A. HISTORY AND DEVELOPMENT OF THE COMPANY Both our legal and commercial name is RADCOM Ltd., and we are an Israeli company. We were incorporated in 1985 under the laws of the State of Israel and commenced operations in 1991. The principal legislation under which we operate is the Israeli Companies Law. Our principal executive offices are located at 24 Raoul Wallenberg Street, Tel Aviv 69719, Israel, and our telephone is 972-3-645-5055. Our website is www.radcom.com. Information on our website and other information that can be accessed through it are not part of, or incorporated by reference into, this Annual Report. In 1993, we established a wholly-owned subsidiary in the United States, currently named RADCOM, Inc., or RADCOM US. In 1996, we incorporated a wholly-owned subsidiary in Israel, RADCOM Investments (96) Ltd., located at our office in Tel Aviv, Israel. In 2010, we established a wholly-owned subsidiary in Brazil, RADCOM do Brasil Comercio, Importacao e Exportacao Ltda., or RADCOM Brazil. In 2012, we incorporated a wholly-owned subsidiary in India, RADCOM Trading India Private Limited, or RADCOM India. In 2022, we incorporated a wholly-owned subsidiary in Canada, RADCOM Canada Limited, or RADCOM Canada. In the years ended December 31, 2024, 2023 and 2022, our capital expenditures were approximately $427,000, $232,000 and $150,000 respectively, and were spent primarily on computers and electronic equipment. We have no current significant commitments for capital expenditures. For more information, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us that has been filed electronically with the SEC. B. BUSINESS OVERVIEW Overview We are a leader in automated assurance and intelligent analytics for telecom operators. Relying on its vast industry-wide experience, we understand operators’ needs and pain points and the crucial role that enhanced performance, service quality, and customer satisfaction play. Our platform is designed to offer intelligent insights across multiple network layers and technologies from 3G to 5G and beyond. It enables operators to navigate networks’ complexities, assists with advanced troubleshooting, enhances network performance and operational efficiencies, ensures service quality and first-rate customer experiences, and optimizes revenue growth. When CSPs seek a solution to assure all or parts of their network, maximize value out of their network data, elevate their customers’ experience or deploy a new 5G or greenfield network, they may select RADCOM as their assurance partner. Chosen by AT&T, DISH Purchasing Corporation, or Dish, Rakuten Mobile, Rakuten Symphony Singapore Pte. Ltd., Telia Mobil Danmark A/S, or Telia Denmark, and others, we offer an intelligent cloud-native assurance solution - RADCOM ACE - that seamlessly integrates into multi-cloud environments. It captures, analyzes, and delivers real-time subscriber analytics and network insights into how the network performs 24/7. Designed to be open, vendor-neutral, and cloud-agnostic, RADCOM’s platform captures real-time data using advanced networking technologies. It provides comprehensive network observability from radio-access networks, or RAN to the core, delivering actionable, customer-focused insights to enhance customer experience. We have extensive experience with leading telecom operators globally. We offer advanced cloud-native solutions for large-scale networks, which smartly analyze and correlate multiple data types (network packets, events, performance management and fault management, counters, and more) across multiple domains, (mobile and fixed), and generations of technologies (5G, 4G, 3G) providing real-time subscriber analytics to drive network automation. We provide operators with an innovative, efficient, and on-demand approach to network assurance that meets the challenges of improving customer experience in the 5G era. Our solution is cloud and vendor agnostic, can be deployed in multiple cloud environments and can also deploy on bare-metal, and supports any hybrid deployments of public and private clouds as required in the market. 17 We specialize in solutions for next-generation mobile and fixed networks, including 5G, Voice over New Radio, or VoNR, Long Term Evolution, or LTE, VoLTE, Voice over Wifi, or VoWifi, IP Multimedia Subsystem, or IMS, Voice over IP, or VoIP, and Universal Mobile Telecommunication Service, or UMTS. Our solution portfolio enables CSPs to deploy 5G networks and those still running or migrating their 4G, 3G, and 2G legacy networks to have one platform covering their entire network, providing fully cloud-native network intelligence and service assurance. Monitoring 5G standalone, or SA, requires a new approach that supports different options for traffic tapping and data acquisition. RADCOM supports all methods due to the flexibility of our solution, which has multiple deployment options, allowing us to monitor any network. Being dynamic and fully integrated enables operators who deploy RADCOM solutions to take an end-to-end view, from RAN to core, utilizing an on-demand approach to assure the customer experience for the first 5G use cases and more advanced use cases along their 5G journey. Our global customer base Our solution is deployed at multiple CSPs globally, such as AT&T, Dish, Rakuten, and Telefonica, and has received wide industry recognition, winning a Fierce Network Innovation Award, a Frost & Sullivan Product Differentiation Innovation Awards three times, multiple TMC Labs Innovation Awards, the Technology Marketing Corp. Award for network function virtualization, or NFV Innovation and being recommended for the most innovative cloud offering in the Glotel Awards competition. By developing and adapting our solutions to meet the industry’s most stringent requirements, we have expanded our customer base to include new opportunities and markets while expanding our footprint with existing customers by supporting them in transitioning to a 5G network. CSPs across the globe use our solutions to deliver high-quality services, reduce churn, manage network performance, analyze traffic, and enhance customer experiences. Our solutions incorporate cutting-edge technologies and the vast knowledge we have gained in our advanced work with some of the most technologically innovative CSPs in the industry. Our solutions support both mobile and fixed networks, including 5G, LTE, VoLTE, VoWifi, VoNR, IMS, VoIP, and UMTS. Our long standing investment in research and development was validated in 2019 by our renewed engagement with AT&T, when we entered a multi-year engagement to continue our relationship and expand the integration of our solutions into AT&T’s network. Since then we extended the agreements we signed with AT&T and have expanded our relationship. In May 2019, we entered into a multi-year agreement with Rakuten to provide our Network Intelligence solution for Rakuten’s unique and innovative mobile network. Rakuten’s network is the world’s first fully virtualized, end-to-end cloud-native mobile network that has adopted 5G systems architecture since its launch. Rakuten chose RADCOM Network Intelligence because it monitors the entire end-to-end network, including the world’s first fully virtualized RAN and we have continued to work with Rakuten since then, among other things on Rakuten’s successful commercial launch of the world’s first fully virtualized mobile network in April 2020. During 2021, we announced partnerships with Amazon Web Services, or AWS and Microsoft Azure through which we are offering our RADCOM ACE solution with real-time subscriber analytics and advanced troubleshooting for both telecom operators that are rolling out 5G, Internet of Things, and edge services and operators already running 4G and VoLTE networks. In May 2022, we announced our selection by Dish to provide RADCOM ACE solution to monitor customers’ experience across Dish’s 5G Smart Network™ — the first cloud-native, Open RAN-based 5G network in the United States. RADCOM ACE at Dish runs on AWS. In April 2023, we acquired Continual’s technology, intellectual property, and customer agreements for $2.5 million in cash. This leading mobility experience analytics company uses AI and ML to deliver advanced insights to help telecom operators improve their subscribers’ mobility experience. 