Radware® (NASDAQ: RDWR), a leading provider of cyber security and
application delivery solutions, today announced its consolidated
financial results for the first quarter ended March 31, 2024.
“We delivered a solid first quarter performance in 2024,
exceeding the high-end of our revenue and EPS guidance while
producing 22% year-over-year growth in cloud ARR,” said Roy
Zisapel, Radware’s president and CEO. “During the quarter, we saw
recovery in customer spending, driven by a slight improvement in
the business environment and a surge in cyber-attacks. Looking
ahead in 2024, we intend to capitalize on the strong growth across
our cloud security business and partner channels and the market
need for best-in-class critical security. Combined with cost
discipline, we believe we are well-positioned to return to revenue
growth and improved profitability.”
Financial Highlights
for the First
Quarter
2024Revenue for the first quarter of 2024 totaled
$65.1 million:
- Revenue in the Americas region was $27.1 million for the first
quarter of 2024, the same as in the first quarter of 2023.
- Revenue in the Europe, Middle East, and Africa (“EMEA”) region
was $22.7 million for the first quarter of 2024, a decrease of 24%
from $29.7 million in the first quarter of 2023.
- Revenue in the Asia-Pacific (“APAC”) region was $15.3 million
for the first quarter of 2024, an increase of 25% from $12.2
million in the first quarter of 2023.
GAAP net loss for the first quarter of 2024 was $1.2 million, or
$(0.03) per diluted share, compared to GAAP net loss of $3.1
million, or $(0.07) per diluted share, for the first quarter of
2023.
Non-GAAP net income for the first quarter of
2024 was $6.8 million, or $0.16 per diluted share, compared to
non-GAAP net income of $6.1 million, or $0.14 per diluted share,
for the first quarter of 2023.
As of March 31, 2024, the Company had cash, cash
equivalents, short-term bank deposits, and marketable securities of
$382.8 million. Cash flow from operations was $21.1 million in the
first 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, May 8, 2024, at 8:30 a.m. EDT to
discuss its first quarter of 2024 results and the Company’s second
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 of cyber security and application delivery solutions
for physical, cloud, and software defined data centers. Its
award-winning solutions portfolio secures the digital experience by
providing infrastructure, application, and corporate IT protection,
and availability services to enterprises globally. Radware’s
solutions empower enterprise and carrier customers worldwide to
adapt to market challenges quickly, maintain business continuity,
and achieve maximum productivity while keeping costs down. 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, ir@radware.com
Media Contact:Gerri Dyrek,
gerri.dyrek@radware.com
Radware Ltd. |
Condensed Consolidated Balance Sheets |
(U.S. Dollars in thousands) |
|
|
|
|
|
March 31, |
|
December 31, |
|
2024 |
|
|
2023 |
|
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
74,626 |
|
|
70,538 |
|
Marketable securities |
97,743 |
|
|
86,372 |
|
Short-term bank deposits |
191,585 |
|
|
173,678 |
|
Trade receivables, net |
20,486 |
|
|
20,267 |
|
Other receivables and prepaid
expenses |
9,199 |
|
|
9,529 |
|
Inventories |
14,540 |
|
|
15,544 |
|
|
408,179 |
|
|
375,928 |
|
|
|
|
|
Long-term
investments |
|
|
|
Marketable securities |
18,853 |
|
|
33,131 |
|
Other assets |
2,083 |
|
|
2,166 |
|
|
20,936 |
|
|
35,297 |
|
|
|
|
|
Property and equipment,
net |
18,044 |
|
|
18,221 |
|
Intangible assets, net |
14,726 |
|
|
15,718 |
|
Other long-term assets |
37,052 |
|
|
37,967 |
|
Operating lease right-of-use
assets |
20,268 |
|
|
20,777 |
|
Goodwill |
68,008 |
|
|
68,008 |
|
Total assets |
587,213 |
|
|
571,916 |
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
Trade payables |
5,704 |
|
|
4,298 |
|
Deferred revenues |
101,892 |
|
|
105,012 |
|
Operating lease
liabilities |
4,537 |
|
|
4,684 |
|
Other payables and accrued
expenses |
42,757 |
|
|
41,021 |
|
|
154,890 |
|
|
155,015 |
|
|
|
|
|
Long-term
liabilities |
|
|
|
Deferred revenues |
72,513 |
|
|
60,499 |
|
Operating lease
liabilities |
15,279 |
|
|
16,020 |
|
Other long-term
liabilities |
15,164 |
|
|
17,108 |
|
|
102,956 |
|
|
93,627 |
|
|
|
|
|
Equity |
|
|
|
Radware Ltd.
equity |
|
|
|
Share capital |
744 |
|
|
742 |
|
Additional paid-in
capital |
536,881 |
|
|
529,209 |
|
Accumulated other
comprehensive income (loss) |
(66) |
|
|
77 |
|
Treasury stock, at cost |
(366,588) |
|
|
(365,749) |
|
Retained earnings |
118,590 |
|
|
119,812 |
|
Total Radware Ltd.
