in services is headlined by our live subscription business, which ended first quarter at 53 million annual recurring revenue. putting us on track to achieve our guidance for the year of 64 to 70 million, exiting 2024. Another positive development on the live services front is the emergence of new live CX services for the past two, three quarters. This new area of activity for us in the CX market seems to represent growing potential connected to the continued shift of enterprises to CCaaS in the CX industry. Other positive developments in the quarter were continuous strength in our SBC product line, which grew 15% year-over-year, and where we kept our top leading position with more than 25% market share in enterprise space. Most notably, growth came mainly from increasing our SBC managed services, which should further cement our strength in this market. And then we saw very nice progress in the conversation AI business, live bookings grew about 50%. And basically, we see that growth in the future. reference our profitability metrics. Our first quarter 2024, non gap PPS was 17 cents, which was below our internal budget, primarily on lower revenues. A non gap gross margin in the core was came at 65.2%, lower than the 65 to 68 long-term range, and compared to 67.6% in the first quarter of 2023 and 62.1% in the first quarter of 2023. The sequential margin decline is primarily attributable to less favorable product mix. First quarter non-GAAP OPEX was $32.9 million, in line with our planning and expectation. Net cash provided by operating activities was $15 million. We ended the quarter with ad count of 959 employees, up from 950 employees in the first quarter, and compared to 978 employees in the first quarter of 23. We expect our ad count figures to come down from current levels. It's our second phase of cost reduction. initiative takes effect in second and third quarter 24. Now to budget streaming. Let me discuss steps we have already initiated and are taking as part of our long-term commitment to drive significant margin expansion and operating leverage. In the first quarter of 24, operating expenses were in line with the original budget for the year. Anticipating now further industry muted business spending in 2024 and continued transition in our revenue model from CapEx into recurring business model, we took budget cut steps to adjust our operation expenses to lower forecast of revenues in 2024. We've recently initiated the second phase of the cost reduction measures that we previously communicated a few quarters ago. This current phase covers at-count resolution of more than 6%, primarily related to R&D functions dedicated to legacy areas such as gateways and multi-service administrators. Once fully implemented, which is expected to occur by mid-third quarter 2024, this program is expected to yield 1.5 million of quarterly run-run savings or 6 million annually. This action does not impact R&D spending on core strategic areas of our business, such as Microsoft Teams, CX, and conversational AI, which continue to be robust. In fact, while reducing position in legacy-related R&D, we kept hiring and growing our R&D, product management, marketing, and sales resources in our live and conversational AI operations. On the guidance front, As Niran suggested, in view of the continued decline in our legacy gateway revenue and market outlook for the rest of 2024 in our market segments, we are updating our 2024 guidance as earlier stated by Niran. We believe that the continued shift to software and services coupled with cost-cutting measures we took already in first quarter 24 should allow us to continue to expand our margins and grow earnings by about 15% compared to 2023. The top line outlook assumes continued success in our UCaaS, CCaaS, and conversational AI operations in line with the growth that we have demonstrated already throughout the whole of 2023 and during the first quarter of 2024. In terms of our key business line, I'll touch a few areas. Microsoft, as discussed previously, Microsoft business increased 8% year-over-year in the first quarter. Microsoft Teams business grew higher, reaching 9.6% growth year over year. Sky for Business continued to decline close to 20% to a rather very low level of about $1 million a core. As such, solutions for Microsoft Teams consist now 97% of Microsoft quarterly revenue. Exit first core 24, life for Teams 21. annual recurring revenues reached a level of $53 million in line with our plans. We are thus confident that we are on track to achieve our stated goal of achieving live annual recurring revenue of $64 to $70 million for the whole year. Live managed services for Teams represent now nearly 45% of Microsoft Teams business compared to just 25% in the year-ago quarter, and thus we believe that the impact of the shift to recurring revenue model should ease in coming course. We've also enjoyed growth in total contract value of live services, which grew about 45% year-over-year. From GEO perspective, EMEA bookings registered modest growth for the first time in multiple course, while North America experienced steady growth. Given the robust growth in our pipeline of credit opportunities, really remain optimistic about the long-term growth potential for Microsoft Business. In addition to