18 In January 2024 we launched our new GenAI applications, NetTalkTM. Our GenAI applications are part of the RADCOM ACE portfolio, enabling operators to adopt the power of GenAI and trusted data to manage their network operations faster and cost-effectively. In May 2024 we announced the availability of our GenAI applications – RADCOM NetTalkTM on AWS. In February 2024, we announced that Wind Tre S.p.A, or WINDTRE, along with NTT DATA Italia S.p.A. and RADCOM have implemented sustainable Virtual Drive Test technology that enhanced its customers’ mobile experience on Italy’s roads and railway lines. Through the use of RADCOM’s Virtual Drive Test, WINDTRE analyzes the quality of mobile network services along Italy’s road and rail routes, achieving significant time and cost savings, as well as a significant reduction in CO2 emissions to the environment. In January 2025, we announced our contract with Norlys, the owner of Telia Mobil Danmark A/S, or Telia Mobil to provide Telia Mobil with RADCOM ACE to monitor customer experiences across 5G and 4G networks. In February 2025, we announced the integration with ServiceNow to automate service and complaint resolution for telecom operators. The integration of RADCOM RAN Analytics Solution, part of RADCOM ACE Service Assurance, with ServiceNow, leverages AIOps (the use of Artificial Intelligence technology to automate Operations) to offer advanced automated complaint resolution. In February 2025, we announced that we are developing a next-generation, high-capacity user plane data capture and analytics solution powered by the NVIDIA BlueField-3 DPU. This solution is designed to provide real-time, customer-level QoE insights by capturing and processing high-volume user plane data across the entire network at the edge. This solution aims to empower telecom operators with greater subscriber and service visibility while optimizing network computing resources. During 2025, we expect to continue to enhance and expand our product offerings and capabilities. As a result, we expect to allocate significant resources to research and development. In addition, in 2025 we plan to increase our sales and marketing efforts to drive additional growth. We intend to leverage our success with industry-leading customers as we seek to engage with other CSPs looking to transition to a 5G network or invest in cutting edge technology to proactively assure their customers experience while using automated assurance at the core of their operations. Industry Background Our Customers and the Market for Our Solutions We operate in the telecom market which is undergoing significant transformation with significant potential for growth, which is evidenced by the evolution of the networks and transition to 5G networks and the beginning of outlook to 5G advanced and GenAI embedded network technologies. The customers in our market consist primarily of mobile and fixed CSPs who are responsible for providing mobile and fixed telecommunications services. Our solutions are used by multiple divisions within a CSPs’ organization, including engineering, operations, marketing, management and customer care departments. CSPs are expanding their 5G network in an effort to improve coverage and deliver enhanced 5G services to their customers. However, while they upgrade technologies, adapting customer-centric strategies is even more critical. It is no longer enough to focus on understanding the overall satisfaction and perception of the customers. To maintain customer loyalty, telecom companies, or telcos need to become digital service innovators, setting the standards in service delivery, quality, and performance to match enhanced speeds. This means that operators need to implement a process of monitoring, evaluating, and enhancing the quality of services to understand the actual customer experience in real time. To ultimately drive revenue growth, CSPs need insights and analysis across multiple network domains. Technologies, such as advanced analytics, AI, and automation, streamline network operations and offer improved service quality to their customers. In addition, with new technology rapidly evolving, AI and GenAI are central to the vision of next-generation network operations (AIOps). 19 Deploying a cloud-native AI-based assurance solution, is an essential part of a CSP’s network, derived by the need to smartly manage huge amounts of various network elements, data and services from multiple vendors and technologies. In addition, CSPs are facing strong competition both from other CSPs and from over-the-top, or OTT players who are offering more and more similar services. In order to fight for their customers’ satisfaction, CSPs will need to gain deeper insight into customer behavior end to end, enabling them to tailor processes based on customer preferences. CPSs’ adoption of 5G is accelerating while they continue to operate their 4G, 3G and 2G networks and search for superior solutions that will enable them full end-to-end network visibility. In addition, CSP’s requirement to run 5G network analytics in public cloud infrastructure is rising. Move to the Cloud The move to automation is fueling the transition to the cloud, driving the need for software and virtual functions on the network. While software-controlled networks reduce capital and operational expenditures, they also demand interoperability with existing solutions across private, public, and hybrid domains. RADCOM is designed as a scalable set of microservices that can operate across multiple technologies and domains, including public, private, and hybrid cloud environments. It ensures network and business continuity, pinpointing the source of a problem or degradation in real-time. Move to Open RAN While reducing costs, the move to open RAN also demands verification of interconnectivity between various systems, including servers, accelerators, base station software, and virtualization platform software. RADCOM safeguards quality and interoperability between environments and domains, identifying risks and faults in real-time and offering an end-to-end, birds-eye view of the network. AI Models & Generative AI Introducing artificial intelligence and machine learning, or AI/ML, and GenAI models is proving transformative in the telecom industry. RADCOM was the first assurance vendor