Radcom Q2 Earnings Call Highlights

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Wed, August 12, 2026 at 7:04 PM GMT+3 6 min read

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Second-quarter revenue fell 33.4% year over year to $11.8 million as Tier 1 customers delayed private-cloud and on-premises expansion projects amid higher server costs. Radcom said the projects remain on customers' roadmaps rather than being canceled or lost to competitors.
Radcom reported a non-GAAP net loss of $1.5 million versus income of $4.2 million a year earlier, but maintained its $57 million–$63 million 2026 revenue outlook and expects to remain profitable for the full year. Management sees deployment activity potentially normalizing in early 2027 and expects double-digit revenue growth that year.
The company ended the quarter with $109.7 million in cash and short-term deposits and plans a $20 million–$25 million share-repurchase program. It also announced new contracts with CETIN Networks and an Asia-Pacific Tier 1 operator, along with a European renewal.

Radcom (NASDAQ:RDCM) reported second-quarter revenue of $11.8 million, down 33.4% from $17.7 million a year earlier, as certain planned expansion deployments at a limited number of existing Tier 1 customers were delayed by rising server infrastructure costs.

Chief Executive Officer Benny Eppstein said the delayed projects remain part of customers' longer-term deployment roadmaps and do not reflect contract cancellations, competitive losses, pricing issues or dissatisfaction with Radcom's products. However, customers using private-cloud and on-premises environments have been reassessing the timing and scope of infrastructure investments after server prices rose sharply.

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"The key point is that so far these projects have been delayed, not displaced," Eppstein said. "They remain associated with active customer relationships and established expansion roadmaps."

Infrastructure costs delay expansion phases

Eppstein said some customers need to rebalance budgets, prepare additional sites or shift portions of planned expansions into later budget periods before approving the next phase of a deployment. Large projects can require dozens of servers across multiple locations, making the increased cost of hardware a substantial commitment for operators.

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Radcom does not manufacture the servers, Eppstein noted, but its software must be installed in an operating environment that is ready to support it. The company said it has secured hardware for some anticipated deployments so it can begin execution once customers complete their planning and sites are prepared.

The effect has been concentrated in private-cloud and on-premises deployments. Public-cloud projects, which are less dependent on purchasing, shipping and installing physical infrastructure, have been less affected, according to the company.

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Based on current customer discussions, Eppstein said the first quarter of 2027 is the earliest period when deployment activity could begin returning to a more normal pace, although one or more projects could move ahead during the fourth quarter of 2026. The company expects some additional clarity as customers work through their 2027 budgeting processes.

Radcom said it expects to remain profitable on a non-GAAP basis in 2026 and to return to double-digit revenue growth in 2027.

Quarterly results and outlook

Chief Financial Officer Hod Cohen said the company's non-GAAP gross margin was 76.3% in the second quarter. Radcom recorded a non-GAAP operating loss of $2.2 million, or 18.5% of revenue, and a non-GAAP net loss of $1.5 million, or $0.09 per diluted share. In the same quarter of 2025, it posted non-GAAP net income of $4.2 million, or $0.25 per diluted share.

For the first half of 2026, non-GAAP operating income was $1.6 million, representing 5.1% of revenue. Cohen said the company expects to remain profitable on a non-GAAP basis for the full year.

On a GAAP basis, Radcom posted a net loss of $3.1 million, or $0.18 per diluted share, compared with net income of $2.4 million, or $0.15 per diluted share, in the prior-year period. The company attributed the shift largely to lower quarterly revenue as well as continuing investments in research and development and sales and marketing.

Research and development expense totaled $5.3 million, up 15.9% year over year, while sales and marketing expense was $4.7 million, up 8.8%. Cohen said both expense categories were affected by foreign-exchange headwinds, particularly the shekel-dollar exchange rate. The company has initiated a short-term hedging program for shekel-denominated expenses through the end of 2026.

Radcom ended the quarter with 331 employees and $109.7 million in cash equivalents and short-term bank deposits. It generated $1.3 million of positive cash flow during the quarter and said it aims to remain free-cash-flow positive during the second half of 2026.

The company reaffirmed its revised 2026 revenue outlook of $57 million to $63 million, with a midpoint of $60 million.

Recent customer wins and product developments

A few weeks after the quarter ended, Radcom secured three contracts, including two new-customer wins and one renewal. The company announced a multiyear agreement with CETIN Networks in Slovakia to provide end-to-end, AI-driven assurance across the operator's mobile network. CETIN selected Radcom after a competitive multivendor request-for-proposal process and is replacing its incumbent assurance provider, Eppstein said.

Radcom also won a competitive tender with an unnamed Tier 1 Asia-Pacific operator, replacing a long-term incumbent in a deal Eppstein described as small but strategically important. The company said the win could position it to pursue a larger network-wide project. Separately, Radcom renewed a network-visibility contract with an existing European customer.

During the quarter, the company launched RADCOM ADM, or Analytics Designer Module, an addition to the RADCOM ACE platform. Eppstein said the product is designed to allow operators to create analytics in real time rather than submitting requests that could take months to complete. ADM is expected to become generally available to existing and new customers later in the quarter.

The company also highlighted its continued work with customers including 1GLOBAL, AT&T and Rakuten Mobile, where its assurance products remain deployed in production networks.

Planned share repurchase

Radcom said its board and management intend to establish a share-repurchase program of $20 million to $25 million. Eppstein said the company has begun the required process and plans to complete it as quickly as applicable rules allow before beginning purchases.

Management said it believes its debt-free balance sheet and cash position allow it to return capital to shareholders while continuing investments in its AI capabilities, partnerships and product roadmap.

About Radcom (NASDAQ:RDCM)

Radcom Ltd. (NASDAQ: RDCM) is a provider of cloud-based service assurance and analytics solutions designed to help communications service providers monitor and optimize the performance of their networks. Its flagship product, RADCOM ACE, delivers real-time visibility into service quality, subscriber experience and network resource utilization across traditional and virtualized architectures. By combining packet-level data collection with advanced analytics and machine-learning algorithms, Radcom enables carriers to detect, troubleshoot and resolve network and service issues before they impact end users.

Founded in 1991 and headquartered in Tel Aviv, Israel, Radcom has evolved from an early vendor of network testing equipment into a specialist in end-to-end assurance for voice, data, video and next-generation services.

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The article "Radcom Q2 Earnings Call Highlights" was originally published by MarketBeat.

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