Q1 2026 RADCOM Ltd Earnings Call

May 19, 2026

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Ltd. Results Conference Call for Q1 2026. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. 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. On the call are Benny Eppstein, RADCOM's CEO, and Hod Cohen, 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 investor section of RADCOM's website at www.radcom.com/investor-relations. Before we begin, I would like to review the Safe Harbor provision. This conference call will contain forward-looking statements.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Limited Results Conference Call for Q1 2026. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. 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. On the call are Benny Eppstein, RADCOM's CEO, and Hod Cohen, 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 investor section of RADCOM's website at www.radcom.com/investor-relations. Before we begin, I would like to review the Safe Harbor provision. This conference call will contain forward-looking statements.

Speaker #2: Following management's formal presentation, instructions will be given for the question-and-answer session. For operator assistance during the conference, please press star 0. 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.

Speaker #2: On the call are Benny Eppstein, RADCOM's CEO, and Hod Cohen, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call.

Speaker #2: If you have not downloaded it yet, you may do so through the link in the Investors section of RADCOM's website at www.radcom.com/investor-relations. Before we begin, I would like to review the Safe Harbor provision.

Speaker #2: This conference call will contain forward-looking statements. Forward-looking statements in the conference call involve several risks and uncertainties, including, but not limited to: companies' statements at this moment, strategic direction and goals, market position and trajectory, future execution and delivery of value to customers and stakeholders, expansion within its existing customer base, and expansion of its footprint, development of and enhancing strategic partnerships, and expected benefits and revenues from collaborations. The success of new technologies, including AI, to, among other things, enhance automation and efficiency pipeline, opportunities and customer engagement, and the timing thereof, the launch and reception of RADCOM's Miura and its integration into Agentic AI ecosystems, demand for its products and solutions, and the ability to address new customer segments and expand its market reach, trends in the market, the expected benefits of its AI-driven assurance and other solutions, its expectations with respect to research and development and sales and marketing expenses, expectations regarding the growth of 5G and AI and related spending, and its full year 2026 revenue guidance, future growth, and profitability.

Operator: Forward-looking statements in the conference call involve several risks and uncertainties, including, but not limited to, company's momentum, strategic direction and goals, market position and trajectory, future execution and delivery of value to customers and stakeholders, expansion within its existing customer base, and expansion of its footprint, development, often enhancing strategic partnerships and expected benefits and revenues from collaborations, the success of new technologies, including AI, to, among other things, enhance automation and efficiencies pipeline, opportunities and customer engagement and the timing thereof, the launch and reception of RADCOM Neura and its integration into agentic AI ecosystems, demand for its products and solutions, and the ability to address new customer segments and expand its market reach, Trends in the market, the expected benefits of its AI-driven assurance and other solutions, its expectations with respect to research and development and sales and marketing expenses, expectations regarding the growth of 5G and AI and related spending, and its full year 2026 revenue guidance, future growth and profitability.

Operator: Opportunities and customer engagement and the timing thereof, the launch and reception of RADCOM Neura and its integration into agentic AI ecosystems, demand for its products and solutions, and the ability to address new customer segments and expand its market reach, Trends in the market, the expected benefits of its AI-driven assurance and other solutions, its expectations with respect to research and development and sales and marketing expenses, expectations regarding the growth of 5G and AI and related spending, and its full year 2026 revenue guidance, future growth and profitability.

Speaker #2: The company does not undertake to update forward-looking statements. The full Safe Harbor provisions including risk that could cause actual results to differ from forward-looking statements outline in today's press release and the company's SEC filings.

Operator: 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 future forward-looking statements, are outlined in today's press release 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. By excluding non-cash stock-based compensation that has been expensed in accordance with ASC Topic 718, financial income expenses related to acquisitions, and amortization of intangible, non-GAAP results provide information core operation performance and evaluating and comparing the results of operations consistently from period to period. Representation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with the Generally Accepted Accounting Principles.

Speaker #2: 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.

Speaker #2: By excluding non-cash stock-based compensation that has been expensed in accordance with AST topic 718, financial income expenses, related to acquisitions, and amortization of intangible assets, non-GAAP results provide information core operation performance and evaluate and compare the results of operations consistently from period to period.

Speaker #2: The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measure prepared in accordance with the generally expected accounting principles.