to announce a GenAI assurance application (NetTalkTM) to enable operators to tap into the wealth of data insights from their existing network with RADCOM ACE. Operators gain a new, cost-effective, and time-saving interface for accessing data and insights in natural language with trusted data accuracy. Automation The telecom industry is undergoing a digital transformation. While the numbers of IoTs and connected devices have grown and reshaped industries, network operations costs have risen. RADCOM helps streamline the process with complete lifecycle management (LCM). We offer automated on-demand instantiation, scaling, healing, and updating according to policies. We offer automated insights through AI/ML, enabling operators to save engineering resources, manage the network more efficiently, and gain proactive assurance features such as anomaly detection, predictive analytics, and automated root cause analysis before degradations affect customers. Security CSPs need to prioritize security in their customer offerings. RADCOM promotes adherence to security standards while ensuring operators can maintain quality of service and connectivity. We extend security through a native design, where elements that are deployed, distributed, and communicated, use encryption to enhance security, especially across domains. 20 Our Strategy Our objective is to be the worldwide market leader for 5G automated assurance solutions and customer experience analytics while maintaining our leadership by providing end-to-end network visibility. We believe our leadership and innovation around 5G assurance solutions is one of our core competencies and will be advantageous to us as these types of solutions are expected to play a key role in the deployment of 5G networks. We plan to increase our sales by leveraging our unparalleled experience gained from implementing some of largest, most advanced network deployments to date, where we are providing complete end-to-end network visibility from the RAN to the network core in multiple deployment models including public cloud. We offer our solutions and expertise to CSPs worldwide, with a focus on CSPs which are deploying or have already deployed 5G SA networks. We plan to maintain our technical advantage over competitors by further investing in enhancing the analytics and automation capabilities (including advanced AI\ML capabilities), embed GenAI capabilities and open our solution to adjacent partnerships to allow for a wider scope and target market. Key elements of our strategy include: ● Targeting Tier 1, Greenfield Operators and other CSPs worldwide, who have deployed, or are planning to deploy 5G networks. The ongoing deployments of 5G networks and the benefits that come with it are expected to drive a greater opportunity for advanced automated assurance and customer experience analytics solutions like ours. We believe that our solutions are significantly more advanced than competitors’ offerings and that we are better positioned than competitors who lack the experience deploying in cloud-native and AI-native environments or do not offer true 5G-ready solutions that can be deployed at large scale. In order to transition to 5G networks, CSPs generally need to replace or upgrade their assurance solutions with software that can support both their legacy networks as well as their future network architectures, including 5G use cases. Our solution, which monitors both legacy and next-generation networks, ensures a smooth migration and enables CSPs to future-proof their investment in an automated assurance solution. With our advanced deployment with customers such as AT&T, Rakuten and Dish, and our position as a 5G assurance leader which is cloud-native and can be deployed on any public or private cloud, we believe we are well positioned to leverage our vast experience in true 5G assurance solutions in order to successfully expand our deployment base to other CSPs as we focus our sales and marketing activities on Tier 1, galaxy (multi-carrier) and innovative CSPs and other CSPs. ● Shifting to multi-year recurring revenue contracts. We aim to leverage our offering to CSPs and offer long term multi-year business engagement models, which will allow them to meet their system planning needs through subscription or term licensing, operational services, managed services, annual maintenance and support and software upgrade packages. Such multi-year contracts also provide us with the ability to add new capabilities over-time to ensure that the CSPs are always benefitting from our most-up to date cutting-edge software solutions. ● Expand our addressable market via internal development, strategic partnerships and M&A. We are expanding our addressable market through a three-pronged approach. Our internal development efforts are driving the creation of new products and addressing broader business processes within our CSP target customer base. We are simultaneously establishing strategic partnerships with complementary product companies, leveraging their expertise, distribution networks, and customer bases to engage with additional buying personas. Additionally, we are pursuing mergers and acquisitions to enter adjacent market segments, gain market share, obtain valuable intellectual property and expand our customer base. This comprehensive strategy enables us to systematically increase our market reach while managing risks and resources effectively. Products and Solutions RADCOM’s Technology The first 5G assurance technology to go cloud-native, RADCOM ACE is RADCOM’s automated assurance platform that provides a closed-loop, end-to-end approach to assurance across 3G, 4G, and 5G SA and NSA technologies. The platform ensures data integrity and seamless operation even in the face of individual component failures. 21 The architecture, designed for high availability and redundancy, guarantees that operators’ networks remain robust and reliable, fostering a superior user experience for all subscribers. With an emphasis on flexibility and scalability, RADCOM supports many network technologies and infrastructures, ensuring modularity for easy integration and future expansion. Using streaming analytics from AI and ML technologies, real-time subscriber data is automatically collected, correlating RAN and core network data that detects, analyzes, and resolves issues. The platform can easily be installed on mobile (5G or 4G), fixed networks, or as a cloud-native function on multiple cloud domains in fully containerized solutions controlled by Kubernetes on both public and private cloud. It is available as a virtual network function, or VNF on virtual machines as software or commercial off-the-shelf hardware. RADCOM’s platform, RADCOM ACE is deployable from labs to full-scale nationwide networks. It allows operators to troubleshoot in real time, identify network bottlenecks, and monitor all traffic loads to ensure premium services. RADCOM ACE RADCOM ACE is an automated assurance and intelligent analytics platform that offers an entirely cloud-native and containerized portfolio of network visibility, service assurance, and network insights. It seamlessly integrates into an operator’s cloud environment (OpenStack, VMWare, Kubernetes, etc.) and fully supports 5G, 4G, 3G and 2G. RADCOM ACE uses built-in AI/ML, and heuristic modeling