Transcript: Radcom Q2 2026 Earnings Conference Call

Radcom (NASDAQ: RDCM ) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

View the webcast at Summary Radcom Ltd. 5 million on a non-GAAP basis. The company is experiencing delays in customer deployment programs due to increased server infrastructure costs, impacting the timing of certain projects with Tier One customers. Despite the challenges, Radcom secured three new contracts shortly after the quarter ended, including a multi-year deal with Setin Networks in Slovakia.

The strategic focus remains on expanding the Tier One footprint, advancing AI-native assurance, and maintaining strong customer relationships and competitive positioning. Radcom has initiated a share buyback program of $20 to $25 million and expects to remain profitable on a non-GAAP basis for the full year 2026. Management anticipates a return to stronger growth in 2027, driven by increased demand for 5G and AI-driven solutions. Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by.

Welcome to the Radcom Limited results conference call for the second quarter of 2026. All participants are 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 later today. On the call are Benny Eppstein, Radcom 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 investors section of Radcom's website at Before we begin, I would like to review the safe harbor provision.

This conference call will contain forward-looking statements.

Forward-looking statements in the conference call involve known and unknown risks and uncertainties, including but not limited to the company's statements about its 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 broader footprint, development and enhancement of strategic partnerships and the expected benefits and revenues from collaborations, the success and expected benefits of new technologies including AI, Radcom ACE, Radcom Nura, Radcom ADM, and Radcom RACE, including to enhance automation opportunities and customer engagements and the timing thereof, demand for its products and solutions and the ability to address new customer segments and expand its market reach, trends in the telecom market, including the expected growth of 5G, AI, cloud-native deployments, network automation and autonomous networks, the timing, scope and sequencing of customer deployment programs, the effects of server infrastructure costs and supply constraints and the timing and extent to which deferred deployments may move forward or return to a normalized cadence, customer relationships, competitive position, sales pipeline, commercial discussions, conversion of opportunities and expansion within existing accounts, the anticipated scope, timing, implementation, benefits, customer transition and extension potential of the company's contract with the European operator, expectations with respect to gross margins, research and development, sales and marketing expenses, cash flow, non-GAAP profitability, free cash flow positivity, full-year 2026 revenue outlook, future growth including double-digit percentage revenue growth in 2027, the impact of foreign exchange rates and hedging, resilience, long-term commitment and continued investments, and the establishment, size, timing, initiation and implementation of the intended share repurchase program and the company's ability to return capital to shareholders while continuing to invest in its platform and AI roadmap.

The company does not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements, are outlined in 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 and expenses, and amortization of intangible assets related to acquisitions.

Non-GAAP results provide information helpful in assessing Radcom's core operating performance and evaluating and comparing the results of operations consistently from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with Generally Accepted Accounting Principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the quarter's earnings release available on our website, Now I would like to turn the call over to Benny. Please go ahead.

Benny Eppstein, Chief Executive Officer Thank you, operator, and thank you all for joining us today. To review Radcom's results for the second quarter of 2026, please turn to Slide 7. On July 13th we announced our preliminary second quarter revenue expectations and revised our full year 2026 outlook. I would like to provide more specific context on what has changed within several customer deployment programs and why we remain confident in the underlying opportunities.

The affected projects are primarily planned expansion phases with a limited number of existing Tier One customers. These customers continue to use Radcom solutions in their production networks, and the projects remain part of the longer-term deployment roadmap we have developed with them. The delays do not reflect any weakening of our customer relationships, unhappiness with Radcom solutions or pricing, product cancellation, or business loss to competitors. The main issue is cost across the industry.

The price of server infrastructure needed for private cloud and on-premise deployment has reached, in some cases, comparable server configurations now cost multiples of their previous levels, and this increase has occurred over several months, not several years. A large deployment may require dozens of servers across multiple sites, so this increase can add up to a substantial infrastructure commitment for the customer. As a result, some customers are rethinking the timing, scope, and order of their infrastructure investments.

