Radware Q3 2024 Financial Results

Radware (NASDAQ: RDWR), a global leader in cybersecurity and application delivery solutions, reported strong financial results for Q3 2024. In the earnings call on October 31, CEO Roy Zisapel and CFO Guy Avidan highlighted a 13% year-over-year revenue growth, reaching $69.5 million.

The company's non-GAAP earnings per share (EPS) increased significantly to $0.23, up from $0.07 in the same quarter last year. The cloud security business contributed to this growth, with cloud Annual Recurring Revenue (ARR) rising by 15% to $71.6 million. Radware's outlook for Q4 2024 remains positive, with revenue projections between $71 million and $72 million and non-GAAP diluted EPS expected to be between $0.23 and $0.24.

Key Takeaways

• Q3 2024 revenue increased by 13% year-over-year to $69.5 million.
• Non-GAAP EPS for Q3 2024 more than tripled to $0.23 from $0.07 in Q3 2023.
• Cloud security business grew, with cloud ARR up 15% to $71.6 million.
• Subscription revenue now makes up 47% of total revenue.
• Gross margin improved to 82.3%, and net income rose to $10.2 million.
• Q4 2024 revenue is projected at $71 million to $72 million, with non-GAAP diluted EPS between $0.23 and $0.24.

Company Outlook

• Radware expects Q4 2024 revenue in the range of $71 million to $72 million.
• Non-GAAP operating expenses for Q4 are projected at $50.5 million to $51.5 million.
• A modest increase in operating expenses is anticipated, mainly for sales and marketing efforts.

Bearish Highlights

• Softer demand from service providers in North America.

Bullish Highlights

• Secured a significant cloud DDoS deal with a major U.S. communication provider.
• Strong performance from OEM partners, including Cisco and Check Point.
• Transition to the upgraded DefensePro X platform has begun, with only 20% of the installed base upgraded so far.
• Strong growth in the EMEA region with a healthy mix of on-premises, carrier, and government deals.

Misses

• No specific misses were discussed in the earnings call.

Q&A Highlights

• Zisapel discussed ongoing upgrades to cloud scrubbing centers and strategic investments in sales and marketing.
• Expressed optimism about growth opportunities, including security MSSP and 5G deployments.

In summary, Radware's Q3 2024 results reflected substantial growth in revenue and earnings, driven by its robust cloud security business and strategic partnerships. The focus on profitable growth and investments positions Radware well for future success despite challenges in North America.

InvestingPro Insights

InvestingPro data supports Radware's strong Q3 2024 results, highlighting a gross profit margin of 80.48% and the company holding more cash than debt, providing financial flexibility for growth initiatives.

Recent stock performance has shown a 28.72% total return over six months, reflecting investor confidence and aligning with the optimistic outlook for Q4 2024.

While the non-GAAP EPS for Q3 2024 more than tripled, it’s noted that Radware was not profitable over the last twelve months on a GAAP basis. Analysts suggest profitability is expected this year, consistent with guidance for Q4 2024.

For a more comprehensive analysis, InvestingPro offers additional insights into Radware's financial health and market position.

Full transcript – Radware Ltd (RDWR) Q3 2024

Operator

Welcome to the Radware Conference Call discussing Third Quarter 2024 Results… [content continues with operator instructions, director introductions, etc.]

Roy Zisapel

Thank you, Yisca… [summary of CEO's remarks on performance]

Guy Avidan

Thank you, Roy… [CFO financial overview]

Operator

There are no more questions… [concludes the call]

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