the multi-year opportunity of Teams Fund connectivity, we can see clear signs of growing potential for a new source of revenue based on voice-related business application. Among these, they include components such as Vocal CIC as a contact center solution for the Teams environment, SmartApp 360 as a compliance recording solution, for the team's environment, and Meeting Insights is a central hub solution for capturing and sharing meeting information across the organization. Moving to CX and conversational AI. First quarter contact center business grew 15% year-over-year led by North America and the Asia-Pacific regions. Conversational AI, as I've mentioned before, Conversational AI bookings grew over 50% year-over-year. Voice services for enterprise CCaaS deployments continue to be the center of our activity. With the integration of our live platform into these opportunities, we see a steady rise of revenues associated with our live CX activity. We now see strength in the CX CAI on all fronts. emanating from sales of our solution in support of enterprise customers and leading vendors of customer experience platform and cross-sell for our own AI-first VocalCAC contact center platform to the team's phone install base. Staying on the topic of VocalCAC, over the past 12 months, we have significantly stepped up our product development resources and investment into the team's contact center solution highlighted by a recent addition of the omni-channel capabilities. We are thrilled that the industry analysts and market alike are starting to notice, as evidenced by us, having recently been awarded by CX Today the Best Microsoft Teams Contact Center Solution, based on the evaluation of 16 top industry experts. While still a small portion, still a small percentage of our overall business, we expect VACA CAC to be a major growth catalyst, a growth pillar for CX and overall long-term future, arising from both direct revenue contribution and pull-through of the rest of the conversational AI business lines, such as smart tap compliance, recording, and code summarization. Now, let's quickly go through highlights of other conversational AI business segments. First, on meeting insights, just to remind us all, meeting insights, of for Teams is an enterprise-grade software-as-a-service solution that enables organizations to capture, analyze, and share business meeting information across the company. It provides a comprehensive set of tools and conversational AI technologies for recording, transcribing, indexing, and analysis, making it easy to search and retrieve information from past meetings. With Meeting Insights, users can quickly find and review key points and decisions from previous meetings, improving collaboration and decision-making across the organization. In the first quarter of 2024, we have achieved a key development milestone where the solution was upgraded to become a cloud-based true SaaS solution providing multi-tenant service to enterprises. Roadmap for the solution in 2024 includes, among others, additions of automation capabilities, more languages, European languages, enhanced mobile operation, and extending the function of meeting inside to more U.K. solutions. As for sales, we have seen nice growth in new accounts in the U.K. and U.S., adopting the tool for their ongoing daily operations. On SmartApp, in second quarter 2024, we plan to launch SmartApp also as a SaaS solution for enterprises. a platform that will expand our go-to-market opportunities, enabling service providers and resellers to offer their own branded recording services powered by other codes. This new platform shares the same infrastructure as Meeting Insights, and we have plans to unify the services in 2024, given growing synergies between these two business lines. To wrap up our discussion, relying on the NICE progress we see in our strategic clients around Microsoft Teams, CEX, and conversational AI. And despite the slower than expected start of the year due to legacy decline, we have strong conviction about our long-term business fundamentals and have made significant progress in our transformation to a software and services company with strong profitability. This optimism is supported by record pipeline of creative opportunity in the first quarter of 2024 particularly in the Microsoft and contact center environments. Growing momentum of VOCA CIC is a major long-term growth driver for the company, and ongoing strong annual recurring revenue growth for the live managed services for the company. And with that, I've concluded my section of the call, and I'd like to move the call 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, you can press star one on your phone keypad now. We ask that while you're posing your question, you please pick up your handset if you're using a speaker or phone. And please give us one minute whilst we poll for any questions. Thank you. Your first question is coming from Samad Samana of Jefferies. Samad, your line is live.
spk05: Hi, this is Mason Marion. I'm for Samad. Thanks for taking our questions. So I want to start with guidance. Of the $15 million reduction to the full year revenues, what amounts from lower than expected gateway revenue? Did you lower revenue expectations for any other products or services as well?
