Radware Reports First Quarter 2024 Financial Results

Published

First Quarter 2024 Financial Results and Highlights

  • Revenue of $65.1 million, a decrease of 6% year-over-year
  • Cloud ARR of $67.0 million, an increase of 22% year-over-year
  • Non-GAAP EPS of $0.16; GAAP net loss per diluted share of $0.03
  • Cash flow from operations of $21.1 million.

TEL AVIV, Israel, May 08, 2024 (GLOBE NEWSWIRE) -- 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 equivalents74,626  70,538 
Marketable securities97,743  86,372 
Short-term bank deposits191,585  173,678 
Trade receivables, net20,486  20,267 
Other receivables and prepaid expenses9,199  9,529 
Inventories14,540  15,544 
 408,179  375,928 
    
Long-term investments   
Marketable securities18,853  33,131 
Other assets2,083  2,166 
 20,936  35,297 
    
Property and equipment, net18,044  18,221 
Intangible assets, net14,726  15,718 
Other long-term assets37,052  37,967 
Operating lease right-of-use assets20,268  20,777 
Goodwill68,008  68,008 
Total assets587,213  571,916 
    
Liabilities and equity   
    
Current liabilities   
Trade payables5,704  4,298 
Deferred revenues101,892  105,012 
Operating lease liabilities4,537  4,684 
Other payables and accrued expenses42,757  41,021 
 154,890  155,015 
    
Long-term liabilities   
Deferred revenues72,513  60,499 
Operating lease liabilities15,279  16,020 
Other long-term liabilities15,164  17,108 
 102,956  93,627 
    
Equity   
Radware Ltd. equity   
Share capital744  742 
Additional paid-in capital536,881  529,209 
Accumulated other comprehensive income (loss)(66)  77 
Treasury stock, at cost(366,588)  (365,749) 
Retained earnings118,590  119,812 
Total Radware Ltd. shareholder's equity289,561  284,091 
    
Non–controlling interest39,806  39,183 
    
Total equity329,367  323,274 
    
Total liabilities and equity587,213  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 profit52,273  55,735 
 Share-based compensation79  113 
 Amortization of intangible assets992  992 
Non-GAAP gross profit53,344  56,840 
     
GAAP research and development, net18,896  21,150 
 Share-based compensation1,722  1,959 
Non-GAAP Research and development, net17,174  19,191 
     
GAAP selling and marketing29,701  31,919 
 Share-based compensation2,551  3,394 
Non-GAAP selling and marketing27,150  28,525 
     
GAAP general and administrative7,339  8,247 
 Share-based compensation2,395  3,531 
 Acquisition costs220  13 
Non-GAAP general and administrative4,724  4,703 
     
GAAP total operating expenses, net55,936  61,316 
 Share-based compensation6,668  8,884 
 Acquisition costs220  13 
Non-GAAP total operating expenses, net49,048  52,419 
     
GAAP operating loss(3,663)  (5,581) 
 Share-based compensation6,747  8,997 
 Amortization of intangible assets992  992 
 Acquisition costs220  13 
Non-GAAP operating income4,296  4,421 
     
GAAP financial income, net3,608  3,491 
 Exchange rate differences, net on balance sheet items included in financial income, net153  (775) 
Non-GAAP financial income, net3,761  2,716 
     
GAAP loss before taxes on income(55)  (2,090) 
 Share-based compensation6,747  8,997 
 Amortization of intangible assets992  992 
 Acquisition costs220  13 
 Exchange rate differences, net on balance sheet items included in financial income, net153  (775) 
Non-GAAP income before taxes on income8,057  7,137 
     
GAAP taxes on income1,167  991 
 Tax related adjustments62  62 
Non-GAAP taxes on income1,229  1,053 
     
GAAP net loss(1,222)  (3,081) 
 Share-based compensation6,747  8,997 
 Amortization of intangible assets992  992 
 Acquisition costs220  13 
 Exchange rate differences, net on balance sheet items included in financial income, net153  (775) 
 Tax related adjustments(62)  (62) 
Non-GAAP net income6,828  6,084 
     
GAAP diluted net loss per share(0.03)  (0.07) 
 Share-based compensation0.16  0.20 
 Amortization of intangible assets0.02  0.02 
 Acquisition costs0.01  0.00 
 Exchange rate differences, net on balance sheet items included in financial income, net0.00  (0.02) 
 Tax related adjustments(0.00)  (0.00) 
Non-GAAP diluted net earnings per share0.16  0.14 
     
     
Weighted average number of shares used to compute non-GAAP diluted net earnings per share42,875,058  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 expense2,943  3,078 
 Exclude: Taxes on income1,167  991 
EBITDA(720)  (2,503) 
     
 Share-based compensation6,747  8,997 
 Acquisition costs220  13 
Adjusted EBITDA6,247  6,507 
     
     
  For the three months ended
  March 31,
  2024  2023 
 Amortization of intangible assets992  992 
 Depreciation1,951  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 
     

 

Primary Logo

Source: Radware Ltd.

In This Story

RDWR