Radcom Posts $14.04 Million Q3 Revenue, Holds 2026 Outlook

Radcom booked $14.04 million in third-quarter revenue, up 19.4% from the second quarter but down 23.6% from a year earlier, as the Israeli network assurance company reaffirmed its 2026 guidance of $57 million to $63 million and pointed to early 2027 for the return of delayed customer deployments.

The sequential recovery tells the quarter's story. Revenue climbed from $11.8 million in the prior quarter, though it fell short of the $18.4 million Radcom recorded in the third quarter of 2025. Behind the swings sit server infrastructure costs — the main driver of deployment delays, according to CEO Benny Eppstein, who framed the problem as one of timing rather than demand. The takeaway: customers have not walked away, they have postponed.

What did the P&L show?

The gap between accounting measures widened sharply. Radcom reported a GAAP operating loss of $0.9 million, while non-GAAP operating income came in at $0.7 million, or 4.9% of revenue. A quarter earlier the company posted a non-GAAP operating loss of $2.2 million; a year ago it earned $3.8 million on the same basis.

Non-GAAP net income reached $1.9 million, or $0.11 per diluted share, down from $4.9 million, or $0.29, a year earlier. GAAP net income fell to $441,000, or $0.03 per diluted share, from $3.5 million, or $0.21. Non-GAAP gross margin stood at 73.8%.

CFO Hod Cohen walked through the cost lines. Net research and development expenses rose 9.1% year over year to $4.9 million, driven mainly by a weaker dollar against the Israeli shekel. Sales and marketing expenses dropped 23.5% to $3.5 million, on lower bonus and commission expenses and fewer marketing events.

Which customers signed?

Two contracts anchored the quarter. Radcom closed deals with CETIN Networks in Slovakia and Vietnam Posts and Telecommunications Group (VNPT), and Eppstein said both wins followed competitive bidding processes that displaced incumbent assurance vendors.

CETIN selected Radcom for a multiyear contract covering AI-driven assurance across its mobile network. The RADCOM ACE platform is installed in production and undergoing acceptance testing, Eppstein said.

VNPT — a Tier-1 operator with more than 30 million subscribers, in Eppstein's description — chose RADCOM ACE for its roaming network. He called it an initial deal and said Radcom is discussing an opportunity to extend assurance services across VNPT's broader network.

The pipeline holds both expansions and new-operator opportunities. Several prospects across North America, Europe and Asia-Pacific moved from technical evaluations and proofs of concept to commercial discussions during the quarter, though Eppstein cautioned that Tier-1 sales cycles run long and timing can shift. Cohen quantified the activity: a high-single-digit number of proofs of concept and field trials across North America and Europe, with six months to a year between contract signing and revenue ramp, depending on project scope.

When do delayed deals land?

On timing, Cohen was specific. Radcom has received a couple of orders originally expected in early 2026 that are now planned for early 2027. Delayed upgrades, he said, would come early in the first quarter of 2027.

The guidance framework stays intact. Radcom reaffirmed its July forecast for 2026 revenue of $57 million to $63 million, with a $60 million midpoint. Eppstein said the company expects to remain profitable on a non-GAAP basis for the full year, aims to turn free cash flow positive in the second half, and believes it is positioned to return to double-digit revenue growth in 2027.

What about cash and the buyback?

The balance sheet strengthened slightly. 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, after generating $1.7 million in positive cash flow. The company carries no debt.

The board authorized a share repurchase program of up to $20 million in September, running for up to 18 months. Cohen said the period in which creditors could object under Israeli law had ended without objections. Radcom bought back no shares in the third quarter and expects to begin repurchases after the current blackout period ends, at management's discretion.

On product strategy, Eppstein said Radcom will keep investing in RADCOM ACE and its agentic AI roadmap while staying open to targeted acquisitions and partnerships. The Analytics Designer Module is now available to customers, and several customers and prospects are evaluating RADCOM Neura, which uses AI agents to identify the root causes of network issues.

Radcom, listed on NASDAQ as RDCM, provides cloud-native network intelligence and service assurance software for communications service providers, spanning mobile, fixed, 4G and 5G networks. Its flagship products include RADCOM MaveriQ and RADCOM ACE. In plain terms: the revenue hole is real, the cash cushion is deep, and management is betting 2027 delivers what 2026 deferred.