spk02: Okay, well, we've seen about 3 million decline in the first quarter. Just relying on the experience we had from 2023, we believe that we will not see major improvements throughout the year. So taking 3 million for a quarter, we took 12 million for the full year for the gateway decline. And then, you know, based on in our assessment of the ongoing continued slowdown in the market and muted spending in the market, we left room for another $3 million.
spk05: Understood. Thank you, Shabtai. You've been talking about this transition towards more recurring revenue for several years now. Are we reaching an inflection point? How big is your legacy business still, and when could we start to see your total revenue growth more closely reflect your recurring revenue growth?
spk02: Right. Okay, so let me repeat some of the stats I mentioned before. The most important business when you try to analyze recurring business versus CapEx is Microsoft Teams. Now, what I've stated is in this first quarter of 2024, recurring revenues, TIMSS recurring revenues reached 45% compared to just 25% a year ago. So our expectations are that within the next two, three months, the decline of, I would say, CAPEX TIMSS will be substantially less meaningful. So, you know, in general, you know, we view 2023, 24, and probably the first half of 25 as the years of transition in our revenues from a CAPEX model to an OPEX model. So we do expect that, you know, this quarter, maybe another quarter of two will still suffer from that, but I think entering towards the end of this year and early 25, I think we'll have a very strong base of ongoing accumulated pipeline for our recurring revenues. And therefore, I believe that we should be safe from that point on. All right. Thank you.
spk08: Thank you very much. Your next question is coming from Ryan McWilliams of Barclays. Ryan, your line is live.
spk06: Hey, thanks for taking the question. This is Pete Newton on for Ryan McWilliams. I'm trying to look into what dynamics you're seeing right now in terms of CCAS versus UCAS-driven demand, and how would you characterize those demands for both, and if that's similar to what you saw in 2023? So actually, we do see...
spk02: We do see a shift. I mean, I think the turning point was probably somewhere in the beginning of 2023. Until then, I think UCAS was primarily the biggest market and CCAS was less. We all believe, and I think anybody who attends, you know, industry trade shows and events such as Enterprise Connect and figure out that UCAS is kind of, you know, taking a slower growth path, although still big and strong. However, the majority of the interest, and I think this is mainly due to the impact of, you know, AI and Gen AI and conversational AI technologies, we definitely see substantially more opportunities in CCAS. Also, take the fact that the CCAS market is substantially more fragmented than compared to UCAS. UCAS, you know, just take the top three accounts, it's Microsoft Teams and Cisco WebEx and Zoom, and maybe you have another one player or two, you know, that comprise about 70-80% of the market. So the opportunities there are becoming, you know, kind of narrow and limited. While the CX industry is growing fast, substantially higher rate, and it's substantially more fragmented and also broken into different functionalities and solutions. So our ability to take our deep technology base and experience and expertise in many networking and cognitive services and conversational technologies, this will allow us to substantially be more creative and successful. So for us, starting 2023 and this year more, definitely the CX, the CCAS industry is much more interesting for us, and this is where we will put most of our efforts.
spk06: Great. That's very helpful. Thank you, Shabtai. And then just maybe following up, how should we think about the shape of product and service revenue for the rest of FY24, just given the commentary around the legacy business And then also the service pipeline looking good. Just anything you can talk about in terms of shape of revenue for products and services for the rest of this year.
spk02: So just like, you know, on the heels of 2023, we believe services will continue growing. Last year I think we ended around 50%. This year we'll probably grow probably towards, you know, the 52%, 55%. product portion of our sales will always come down, also due to the fact that, you know, still very high impact from the high interest rates. So we may see further, you know, product decline, but in essence we have crossed, you know, the line where products are as important as they were you know, back in our history. Services is now, any new project we are initiating, be it in UCAS, in CCAS, and also conversational AI, tends to be services and long-term booking. So the shift is occurring. So I would expect, you know, just as we provided in our guidance, that we will, you know, either keep or even grow beyond where we are in the first quarter.
spk06: Very helpful. Thanks, guys.
spk08: Thank you very much. Just a reminder, if anyone has any remaining questions, you can press star 1 on your phone keypad to join the queue. Our next question is coming from Ryan Kuntz of Neat Needham & Company. Ryan, your line is live.