shareholder's equity |
289,561 |
|
|
284,091 |
|
|
|
|
|
Non–controlling interest |
39,806 |
|
|
39,183 |
|
|
|
|
|
Total
equity |
329,367 |
|
|
323,274 |
|
|
|
|
|
Total liabilities and
equity |
587,213 |
|
|
571,916 |
|
|
|
|
|
Radware Ltd. |
Condensed Consolidated Statements of Income |
(U.S Dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
Revenues |
|
65,085 |
|
|
69,041 |
|
Cost of revenues |
|
12,812 |
|
|
13,306 |
|
Gross profit |
|
52,273 |
|
|
55,735 |
|
|
|
|
|
|
Operating expenses, net: |
|
|
|
|
Research and development,
net |
|
18,896 |
|
|
21,150 |
|
Selling and marketing |
|
29,701 |
|
|
31,919 |
|
General and
administrative |
|
7,339 |
|
|
8,247 |
|
Total operating expenses,
net |
|
55,936 |
|
|
61,316 |
|
|
|
|
|
|
Operating loss |
|
(3,663) |
|
|
(5,581) |
|
Financial income, net |
|
3,608 |
|
|
3,491 |
|
Loss before taxes on
income |
|
(55) |
|
|
(2,090) |
|
Taxes on income |
|
1,167 |
|
|
991 |
|
Net loss |
|
(1,222) |
|
|
(3,081) |
|
|
|
|
|
|
Basic net loss per share
attributed to Radware Ltd.'s shareholders |
|
(0.03) |
|
|
(0.07) |
|
|
|
|
|
|
Weighted average number of
shares used to compute basic net loss per share |
|
41,750,203 |
|
|
44,053,402 |
|
|
|
|
|
|
Diluted net loss per share
attributed to Radware Ltd.'s shareholders |
|
(0.03) |
|
|
(0.07) |
|
|
|
|
|
|
Weighted average number of
shares used to compute diluted net loss per share |
|
41,750,203 |
|
|
44,053,402 |
|
|
|
|
|
|
|
Radware Ltd. |
|
Reconciliation of GAAP to Non-GAAP Financial
Information |
|
(U.S Dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
(Unaudited) |
GAAP gross
profit |
52,273 |
|
|
55,735 |
|
|
Share-based compensation |
79 |
|
|
113 |
|
|
Amortization of intangible
assets |
992 |
|
|
992 |
|
Non-GAAP gross
profit |
53,344 |
|
|
56,840 |
|
|
|
|
|
|
GAAP research and
development, net |
18,896 |
|
|
21,150 |
|
|
Share-based compensation |
1,722 |
|
|
1,959 |
|
Non-GAAP Research
and development, net |
17,174 |
|
|
19,191 |
|
|
|
|
|
|
GAAP selling and
marketing |
29,701 |
|
|
31,919 |
|
|
Share-based compensation |
2,551 |
|
|
3,394 |
|
Non-GAAP selling
and marketing |
27,150 |
|
|
28,525 |
|
|
|
|
|
|
GAAP general and
administrative |
7,339 |
|
|
8,247 |
|
|
Share-based compensation |
2,395 |
|
|
3,531 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
Non-GAAP general
and administrative |
4,724 |
|
|
4,703 |
|
|
|
|
|
|
GAAP total
operating expenses, net |
55,936 |
|
|
61,316 |
|
|
Share-based compensation |
6,668 |
|
|
8,884 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
Non-GAAP total
operating expenses, net |
49,048 |
|
|
52,419 |
|
|
|
|
|
|
GAAP operating
loss |
(3,663) |
|
|
(5,581) |
|
|
Share-based compensation |
6,747 |
|
|
8,997 |
|
|
Amortization of intangible
assets |
992 |
|
|
992 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
Non-GAAP operating
income |
4,296 |
|
|
4,421 |
|
|
|
|
|
|
GAAP financial
income, net |
3,608 |
|
|
3,491 |
|
|
Exchange rate differences, net
on balance sheet items included in financial income, net |
153 |
|
|
(775) |
|
Non-GAAP financial
income, net |
3,761 |
|
|
2,716 |
|
|
|
|
|
|
GAAP loss before
taxes on income |
(55) |
|
|
(2,090) |
|
|
Share-based compensation |
6,747 |
|
|
8,997 |
|
|
Amortization of intangible
assets |
992 |
|
|
992 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
|
Exchange rate differences, net
on balance sheet items included in financial income, net |
153 |
|
|
(775) |
|
Non-GAAP income
before taxes on income |
8,057 |
|
|
7,137 |
|
|
|
|
|
|
GAAP taxes on
income |
1,167 |
|
|
991 |
|
|
Tax related adjustments |
62 |
|
|
62 |
|
Non-GAAP taxes on
income |
1,229 |
|
|
1,053 |
|
|
|
|
|
|
GAAP net loss |
(1,222) |
|
|
(3,081) |
|
|
Share-based compensation |
6,747 |
|
|
8,997 |
|
|
Amortization of intangible
assets |
992 |
|
|
992 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
|