They may need to rebalance budgets, prepare additional sites, or move a portion of the expansion into a later budget period before approving the next deployment phase. Radcom does not manufacture these servers. Our strategic value and profitability are derived from our software analytics and automated assurance capabilities. Still, our software must be deployed within an operating environment that is ready to support it.

A project cannot move forward until the customer's infrastructure is prepared for installation. We've taken steps to reduce the risks within our control for certain anticipated deployments. We have already secured hardware so that Radcom can begin execution once the customer gives us the green light and the site is ready. Any further delay simply reflects the time customers need to prepare their infrastructure before they can install our product.

These effects are primarily concentrated in private cloud and on-premises deployment. Public cloud projects are less dependent on the purchase, shipment, and installation of physical infrastructure and therefore have been less affected. Based on our current customer discussions and project roadmaps, we believe that the first quarter of 2027 is the first period in which deployment activity could begin returning to a more normal pace. One or more projects could potentially begin moving forward sooner, including during the fourth quarter of 2026.

Some customers are also working through their 2027 budgeting processes, which should provide greater clarity on the timing and order of these projects. We have already secured hardware to support part of this activity, so Radcom will be ready to execute as soon as customers finish their infrastructure planning and give us the go-ahead. The key point is that so far these projects have been delayed, not displaced. They remain associated with active customer relationships and established expansion roadmaps.

However, customers must first fund and establish the underlying network and computing infrastructure on which our software will operate. Our customer relationships remain strong, our competitive position remains intact, and we are not seeing customers move away from our solutions. As customers finish their infrastructure preparation and authorize these expansion phases, we believe deferred deployment activity should return together with long-term demand for AI-driven assurance, 5G visibility, and network automation. We believe we will return to stronger growth in 2027.

Furthermore, our sales pipeline and our medium- to long-term customer deployment plans remain unchanged. In fact, the pipeline continues to improve in quality and a number of opportunities are now advancing to commercial discussions. We believe Radcom will remain profitable on a non-GAAP basis in 2026. We also expect to return to double-digit growth in 2027.

Please turn to Slide 8. 8 million. 7 million a year ago. Please turn to Slide 9.

Our recent wins: a few weeks after the quarter ended we secured three new contracts. Two were new customers and the third was a renewal at an existing customer. First, as announced yesterday, we expanded our European presence by winning a multi-year contract with new customer Setin Networks in Slovakia. Setin Networks selected Radcom to deploy end-to-end AI-driven assurance across its mobile network from the radio access network to the core.

Setin is replacing its incumbent assurance provider with a single subscriber-aware platform built on Radcom ACE. We were selected following a competitive multi-vendor RFP. We believe that this selection is evidence of our technology's strength and the growing preference for our platform among European operators. Setin is part of Setin International and a wider E and PPF Telecom group.

Together they serve more than 12 million customers across four countries, which gives us a foundation to potentially expand across the broader group over time. Second, in Asia Pacific we won a new customer through a competitive tender with a Tier One operator and replaced the long-term incumbent. The deal is small, but it is an important reference win. It puts us in a strong position to compete for a much larger network-wide project with this operator.

Third, we renewed the contract with an existing European customer for Radcom Network Visibility. All these deals closed only a few weeks after the quarter ended. This shows the pattern behind the second quarter results: with operators, deal timing can shift; demand for our solution and our competitive position do not. Please turn to Slide 10.

Our strategy: our priorities remain unchanged—expanding our Tier One footprint, deepening our installed base, and advancing AI-native assurance for autonomous networks. And we will do all of this while keeping the operating discipline to support our profitability. Our partner-led model works alongside NVIDIA, ServiceNow, AWS, and leading system integrators. It efficiently extends our reach and meets operators wherever they are in their AI and cloud journey.

A key advantage for us is the significant reduction in total cost of ownership, or TCO, that we offer. Our platform is fully cloud-native and highly efficient, so it delivers far lower TCO than legacy solutions. That means lower capex and opex than our competitors. Also, our software can run on incumbent hardware and deliver much more efficient performance per watt.

This means it can be deployed on the very same hardware an operator already uses with the incumbent assurance vendor. Reusing the same infrastructure means an easier migration with no costly rip-and-replace. It delivers real savings and better performance. Combine this with our TCO advantage and the data that telco AI depends on, and we believe we are well positioned for long-term profitable growth.

