Radcom (NASDAQ:RDCM) reported third-quarter revenue of $14.04 million, up 19.4% from the preceding quarter but down 23.6% from a year earlier, as the network assurance company reaffirmed its revised 2026 revenue outlook and pointed to signs that delayed customer deployments could resume in early 2027.
CEO Benny Eppstein said the company expects to remain profitable on a non-GAAP basis for the full year and aims to be free cash flow positive in the second half. He also said Radcom believes it is positioned to return to double-digit revenue growth in 2027.
The company reaffirmed its July forecast for 2026 revenue of $57 million to $63 million, with a midpoint of $60 million. Eppstein said server infrastructure costs remain the main driver of deployment delays and that the company views the issue as one of timing rather than demand for its products.
Quarterly Results and Delayed Deployments
Third-quarter revenue rose from $11.8 million in the second quarter but fell from $18.4 million in the third quarter of 2025. Radcom recorded a GAAP operating loss of $0.9 million, while non-GAAP operating income was $0.7 million, or 4.9% of revenue. That compared with a non-GAAP operating loss of $2.2 million in the preceding quarter and non-GAAP operating income of $3.8 million a year earlier.
Non-GAAP net income was $1.9 million, or $0.11 per diluted share, down from $4.9 million, or $0.29 per diluted share, a year earlier. On a GAAP basis, net income declined to $441,000, or $0.03 per diluted share, from $3.5 million, or $0.21 per diluted share.
Non-GAAP gross margin was 73.8%. CFO Hod Cohen said net research and development expenses rose 9.1% year over year to $4.9 million, mainly because of a weaker dollar against the Israeli shekel. Sales and marketing expenses fell 23.5% to $3.5 million, primarily because of lower bonus and commission expenses and fewer marketing events.
During the question-and-answer session, Cohen said Radcom had received a couple of orders planned for early 2027 that had originally been expected in early 2026. Asked about delayed upgrades, he said they would come in early in the first quarter of 2027.
New Customers and Sales Pipeline
Radcom closed contracts in the third quarter with CETIN Networks in Slovakia and Vietnam Posts and Telecommunications Group, or VNPT. Eppstein said both wins followed competitive bidding processes and involved replacing incumbent assurance vendors.
CETIN selected Radcom for a multiyear contract covering AI-driven assurance across its mobile network. Eppstein said the company’s RADCOM ACE platform was installed in production and undergoing acceptance testing.
VNPT, which Eppstein described as a Tier-1 operator with more than 30 million subscribers, selected RADCOM ACE for its roaming network. He called the contract an initial deal and said Radcom is discussing an opportunity to extend its assurance services across VNPT’s broader network.
Eppstein said Radcom’s pipeline included both potential expansions with existing customers and opportunities with new operators. Several opportunities across North America, Europe and Asia-Pacific advanced from technical evaluations and proofs of concept to commercial discussions during the quarter, he said, while noting that Tier-1 sales cycles are long and timing can shift.
Asked to quantify the pipeline, Cohen said Radcom had a high-single-digit number of proofs of concept and field trials across North America and Europe. He said the time from contract to revenue picking up could range from six months to a year, depending on the scope of the project.
Cash, Buyback and Product Investment
Radcom ended the quarter with $111.4 million in cash equivalents and short-term bank deposits, up from $109.7 million at the end of June. Cohen said the company generated $1.7 million in positive cash flow during the quarter and had no debt.
The board authorized a share repurchase program of up to $20 million in September, expected to remain in effect for up to 18 months. Cohen said the period in which creditors could object under Israeli law had ended without objections. Radcom did not repurchase shares in the third quarter and expects to begin buying back stock after the current blackout period ends, with purchases at management’s discretion.
Eppstein said the company would continue investing in RADCOM ACE and its agentic AI roadmap while remaining open to targeted acquisitions and partnerships. He said the Analytics Designer Module is now available to customers, and that several customers and prospects are evaluating RADCOM Neura, which uses AI agents to help identify the root causes of network issues.
About Radcom (NASDAQ:RDCM)
RADCOM Ltd. is an Israeli provider of cloud-native network intelligence and service assurance solutions for communications service providers. Its software helps telecommunications operators monitor network performance, identify service issues, and improve customer experiences across mobile, fixed, 4G, and 5G networks. The company’s offerings include RADCOM MaveriQ, a cloud-native network assurance platform, and RADCOM ACE, an analytics and automation solution designed to support real-time network visibility and service quality management.
