Radware® (NASDAQ: RDWR), a leading provider of cyber security and
application delivery solutions, today announced its consolidated
financial results for the quarter ended June 30, 2019.
“We are pleased to report solid second quarter results, with
revenue growth for the first half of 2019 at 9%,” said Roy Zisapel,
Radware President & CEO. “Our product subscriptions and cloud
security offerings continue to grow quickly, providing our
customers with unmatched business value and excellent business
outcomes as they migrate to a multi-cloud application
infrastructure.”
Financial Highlights for the
Second Quarter of
2019
Revenues for the second quarter of 2019 totaled
$60.5 million, up 6% from revenues of $57.3 million for the second
quarter of 2018. Revenues for the first six months of 2019 totaled
$121.9 million, up 9% from revenues of $111.8 million for the first
six months of 2018:
- Revenues in the Americas region were $27.6 million for the
second quarter of 2019, up 16% compared to revenues of $23.9
million in the second quarter of 2018. For the first six months of
2019, revenues in the Americas region increased 9% over the same
period in 2018.
- Revenues in the Europe, Middle East and Africa (“EMEA”) region
were $16.9 million for the second quarter of 2019, compared with
revenues of $19.8 million in the second quarter of 2018. For the
first six months of 2019, revenues in the EMEA region increased 1%
over the same period of 2018.
- Revenues in the Asia-Pacific (“APAC”) region were $15.9 million
for the second quarter of 2019, up 17% from revenues of $13.6
million in the second quarter of 2018. For the first six months of
2019, revenues in the APAC region increased 19% over the same
period of 2018.
Net income on a GAAP basis for the second
quarter of 2019 was $3.7 million, or $0.08 per diluted share,
compared with net income of $1.7 million, or $0.04 per diluted
share for the second quarter of 2018.
Non-GAAP net income for the second quarter of
2019 was $8.9 million, or $0.18 per diluted share, compared with
non- GAAP net income of $5.0 million, or $0.10 per diluted share
for the second quarter of 2018.
Non-GAAP results are calculated excluding, as
applicable, the impact of stock-based compensation, exchange rate
differences, net on balance sheet items included in financial
income, amortization of intangible assets, acquisition costs,
litigation costs and other gain adjustments, net of tax. A
reconciliation of each of the Company’s non-GAAP measures to the
comparable GAAP measured is included at the end of this press
release.
As of June 30, 2019, the Company had cash, cash
equivalents, short-term and long-term bank deposits and marketable
securities of $414.0 million, compared with $401.1 million as of
December 31, 2018. Net cash provided by operating activities in the
second quarter of 2019 totaled $5.1 million. Net cash provided by
operating activities in the last 12 months totaled $63.2
million.
Conference Call
Radware management will host a call on
Wednesday, July 31, 2019 at 8:30 a.m. ET to discuss its second
quarter 2019 results and the Company’s outlook for the third
quarter of 2019.
Participants in the US call: Toll Free 833-241-4257
Participants Internationally call:
+1-647-689-4208
Conference ID: 4971594
A replay will be available for two days, starting two hours
after the end of the call, at telephone number +1-416-621-4642 or
(US toll-free) 800-585-8367.
A live webcast of the conference call can also
be heard by accessing 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
MeasuresIn 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, sales and marketing expense, general and
administrative expense, other income, total operating expenses,
operating income, financial income, income before taxes on income,
net income and earnings per share, which are adjustments from
results based on GAAP to exclude stock-based compensation expenses,
amortization of intangible assets, acquisition costs, litigation
costs, exchange rate differences, net on balance sheet items
included in finance income and other gain adjustment, net of tax.
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 measures 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.