to proactively and predictively monitor and troubleshoot the network with real-streaming analytics for a closed-loop approach to customer experience management. RADCOM ACE provides full end-to-end coverage from the RAN (including vRAN and O-RAN) to the Core. Collecting, analyzing, and correlating all the data into subscriber (international mobile subscriber identity, or IMSI-based) insights. This provides hundreds of subscriber-centric metrics and key performance indicators, or KPIs, for end-to-end network optimization and advanced troubleshooting. It covers a wide range of customizable use cases, including anomaly detection, automated root cause analysis, mobile device and geographic-based analytics, network dimensioning, network performance monitoring, pinpointing radio network issues, complaint investigation, predictive and prescriptive analytics, and QoE analytics. RADCOM ACE can also be deployed to support private network monitoring. With RADCOM ACE, CSPs are able to manage their networks in a more dynamic and agile way, which can run on private and public clouds such as AWS, Google Cloud Platform, or GCP, and Azure. RADCOM ACE is built to ensure that 5G services continuously run at optimal quality, while at the same time improving the operators’ operational efficiency through automation and rapidly enhancing time to market for new services and innovations. RADCOM ACE is the culmination of our significant product investment over the last few years and reinforced by customer feedback to enable a new way of monitoring 5G services that ensures a high-quality customer experience as operators transition to 5G. RADCOM ACE is a solution that samples, filters, manages, and load balances massive traffic volumes across multiple clouds from the edge to the network core. Using AI/ML and heuristic modeling, it proactively and predictively monitors and troubleshoots the network with automated root-cause analysis, anomaly detection, and insights into encrypted traffic for services such as video and data streaming. The platform uses a microservices architecture, which allows each part to be scaled, updated, or replaced. It offers real-time performance and elastic scalability. RADCOM ACE fully supports 5G SA and NSA and offers Service Based Architecture readiness for both, Service Based Interface, or SBI and non-SBI (supporting complex Control Plane and User Plane Separation correlation). RADCOM ACE encompasses intelligent, containerized, and stateless functions for collecting and correlating network events. Data correlation is done from numerous sources, including network packets, generic network events, JavaScript Object Notation, protocol buffers, counters, VNF inputs/events, and call data records, or CDRs from legacy probes (normally packet-based), and other standards/frameworks as they evolve. 22 In addition to automated assurance, the RADCOM ACE platform provides multiple data analytics functions, such as RAN-DAF, management data analytics function, and network data analytics function, or NWDAF, which offer closed-loop automation. As operators increasingly transition to standalone 5G, we see significant potential in offering our intelligent assurance solution to mid-tier operators. To seize this opportunity, we are productizing our industry-leading 5G assurance solution, RADCOM ACE, into a scalable, flexible package designed to meet the needs of operators of all sizes. This approach will enable us to introduce new product offerings to a broader audience, ranging from full-scale deployments and mid-tier implementations to limited-scope lab environments. RADCOM ACE’s solutions include: RADCOM Advanced Network Troubleshooting RADCOM ACE offers advanced network troubleshooting capabilities, with the RADCOM Network Discovery suite of applications delivering real-time subscriber analytics for telecom operators to understand end-to-end service quality and optimize the network. Service-level awareness and appreciation of the customer experience through their subscribers’ eyes help operators take a customer-centric approach to managing their network operations and drive advanced fixed and mobile network troubleshooting and service optimization. RADCOM Advanced Network Troubleshooting can be used by multiple departments across the telecom operator organization: RAN/core planning and engineering, RAN/core operations, customer care tech support, network quality teams, network operations center, or NOC, and roaming. It troubleshoots multi-vendor 2G, 3G, 4G, and 5G networks across protocols, interfaces, and interactions. RAN Analysis RAN problems cause many subscriber-impacting issues, making RADCOM RAN Analysis an essential solution for engineering teams to understand RAN performance and gain critical data insights for troubleshooting. RADCOM RAN Analysis offers an in-depth analysis of RAN performance in real time, together with user data insights, to determine optimal strategies for enhancing customer experience performance. It covers a wide range of KPIs and key quality indicators, from accessibility to handover performance, including performance by cell, IMSI, and neighboring cells, as well as the ability to retain radio link failures. Our RAN Analysis solution is part of RADCOM ACE for operators that require an end-to-end solution. In this case, RAN and core data correlate, providing end-to-end subscriber sessions that help operators perform advanced 5G troubleshooting to ensure excellent customer experiences. RADCOM AI Intelligent Module (RADCOM AIM) RADCOM ACE incorporates RADCOM AIM – RADCOM’s AI Intelligent Module for intelligent analytics and automated assurance. RADCOM AIM is designed for mobile and fixed networks to allow telecom operators to integrate AI and ML into their networks. It monitors the network data in real time and offers automated insights for various operations. RADCOM AIM uses built-in machine learning models deployed on the network, which learn baseline behavior, automatically creating thresholds without configuring them. The solution is modular, which means its ML models can be updated to the solution seamlessly. RADCOM NetTalkTM – Generative AI Solution In a world transitioning to GenAI, accessing trusted data demands automated engines to ensure streamlined and efficient network flows. This data often comes from multiple vendors across various domains and correlates with data from core and RAN sessions, including data and voice services. Operators need a customer-centric approach to process the data to improve services and remediate network issues quickly. RADCOM NetTalkTM is a GenAI suite of applications that transforms telecom operators’ interfaces with quick insights into telco-focused near real-time data. Powered by large language models, RADCOM NetTalkTM enables operators to leverage the extensive data insights generated by RADCOM ACE utilizing trusted data from their network. 