Second Quarter 2018 Results and Financial
Highlights
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, 2018.
“We are pleased to report another strong
quarter, with continued growth in bookings, revenue, and
profitability. We remain committed to our mission of ensuring
network and application availability and security. The cyber
threats landscape continues to evolve, and as threats grow more
complex, our innovation around adaptive and analytics-based early
attack detection, surgical mitigation, and advanced automation, all
become more valuable” said Roy Zisapel, Radware President &
CEO.
Financial Highlights for the
Second Quarter of 2018
Revenues for the second quarter of 2018 totaled
$57.3 million, up 12% from revenues of $51.0 million for the second
quarter of 2017:
- Revenues in the Americas region were $23.9 million for the
second quarter of 2018, down 2% from revenues of $24.3 million in
the second quarter of 2017. For the first six months of 2018,
revenues in the Americas region were up 13% over the same period in
2017
- Revenues in the EMEA region were $19.8 million for the second
quarter of 2018, up 51% from revenues of $13.1 million in the
second quarter of 2017. For the first six months of 2018, revenues
in the EMEA region increased 26% over the same period of 2017
- Revenues in the APAC region were $13.6 million for the second
quarter of 2018, same as in the second quarter of 2017. For the
first six months of 2018, revenues in the APAC region decreased 3%
over the same period of 2017
Net profit on a GAAP basis for the second
quarter of 2018 was $1.7 million or $0.04 per diluted share,
compared with net loss of ($4.1) million or ($0.09) per diluted
share for the second quarter of 2017.
Non-GAAP net income for the second quarter of
2018 was $5.0 million or $0.10 per diluted share, compared with
non- GAAP net income of $1.2 million or $0.03 per diluted share for
the second quarter of 2017.
Non-GAAP results are calculated excluding the
impact of stock-based compensation, exchange rate differences, net
on balance sheet items included in financial income, amortization
of intangible assets, acquisition costs and litigation costs. 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, 2018, the Company had cash, cash
equivalents, short-term and long-term bank deposits and marketable
securities of $367.2 million, up from $358.1 million as of the end
of March 31, 2018.
Conference Call
Radware management will host a call on
Wednesday, August 1, 2018 at 8:30 am ET to discuss its second
quarter 2018 results and the company’s outlook for the third
quarter of 2018.
Participants in the US call: Toll Free 833-241-4257
Participants Internationally call:
+1-647-689-4208
Conference ID: 8599407
A replay will be available for 2 days, starting 2 hours after
the end of the call, on 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
InformationIn addition to reporting financial results in
accordance with generally accepted accounting principles (GAAP),
Radware uses non-GAAP measures of gross profit, operating income,
financial income, net income and earnings per share, which are
adjustments from results based on GAAP to exclude stock-based
compensation expenses, in accordance with ASC No. 718, amortization
of intangible assets, acquisition costs, litigation costs and
exchange rate differences, net on balance sheet items included in
finance income. Such exchange rate differences may vary from period
to period due to changes in exchange rates driven by general market
conditions or other circumstances outside of the normal course of
Radware's operations. Management believes that exclusion of these
charges allows comparisons of operating results that are consistent
across past, present and future periods. Furthermore, Radware uses
a measure called “total deferred revenues” which is defined as the
sum of short and long term deferred revenues on the balance sheet
and uncollected billed amounts that were offset against trade
receivables, and are not presented on the balance sheet. Radware’s
management believes the non-GAAP financial information provided in
this release is useful to investors for the purpose of
understanding and assessing Radware’s ongoing operations. The
presentation of this non-GAAP financial information is not intended
to be considered in isolation or as a substitute for results
prepared in accordance with GAAP. A reconciliation of the non-GAAP
financial measures discussed in this press release, 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 information in evaluating and operating
business internally and, as such, has determined that it is
important to provide this information to investors.
Safe Harbor Statement
This press release may contain statements
concerning Radware’s future prospects that are “forward-looking
statements” under the Private Securities Litigation Reform Act of
1995. Statements preceded by, followed by, or that otherwise
include the words "believes", "expects", "anticipates", "intends",
"estimates", "plans", and similar expressions or future or
conditional verbs such as "will", "should", "would", "may" and
"could" are generally forward-looking in nature and not historical
facts. 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; 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;
Competition in the market for Application Delivery and Network
Security solutions and our industry in general is intense; and
other factors and risks on 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, reference is made to Radware’s Annual Report on Form 20-F,
which is on file 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.