Exchange rate differences, net
on balance sheet items included in financial income, net |
153 |
|
|
(775) |
|
|
Tax related adjustments |
(62) |
|
|
(62) |
|
Non-GAAP net
income |
6,828 |
|
|
6,084 |
|
|
|
|
|
|
GAAP diluted net
loss per share |
(0.03) |
|
|
(0.07) |
|
|
Share-based compensation |
0.16 |
|
|
0.20 |
|
|
Amortization of intangible
assets |
0.02 |
|
|
0.02 |
|
|
Acquisition costs |
0.01 |
|
|
0.00 |
|
|
Exchange rate differences, net
on balance sheet items included in financial income, net |
0.00 |
|
|
(0.02) |
|
|
Tax related adjustments |
(0.00) |
|
|
(0.00) |
|
Non-GAAP diluted
net earnings per share |
0.16 |
|
|
0.14 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used to compute non-GAAP diluted net earnings per
share |
42,875,058 |
|
|
44,762,161 |
|
|
|
|
|
|
|
|
Radware Ltd. |
|
RECONCILIATION OF GAAP NET LOSS TO EBITDA AND ADJUSTED
EBITDA (NON-GAAP) |
|
(U.S Dollars in thousands) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
(Unaudited) |
GAAP net
loss |
(1,222) |
|
|
(3,081) |
|
|
Exclude: Financial income,
net |
(3,608) |
|
|
(3,491) |
|
|
Exclude: Depreciation and
amortization expense |
2,943 |
|
|
3,078 |
|
|
Exclude: Taxes on income |
1,167 |
|
|
991 |
|
EBITDA |
(720) |
|
|
(2,503) |
|
|
|
|
|
|
|
Share-based compensation |
6,747 |
|
|
8,997 |
|
|
Acquisition costs |
220 |
|
|
13 |
|
Adjusted
EBITDA |
6,247 |
|
|
6,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
Amortization of intangible
assets |
992 |
|
|
992 |
|
|
Depreciation |
1,951 |
|
|
2,086 |
|
|
|
|
|
|
|
|
2,943 |
|
|
3,078 |
|
|
|
|
|
|
Radware Ltd. |
Condensed Consolidated Statements of Cash
Flow |
(U.S. Dollars in thousands) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31, |
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited) |
|
(Unaudited) |
Cash flow from operating
activities: |
|
|
|
|
|
|
|
|
|
Net loss |
|
(1,222) |
|
|
(3,081) |
|
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
Depreciation and
amortization |
|
2,943 |
|
|
3,078 |
|
Share-based compensation |
|
6,747 |
|
|
8,997 |
|
Amortization of premium,
accretion of discounts and accrued interest on marketable
securities, net |
|
(73) |
|
|
237 |
|
Loss related to securities,
net |
|
- |
|
|
245 |
|
Decrease in accrued interest
on bank deposits |
|
(9) |
|
|
(1,754) |
|
Decrease in accrued severance
pay, net |
|
(58) |
|
|
(69) |
|
Increase in trade receivables,
net |
|
(219) |
|
|
(1,005) |
|
Decrease (increase) in other
receivables and prepaid expenses and other long-term assets |
|
605 |
|
|
(2,858) |
|
Decrease in inventories |
|
1,004 |
|
|
149 |
|
Increase (decrease) in trade
payables |
|
1,406 |
|
|
(1,637) |
|
Increase in deferred
revenues |
|
8,894 |
|
|
746 |
|
Increase (decrease) in other
payables and accrued expenses |
|
1,483 |
|
|
(4,498) |
|
Operating lease liabilities,
net |
|
(379) |
|
|
214 |
|
Net cash provided by (used in)
operating activities |
|
21,122 |
|
|
(1,236) |
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
(1,774) |
|
|
(1,768) |
|
Proceeds from (investment in)
other long-term assets, net |
|
(25) |
|
|
47 |
|
Proceeds from (investment in)
bank deposits, net |
|
(17,898) |
|
|
9,200 |
|
Investment in, redemption of
and purchase of marketable securities ,net |
|
3,502 |
|
|
1,976 |
|
Net cash provided by (used in)
investing activities |
|
(16,195) |
|
|
9,455 |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
Proceeds from exercise of
share options |
|
- |
|
|
220 |
|
Repurchase of shares |
|
(839) |
|
|
(12,742) |
|
Net cash used in financing
activities |
|
(839) |
|
|
(12,522) |
|
|
|
|
|
|
Increase (decrease) in cash
and cash equivalents |
|
4,088 |
|
|
(4,303) |
|
Cash and cash equivalents at
the beginning of the period |
|
70,538 |
|
|
46,185 |
|
Cash and cash equivalents at
the end of the period |
|
74,626 |
|
|
41,882 |
|
|
|
|
|
|
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