Speaker #2: Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures included in the quarter-ending release available on our website www.radcom.com. Now I would like to turn over the call to Benny.

Operator: Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the quarter and release available on our website www.radcom.com. Now I would like to turn over the call to Ben. Please go ahead.

Speaker #2: Please go ahead. Thank you, operator, and good morning, everyone. Please turn to slide 7. The first quarter marked a strong start to 2026. We sustained financial and operating momentum with delivered revenue of 18.6 million dollars representing 12% year-over-year growth and extending the positive trajectory we have built over the past several quarters.

Benny Eppstein: Thank you, operator, and good morning, everyone. Please turn to slide 7. The Q1 marked a strong start to 2026. We sustained financial and operating momentum. We delivered revenue of $18.6 million, representing 12% year-over-year growth and extending the positive trajectory we have built over the past several quarters. Profitability also strengthened with non-GAAP operating income increasing to $3.7 million and operating margin expanding to 20.1%, up from 19% in Q1 2025. This performance reflects our operating discipline and our ability to efficiently convert top-line growth into higher profitability while investing in innovation and long-term initiatives. Based on our current visibility, we are reaffirming our full year 2026 revenue guidance of 8% to 12% year-over-year growth. Now to slide 8.

Benny Eppstein: Thank you, operator, and good morning, everyone. Please turn to slide seven. The Q1 marked a strong start to 2026. We sustained financial and operating momentum. We delivered revenue of $18.6 million, representing 12% year-over-year growth and extending the positive trajectory we have built over the past several quarters. Profitability also strengthened with non-GAAP operating income increasing to $3.7 million and operating margin expanding to 20.1%, up from 19% in Q1 2025. This performance reflects our operating discipline and our ability to efficiently convert top-line growth into higher profitability while investing in innovation and long-term initiatives. Based on our current visibility, we are reaffirming our full year 2026 revenue guidance of 8% to 12% year-over-year growth. Now to slide eight.

Speaker #2: Profitability also strengthened, with non-GAAP operating income increasing to $3.7 million and operating margin expanding to 20.1%, up from 19% in the first quarter of 2025.

Speaker #2: This performance reflects our operating discipline and our ability to efficiently convert top-line growth into higher profitability, while investing in innovation and long-term initiatives. Based on our current visibility, we are reaffirming our full-year 2026 revenue guidance of 8% to 12% year-over-year growth.

Speaker #2: Now to slide 8. From an execution standpoint, we delivered financially and continue to strengthen our position within the evolving AI-native telecom ecosystem. During the quarter, we signed a multi-year renewal with one of our Tier 1 customers, expanding the deployment of RADCOM ACE into additional AI-driven use cases, focusing on automated, data-driven network operations.

Benny Eppstein: From an execution standpoint, we delivered financially and continued to strengthen our position within evolving AI-native telecom ecosystem. During the quarter, we signed a multi-year renewal with one of our tier 1 customer, expanding the deployment of RADCOM ACE into additional AI-driven use cases focused on automated data-driven network operations. The extended scope includes enhanced automation capabilities designed to improve service assurance workflows, accelerate issue identification and resolution, and provide deeper real-time network insight across increasingly complex 5G environments. This renewal not only confirms the strategic nature of our relationship with this operator, but also reflects growing confidence in the measurable value we deliver: lower operating costs, faster issue resolution, and stronger service quality in 5G networks. During the quarter, we also launched RADCOM Neura, our AI agent suite designed specifically for agentic telecom ecosystem. Neura represents an important milestone in our AI strategy and product roadmap.

Speaker #2: The extended scope includes enhanced automation capabilities, designed to improve service assurance workflows, accelerate issue identification, and resolution, and provide deeper real-time network insight across increasingly complex 5G environments.

Speaker #2: This renewal not only confirmed that strategic nature of our relationship with this operator but also reflects growing confidence in the measurable value we deliver.

Speaker #2: Lower operating costs, faster issue resolution, and stronger service quality in 5G networks. During the quarter, we also launched RADCOM Miura, our AI agent suite designed specifically for Agentic Telecom ecosystem.

Speaker #2: Miura represents an important milestone in our AI strategy and product roadmap. This suite turns real-time network and subscriber data into autonomous intelligence that identifies issues, analyzes user behavior, and automates workflows across assurance, network operations, and customer care.