©2018 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
723917548ir@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, |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
61,676 |
|
65,237 |
Available-for-sale marketable securities |
41,234 |
|
42,573 |
Short-term
bank deposits |
149,622 |
|
93,151 |
Trade
receivables, net |
18,598 |
|
16,150 |
Other
receivables and prepaid expenses |
7,687 |
|
12,252 |
Inventories |
18,443 |
|
18,772 |
|
297,260 |
|
248,135 |
|
|
|
|
Long-term investments |
|
|
|
Available-for-sale marketable securities |
55,948 |
|
54,427 |
Long-term
bank deposits |
58,718 |
|
88,911 |
Severance
pay funds |
3,039 |
|
3,251 |
|
117,705 |
|
146,589 |
|
|
|
|
|
|
|
|
Property
and equipment, net |
22,453 |
|
23,642 |
Intangible
assets, net |
9,932 |
|
10,415 |
Other
long-term assets |
18,492 |
|
8,133 |
Goodwill |
32,174 |
|
32,174 |
Total
assets |
498,016 |
|
469,088 |
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
Trade
payables |
4,744 |
|
5,367 |
Deferred
revenues |
76,758 |
|
69,829 |
Other
payables and accrued expenses |
25,212 |
|
32,174 |
|
106,714 |
|
107,370 |
|
|
|
|
Long-term liabilities |
|
|
|
Deferred
revenues |
43,719 |
|
43,482 |
Other
long-term liabilities |
5,413 |
|
2,880 |
|
49,132 |
|
46,362 |
|
|
|
|
Shareholders' equity |
|
|
|
Share
capital |
685 |
|
673 |
Additional
paid-in capital |
368,318 |
|
349,250 |
Accumulated
other comprehensive loss, net of tax |
(1,212) |
|
(443) |
Treasury
stock, at cost |
(116,442) |
|
(116,442) |
Retained
earnings |
90,821 |
|
82,318 |
Total
shareholders' equity |
342,170 |
|
315,356 |
|
|
|
|
Total
liabilities and shareholders' equity |
498,016 |
|
469,088 |
|
|
|
|
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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
57,287 |
|
50,956 |
|
111,823 |
|
99,868 |
Cost of
revenues |
|
10,340 |
|
9,634 |
|
20,280 |
|
18,628 |
Gross
profit |
|
46,947 |
|
41,322 |
|
91,543 |
|
81,240 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development, net |
|
14,633 |
|
15,013 |
|
29,295 |
|
29,253 |
Selling and
marketing |
|
27,803 |
|
26,410 |
|
55,986 |
|
52,389 |
General and
administrative |
|
3,811 |
|
4,380 |
|
7,866 |
|
9,160 |
Total
operating expenses |
|
46,247 |
|
45,803 |
|
93,147 |
|
90,802 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
700 |
|
(4,481) |
|
(1,604) |
|
(9,562) |
Financial
income, net |
|
1,701 |
|
640 |
|
3,390 |
|
1,747 |
Income
(loss) before taxes on income |
|
2,401 |
|
(3,841) |
|
1,786 |
|
(7,815) |
Taxes on
income |
|
(727) |
|
(218) |
|
(1,107) |
|
(322) |
Net income
(loss) |
|
1,674 |
|
(4,059) |
|
679 |
|
(8,137) |
|
|
|
|
|
|
|
|
|
Basic net
income (loss) per share |
|
0.04 |
|
(0.09) |
|
0.02 |
|
(0.19) |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used to compute basic net earnings (loss)
per share |
|
44,839,420 |
|
43,821,006 |
|
44,583,442 |
|
43,282,607 |
|
|
|
|
|
|
|
|
|
Diluted net
earnings (loss) per share |
|
0.04 |
|
(0.09) |
|
0.01 |
|
(0.19) |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used to compute diluted net earnings
(loss) per share |
|
47,396,099 |
|
43,821,006 |
|
46,936,309 |
|
43,282,607 |
|
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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
GAAP gross profit |