23 Mobility Experience Analytics (MEA) also referred to as RAN Experience Analytics (REA) Following the acquisition of Continual in April 2023, RADCOM offers mobility experience analytics solutions that analyze, monitor, and optimize the RAN’s performance, focusing on voice and data quality and subscribers’ mobility experience. ○ Virtual Drive Test for route service assurance - Route analysis monitors the customer experience across all highways and railways 24/7 to benchmark service quality on transportation routes. The solution prioritizes investments and optimizations and enhances the mobility experience across a customer’s network nationwide. ○ New site validation workflow - Validates and optimizes new 5G radio sites by comparing the performance and quality in the impacted area before and after the new site activation. New site validation offers both on-demand and semi-automatic analysis and provides engineers with root cause analysis and corrective actions introduced by the launch of the new network cell sites. ○ Complaint Investigation - RADCOM Complaint Investigation allows operators to gain a complete understanding of the actual subscriber’s experience. It offers a holistic view of all subscriber activities, including voice and data. Engineers can quickly investigate the complaint and validate it against thousands of other subscriber experiences along the same route and region. RADCOM Complaint Investigation identifies the impacted cells, provides root cause analysis, and makes recommendations to resolve the problem. Enterprise Analytics RADCOM’s Enterprise Analytics solution analyzes customer experiences for all devices and handsets affiliated with an enterprise. This capability allows the CSP to benefit from prioritizing enterprise accounts, proactively addressing technical issues, backing up its contracts with Service Level Agreement and premier customers, or VIP care, and directing the conversation with the customer toward experience and value. RADCOM offers a set of interactive reports that show the entire enterprise experience, with the ability to drill down to network issues and proactively resolve them. Customer Care Customer care is often the first touchpoint between the operator and a customer when an issue or problem arises. It is therefore critical that operators have as much real-time data as possible to resolve the issue quickly or inform the relevant team to speed up the resolution. RADCOM Customer Care Solution provides operators with customer experience insights across all services to improve first-call resolution and ensure seamless support interactions. It supports all services, such as video conferencing, video streaming, messaging, gaming, and tethering. This includes OTT services, like WhatsApp, Facebook, Teams, Zoom, and YouTube, so that operators can understand the entire customer experience, whoever provides the service or application. RADCOM Operational Efficiencies The RADCOM Operational Efficiencies portfolio provides solutions that enable operators to streamline operations using data-driven insights enhanced by telco-focused AI capabilities. Using AI/ML, the solution automatically collects and analyzes massive amounts of network data in real time, allowing engineering teams to gain deep insights into the impact of glitches and problems affecting the customer experience. The solution helps operators improve new 5G sites, automate root cause analysis, optimize mobility services, and digitize their network operations center. 24 Sales and Marketing Organization We mainly sell directly to customers throughout the world through our executives and sales representatives in North America, Europe, Latin America, Asia Pacific and Israel, which are supported by local representatives and agents in the local markets. During 2024, these direct sales were made mainly in North America, Europe, the Middle East and Africa. or EMEA, and Asia. In North America, we operate mainly through RADCOM US, which sells our solutions to end-users directly and provides support to customers in the North American market. Our solutions are sold to CSPs in North America either by RADCOM US, RADCOM Canada or by us. In Brazil, we operate through RADCOM Brazil, which primarily sells our solutions to end-users in the Brazilian market directly. In India, we operate through RADCOM India, which primarily provides customer support and development services worldwide. Elsewhere, our solutions are primarily sold through our sales representatives in Europe, Latin America, the Commonwealth of Independent States, Asia Pacific and Israel, and supported by local representatives and subcontractors in the local market. In territories in which we do not have direct presence, we expanded our outreach by entering into agreements with local distributors and value-added resellers. In 2024, we signed agreements with new distributors to penetrate new geographical markets and engage with new customers, and to better serve our target markets. We continue to search for more of these channels to expand our outreach further. In certain territories, our distributors and resellers serve as part of our sales, marketing and support teams as our local representatives, helping to sell, deploy and service our solutions, offer technical support in the end-user’s native language, and attend to customer needs during local business hours. Geographic Markets: The table below indicates the approximate breakdown of our revenue by territory, based on the location of the end-customer: Year ended December 31, (in millions of U.S. dollars) Year ended December 31, (in percentages) 2024 2023 2022 2024 2023 2022 North America 36.1 31.8 23.0 59.1 61.6 49.8 Asia 12.7 9.8 12.5 20.9 19.0 27.2 Latin America 0.3 1.3 3.0 0.5 2.5 6.4 EMEA (including Israel) 11.9 8.7 7.6 19.5 16.9 16.6 Total revenues 61 51.6 46.1 100 % 100 % 100 % Competition The market for our solutions is competitive, and we expect that competition will continue in the future, both with respect to solutions that we are currently offering and solutions that we are developing. Our principal competitors include NetScout System Inc., Infovista S.A. (acquired Empirix Inc.), Elisa Oyj (acquired Polystar), Anritsu Corporation, Viavi Solutions Inc. and EXFO Inc. In addition to these competitors, we expect competition from established and emerging communications, network management and test equipment companies, as well as traditional players in the network intelligence space such as Huawei, Ericsson and Nokia. Many of our competitors have substantially greater resources than we have, including financial, technological, engineering, manufacturing, marketing and distribution capabilities, and some of them may enjoy greater market recognition than we do. Furthermore, the transition to cloud-virtualized network solutions could possibly open the market to new competitors or bring in competitors from adjacent markets, including network core providers. For more information, see “Item 3.D—Risk Factors— Risks Related to Our Business and Our Industry.” 