spk07: Great. Thanks for the questions. I'm going to ask about generally the exposure to service providers here, traditional service providers. Weakness in gateways, I assume, is due to that exposure. And beyond just their weakness in cloud, I'm sorry, their weakness in CapEx, they're also putting up some pretty awful growth numbers in their wholesale and business services. That seems to be an accelerating decline. So I assume that that's also an impact on the gateway business there. Can you confirm?
spk02: Yes, that is indeed what has hurt our gateway business back in 23 and now. In essence, we definitely view the giants in the software industry capable of investing in growing their offering and therefore spending more and allowing enterprise to be beneficial. Service providers, according to what we see, are playing a very safe and minimal play, trying to hold where they are, but we cannot see any growth from that side of the business.
spk07: Right, okay. And then when it comes to teams... It seems like their growth numbers on PSTN ads continue to be real healthy, if anything, accelerating in that 20 million subscriber or seat number. How do you read your attach rate there? for the Teams ads? Is this primarily through service provider solutions where they're struggling a bit to stay relevant relative to the new Teams deployments?
spk02: Okay, so yeah, well, Microsoft Teams phone business seems to be growing nicely, you know, about a few millions every year. We are definitely enjoying that trend. When we cite growth in our live managed services growth of 45% growth, that is attached to business in the Microsoft phone business. And therefore, yes, we definitely benefit from that. We actually see Our backlog is growing. Our live services are growing. Bigger companies who just did the first step of deploying a project now enter a more meaningful phase of moving. We also believe that Gen AI, Copilot, and others will drive more use of Teams phones simply because once you get those great analytics capabilities from Copilot, on meetings and calls that would definitely drive, we believe, you know, phone users from legacy telephony systems to move to Teams Phone in order to be able to benefit from the capabilities Copilot brings. So, yeah, we believe Teams Phone is growing nicely or businesses attached to it and I can definitely see a very long runaway for this activity.
spk07: One last quick one, if I could, on VOCA for Teams. What are you seeing as your use cases there? Is this primarily in the tier two use cases? A lot of companies, your peers that roll out early contact center products, early generation products, are seeing internal use cases and kind of second tier use cases. Is that similar for VOCA or what sort of use cases are you seeing? Thank you.
spk02: Yes, yes, indeed, you know, with VOCA CAC being, you know, a new entrant, obviously, you know, we need to go for the lower hanging fruit. So yeah, lower number of seats, you know, contact center that serve, you know, internal desks, and or, you know, small offices. But then, you know, I can tell you, you know, we just won end of 2023. a huge project with one of the leading universities in the U.S. This university has tens of thousands, more than 50,000 students. All in all, with staff and other functionalities on the campus, I think they all in all have above 150,000 users. But that means that Contact Center is going to be using a variety of applications within that campus. And, you know, in many cases, you know, you have, you know, many, you know, let's say one application, you know, that is serving about 25 contact center out of, you know, substantially larger number in that campus. So VOCA definitely serves that need. So we are growing, we are investing, you know, we just said, as I've mentioned, omni-channel capabilities you know, on top of voice where we already achieved 90% coverage of what's needed. So, yeah, we're gaining a lot of, the fact is that, you know, due to the fact that we have such a very large install base of customers in Microsoft Teams, and because the solution is Azure native, you know, relies heavily on the state of the art, the deepest level of technology available for Microsoft Azure, which is not available in other contexts as a solution in the market, makes our solution for Microsoft Teams and Azure substantially more advanced and preferable. So the solution is very unique in that environment, and we believe we're gaining a lot of traction in that space.
spk07: Thanks very much, Shantan.
spk08: Thank you very much. That appears to be the end of our question and answer session. I will now hand back over to Shabtai for any closing comments.
spk02: Okay. Well, thank you, Operator. I would like to thank everyone who attended our conference call today. With continued good business momentum in our enterprise operations and good underlying market trends in UCAS, CCAS, and Gen AI growing, we believe we are transitioning the business towards continued growth and prosperity in the future. We look forward to your participation in our next quarterly conference calls. Thank you very much for being with us today. Have a nice day.
spk08: Thank you very much, Shabtai. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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