RADCOM Ltd.

Second-quarter 2026 revenue was $11.8 million, down 33.4% year over year from $17.7 million. Gross margin was 76.3%. Non-GAAP operating loss was $2.2 million, or negative 18.5% of revenue, and non-GAAP net loss was $1.5 million, or $0.09 per diluted share, versus net income of $4.2 million, or $0.25 per diluted share last year. GAAP net loss was $3.1 million, or $0.18 per diluted share, versus GAAP net income of $2.4 million, or $0.15 per diluted share. Cash, cash equivalents, and short-term bank deposits totaled $109.7 million, with positive cash flow of $1.3 million for the quarter. For the first half of 2026, operating income was $1.6 million, or 5.1% of revenue. Full-year 2026 revenue outlook was reaffirmed at $57 million to $63 million, with a midpoint of $60 million. Management said it expects to remain profitable on a non-GAAP basis for full-year 2026 and aims to remain free cash flow positive in the second half of 2026.

Benny Eppstein framed the quarter as a timing issue tied to delayed customer infrastructure spending, especially in private cloud and on-prem deployments, rather than a sign of weakened demand or competitive loss. He stressed that the delayed projects remain part of longer-term road maps with existing customers and said some activity could resume in Q4 2026, with a more normal pace potentially starting in Q1 2027. His tone was cautious on near-term execution but confident on the company’s strategic position, pipeline quality, and return to stronger growth in 2027.

Hod Cohen focused on the financial impact of lower revenue and the company’s investment cadence. He cited Q2 gross margin of 76.3%, net R&D expense of $5.3 million, up 15.9% year over year, and sales and marketing expense of about $4.7 million, up 8.8%, with FX headwinds contributing to both; he also said RADCOM started a short-term hedging program for shekel expenses through the end of 2026. On the balance sheet, he highlighted $109.7 million in cash, cash equivalents, and short-term bank deposits, plus $1.3 million of positive cash flow in the quarter, and said the company plans to stay free cash flow positive in the second half and may return capital through a planned $20 million to $25 million buyback.

The lone analyst asked why the second-quarter drop was not visible earlier, whether there is better visibility for Q3 and Q4, and how the planned share repurchase would work given the size of the program. Management was unable to fully answer live because of audio issues in the Zoom setup, so the exchange did not produce detailed guidance beyond the prepared remarks. The key concern raised was surprise around the magnitude of the quarter’s weakness and operational visibility into the next two quarters.