Benny Eppstein: This suite turns real-time network and subscriber data into autonomous intelligence that identifies issues, analyze user behavior, and automates workflows across assurance, network operations, and customer care. Neura integrates directly with existing service management systems, including ServiceNow, letting operators embed telecom intelligence into their broader IT and support environment. As we broaden our strategic offering, our AI strategy is receiving positive feedback from operators, ecosystem partners, and industry publications. Last quarter, our predictive complaint resolution agent received the Best AI/ML Innovation Award at the Global Connectivity Awards in London, highlighting growing industry recognition for our AI-native assurance capabilities. Turn to slide 9. In March, we launched our second certified connector on the ServiceNow Store, RADCOM Network Case Validation and Verification, which extends deeper network intelligence directly into service management workflows.

Speaker #2: Miura integrates directly with existing service management systems, including ServiceNow, letting operators embed telecom intelligence into their broader IT and support environment. As we broaden our strategic offering, our AI strategy is receiving positive feedback from operators.

Speaker #2: Ecosystem partners and industry publications. Last quarter, our predictive complaint resolution agent received the best AI/ML innovation award at the Global Connectivity Award in London.

Speaker #2: Highlighting growing industry recognition for our AI-native assurance capabilities. Turn to slide 9. In March, we launched our second certified connector on the ServiceNow Store.

Speaker #2: RADCOM Network Case Validation and Verification, which extends deeper network intelligence directly into service management workflows. As operators, we detect, validate, prioritize, and resolve network issues faster without leaving the ServiceNow platform.

Benny Eppstein: As operators detect, validate, prioritize, and resolve network issues faster without leaving the ServiceNow platform, cutting manual work and improving efficiency. These releases demonstrate our ability to rapidly translate our AI roadmap into deployable capabilities that operators can implement today. AI is reshaping how to run networks, and the value it delivers will be defined by the quality of the data it receives. In telecom, the data that matters most is the data that reveals the real subscriber experience on the live network. That is precisely what RADCOM produces. We capture data, accelerate it, and transform it into subscriber-level insights that drive the AI use cases our customer needs to deliver real-time benefits and fuel network automation. If data is the new oil, RADCOM operates the refinery, the point where raw telecom data become the subscriber-level intelligence that AI use cases actually need. Turn to slide 10.

Speaker #2: Cutting manual work and improving efficiency. This release demonstrates our ability to rapidly translate our AI roadmap into deployable capabilities that operators can implement today.

Speaker #2: AI is reshaping how to run networks, and the value it delivers will be defined by the quality of the data it receives. In telecom, the data that matters most is the data that reveals the real subscriber experience on the live network.

Speaker #2: That is precisely what RADCOM produces. We capture data, accelerate it, and transform it into subscriber-level insights that drive the AI use cases our customers need to deliver real-time benefits and fuel network automation.

Speaker #2: If data is the new oil, RADCOM operates the refinery—the point where raw telecom data becomes the subscriber-level intelligence that AI use cases actually need.

Speaker #2: Turn to slide 10. This is also the value we bring to our work with key ecosystem partners, including NVIDIA, ServiceNow, AWS, and leading global system integrators such as Infosys.

Benny Eppstein: This is also the value we bring to our work with key ecosystem partners, including NVIDIA, ServiceNow, AWS, and leading global system integrators such as Infosys, with whom we have recently partnered to develop telco-specific AI agents and network use cases. These partnerships are increasingly important, operators seek AI solutions specifically for telecom environments rather than on globalized AI platforms that lack telecom domain expertise. For us, these partnerships amplify our reach, putting our technology in front of operators we might not have reached directly, carried by trusted intimacy partner. The right partner relationships don't just expand our reach, they accelerate the sales cycle and lower the barrier to adoption. Turn to slide 11.

Speaker #2: With whom we have recently partnered. To develop telco-specific AI agents and network use cases. These partnerships are increasingly important and operators seek AI solutions with specifically for telecom environments rather than on globalized AI platforms that lack telecom domain expertise.

Speaker #2: For us, these partnerships amplify our reach, putting our technology in front of operators we might not have reached directly. Carried by trusted implementation partner.