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
and volatility of the market for our products; changes in the
competitive landscape; inability to realize our investment
objectives; timely availability and customer acceptance of our new
and existing products; risks and uncertainties relating to
acquisitions or other investments; the impact of economic and
political uncertainties and weaknesses in various regions of the
world, including the commencement or escalation of hostilities or
acts of terrorism; intense competition in the market for
Application Delivery and Network Security solutions and in our
industry in general; changes in government regulation; outages,
interruptions or delays in hosting services or our internal network
system; compliance with open source and third party licenses; the
risk that our intangible assets or goodwill may become impaired;
our dependence on independent distributors to sell our products;
long sales cycles for our solutions; changes in foreign currency
exchange rates; undetected defects or errors in our products or a
failure of our products to protect against malicious attacks; the
availability of components and manufacturing capacity; the ability
of vendors to provide our hardware platforms and components for our
main accessories; our ability to protect our proprietary
technology; intellectual property infringement claims made by third
parties; changes in tax laws; our ability to attract, train and
retain highly qualified personnel; 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 Radware
Radware® (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 more than 12,500 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 www.radware.com.
©2019 Radware Ltd. All rights reserved. The 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.
CONTACTS
Investor Relations:Anat Earon-Heilborn+972
723917548 ir@radware.com
Media Contacts:Deborah
SzajngartenRadware201-785-3206deborah.szajngarten@radware.com
Radware Ltd. |
Condensed Consolidated Balance Sheets |
(U.S. Dollars in thousands) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2019 |
|
2018 |
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
34,191 |
|
45,203 |
Available-for-sale marketable
securities |
25,923 |
|
15,742 |
Short-term bank deposits |
193,944 |
|
255,454 |
Trade receivables, net |
14,987 |
|
17,166 |
Other receivables and prepaid
expenses |
10,182 |
|
7,071 |
Inventories |
15,964 |
|
18,401 |
|
295,191 |
|
359,037 |
|
|
|
|
Long-term
investments |
|
|
|
Available-for-sale marketable
securities |
120,174 |
|
84,669 |
Long-term bank deposits |
39,732 |
|
0 |
Severance pay funds |
2,267 |
|
2,973 |
|
162,173 |
|
87,642 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
23,538 |
|
23,677 |
Other long-term assets |
21,425 |
|
20,724 |
Operating lease right-of-use
assets |
19,868 |
|
0 |
Goodwill and intangible
assets, net |
54,838 |
|
41,641 |
Total assets |
577,033 |
|
532,721 |
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
Trade payables |
3,802 |
|
4,483 |
Deferred revenues |
86,207 |
|
83,955 |
Operating lease
liabilities |
5,495 |
|
0 |
Other payables and accrued
expenses |
29,729 |
|
29,596 |
|
125,233 |
|
118,034 |
|
|
|
|
Long-term
liabilities |
|
|
|
Deferred revenues |
45,446 |
|
43,796 |
Operating lease
liabilities |
15,033 |
|
0 |
Other long-term