25 We believe that we are differentiated from our competitors due to: ● our recognized class-leading, cloud-native 5G-ready service assurance solutions; ● our experience deploying and scaling cloud-native solutions with Tier 1 CSPs such as AT&T; ● our telecom domain expertise and knowhow of key members of our company in advanced software development; ● our experience deploying our solutions on the world’s first fully virtualized network and expansion to 5G SA; ● our advanced technology offering an end-to-end solution for service assurance from the RAN to the core; ● our proven 5G-ready solutions deployed in existing 5G networks such as Rakuten Mobile and Dish Networks; ● our multi-technology correlation capabilities that can support all major technologies – 5G, 4G, LTE, IMS, VoLTE, VoIP and legacy 3G and 2G - within the same solution; ● our End-to-End (RAN to Core) view of the network and ability to correlate into a full customer experience view; ● our cloud-native solutions provide cost-efficiency, rapid deployment times and agility in development; ● our ability to operate across multiple technologies and domains, including public, private, and hybrid cloud environments; and ● our proven flexibility and responsiveness in a dynamic customer and technology environment. Our solutions are deployed with leading and innovative CSPs such as AT&T, Dish and Rakuten. We believe that we are positioned to be one of the most advanced leaders in cloud-native, AI-native 5G assurance and customer experience analytics solutions for CSPs deploying 5G networks on private and public cloud (such as RCP, AWS, GCP and Azure). Customer Service and Support We believe that providing a high level of customer service and support to end-users is essential to our success, and it is our goal to establish RADCOM as an industry leader in customer satisfaction. Investments that we are making to achieve this goal include: ● Enhancement of support: We are dedicated to the provision of timely, effective and professional support for all our customers. We provide 24x7 NOC services, monitoring customers’ environments remotely, troubleshooting and resolving system and application incidents, and supporting the continuance services of our solutions. Such NOC service captures and resolves problems before customers report them. We have invested in additional AI based automation with a variety of alerts and alarms monitoring, improving our capabilities to identify and address near real time problems. In addition, we routinely contact our customers to solicit feedback and promote full usage of our solutions. We may provide our customers with a free warranty period which includes bug-fixing and a warranty on our solutions. After the initial warranty period, we offer extended warranties which can be purchased for multi-year periods. Generally, the cost of the extended warranty is an annual maintenance fee based on a percentage of the overall cost of the solutions. ● Customer-oriented product development: With the goal of continuously enhancing our customer relationships, we meet regularly with customers, and use the feedback from these discussions to improve our solutions and guide our R&D roadmap. 26 ● Regional technical support: As the sale of a system and solutions requires a high level of technical skills, we decided to enhance our support with local experts located in our regional offices. This strategy is advantageous in terms of the time zone, culture and language. For example, through our Israel, U.S., Japan, Brazil, Romania and India offices we established local support teams responsible for first level engagements with customers (Tier 1). The physical and cultural proximity contribute to the strength of the relationship, increase our proficiency in our customer’s network and needs, and leverage the ability to identify pain points and needs of our customers. ● Support of our sales representatives: We provide a high level of pre- and post-sale technical support to our sales representatives in the field. We use a broad range of channels to deliver this support, including technical training, marketing material and others. Seasonality of Our Business Orders of our products are affected by numerous reasons, including general market and economic conditions, the impact of inflation and rise of interest rates, overall industry consolidation, the pace of adoption of new technologies and CSPs budgets and multi-year roadmap. Although this results in fluctuations in our revenues from quarter to quarter, such fluctuations are not subject to any clear seasonality or consistent seasonal patterns. Headquarters Facilities Our corporate office is located in Tel Aviv, Israel. and consists primarily of our corporate units such as legal, finance, human resources and operation. Research and Development The industry in which we compete is subject to rapid technological developments, evolving industry standards, changes in customer requirements, and new product introductions and enhancements. As a result, our success depends in part upon our ability to continue to enhance our existing solutions and to develop and introduce new solutions that improve performance and reduce total costs on a cost-effective and timely basis. During the last several years, we invested significant amounts in research and development in order to create and maintain our technological leadership and to meet the current and future needs of the world’s most advanced CSPs. We believe that the widescale rollout of 5G will bring with it a larger wave of cloud native deployments by CSPs. Through our research and development efforts, we believe that we are well positioned to offer state of the art technologies and capabilities to CSPs. Accordingly, we increased our investments in the development of enhanced automation deployment capabilities as well as in advanced ML based techniques to better identify network anomalies and analyze the increased network traffic that is expected following the roll-out of 5G networks. In addition to that, we are constantly focusing on automation as a key goal to reduce costs and optimize the operations of CSPs. In addition, we invested in several aspects that differentiate our cloud native approach to 5G networks, enabling a true continuous integration/continuous delivery approach on multiple clouds, including AWS, GCP and other cloud networks, which enables automated deployment and higher security standards. We also enhanced our RADCOM NETWORK DISCOVERY solution, which is the application layer of the RADCOM ACE solution. On the AI front, we have made significant investment in advancing our RADCOM AIM (Automated Insights Module), including new initiatives leveraging GenAI, which we believe may have an impact in the future. We are expanding our research and development to new domains that require deep knowledge in ML/AI and GenAI, leveraging some of the latest advancements in ML/AI models, tools and hardware assisted solutions such as graphics processing units. We also plan to continue developing our solutions to integrate with service management systems while leveraging network data and GenAI to analyze and predict customer experiences, and to provide insights into service quality. In addition, we are developing a prototype for a high-capacity user plane data capture and analytics solution powered by NVIDIA’s BlueField-3 data processing unit, designed to provide real-time, customer-level QoE insights. In parallel, we continued to enhance and develop both our cloud native virtualized network and 5G solutions to offer greater value and benefit to our current and potential customers. We expect to continue this significant investment in 2025, as we develop new features and new solution offerings to meet the requirements of transition to 5G networks, as well as establishing a modular approach for the enabling of targeted packages for the service assurance market. This modular approach will enable us to offer not just the full solution, but also specific modules for