Speaker #2: The right partner relationships don't just expand our reach but they accelerate the sales cycle and lower the barrier to adoption. Turn to slide 11.

Speaker #2: This partner leverage model is also why we can scale the pipeline efficiently. By extending our reach through trusted system integrators and ecosystem partners, rather than through proportional growth in direct sales and marketing investment.

Benny Eppstein: This partner leverage model is also why we can scale the pipeline efficiently by extending our reach through trusted system integrators and ecosystem partners rather than through proportional growth in direct sales and marketing investment. RADCOM has spent more than 3 decades inside Tier 1 operator networks, generating intelligence from live subscriber and service data, the edge cases, protocol expertise, and operational workloads that emerge only at scale. It's what general-purpose AI can't replicate. A useful analogy is that of a fluent speaker versus a native speaker. General-purpose AI applied to telecom may understand the language, but it lacks the context to understand edge cases and service-impacting events. Combining AI with telecom native expertise and product innovation is what turns automation into real customer outcome, and that is what we bring. Turn to slide 12.

Speaker #2: RADCOM has spent more than three decades inside Tier 1 operator networks. Generating intelligence from live subscriber and service data. The edge cases, protocol expertise, and operational workflows that emerge only at scale.

Speaker #2: It's why general purpose AI can't replicate. A useful analogy is that of a fluent speaker versus a native speaker. General purpose AI applied to telecom may understand the language, but it lacks the context to understand edge cases and service-impacting events.

Speaker #2: Combining AI with telecom-native expertise and product innovation is what turns automation into real customer outcomes, and that is what we bring. Turn to slide 12.

Speaker #2: Beyond AI capabilities, our technology also stands out for operators focused on lowering a total cost of ownership. During the quarter, ACG Research, a leading telecom research firm, independently reviewed our total cost of ownership against competing solutions.

Benny Eppstein: Beyond AI capabilities, our technology also stands out for operators focused on lowering a total cost of ownership. During the quarter, ACG Research, a leading telecom research firm, independently reviewed our total cost of ownership against competing solutions. It found that RADCOM can lower an operator's total cost of ownership by up to 70%, even when run on the same hardware as competing solutions. These savings come from our patented cloud-distributed architecture, which requires fewer servers, use less data center space, consume less power, and handle large-scale network datasets more efficiently. Exact savings vary by deployment, workload, and network setup, but the cost advantage held up across every customer environment ACG reviewed. This combination of AI-native capabilities, telecom domain expertise, and cost efficiency is shaping conversation with operators globally and is driving activity across our pipeline.

Speaker #2: It found that RADCOM can lower an operator's total cost of ownership by up to 70%. Even when run on the same hardware as competing solutions.

Speaker #2: This savings come from our patented cloud-distributed architecture, which requires fewer servers, uses less data center space, consumes less power, and handles large-scale network datasets more efficiently.

Speaker #2: Exact savings vary by deployment, workload, and network setup, but the cost advantage held up across every customer environment ACG reviewed. This combination of AI-native capabilities, telecom domain expertise, and cost efficiency is shaping conversations with operators globally and is driving activity across our pipeline.

Speaker #2: Growing our Tier 1 footprint remains a top priority and we are actively engaged in multiple sales opportunities several of which are advancing through technical evaluation and proof of concept stages.

Benny Eppstein: Growing our Tier 1 footprint remains a top priority, and we are actively engaged in multiple sales opportunities, several of which are advancing through technical evaluation and proof-of-concept stages. Ultimately, adoption of next-generation assurance moves at the pace of each operator set, shaped by a variety of variables from cloud maturity to AI readiness. That variability is why our pipeline is broad and multi-year by design and why our partner leverage model is built to meet operators wherever they are on that curve. Turn to slide 13. Alongside new opportunities, our install base remains an important validation of our strategy and technology. During the quarter, we advanced deployment work with one global following selection of RADCOM Edge to monitor 4G and 5G services, supporting around 43 million subscribers.

Speaker #2: Ultimately, adoption of next-generation assurance moves at the pace of each operator set, shaped by a variety of variables from cloud maturity to AI readiness. That variability is why our pipeline is broad and multi-year by design, and why our partner leverage model is built to meet operators wherever they are on that curve.

