Radware Reports Third Quarter 2024 Financial Results
Third Quarter 2024 Financial Results and Highlights
Revenue of $69.5 million, an increase of 13% year-over-year
Cloud ARR of $71.6 million, an increase of 15% year-over-year
Non-GAAP diluted EPS of $0.23 vs. $0.07 in Q3 2023; GAAP diluted EPS of $0.07 vs. $(0.16) in Q3 2023
Cash flow from operations of $14.7 million and $58.9 million year-to-date
TEL AVIV, Israel, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Radware® (NASDAQ:RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the third quarter ended September 30, 2024.
"We are pleased to report solid third-quarter results, highlighted by 13% year-over-year revenue growth and a significant improvement in profitability and cash flow from operations," said Roy Zisapel, Radware's President and CEO. "Our results reflect double-digit growth in subscription revenue, strong sales of software subscriptions, and the ongoing success of DefensePro X, which carries with it more subscription revenue. We are excited about the momentum we've built and our future growth prospects."
Financial Highlights for the Third Quarter 2024Revenue for the third quarter of 2024 totaled $69.5 million:
Revenue in the Americas region was $27.7 million for the third quarter of 2024, an increase of 11% from $24.9 million in the third quarter of 2023.
Revenue in the Europe, Middle East, and Africa ("EMEA") region was $25.2 million for the third quarter of 2024, an increase of 30% from $19.3 million in the third quarter of 2023.
Revenue in the Asia-Pacific ("APAC") region was $16.6 million for the third quarter of 2024, a decrease of 5% from $17.4 million in the third quarter of 2023.
GAAP net income for the third quarter of 2024 was $3.1 million, or $0.07 per diluted share, compared to GAAP net loss of $6.9 million, or $(0.16) per diluted share, for the third quarter of 2023.
Non-GAAP net income for the third quarter of 2024 was $10.2 million, or $0.23 per diluted share, compared to non-GAAP net income of $2.9 million, or $0.07 per diluted share, for the third quarter of 2023.
As of September 30, 2024, the Company had cash, cash equivalents, short-term and long-term bank deposits, and marketable securities of $411.7 million. Cash flow from operations was $14.7 million in the third quarter of 2024.
Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax-related adjustments. A reconciliation of each of the Company's non-GAAP measures to the most directly comparable GAAP measure is included at the end of this press release.
Conference CallRadware management will host a call today, October 31, 2024, at 8:30 a.m. EDT to discuss its third quarter 2024 results and fourth quarter 2024 outlook. To participate on the call, please use the following numbers:U.S. participants call toll free: 888-510-2008 International participants call: 1 646-960-0306Conference ID: 1864701
A replay will be available for two days, starting two hours after the end of the call, on telephone number +1-609-800-9099 or (US toll-free) 800-770-2030. Passcode 1864701.
The call will be webcast live on the Company's website at: http://www.radware.com/IR/. The webcast will remain available for replay during the next 12 months.
Use of Non-GAAP Financial Information and Key Performance IndicatorsIn addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of gross profit, research and development expense, selling and marketing expense, general and administrative expense, total operating expenses, operating income, financial income, net, income before taxes on income, taxes on income, net income and diluted earnings per share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax-related adjustments. Management believes that exclusion of these charges allows for meaningful comparisons of operating results across past, present, and future periods. Radware's management believes the non-GAAP financial measures provided in this release are useful to investors for the purpose of understanding and assessing Radware's ongoing operations. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included with the financial information contained in this press release. Management uses both GAAP and non-GAAP financial measures in evaluating and operating the business and, as such, has determined that it is important to provide this information to investors.
Annual recurring revenue ("ARR") is a key performance indicator defined as the annualized value of booked orders for term-based cloud services, subscription licenses, and maintenance contracts that are in effect at the end of a reporting period. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations. We consider ARR a key performance indicator of the value of the recurring components of our business.