smaller deployment of CSPs. 27 Israel Innovation Authority We have received royalty-bearing grants from the IIA for certain research and development activities pursuant to an incentive program, in an aggregate amount of $50.2 million, calculated from our inception through December 31, 2024, which are subject to provisions of the Innovation Law and the regulations promulgated thereunder. In addition, we have filed numerous applications, and in the future may continue to file additional applications, for grants from the IIA pursuant to the Innovation Law. Grants received under such programs are repaid through mandatory royalty payments based on revenues generated from products developed pursuant to such programs or deriving therefrom. The receipt of such grants is contingent upon our ability to comply with certain applicable requirements and conditions specified in the Innovation Law and under the applicable program. As of December 31, 2024, royalties at a rate of 3% are due on revenues from sales of products and related services that incorporate know-how developed, in whole or in part, within the framework of projects funded by the IIA. In 2024, and in previous years, we participated in a Magnet consortium program sponsored by IIA, or Magnet Program. Under the terms of this program, we cooperate with additional companies, universities and research institutes in Israel, organized in a consortium for the development of new technologies. The rules of the consortium include several references to the distribution of knowledge between the consortium members, and require us to provide the other members in the consortium with a non-sub-licensable license to use the “new information” developed by such member, without consideration. These programs do not require payments of royalties to the IIA, but all other restrictions under the Innovation Law, such as local manufacturing obligations and know-how transfer limitations, as further detailed in this annual report on Form 20-F, are applicable to the know how developed by us with the funding received in such programs. Since we commenced operations, we have received royalty-bearing grants from the IIA. As of December 31, 2024, our total contingent liability to the IIA in respect of grants received including accumulated interest and net of accumulated royalties paid, was approximately $56.2 million. Below is a description of our obligations in connection with the grants received from the IIA under the Innovation Law: Local Manufacturing Obligations The terms of the grants under the Innovation Law require that we manufacture the products developed with these grants in Israel (but do not restrict the sale of products that incorporate the know-how). Under the regulations promulgated under the Innovation Law, the products may be manufactured outside Israel by us or by another entity only if prior approval is received from the IIA (such approval is not required for the transfer of up to 10% of the manufacturing capacity in the aggregate, in which case a notice must be provided to the IIA and not objected to by the IIA within 30 days of such notice). According to the IIA regulations, that are relevant to our projects until 2024, companies that moved the manufacturing of their products outside of Israel, may be subject to an increased royalties cap ranging between 120% to 300% of the grants, depending on the manufacturing volume that is performed outside of Israel. Know-How and Know-How Transfer Limitation ● The Innovation Law provides that the IIA is authorized to determine the ownership requirements of know-how developed under an approved research and development program and/or derived therefrom and/or rights associated with such know-how including intellectual property, which is not the product that was developed under such program, or the Funded Know-How. 28 ● The Innovation Law further provides that Funded Know-How can not be transferred to any third parties without the IIA’s approval. The approval may be subject to certain requirements, as determined in each project separately. ● Among others, the IIA may determine that certain Funded Know-How can be transferred to third parties in Israel only if such transferee company will also be subject to the same terms and conditions that were levied upon the transferor company under the Innovation Law prior to the transfer of such know-how and that the transferor will need to pay 3% of the consideration for the transfer to the IIA ● The IIA may approve the transfer of Funded Know-How from Israel to abroad, generally, provided that (a) the IIA will receive a payment of the portion of the sale price, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain at least 75% of the R&D positions of the grant recipient in Israel after the transfer for a minimum period of three years)); (b) the grant recipient receives an alternative know-how from a third party in exchange for its Funded Know-How, subject to certain requirements, among which the alternative know-how will generate higher revenues than the Funded Know-How for the company; or (c) such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient and the Funded Know-How is sold for a lower price than the amount of funds invested in it, in which case the payment set forth in (a) may be reduced. ● Approval to manufacture products outside of Israel or consent to the transfer of Funded Know-How, if requested, is within the discretion of the IIA. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer Funded Know-How or manufacturing out of Israel. ● Approval of transfer of Funded Know-How to another Israeli company may be granted only if the recipient abides by the provisions of the Innovation Law and related regulations, including the restrictions on the transfer of know-how and manufacturing rights outside of Israel. Change In Control The Innovation Law generally imposes reporting requirements with respect to certain changes in the ownership of a grant recipient. The Innovation Law requires the grant recipient and its controlling shareholders or the foreign interested party of such grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the grant recipient that results in a non-Israeli citizen or non-Israeli resident or an Israeli citizen or corporation incorporated in Israel becoming an interested party directly in the grant recipient, and requires the new interested party to undertake to the IIA to comply with the Innovation Law. In addition, the IIA may require additional information or representations in respect of such events. For Innovation Law purposes, “control” is defined as the ability to direct the activities of a corporation except the ability that stems from serving as an officer or director of the company. A person is presumed to have control if such person holds 50% or more of the means of control of a company. “Means of control” generally refers to voting rights in a company’s shareholders meeting or the right to appoint directors or the chief executive officer. An “interested party” of a company includes a holder of 5% or more of its outstanding share capital or voting rights, its chief executive officer and directors, someone who has the right to appoint its chief executive officer or at least one director, and a company with respect to which any of the foregoing interested parties owns 25% or more of the outstanding share capital or voting rights or has the right to appoint 25% or more of the directors. Accordingly, any non-Israeli who acquires 5% or more of our ordinary shares will be required to notify the IIA that it has become an interested party and to sign an undertaking to comply with the Innovation Law. Proprietary Rights To protect our rights to our intellectual property, we rely upon a combination of trademarks, contractual rights, trade secret law, copyrights, non-disclosure agreements and technical measures to establish and protect our proprietary rights in our solutions and technologies. We own registered trademarks for the name RADCOM® and for the name Omni-Q®. We currently have nine registered patents and one pending patent application in the United States. In addition, we usually enter into non-disclosure and confidentiality agreements with our employees, distributors, sales representatives and with suppliers and sub-contractors who have access to sensitive information. 