Third 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 September 30, 2018.
“We are pleased with our results for the third
quarter, which included year over year double-digit revenue growth
and operating margin expansion for the fifth consecutive quarter.
We are very well positioned to benefit from the increasing demand
for cloud security solutions and continue to invest in our
portfolio and market reach in order to continue deliver growth and
profitability in the future,” said Roy Zisapel, Radware President
& CEO.
Financial Highlights for the
Third Quarter of 2018
Revenues for the third quarter of 2018 totaled
$58.8 million, up 11% from revenues of $53.0 million for the third
quarter of 2017:
- Revenues in the Americas region were $26.7 million for the
third quarter of 2018, essentially flat compared to revenues of
$26.6 million in the third quarter of 2017. For the first nine
months of 2018, revenues in the Americas region were up 8% over the
same period in 2017
- Revenues in the EMEA region were $17.7 million for the third
quarter of 2018, up 28% from revenues of $13.8 million in the third
quarter of 2017. For the first nine months of 2018, revenues in the
EMEA region increased 27% over the same period of 2017
- Revenues in the APAC region were $14.4 million for the third
quarter of 2018, up 14% from revenues of $12.7 million in the third
quarter of 2017. For the first nine months of 2018, revenues in the
APAC region increased 2% over the same period of 2017
Net profit on a GAAP basis for the third quarter
of 2018 was $3.1 million or $0.06 per diluted share, compared with
net loss of ($1.5) million or ($0.03) per diluted share for the
third quarter of 2017.
Non-GAAP net income for the third quarter of
2018 was $7.1 million or $0.15 per diluted share, compared with
non- GAAP net income of $1.8 million or $0.04 per diluted share for
the third 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 September 30, 2018, the Company had cash,
cash equivalents, short-term and long-term bank deposits and
marketable securities of $382.2 million, up from $367.2 million as
of the end of June 30, 2018.
Conference Call
Radware management will host a call on
Wednesday, November 7, 2018 at 8:30 am ET to discuss its third
quarter 2018 results and the company’s outlook for the fourth
quarter of 2018.
Participants in the US call: Toll Free 833-241-4257
Participants Internationally call:
+1-647-689-4208
Conference ID: 6086038
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) |
|
|
|
|
|
September 30, |
|
December 31, |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
59,565 |
|
65,237 |
Available-for-sale marketable securities |
37,004 |
|
42,573 |
Short-term bank deposits |
203,299 |
|
93,151 |
Trade receivables, net |
18,491 |
|
16,150 |
Other receivables and prepaid expenses |
6,308 |
|
12,252 |
Inventories |
20,463 |
|
18,772 |
|
345,130 |
|
248,135 |
|
|
|
|
Long-term investments |
|
|
|
Available-for-sale marketable securities |
61,078 |
|
54,427 |
Long-term bank deposits |
21,258 |
|
88,911 |
Severance pay funds |
3,105 |
|
3,251 |
|
85,441 |
|
146,589 |
|
|
|
|
|
|
|
|
Property and equipment, net |
21,848 |
|
23,642 |
Intangible assets, net |
9,699 |
|
10,415 |
Other long-term assets |
20,064 |
|
8,133 |
Goodwill |
32,174 |
|
32,174 |
Total assets |
514,356 |
|
469,088 |
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
Trade payables |
5,424 |
|
5,367 |
Deferred revenues |
76,663 |
|
69,829 |
Other payables and accrued expenses |
30,663 |
|
32,174 |
|
112,750 |
|
107,370 |
|
|
|
|
Long-term liabilities |
|
|
|
Deferred revenues |
41,040 |
|
43,482 |
Other long-term liabilities |
5,484 |
|
2,880 |
|
46,524 |
|
46,362 |
|
|
|
|
Shareholders' equity |
|
|
|
Share capital |
691 |
|
673 |
Additional paid-in capital |
378,067 |
|
349,250 |
Accumulated other comprehensive loss, net of
tax |
(1,168) |
|
(443) |
Treasury stock, at cost |
(116,442) |
|
(116,442) |
Retained earnings |
93,934 |
|
82,318 |