Speaker #2: Turn to slide 13. Alongside new opportunities, our install base remains an important validation of our strategy and technology. During the quarter, we advanced deployment work with one global following selection of RADCOM H to monitor 4G and 5G services, supporting around 43 million subscribers.

Speaker #2: We also expanded our relationship with a leading European operator through RADCOM Symphony for our network visibility solution, thereby enhancing visibility and real-time insights across virtualized and cloud-native network environments.

Benny Eppstein: We also expanded our relationship with a leading European operator through Rakuten Symphony for our network visibility solution, thereby enhancing visibility and real-time insights across virtualized and cloud-native network environments. Both deployments are progressing well and further show how our solutions perform in large-scale production. We also continue to support AT&T and Rakuten Mobile, where our assurance solutions remain embedded in production networks, supporting millions of subscribers. Turn to slide 14. Stepping back, the broader market landscape is evolving in ways that align closely with our strength. According to a recent Omdia report, 5G core spending increased 83% in Q4 2025 as operators accelerated 5G standalone deployments, expanded cloud-native architectures, and prioritized AI-driven efficiency initiatives. Operators are increasingly focused on automating their networks, improving subscriber experience, and lowering operating costs while managing rapidly growing data consumption and network complexity.

Speaker #2: Both deployments are progressing well and further show how our solutions perform in large-scale production networks. We also continue to support AT&T and RADCOM Mobile, where our assurance solutions remain embedded in production networks, supporting millions of subscribers.

Speaker #2: Turn to slide 14. Stepping back, the broader market landscape is evolving in ways that align closely with our strengths. According to a recent Omedia report, 5G core spending increased 83% in the fourth quarter of 2025 as operators accelerated 5G standalone deployments.

Speaker #2: Expanded cloud-native architectures and prioritized AI-driven efficiency initiatives. Operators are increasingly focused on automating their networks, improving subscriber experience, and lowering operating costs while managing rapidly growing data consumption and network complexity.

Speaker #2: We believe these industry priorities directly drive demand for cloud-native AI-enabled service assurance and network intelligence solutions, such as RADCOM H and RADCOM EURA. Looking ahead, the FIFA World Cup in June will push operators' networks to increase capacity, with traffic levels as much as five times normal around event stadiums.

Benny Eppstein: We believe these industry priorities directly drive demand for cloud-native, AI-enabled service assurance and network intelligence solutions such as RADCOM Edge and RADCOM Neura. Looking ahead, the FIFA World Cup in June will push operators' networks to increase capacity with traffic levels as much as 5 times normal around event stadiums. High-density, high-press events like this are where real-time assurance, subscriber analytics, and automated workflows matter most and where solutions like RADCOM Edge deliver the clearest value. Turn to slide 15. From a go-to-market perspective, we also remain highly active during the quarter. We participated in NVIDIA GTC, the TM Forum Tour Tokyo, and Mobile World Congress Barcelona, showcasing solutions in collaboration with ServiceNow, AWS, and Infosys.

Speaker #2: High-density, high-first events like this are where real-time assurance subscriber analytics and automated workflows matter most. And where solutions like RADCOM H deliver the clearest value.

Speaker #2: Turn to slide 15. From a go-to-market perspective, we also remain highly active during the quarter. We participated in NVIDIA GTC, the TM Forum Tour Tokyo, and Mobile World Congress Barcelona.

Speaker #2: Showcasing solutions in collaboration with ServiceNow, AWS, and Infosys. Customer and partner responses to our AI agent capabilities and AI-native assurance solutions were very encouraging.

Benny Eppstein: Customer and partner responses to our AI agent capabilities and AI native assurance solutions were very encouraging, and we held productive meeting with operators and ecosystem partners that we believe can translate into additional sales opportunities over time. Turn to slide 16. Overall, this was strong start to the year. Revenue grew 12%, operating margin expanded to 20.1%, and we reaffirm our full year guidance of 8% to 12% revenue growth. The market is moving toward AI-native operations, and RADCOM produces the network and subscriber data that telco AI needs to run on. We remain focused on disciplined execution, deepening our install base, growing our tier 1, advancing AI-driven assurance for autonomous networks.