29 Employees Our total headcount as of December 31, 2024, was 307 including employees and contractors. See “Item 6.D—Directors, Senior Management and Employees—Employees.” We consider our relations with our employees to be good and we have never experienced a strike or work stoppage. Except for employees located in Brazil, none of our employees are represented by labor unions. Although we are not a party to a collective bargaining agreement in Israel, we are subject to certain provisions of collective bargaining agreements among the General Federation of Labor in Israel, or the Histadrut, and the Coordinating Bureau of Economic Organizations (including the Industrialists’ Association), or the CBEO, that are applicable to our Israeli employees by virtue of expansion orders of the Israeli Ministry of Economy and Industry, including transportation allowance, annual recreation allowance, the lengths of the workday and workweek and mandatory general insurance pension. In addition, we may be subject to the provisions of the extension order applicable to the Metal, Electricity, Electronics and Software Industry. Israeli labor laws are applicable to all our employees in Israel. These provisions and laws principally concern the length of the workday, minimum wages for workers, procedures for dismissing employees, determination of severance pay, leaves of absence (such as annual vacation or maternity leave), sick pay and other conditions of employment. In Israel, we follow a general practice, which is the contribution of funds on behalf of most of our employees to an individual insurance policy known as “Managers Insurance” or a pension fund. The contribution rates towards such Managers’ Insurance are above and beyond the legal requirement. This policy provides a combination of savings plan, disability insurance and severance pay benefits to the insured employee. It provides for payments to the employee upon retirement or death and accumulates funds on account of severance pay, if any, to which the employee may be legally entitled upon termination of employment. Each participating employee contributes an amount equal to up to 7% of such employee’s base salary, and we contribute between 15.83% and 19.1% of the employee’s base salary. Pursuant to changes to Israeli law as well as collective bargaining agreements entered into by the Histadrut and the CBEO, the amounts that we are required to contribute may increase from time to time. Our employment agreements with new employees in Israel are in accordance with Section 14 of the Israeli Severance Pay Law – 1963, or the Israeli Severance Pay Law, which provides that our contributions to severance pay fund shall cover our entire severance obligation. Upon termination, the release of the contributed amounts from the fund to the employee shall relieve us from any further severance obligation and no additional payments shall be made by us to the employee. As a result, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as we are legally released from severance obligation to employees once the amounts have been deposited, and we have no further legal ownership on the amounts deposited. We also provide employees of RADCOM with an Education Fund, to which each participating employee contributes an amount equal to 2.5% of such employee’s base salary and we contribute an amount equal to 7.5% of the employee’s base salary (generally up to a certain ceiling provided in the Israeli Income Tax Regulations). Israeli employees and employers also are required to pay pre-determined sums which include a contribution to national health insurance to the Israel National Insurance Institute, which provides a range of social security benefits. In the United States, we provide benefits in the form of health, dental, vision and disability coverage and matching 401(k) plan contributions, in an average amount equal to approximately 22.61% of the employee’s base salary. In Brazil, we provide benefits in the form of health coverage, including health, vision and dental coverage, in an average amount equal to approximately 17% of the employee’s base salary. In India, we provide benefits in form of health coverage, education fund, house rent allowance and health insurance fund, in an average amount equal to approximately 24.37% of the employee’s salary. 30 C. ORGANIZATIONAL STRUCTURE Our subsidiaries are: (1) RADCOM US, which conducts the sales, marketing, and customer support of our products mainly in the United States; (2) RADCOM Investments (96) Ltd, for the purpose of making various investments, including the purchase of securities; (3) RADCOM Brazil, which conducts the sales, marketing and customer support of our products mainly in Brazil; (4) RADCOM India, which primarily provides, customer support and development services worldwide; and (5) RADCOM Canada, which conducts the sales and marketing of our products in Canada. The following is a list of our subsidiaries, each of which is wholly owned: Name of Subsidiary Jurisdiction of Incorporation RADCOM, Inc. New Jersey RADCOM Investments (96) Ltd Israel RADCOM do Brasil Comercio, Importacao Exportacao Ltda Brazil RADCOM Trading India Private Limited India RADCOM Canada Limited Canada D. PROPERTY, PLANTS AND EQUIPMENT We currently lease an aggregate of approximately 22,830 square feet of office space in Tel Aviv, Israel. This space includes our development facilities, which consist primarily of programming, documenting, quality control, testing and bug fixing, as well as from time to time, installation of software components on third party hardware. In 2024, our aggregate annual lease and maintenance expenses were approximately $799,000 for our Tel Aviv offices. We also lease an aggregate of approximately 5,377 square feet of office space in Paramus, New Jersey. In 2024, our aggregate annual lease payments for such premises were approximately $117,000. We also lease an aggregate of approximately 40 square feet of office space in Brazil and 5,809 square feet in India. The aggregate annual lease and maintenance payments for those premises in 2024 were approximately $6,000 and $84,000, respectively. We believe that our offices and facilities are adequate for our current needs and that suitable additional or substitute space will be available when needed.