Radcom NASDAQ: RDCM reported a stronger first quarter of 2026, with management highlighting revenue growth, expanded profitability and continued investment in AI-driven telecom service assurance.
Chief Executive Officer Benny Eppstein said the company delivered revenue of $18.6 million in the quarter, up 12% year over year, extending what he described as a positive trajectory built over recent quarters. Non-GAAP operating income rose to $3.7 million, while non-GAAP operating margin expanded to 20.1% from 19% in the first quarter of 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,” Eppstein said.
Radcom reaffirmed its full-year 2026 revenue guidance for 8% to 12% year-over-year growth, citing current visibility.
AI Strategy Remains Central to Growth Plans
Eppstein focused much of the call on Radcom’s positioning in what he called the “AI-native telecom ecosystem.” During the quarter, the company signed a multi-year renewal with a tier 1 customer and expanded the deployment of RADCOM ACE into additional AI-driven use cases for automated, data-driven network operations.
According to Eppstein, the expanded scope includes enhanced automation capabilities intended to improve service assurance workflows, accelerate issue identification and resolution, and provide deeper real-time network insight across complex 5G environments. He said the renewal demonstrates the strategic nature of the relationship and reflects customer confidence in Radcom’s ability to deliver lower operating costs, faster issue resolution and stronger service quality in 5G networks.
The company also launched RADCOM Neura, an AI agent suite designed for agentic telecom environments. Eppstein said Neura converts real-time network and subscriber data into autonomous intelligence that can identify issues, analyze user behavior and automate workflows across assurance, network operations and customer care.
Neura integrates with existing service management systems, including ServiceNow, allowing operators to embed telecom intelligence into broader IT and support environments, management said.
In the question-and-answer session, William Blair analyst Arjun Bhatia asked whether Neura represents a new monetization model. Eppstein said monetization may vary by customer and could be based on the number of AI agent use cases purchased, included in a broader bundle, or structured through partnership arrangements such as those involving Infosys or others.
“It very depends on the requirement and very specific to customer pain points,” Eppstein said.
Partnerships Seen as Key to Market Reach
Radcom highlighted partnerships with NVIDIA, ServiceNow, AWS and global systems integrators, including Infosys. Eppstein said these relationships are increasingly important as telecom operators seek AI solutions built specifically for telecom environments rather than generalized AI platforms without telecom domain expertise.
He said the partnerships help put Radcom’s technology in front of operators the company may not have reached directly and can reduce barriers to adoption. The company’s partner strategy is also intended to scale the sales pipeline without requiring proportional growth in direct sales and marketing spending.
During the quarter, Radcom launched its second certified connector on the ServiceNow Store, called RADCOM Network Case Validation and Verification. The solution is designed to bring network intelligence into service management workflows, enabling operators to detect, validate, prioritize and resolve network issues inside the ServiceNow platform.
Responding to Needham & Company analyst Ryan Koontz, Eppstein said Radcom is working with existing customers and new prospects through ecosystem partnerships, expanding geographic reach. He noted that telecom sales cycles remain long but said the company is seeing positive responses from customers.
“I do hope to get something in production by end of the year or early 2027,” Eppstein said of the joint partner-driven opportunities.
Customer Activity and Pipeline
Radcom said it continued deployment work with 1GLOBAL following that company’s selection of RADCOM ACE to monitor 4G and 5G services supporting approximately 43 million subscribers. The company also expanded its relationship with a leading European operator through Rakuten Symphony for its network visibility solution, aimed at enhancing real-time insights across virtualized and cloud-native network environments.
Eppstein said both deployments are progressing well and demonstrate how Radcom’s products perform in large-scale production networks. He also noted that Radcom continues to support AT&T and Rakuten Mobile, where its assurance solutions remain embedded in production networks supporting millions of subscribers.
Asked by Bhatia about the timing of new tier 1 operator opportunities, Eppstein said he believes at least part of the pipeline will translate into revenue in the second half of 2026, with the fourth quarter expected to reflect some of the new customers currently engaged with the company.
Management said several sales opportunities are advancing through technical evaluation and proof-of-concept stages, but Eppstein cautioned that adoption of next-generation assurance depends on each operator’s pace, including cloud maturity and AI readiness.
5G Standalone and Cost Efficiency
Management said broader industry trends are aligning with Radcom’s strengths. Eppstein cited an Omdia report showing that 5G core spending increased 83% in the fourth quarter of 2025 as operators accelerated 5G standalone deployments, expanded cloud-native architectures and prioritized AI-driven efficiency.
He said operators are increasingly focused on automation, subscriber experience and operating cost reduction as network complexity and data consumption grow. Radcom believes these priorities support demand for cloud-native, AI-enabled service assurance and network intelligence offerings such as RADCOM ACE and RADCOM Neura.
Eppstein also referenced an independent review by ACG Research, which found that Radcom can lower an operator’s total cost of ownership by up to 70%, even when running on the same hardware as competing solutions. He said the savings come from Radcom’s patented cloud-distributed architecture, which requires fewer servers, less data center space and less power while handling large-scale network data sets more efficiently.
In response to Koontz’s question about 5G standalone cores, Eppstein said Radcom sees strong demand for cloud-native architecture and believes some competitors are struggling to provide those capabilities. He said Radcom can work with cloud providers and support private cloud environments, which he said helps promote the company’s business globally.
Financial Details
Chief Financial Officer Hod Cohen said first-quarter non-GAAP gross margin was 76.5%. Non-GAAP net income was $4.7 million, or $0.28 per diluted share, compared with $4.1 million, or $0.25 per diluted share, in the year-earlier period.
Gross research and development expenses were $5.1 million, up 19.7% year over year, reflecting investments in collaboration, innovation and product portfolio expansion. Cohen said Radcom plans to continue strategic R&D investment, particularly in agent-to-agent and multi-modal workflows, while supporting strategic partnerships and productization efforts.
Sales and marketing expenses were $4.3 million, up 1.4% from the prior-year quarter, as the company continued investing in sales capabilities to support pipeline growth and expansion in high-value regions.
On a GAAP basis, first-quarter net income was $3.1 million, up 26.1% year over year. GAAP diluted earnings per share were $0.18, compared with $0.15 in the prior-year period. Radcom ended the quarter with 328 employees and $108.4 million in cash equivalents and short-term bank deposits, reflecting negative cash flow of $1.5 million, mainly due to annual bonus payments.
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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