liabilities |
10,171 |
|
6,934 |
|
70,650 |
|
50,730 |
|
|
|
|
Shareholders'
equity |
|
|
|
Share capital |
704 |
|
693 |
Additional paid-in
capital |
400,756 |
|
383,536 |
Accumulated other
comprehensive income (loss), net of tax |
791 |
|
(1,110) |
Treasury stock, at cost |
(130,770) |
|
(120,717) |
Retained earnings |
109,669 |
|
101,555 |
Total shareholders'
equity |
381,150 |
|
363,957 |
|
|
|
|
Total liabilities and
shareholders' equity |
577,033 |
|
532,721 |
|
|
|
|
Radware Ltd. |
Condensed Consolidated Statements of Income |
(U.S Dollars in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
60,454 |
|
57,287 |
|
121,851 |
|
111,823 |
Cost of revenues |
|
10,644 |
|
10,340 |
|
21,653 |
|
20,280 |
Gross profit |
|
49,810 |
|
46,947 |
|
100,198 |
|
91,543 |
|
|
|
|
|
|
|
|
|
Operating expenses, net: |
|
|
|
|
|
|
|
|
Research and development,
net |
|
15,400 |
|
14,633 |
|
30,630 |
|
29,295 |
Selling and marketing |
|
26,680 |
|
27,803 |
|
53,341 |
|
55,986 |
General and
administrative |
|
5,042 |
|
3,811 |
|
9,806 |
|
7,866 |
Total operating expenses,
net |
|
47,122 |
|
46,247 |
|
93,777 |
|
93,147 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
2,688 |
|
700 |
|
6,421 |
|
(1,604) |
Financial income, net |
|
2,119 |
|
1,701 |
|
3,910 |
|
3,390 |
Income before taxes on
income |
|
4,807 |
|
2,401 |
|
10,331 |
|
1,786 |
Taxes on income |
|
(1,061) |
|
(727) |
|
(2,217) |
|
(1,107) |
Net income |
|
3,746 |
|
1,674 |
|
8,114 |
|
679 |
|
|
|
|
|
|
|
|
|
Basic net earnings per
share |
|
0.08 |
|
0.04 |
|
0.17 |
|
0.02 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute basic net
earnings per share |
|
46,899,813 |
|
44,839,420 |
|
46,757,981 |
|
44,583,442 |
|
|
|
|
|
|
|
|
|
Diluted net earnings per
share |
|
0.08 |
|
0.04 |
|
0.17 |
|
0.01 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute diluted net
earnings per share |
|
48,722,684 |
|
47,396,099 |
|
48,649,438 |
|
46,936,309 |
|
|
|
|
|
|
|
|
|
|
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 |
|
For the six
months ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
GAAP gross profit |
49,810 |
|
46,947 |
|
100,198 |
|
91,543 |
|
Stock-based compensation |
59 |
|
59 |
|
114 |
|
117 |
|
Amortization of intangible assets |
410 |
|
212 |
|
821 |
|
442 |
Non-GAAP gross profit |
50,279 |
|
47,218 |
|
101,133 |
|
92,102 |
|
|
|
|
|
|
|
|
|
GAAP research and development, net |
15,400 |
|
14,633 |
|
30,630 |
|
29,295 |
|
Stock-based compensation |
714 |
|
679 |
|
1,424 |
|
1,610 |
Non-GAAP Research and development, net |
14,686 |
|
13,954 |
|
29,206 |
|
27,685 |
|
|
|
|
|
|
|
|
|
GAAP selling and marketing |
26,680 |
|
27,803 |
|
53,341 |
|
55,986 |
|
Stock-based compensation |
1,735 |
|
1,774 |
|
3,304 |
|
3,678 |
|
Amortization of intangible assets |
18 |
|
21 |
|
35 |
|
41 |
Non-GAAP selling and marketing |
24,927 |
|
26,008 |
|
50,002 |
|
52,267 |
|
|
|
|
|
|
|
|
|
GAAP general and administrative |
5,042 |
|
3,811 |
|
9,806 |
|
7,866 |
|
Stock-based compensation |
782 |
|
378 |
|
1,549 |
|
785 |
|
Acquisition costs |
- |
|
- |
|
264 |
|
- |
|
Litigation costs |
777 |
|
143 |
|
859 |
|
413 |
Non-GAAP general and administrative |
3,483 |
|
3,290 |
|
7,134 |
|
6,668 |
|
|
|
|
|
|
|
|
|
GAAP total operating expenses, net |
47,122 |
|
46,247 |
|
93,777 |
|
93,147 |
|
Stock-based compensation |
3,231 |
|
2,831 |