46,947 |
|
41,322 |
|
91,543 |
|
81,240 |
|
Stock-based
compensation |
59 |
|
61 |
|
117 |
|
116 |
|
Amortization of intangible assets |
212 |
|
419 |
|
442 |
|
672 |
Non-GAAP gross profit |
47,218 |
|
41,802 |
|
92,102 |
|
82,028 |
|
|
|
|
|
|
|
|
|
GAAP research and development, net |
14,633 |
|
15,013 |
|
29,295 |
|
29,253 |
|
Stock-based
compensation |
679 |
|
1,028 |
|
1,610 |
|
1,926 |
Non-GAAP Research and development, net |
13,954 |
|
13,985 |
|
27,685 |
|
27,327 |
|
|
|
|
|
|
|
|
|
GAAP selling and marketing |
27,803 |
|
26,410 |
|
55,986 |
|
52,389 |
|
Stock-based
compensation |
1,774 |
|
1,875 |
|
3,678 |
|
3,499 |
|
Amortization of intangible assets |
21 |
|
24 |
|
41 |
|
47 |
Non-GAAP selling and marketing |
26,008 |
|
24,511 |
|
52,267 |
|
48,843 |
|
|
|
|
|
|
|
|
|
GAAP general and administrative |
3,811 |
|
4,380 |
|
7,866 |
|
9,160 |
|
Stock-based
compensation |
378 |
|
583 |
|
785 |
|
1,003 |
|
Acquisition
costs |
- |
|
- |
|
- |
|
340 |
|
Litigation
costs |
143 |
|
600 |
|
413 |
|
1,619 |
Non-GAAP general and administrative |
3,290 |
|
3,197 |
|
6,668 |
|
6,198 |
|
|
|
|
|
|
|
|
|
GAAP total operating expenses |
46,247 |
|
45,803 |
|
93,147 |
|
90,802 |
|
Stock-based
compensation |
2,831 |
|
3,486 |
|
6,073 |
|
6,428 |
|
Acquisition
costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of intangible assets |
21 |
|
24 |
|
41 |
|
47 |
|
Litigation
costs |
143 |
|
600 |
|
413 |
|
1,619 |
Non-GAAP total operating expenses |
43,252 |
|
41,693 |
|
86,620 |
|
82,368 |
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) |
700 |
|
(4,481) |
|
(1,604) |
|
(9,562) |
|
Stock-based
compensation |
2,890 |
|
3,547 |
|
6,190 |
|
6,544 |
|
Acquisition
costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of intangible assets |
233 |
|
443 |
|
483 |
|
719 |
|
Litigation
costs |
143 |
|
600 |
|
413 |
|
1,619 |
Non-GAAP operating income (loss) |
3,966 |
|
109 |
|
5,482 |
|
(340) |
|
|
|
|
|
|
|
|
|
GAAP finance income |
1,701 |
|
640 |
|
3,390 |
|
1,747 |
|
Exchange
rate differences, net on balance sheet items included in financial
income |
26 |
|
659 |
|
(177) |
|
806 |
Non-GAAP finance income |
1,727 |
|
1,299 |
|
3,213 |
|
2,553 |
|
|
|
|
|
|
|
|
|
GAAP income (loss) before taxes on income |
2,401 |
|
(3,841) |
|
1,786 |
|
(7,815) |
|
Stock-based
compensation |
2,890 |
|
3,547 |
|
6,190 |
|
6,544 |
|
Acquisition
costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of intangible assets |
233 |
|
443 |
|
483 |
|
719 |
|
Litigation
costs |
143 |
|
600 |
|
413 |
|
1,619 |
|
Exchange
rate differences, net on balance sheet items included in financial
income |
26 |
|
659 |
|
(177) |
|
806 |
Non-GAAP income before taxes on income |
5,693 |
|
1,408 |
|
8,695 |
|
2,213 |
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
1,674 |
|
(4,059) |
|
679 |
|
(8,137) |
|
Stock-based
compensation |
2,890 |
|
3,547 |
|
6,190 |
|
6,544 |
|
Acquisition
costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of intangible assets |
233 |
|
443 |
|
483 |
|
719 |
|
Litigation
costs |
143 |
|
600 |
|
413 |
|
1,619 |
|
Exchange
rate differences, net on balance sheet items included in financial
income |
26 |
|
659 |
|
(177) |
|
806 |
Non GAAP net income |
4,966 |
|
1,190 |
|
7,588 |
|
1,891 |
|
|
|
|
|
|
|
|
|