Benny Eppstein: Customer and partner responses to our AI agent capabilities and AI native assurance solutions were very encouraging, and we held productive meeting with operators and ecosystem partners that we believe can translate into additional sales opportunities over time. Turn to slide 16. Overall, this was strong start to the year. Revenue grew 12%, operating margin expanded to 20.1%, and we reaffirm our full year guidance of 8% to 12% revenue growth. The market is moving toward AI-native operations, and RADCOM produces the network and subscriber data that telco AI needs to run on. We remain focused on disciplined execution, deepening our install base, growing our Tier 1, advancing AI-driven assurance for autonomous networks.

Speaker #2: And we held productive meetings with operators and ecosystem partners that we believe can translate into additional sales opportunities over time. Turn to slide 16.

Speaker #2: Overall, this was a strong start to the year. Revenue grew 12%, operating margin expanded to 20.1%, and we reaffirmed our full-year guidance of 8 to 12% revenue growth.

Speaker #2: The market is moving toward AI-native operations and RADCOM produces the network and subscriber data that Telco AI needs to run on. We remain focused on disciplined execution, deepening our install base, growing our Tier 1, and advancing AI-driven assurance for autonomous networks.

Speaker #2: Looking ahead to the rest of 2026, we expect to expand the EURA agent suite with additional use cases across assurance, customer care, and network operations.

Benny Eppstein: Looking ahead to the rest of 2026, we expect to expand the Neura agent suite with additional use cases across assurance, customer care, and network operations, and to continue translating our AI roadmap into deployable capabilities that our customers can run today. With that, I'll turn the call over to Hadar.

Speaker #2: And to continue translating our AI roadmap into deployable capabilities that our customers can run today. With that, I'll turn the call over to Hope.

Speaker #2: Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will refer to non-GAAP results reconciliations between GAAP and non-GAAP measures are provided in our press release and presentation.

Hod Cohen: Thank you, Benny, and good morning, everyone. As a reminder, unless otherwise noted, I will refer to non-GAAP results. Reconciliations between GAAP and non-GAAP measures are provided in our press release and presentation. All comparisons are year over year unless otherwise noted. Please turn to slide 18 for our quarterly financial highlights. We grew revenue 12% year over year to $18.6 million and managed expenses effectively even as we increased strategic R&D investments, resulting in improved margins and profitability. Gross margin in Q1 was 76.5%. Operating income reached $3.7 million, and the operating margin was 20.1%. Net income was $4.7 million or $0.28 per diluted share, compared with $4.1 million or $0.25 per diluted share last year.

Speaker #2: Additionally, all comparisons are year-over-year unless otherwise noted. Please turn to slide 18 for our quarterly financial highlights. We grew revenue 12% year-over-year to 18.6 million dollars and managed expenses effectively even as we increased strategic R&D investments resulting in improved margins and profitability.

Speaker #2: Gross margin in the first quarter was 76.5%. Operating income reached $3.7 million, and the operating margin was 20.1%. Net income was $4.7 million, or 28 cents per diluted share, compared with $4.1 million, or 25 cents per diluted share last year.

Speaker #2: As shown on slide 19, our gross R&D expenses for the first quarter totaled 5.1 million dollars. Up 19.7% year-over-year. This growth reflects our focus on strengthening collaboration, fostering innovation, and expanding our product portfolio.

Hod Cohen: As shown on slide 19, our gross R&D expenses for Q1 totaled $5.1 million, up 19.7% year-over-year. This growth reflects our focus on strengthening collaboration, fostering innovation, and expanding our product portfolio. We plan to continue strategic R&D investment to deliver advanced intelligent solution with a focus on agent-to-agent and multimodal workflow while supporting our strategic partnership and productization efforts. Sales and marketing expenses for Q1 totaled $4.3 million, a 1.4% year-over-year increase. We continue to invest in our sales capabilities to support pipeline growth and expansion in high-value regions. On a GAAP basis, as shown on slide 20, our net income for Q1 of 2026 was $3.1 million, a 26.1% year-over-year increase.

Speaker #2: We plan to continue strategic R&D investment to deliver advanced intelligence solutions, with a focus on agent-to-agent and multimodal workflow, while supporting our strategic partnership and productization efforts.

Speaker #2: Sales and marketing expenses for the first quarter totaled $4.3 million, a 1.4% year-over-year increase. We continue to invest in our sales capabilities to support pipeline growth and expansion in high-value regions.