|
6,277 |
|
6,073 |
|
Acquisition costs |
- |
|
- |
|
264 |
|
- |
|
Amortization of intangible assets |
18 |
|
21 |
|
35 |
|
41 |
|
Litigation costs |
777 |
|
143 |
|
859 |
|
413 |
Non-GAAP total operating expenses, net |
43,096 |
|
43,252 |
|
86,342 |
|
86,620 |
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) |
2,688 |
|
700 |
|
6,421 |
|
(1,604) |
|
Stock-based compensation |
3,290 |
|
2,890 |
|
6,391 |
|
6,190 |
|
Acquisition costs |
- |
|
- |
|
264 |
|
- |
|
Amortization of intangible assets |
428 |
|
233 |
|
856 |
|
483 |
|
Litigation costs |
777 |
|
143 |
|
859 |
|
413 |
Non-GAAP operating income |
7,183 |
|
3,966 |
|
14,791 |
|
5,482 |
|
|
|
|
|
|
|
|
|
GAAP financial income, net |
2,119 |
|
1,701 |
|
3,910 |
|
3,390 |
|
Other gain adjustments |
(310) |
|
- |
|
(310) |
|
- |
|
Exchange rate differences, net on balance sheet items included
in financial income, net |
909 |
|
26 |
|
1,540 |
|
(177) |
Non-GAAP financial income, net |
2,718 |
|
1,727 |
|
5,140 |
|
3,213 |
|
|
|
|
|
|
|
|
|
GAAP income before taxes on income |
4,807 |
|
2,401 |
|
10,331 |
|
1,786 |
|
Stock-based compensation |
3,290 |
|
2,890 |
|
6,391 |
|
6,190 |
|
Acquisition costs |
- |
|
- |
|
264 |
|
- |
|
Amortization of intangible assets |
428 |
|
233 |
|
856 |
|
483 |
|
Litigation costs |
777 |
|
143 |
|
859 |
|
413 |
|
Other gain adjustments |
(310) |
|
- |
|
(310) |
|
- |
|
Exchange rate differences, net on balance sheet items included
in financial income, net |
909 |
|
26 |
|
1,540 |
|
(177) |
Non-GAAP income before taxes on income |
9,901 |
|
5,693 |
|
19,931 |
|
8,695 |
|
|
|
|
|
|
|
|
|
GAAP taxes on income |
(1,061) |
|
(727) |
|
(2,217) |
|
(1,107) |
|
Tax expenses on other gain adjustments |
71 |
|
- |
|
71 |
|
- |
Non-GAAP taxes on income |
(990) |
|
(727) |
|
(2,146) |
|
(1,107) |
|
|
|
|
|
|
|
|
|
GAAP net income |
3,746 |
|
1,674 |
|
8,114 |
|
679 |
|
Stock-based compensation |
3,290 |
|
2,890 |
|
6,391 |
|
6,190 |
|
Acquisition costs |
- |
|
- |
|
264 |
|
- |
|
Amortization of intangible assets |
428 |
|
233 |
|
856 |
|
483 |
|
Litigation costs |
777 |
|
143 |
|
859 |
|
413 |
|
Other gain adjustments |
(310) |
|
- |
|
(310) |
|
- |
|
Exchange rate differences, net on balance sheet items included
in financial income, net |
909 |
|
26 |
|
1,540 |
|
(177) |
|
Tax expenses on other gain adjustments |
71 |
|
- |
|
71 |
|
- |
Non-GAAP net income |
8,911 |
|
4,966 |
|
17,785 |
|
7,588 |
|
|
|
|
|
|
|
|
|
GAAP diluted net earnings per share |
0.08 |
|
0.04 |
|
0.17 |
|
0.02 |
|
Stock-based compensation |
0.07 |
|
0.06 |
|
0.13 |
|
0.13 |
|
Acquisition costs |
0.00 |
|
0.00 |
|
0.01 |
|
0.00 |
|
Amortization of intangible assets |
0.01 |
|
0.00 |
|
0.02 |
|
0.01 |
|
Litigation costs |
0.02 |
|
0.00 |
|
0.02 |
|
0.01 |
|
Other gain adjustments |
(0.01) |
|
0.00 |
|
(0.01) |
|
0.00 |
|
Exchange rate differences, net on balance sheet items included
in financial income, net |
0.02 |
|
0.00 |
|
0.03 |
|
(0.00) |
|
Tax expenses on other gain adjustments |
0.00 |
|
0.00 |
|
0.00 |
|
0.00 |
Non-GAAP diluted net earnings per share |
0.18 |
|
0.10 |
|
0.37 |
|
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute
Non-GAAP diluted net earnings per share |
48,722,684 |
|
47,396,099 |
|
48,649,438 |
|
46,936,309 |
|
|
|
|
|
|
|
|
|
Radware
Ltd. |
Condensed
Consolidated Statements of Cash Flow |
(U.S.
