RADCOM Gears Up to Report Q1 Earnings: What Should Investors Expect?

RADCOM Ltd. RDCM is slated to report first-quarter 2025 results on May 14, before market open. 

The Zacks Consensus Estimate for revenues is $16.5 million, suggesting 16.9% growth from the year-ago quarter’s reported figure.

The consensus estimate for earnings is pegged at 22 cents per share, unchanged in the past 60 days, indicating an increase of 22.2% from the year-ago quarter’s reported figure.

RDCM’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching once, with the average surprise being 18.9%. Shares of the company have gained 17.5% in the past year compared with the Zacks Computer - Networking industry's growth of 25.5%.

Factors Shaping RDCM’s Q1 Results

Focus on driving innovation, expanding its business and entering a new growth phase through both organic initiatives and strategic expansion opportunities are likely to have driven RADCOM’s performance in the first quarter. Its Cloud GenAI-based assurance solution is a major driving force, enhancing telecom operators’ efficiency and improving customer experiences. 

It continues to ink lucrative deals, ensuring steady, long-term revenue streams. During the quarter, RDCM secured a multi-year contract with Norlys, owner of Telia Denmark, replacing the incumbent assurance vendor and reinforcing its position as a trusted partner for disruptive telcos in Europe.

The company is investing in research and development to introduce cutting-edge AI and Generative AI capabilities, which are expected to support network management, improve customer satisfaction and drive automation for telecom operators transitioning to standalone 5G networks.

Radcom Ltd. Price and EPS Surprise

Radcom Ltd. price-eps-surprise | Radcom Ltd. Quote

RADCOM plans to balance driving operating leverage by reinvesting in the business to support growth, particularly in areas like AI-driven automation and mid-tier market expansion. The company was focused on acquiring profitable customers and operating efficiently to maintain its growth trajectory in the to-be-reported quarter. The company is actively working on expanding its geographic footprint, particularly in Europe, and targeting mid-tier operators by productizing its RADCOM ACE solution into scalable packages to facilitate broader market adoption. 

During the quarter, the company leveraged partnerships, such as its collaboration with ServiceNow, to integrate AI-driven solutions and expand its addressable market into areas like customer care domains. Integration with ServiceNow enables AI Ops to automate service complaint resolution, reduce network engineering time and enhance customer satisfaction, with promising synergies from the Continual acquisition in 2023.

Grants and continuous support from the Israel Innovation Authority bode well. It received cumulative grants of $684,000 from the Israel Innovation Authority in 2024, with additional grants of $100,000 during the first quarter.

Nonetheless, an uptick in expenses to support its growing pipeline of opportunities and expand coverage in local regions is likely to have weighed on its margins. Broader macroeconomic challenges such as forex headwinds, geopolitical tensions and tough competition remain concerns for management.

Key Recent Developments

In May 2025, RADCOM inked a multi-year, eight-figure contract renewal with a top North American telecom operator, bolstering its position in ensuring network performance and service quality.

In February 2025, RADCOM unveiled the development of a cutting-edge, high-capacity user plane data capture and analytics solution driven by the NVIDIA BlueField-3 DPU. This innovative solution is designed to transform network observability, providing real-time, customer-level QoE insights while optimizing network computing resources.

What Our Model Predicts for RDCM

Our proven model does not predict an earnings beat for RDCM this time around. The combination of a positive  Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

RDCM currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.

Ralph Lauren RL has an Earnings ESP of +2.21% and a Zacks Rank #3 at present. Ralph Lauren is set to report its fourth-quarter fiscal 2025 results on May 22. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for revenues and earnings is pegged at $1.63 billion and $1.96 per share, respectively. Shares of RL have appreciated 14.5% year to date. 

Dollar General Corporation DG currently has an Earnings ESP of +4.30% and a Zacks Rank #3. It is set to release its quarterly results on June 3.

The Zacks Consensus Estimate for DG’s first-quarter fiscal 2025 earnings per share is pegged at $1.46, and quarterly revenues are pegged at $10.26 billion. Dollar General has a trailing four-quarter earnings surprise of 1.2%, on average.

NetApp NTAP currently has an Earnings ESP of +0.35% and a Zacks Rank #3. It is set to release its quarterly results on May 29.

The Zacks Consensus Estimate for NTAP’s fourth-quarter fiscal 2025 earnings per share is pegged at $1.89, and quarterly revenues are pegged at $1.73 billion. Shares of NTAP declined 9.7% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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