Speaker #2: On a GAAP basis, as shown on slide 20, our net income for the first quarter of 2026 was 3.1 million dollars, a 26.1% year-over-year increase.

Speaker #2: GAAP earnings per diluted share were 18 cents compared with 15 cents last year. We ended the first quarter of 2026 with 328 employees. Turning to the balance sheet on slide 23, we closed the quarter with 108.4 million dollars in cash, cash equivalents, and short-term bank deposits, reflecting a 1.5 million dollars negative cash flow.

Hod Cohen: The earnings per diluted share were $0.18, compared with $0.15 last year. We ended Q1 of 2026 with 328 employees. Turning to the balance sheet on slide 23, we closed the quarter with $108.4 million in cash equivalents, and short-term bank deposits, reflecting a -$1.5 million cash flow, mainly due to annual bonuses payment. Thank you. We will now pass the call back to the operator for any questions.

Speaker #2: Mainly due to annual bonuses payment. Thank you. We will now pass the call back to the operator for any questions.

Speaker #3: Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two.

Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. Please stand by while we pull for your questions. The first question is from Arjun Bhatia of William Blair. Please go ahead.

Speaker #3: Please stand by while we pull up your questions. The first question is from Arjun Bhatia of William Blair. Please go ahead.

Speaker #4: Yeah, perfect. Thank you so much. Benny, I'm curious. You mentioned you're kind of talking to a lot of Tier 1 operators. You're engaged in sort of several opportunities.

Arjun Bhatia: Yeah, perfect. Thank you so much. Benny, I'm curious, you mentioned you're kind of talking to a lot of tier 1 operators. You're engaged in sort of several opportunities at various stages. It sounds like the pipeline is strong. I'm curious if you can just touch on where you are in these deals, when you expect they might convert, and, you know, is that growth opportunity a 2026 driver, or is it further out in 2027 and 2028?

Arjun Bhatia: Yeah, perfect. Thank you so much. Benny, I'm curious, you mentioned you're kind of talking to a lot of Tier 1 operators. You're engaged in sort of several opportunities at various stages. It sounds like the pipeline is strong. I'm curious if you can just touch on where you are in these deals, when you expect they might convert, and, you know, is that growth opportunity a 2026 driver, or is it further out in 2027 and 2028?

Speaker #4: At various stages and so it sounds like the pipeline is strong and I'm curious if you can just touch on how where you are in these deals when you expect they might convert and is that growth opportunity 26 driver or is it further out in 27 and 28?

Speaker #5: Hey, Arjun. Thanks for the question. I believe that at least part of it will translate into revenue in the second half of 2026, definitely in or at least what I believe in it's Q4 definitely will reflect some of the new customers that currently we are engaging with.

Benny Eppstein: Arjun, thanks for the question. I believe that, at least, you know, part of it will translate into revenue in the H2 2026, definitely. Or at least what I, you know, believe in it, Q4 definitely will reflect some of the new customer that currently we are engaging with.

Speaker #4: Okay, got it, perfect. And then, on your new AI offer in EURA, is that a new sort of monetization motion? Is it going to be like add-on pricing or some premium pricing?

Arjun Bhatia: Okay. Got it. Perfect. On your new AI offering, Neura, is that a new sort of monetization motion? Is it going to be like an add-on pricing or some premium pricing? How do you think about sort of layering that into your contracts with customers and prospects?

Speaker #4: How do you think about sort of layering that into your contracts with customers and prospects?

Speaker #5: I believe it's EURA and it's the idea is to orchestrate different AI agents within the agentic ecosystem as a whole and it will definitely be monetized based on the number of use cases the agents, AI agents that you'll acquire from us.

Benny Eppstein: I believe it's variety. The idea is to orchestrate different AI agents within the agentic ecosystem as a whole, and it will definitely be monetized based on the number of use cases, the AI agents that you'll acquire from us. But it could be also part of a larger bundle and also part of a partnership play that we mentioned today with their, you know, with Infosys and/or others. It very depends on the requirement and very specific to customer pain points. I can put it like that.

Speaker #5: But it could also be part of a larger bundle, and also part of a partnership play that we mentioned today, either with Infosys or others.

Speaker #5: So it's very dependent on the requirement and very specific to customer pain points, if I can put it like that.