Dollars in thousands) |
|
|
|
|
|
|
|
|
|
For the
three months ended |
|
For the six
months ended |
|
June 30, |
|
June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
3,746 |
|
1,674 |
|
8,114 |
|
679 |
Adjustments to reconcile net income to net cash
provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
2,701 |
|
2,443 |
|
5,388 |
|
4,948 |
Stock based compensation |
3,290 |
|
2,890 |
|
6,391 |
|
6,190 |
Amortization of premium, accretion of discounts and accrued
interest on available-for-sale marketable securities, net |
149 |
|
414 |
|
327 |
|
690 |
Other gain |
(310) |
|
0 |
|
(310) |
|
0 |
Accrued interest on bank deposits |
3,160 |
|
(146) |
|
2,331 |
|
(212) |
Increase (decrease) in accrued severance pay, net |
65 |
|
(97) |
|
933 |
|
142 |
Decrease (increase) in trade receivables, net |
(641) |
|
(2,564) |
|
2,529 |
|
(2,601) |
Decrease (increase) in other receivables and prepaid expenses
and other long-term assets |
(1,721) |
|
(2,501) |
|
(3,686) |
|
4,697 |
Decrease in inventories |
1,221 |
|
477 |
|
2,437 |
|
329 |
Decrease (increase) in trade payables |
(28) |
|
424 |
|
(738) |
|
(623) |
Increase (decrease) in deferred revenues |
(7,237) |
|
(1,700) |
|
3,783 |
|
7,166 |
Increase (decrease) in other payables and accrued expenses |
463 |
|
1,245 |
|
472 |
|
(6,682) |
Operating lease liabilities, net |
285 |
|
0 |
|
660 |
|
0 |
Net cash provided by operating activities |
5,143 |
|
2,559 |
|
28,631 |
|
14,723 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
(2,382) |
|
(1,187) |
|
(4,343) |
|
(3,276) |
Proceeds from (investment in) other long-term assets, net |
(33) |
|
131 |
|
(62) |
|
40 |
Proceeds from (investment in) bank deposits, net |
19,529 |
|
(9,067) |
|
19,447 |
|
(26,067) |
Investment in sale, redemption of and purchase of
available-for-sale marketable securities, net |
(33,574) |
|
(686) |
|
(43,235) |
|
(1,872) |
Payment for acquisition of subsidiary, net of cash
acquired |
43 |
|
0 |
|
(12,239) |
|
0 |
Net cash used in investing activities |
(16,417) |
|
(10,809) |
|
(40,432) |
|
(31,175) |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
3,109 |
|
7,939 |
|
10,842 |
|
12,891 |
Repurchase of shares |
(10,005) |
|
0 |
|
(10,053) |
|
0 |
Net cash provided by (used in) financing activities |
(6,896) |
|
7,939 |
|
789 |
|
12,891 |
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
(18,170) |
|
(311) |
|
(11,012) |
|
(3,561) |
Cash and cash equivalents at the beginning of the period |
52,361 |
|
61,987 |
|
45,203 |
|
65,237 |
Cash and cash equivalents at the end of the period |
34,191 |
|
61,676 |
|
34,191 |
|
61,676 |
|
|
|
|
|
|
|
|
RADWARE (NASDAQ:RDWR)
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