We also remain financially strong, with a solid cash position and no debt, enabling continued investment in our differentiated agentic AI capabilities and in the expansion of our strategic partnerships throughout this period. Please turn to Slide 11. The telecom market: operators continue to transition to 5G standalone and cloud-native deployments. At the same time, they are embedding AI deeper into their networks to automate operations, enhance the subscriber experience, and reduce operating costs.

All of this is happening while data volumes and network complexity keep growing. Yet a gap remains between AI ambition and AI readiness. Most operators still lack the reliable subscriber-level data that these AI use cases depend on. We saw a shift in operator spending this quarter as some adjusted the timing and mix of their investment, which impacted our results.

But near-term spending patterns can fluctuate without changing the market's underlying direction. The direction still points to what we provide—the data operators need to automate their networks and run them more efficiently. The gap is exactly where Radcom adds value. As operators shift from proof-of-concept to commercial AI deployments, they demand unified, end-to-end intelligence.

This trend only increases the need for cloud-native, AI-enabled service assurance solutions such as Radcom ACE and Radcom Neura. We believe our position as a leading assurance provider for 5G will continue to drive positive returns. Please turn to Slide 12, our installed base. Alongside new opportunities, our installed base remains an important validation of our strategy and the durability of our technology in live, large-scale networks.

Work with OneGlobal continues to progress as Radcom ACE is deployed to monitor its 4G and 5G services. We continue to support key accounts including AT&T and Rakuten Mobile, where our assurance solutions remain embedded in production networks serving millions of subscribers. Taken together, these deployments indicate that demand among our existing customers remains strong and that expansion opportunities are progressing. And that is true even as operators work through longer infrastructure lead times across the market.

Please turn to Slide 13, the launch of Radcom ADM. During the quarter we also launched Radcom ADM, the Analytics Designer Module, a new addition to the Radcom ACE platform. It puts operators in control of their own analytics. What was once a months-long request to a vendor is now something their teams can do themselves in real time.

As networks become more automated, that speed becomes essential, and delivering it at scale requires engineering expertise that is hard to copy. ADM also strengthens our AI strategy. It feeds real-time data directly into Radcom Neura, our agentic AI layer, making those agents more accurate and reliable. ADM will be generally available to existing and new customers later this quarter, and we see it as a clear path to expand within existing accounts through new use cases and higher-value tiers.

Please turn to Slide 14. Some more recent industry recognition: in February we released Radcom Neura, our suite of AI agents designed to work within the AI agent ecosystem. I'm pleased to share that Radcom Neura has since earned industry recognition. Radcom is a finalist in the 2026 Light Reading Leading Lights Award for Most Innovative Telco AI/ML Product.

As operators embrace AI to manage increasingly complex networks, we are proud that Radcom Neura has been recognized for helping transform real-time network intelligence into smarter, more proactive operations. That recognition extended to our collaborative work across the ecosystem. At Digital Transformation World, or DTW Ignite, in Copenhagen, we were proud to be part of the winning team at the Catalyst Award. Our Catalyst was named Outstanding Catalyst in the AI and Automation category.

It showed that multi-vendor AI agents can collaborate to accelerate fault resolution, improve the customer experience, and advance Level 4 autonomous networks. Radcom contributed AI-driven assurance agents that rank issues by real customer impact. We also contributed Radcom Governance, our framework for managing how agents interact and for building trust through policy-based oversight. Please turn to Slide 15, our go-to-market activity.

From a go-to-market perspective, we also remained highly active throughout the quarter. We participated in DTW Ignite in Copenhagen, FutureNet World in London, and Network X Americas in Dallas, where we showcased our AI-native assurance solutions and AI agent capabilities. Our executives also took the stage at these events, sharing our perspective on how operators can use AI, automation, and network data to build demand-driven networks. They also spoke to the opportunity that agentic AI now presents.

Customer and partner responses to our AI agent capabilities and AI-native assurance solutions were very encouraging.