Speaker #4: Okay. Got it. Perfect. Thank you.

Arjun Bhatia: Okay. Got it. Perfect. Thank you.

Speaker #5: Thank you so much.

Benny Eppstein: Thank you so much.

Speaker #3: I repeat. If you have a question, please press star one. If you wish to cancel your request, please press star two. The next question is from Ryan Koontz of Needham & Company.

Operator: The next question is from Ryan Koontz of Needham & Company. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Great, thanks for the question. One maybe to ask about your partnerships here—your kind of ecosystem partners with ServiceNow and maybe AWS to a lesser degree—but can you update us maybe on your joint sales motion there and how that's playing out for you?

Ryan Koontz: Great. Thanks for the question. Wanted to maybe ask about your partnerships here, your ecosystem partners with ServiceNow and maybe AWS to a lesser degree. Can you update us maybe on your joint sales motion there and, you know, how that's playing out for you? You know, what's been working so far and maybe what you think about where and how that relationship evolves in the future?

Speaker #4: What's been working so far, and maybe what do you think about how that relationship evolves in the future?

Benny Eppstein: Sure, absolutely. Thanks, Ryan. Yeah, the number of existing customer and new prospects that we are working together, we're actually expanding some of the geographical reach due to that. We're making good progress. As you know, telco sales cycle is a bit long.

Speaker #5: Absolutely. Thanks, Ryan. Yeah, the number of existing customers and new prospects that we are working together with— we're actually expanding some of the geographical reach due to that.

Speaker #5: We're making good progress. And as you know, telco sales cycle is a bit long, but we are seeing good and positive response from our customers looking into it and also kind of extending their reach and their platforms with our capabilities bringing a lot of value to our end customers.

Benny Eppstein: we are seeing.

Ryan Koontz: Yeah

Benny Eppstein: Positive response from our customers, looking into it and also kinda extending, you know, their reach and their platforms with our capabilities, bringing a lot of value to our end customers. Definitely good prospects. Same here, I do hope to get something in production by end of the year or early 2027.

Speaker #5: So definitely good prospects and same here. I do hope to get something in production by end of the year or early 2027.

Speaker #4: Great. Thanks for that. Maybe a follow-up on a similar vein, but thinking about from a technological perspective, as you see 5G standalone cores we're hearing a lot more about that momentum picking up out there.

Ryan Koontz: Great. Thanks for that. Maybe a follow-up on, you know, similar vein, but thinking about from a technological perspective, as you see, you know, 5G standalone core, you know, we're hearing a lot more about that momentum picking up out there. You know, how does that affect your opportunities out there for your customer base with regards to, you know, the proliferation of standalone X?

Speaker #4: How does that affect your opportunities out there for your customer base with regards to the proliferation of standalone? Thanks.

Speaker #5: We see a lot of need to move to a cloud-native architecture. We see some struggle with our competitors, and the ability to provide those abilities. And I think with us, we already know how to work with each and every cloud provider.

Benny Eppstein: We see a lot of need to move to a cloud-native architecture. We see some struggle with our competitors and the ability to providing those abilities. I think with us, we already know how to work with each and every cloud provider, we know also to support the private cloud solution. Overall, I think it's pushing the customer toward the more innovative and current technology-based solution versus legacy. Definitely helping us combined with the Neura, the AI agents that we're putting into the ecosystem is definitely something that promoting our business globally.

Speaker #5: We know also to support the private cloud solutions. So overall, I think it's pushing the customer toward more innovative and current technology-based solutions versus legacy.

Speaker #5: So, definitely, helping us—combined with the newer and the AI agents that we're putting into the ecosystem—it's definitely something that's promoting our business globally.

Speaker #4: That's great, Benny. Appreciate the insights. That's all I've got.

Ryan Koontz: That's great, Benny. Appreciate the insights. Talk to you guys.

Speaker #5: Thank you so much.

Benny Eppstein: Thank you so much.

Operator: There are no further questions at this time. This concludes the RADCOM Ltd Q1 2026 results conference call. Thank you for your participation. You may go ahead and disconnect.

Speaker #3: There are no further questions at this time. This concludes the RADCOM LTD first-quarter 2026 results conference call. Thank you for your participation. You may go ahead and disconnect.