GAAP Net earnings (loss) per diluted share |
0.04 |
|
(0.09) |
|
0.01 |
|
(0.19) |
|
Stock-based
compensation |
0.06 |
|
0.08 |
|
0.13 |
|
0.15 |
|
Acquisition
costs |
0.00 |
|
0.00 |
|
0.00 |
|
0.01 |
|
Amortization of intangible assets |
0.00 |
|
0.01 |
|
0.01 |
|
0.02 |
|
Litigation
costs |
0.00 |
|
0.01 |
|
0.01 |
|
0.04 |
|
Exchange
rate differences, net on balance sheet items included in financial
income |
0.00 |
|
0.01 |
|
(0.00) |
|
0.02 |
Non GAAP Net earnings per diluted share |
0.10 |
|
0.02 |
|
0.16 |
|
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute Non-GAAP
diluted net earnings per share |
47,396,099 |
|
45,054,172 |
|
46,936,309 |
|
44,279,284 |
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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Cash flow
from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
1,674 |
|
(4,059) |
|
679 |
|
(8,137) |
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
2,443 |
|
2,987 |
|
4,948 |
|
5,806 |
Stock based
compensation |
|
2,890 |
|
3,547 |
|
6,190 |
|
6,544 |
Amortization of premium, accretion of discounts and accrued
interest on available-for- sale marketable securities, net |
|
414 |
|
270 |
|
690 |
|
631 |
Accrued
interest on bank deposits |
|
(146) |
|
150 |
|
(212) |
|
1,532 |
Increase
(decrease) in accrued severance pay, net |
|
(97) |
|
41 |
|
142 |
|
176 |
Decrease
(increase) in trade receivables, net |
|
(2,564) |
|
3,352 |
|
(2,601) |
|
1,902 |
Decrease
(increase) in other current assets and prepaid expenses and other
long-term assets |
|
(2,501) |
|
(196) |
|
4,697 |
|
838 |
Decrease
(increase) in inventories |
|
477 |
|
(1,063) |
|
329 |
|
(2,341) |
Increase
(decrease) in trade payables |
|
424 |
|
1,574 |
|
(623) |
|
(136) |
Increase
(decrease) in deferred revenues |
|
(1,700) |
|
8,135 |
|
7,166 |
|
14,949 |
Increase
(decrease) in other payables and accrued expenses |
|
1,245 |
|
(3,374) |
|
(6,682) |
|
(4,096) |
Net cash
provided by operating activities |
|
2,559 |
|
11,364 |
|
14,723 |
|
17,668 |
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of
property and equipment |
|
(1,187) |
|
(2,475) |
|
(3,276) |
|
(4,357) |
Proceeds
from (investment in) other long-term assets, net |
|
131 |
|
(31) |
|
40 |
|
16 |
Investment
in bank deposits, net |
|
(9,067) |
|
(1,219) |
|
(26,067) |
|
(35,126) |
Investment
in sale, redemption of and purchase of available-for-sale
marketable securities ,net |
|
(686) |
|
(5,910) |
|
(1,872) |
|
(2,023) |
Payment for
acquisition of subsidiary, net of cash acquired |
|
0 |
|
0 |
|
0 |
|
(8,269) |
Net cash
used in investing activities |
|
(10,809) |
|
(9,635) |
|
(31,175) |
|
(49,759) |
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
7,939 |
|
1,228 |
|
12,891 |
|
2,538 |
Net cash
provided by financing activities |
|
7,939 |
|
1,228 |
|
12,891 |
|
2,538 |
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents |
|
(311) |
|
2,957 |
|
(3,561) |
|
(29,553) |
Cash and
cash equivalents at the beginning of the period |
|
61,987 |
|
47,129 |
|
65,237 |
|
79,639 |
Cash and
cash equivalents at the end of the period |
|
61,676 |
|
50,086 |
|
61,676 |
|
50,086 |
|
|
|
|
|
|
|
|
|
RADWARE (NASDAQ:RDWR)
Historical Stock Chart
From Aug 2024 to Sep 2024
RADWARE (NASDAQ:RDWR)
Historical Stock Chart
From Sep 2023 to Sep 2024