Safe Harbor Statement
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware's plans, outlook, beliefs, or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as "believes," "expects," "anticipates," "intends," "estimates," "plans," and similar expressions or future or conditional verbs such as "will," "should," "would," "may," and "could." Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware's current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions, including as a result of the state of war declared in Israel in October 2023 and instability in the Middle East, the war in Ukraine, and the tensions between China and Taiwan; our dependence on independent distributors to sell our products; our ability to manage our anticipated growth effectively; a shortage of components or manufacturing capacity could cause a delay in our ability to fulfill orders or increase our manufacturing costs; our business may be affected by sanctions, export controls, and similar measures, targeting Russia and other countries and territories, as well as other responses to Russia's military conflict in Ukraine, including indefinite suspension of operations in Russia and dealings with Russian entities by many multi-national businesses across a variety of industries; the ability of vendors to provide our hardware platforms and components for the manufacture of our products; our ability to attract, train, and retain highly qualified personnel; intense competition in the market for cyber security and application delivery solutions and in our industry in general, and changes in the competitive landscape; our ability to develop new solutions and enhance existing solutions; the impact to our reputation and business in the event of real or perceived shortcomings, defects, or vulnerabilities in our solutions, if our end-users experience security breaches, if our information technology systems and data, or those of our service providers and other contractors, are compromised by cyber-attackers or other malicious actors, or by a critical system failure; outages, interruptions, or delays in hosting services; the risks associated with our global operations, such as difficulties and costs of staffing and managing foreign operations, compliance costs arising from host country laws or regulations, partial or total expropriation, export duties and quotas, local tax exposure, economic or political instability, including as a result of insurrection, war, natural disasters, and major environmental, climate, or public health concerns, such as the COVID-19 pandemic; our net losses in the past two years and possibility we may incur losses in the future; a slowdown in the growth of the cyber security and application delivery solutions market or in the development of the market for our cloud-based solutions; long sales cycles for our solutions; risks and uncertainties relating to acquisitions or other investments; risks associated with doing business in countries with a history of corruption or with foreign governments; changes in foreign currency exchange rates; risks associated with undetected defects or errors in our products; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; laws, regulations, and industry standards affecting our business; compliance with open source and third-party licenses; and other factors and risks over which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, refer to Radware's Annual Report on Form 20-F, filed with the Securities and Exchange Commission (SEC), and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Radware's public filings are available from the SEC's website at www.sec.gov or may be obtained on Radware's website at www.radware.com.
About RadwareRadware® (NASDAQ:RDWR) is a global leader in application security and delivery solutions for multi-cloud environments. The company's cloud application, infrastructure, and API security solutions use AI-driven algorithms for precise, hands-free, real-time protection from the most sophisticated web, application, and DDoS attacks, API abuse, and bad bots. Enterprises and carriers worldwide rely on Radware's solutions to address evolving cybersecurity challenges and protect their brands and business operations while reducing costs. For more information, please visit the Radware website.
Radware encourages you to join our community and follow us on: Facebook, LinkedIn, Radware Blog, X, YouTube, and Radware Mobile for iOS.
©2024 Radware Ltd. All rights reserved. Any Radware products and solutions mentioned in this press release are protected by trademarks, patents, and pending patent applications of Radware in the U.S. and other countries. For more details, please see: https://www.radware.com/LegalNotice/. All other trademarks and names are property of their respective owners.
Radware believes the information in this document is accurate in all material respects as of its publication date. However, the information is provided without any express, statutory, or implied warranties and is subject to change without notice.
The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.
CONTACTSInvestor Relations:Yisca Erez, +972-72-3917211,
Media Contact:Gerri Dyrek,
Radware Ltd.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
September 30,
December 31,
2024
2023
(Unaudited)
(Unaudited)
Assets
Current assets
Cash and cash equivalents
115,416
70,538
Marketable securities
94,809
86,372
Short-term bank deposits
111,998
173,678
Trade receivables, net
19,963
20,267
Other receivables and prepaid expenses
9,891
9,529
Inventories
13,543
15,544
365,620
375,928
Long-term investments
Marketable securities
30,991
33,131
Long-term bank deposits
58,468
-
Other assets
2,104
2,166
91,563
35,297
Property and equipment, net
16,499
18,221
Intangible assets, net
12,742
15,718
Other long-term assets
35,312
37,967
Operating lease right-of-use assets
18,433
20,777
Goodwill
68,008
68,008
Total assets
608,177
571,916
Liabilities and equity
Current liabilities
Trade payables
6,551
4,298
Deferred revenues
109,924
105,012
Operating lease liabilities
4,333
4,684
Other payables and accrued expenses
46,427
41,021
167,235
155,015
Long-term liabilities
Deferred revenues
65,916
60,499
Operating lease liabilities
13,658
16,020
Other long-term liabilities
14,173
17,108
93,747
93,627
Equity
Radware Ltd. equity
Share capital
749
742
Additional paid-in capital
548,240
529,209
Accumulated other comprehensive income
593
77
Treasury stock, at cost
(366,588)
(365,749)
Retained earnings
123,398
119,812
Total Radware Ltd. shareholder's equity
306,392
284,091
Non–controlling interest
40,803
39,183
Total equity
347,195
323,274
Total liabilities and equity
608,177
571,916
Radware Ltd.Condensed Consolidated Statements of Income (Loss)(U.S Dollars in thousands, except share and per share data)
For the three months ended
For the nine months ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenues
69,488
61,612
201,849
196,260
Cost of revenues
13,392
12,838
39,260
38,886
Gross profit
56,096
48,774
162,589
157,374
Operating expenses, net:
Research and development, net
18,654
20,614
56,251
62,905
Selling and marketing
30,500
30,532
89,945
94,368
General and administrative
6,948
7,824
21,271
24,378
Total operating expenses, net
56,102
58,970
167,467
181,651
Operating loss
(6)
(10,196)
(4,878)
(24,277)
Financial income, net
4,957
3,778
12,982
10,688
Income (loss) before taxes on income
4,951
(6,418)
8,104
(13,589)
Taxes on income
1,807
433