Total shareholders' equity |
355,082 |
|
315,356 |
|
|
|
|
Total liabilities and shareholders' equity |
514,356 |
|
469,088 |
|
|
|
|
Radware
Ltd. |
|
Condensed Consolidated
Statements of Income (loss) |
|
(U.S Dollars in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
For the nine months
ended |
|
|
|
September
30, |
|
September
30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Revenues |
|
58,764 |
|
53,047 |
|
170,587 |
|
152,915 |
Cost of revenues |
|
10,278 |
|
9,928 |
|
30,558 |
|
28,556 |
Gross profit |
|
48,486 |
|
43,119 |
|
140,029 |
|
124,359 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development, net |
|
14,434 |
|
14,678 |
|
43,729 |
|
43,931 |
Selling and marketing |
|
27,263 |
|
27,189 |
|
83,249 |
|
79,578 |
General and administrative |
|
3,985 |
|
4,152 |
|
11,851 |
|
13,312 |
Total operating expenses |
|
45,682 |
|
46,019 |
|
138,829 |
|
136,821 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
2,804 |
|
(2,900) |
|
1,200 |
|
(12,462) |
Financial income, net |
|
1,487 |
|
2,148 |
|
4,877 |
|
3,895 |
Income (loss) before taxes on income |
|
4,291 |
|
(752) |
|
6,077 |
|
(8,567) |
Taxes on income |
|
(1,178) |
|
(725) |
|
(2,285) |
|
(1,047) |
Net income (loss) |
|
3,113 |
|
(1,477) |
|
3,792 |
|
(9,614) |
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share |
|
0.07 |
|
(0.03) |
|
0.08 |
|
(0.22) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute basic net
earnings (loss) per share |
|
45,537,801 |
|
43,951,325 |
|
45,030,328 |
|
43,347,092 |
|
|
|
|
|
|
|
|
|
Diluted net earnings (loss) per share |
|
0.06 |
|
(0.03) |
|
0.08 |
|
(0.22) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute diluted
net earnings (loss) per share |
|
48,519,880 |
|
43,951,325 |
|
48,012,407 |
|
43,347,092 |
|
|
|
|
|
|
|
|
|
|
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 nine months ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
GAAP gross
profit |
48,486 |
|
43,119 |
|
140,029 |
|
124,359 |
|
Stock-based
compensation |
54 |
|
65 |
|
171 |
|
181 |
|
Amortization of
intangible assets |
212 |
|
379 |
|
654 |
|
1,051 |
Non-GAAP
gross profit |
48,752 |
|
43,563 |
|
140,854 |
|
125,591 |
|
|
|
|
|
|
|
|
|
GAAP
research and development, net |
14,434 |
|
14,678 |
|
43,729 |
|
43,931 |
|
Stock-based
compensation |
819 |
|
957 |
|
2,429 |
|
2,883 |
Non-GAAP
Research and development, net |
13,615 |
|
13,721 |
|
41,300 |
|
41,048 |
|
|
|
|
|
|
|
|
|
GAAP
selling and marketing |
27,263 |
|
27,189 |
|
83,249 |
|
79,578 |
|
Stock-based
compensation |
1,666 |
|
1,678 |
|
5,344 |
|
5,177 |
|
Amortization of
intangible assets |
20 |
|
23 |
|
61 |
|
70 |
Non-GAAP
selling and marketing |
25,577 |
|
25,488 |
|
77,844 |
|
74,331 |
|
|
|
|
|
|
|
|
|
GAAP
general and administrative |
3,985 |
|
4,152 |
|
11,851 |
|
13,312 |
|
Stock-based
compensation |
527 |
|
570 |
|
1,312 |
|
1,573 |
|
Acquisition costs |
- |
|
- |
|
- |
|
340 |
|
Litigation costs |
214 |
|
357 |
|
627 |
|
1,976 |
Non-GAAP
general and administrative |
3,244 |
|
3,225 |
|
9,912 |
|
9,423 |
|
|
|
|
|
|
|
|
|
GAAP total
operating expenses |
45,682 |
|
46,019 |
|
138,829 |
|
136,821 |
|
Stock-based
compensation |
3,012 |
|
3,205 |
|
9,085 |
|
9,633 |
|
Acquisition costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of
intangible assets |
20 |
|
23 |
|
61 |
|
70 |
|
Litigation costs |
214 |
|
357 |
|
627 |
|
1,976 |
Non-GAAP
total operating expenses |
42,436 |
|
42,434 |
|
129,056 |
|
124,802 |
|
|
|
|
|
|
|
|
|
GAAP
operating income (loss) |
2,804 |
|
(2,900) |
|
1,200 |
|
(12,462) |
|
Stock-based
compensation |
3,066 |
|
3,270 |
|
9,256 |
|
9,814 |
|
Acquisition costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of
intangible assets |
232 |
|
402 |
|
715 |
|
1,121 |
|
Litigation costs |
214 |
|
357 |
|
627 |
|
1,976 |
Non-GAAP
operating income (loss) |
6,316 |
|
1,129 |
|
11,798 |
|
789 |
|
|
|
|
|
|
|
|
|
GAAP
finance income |
1,487 |
|
2,148 |
|
4,877 |
|
3,895 |
|
Exchange rate
differences, net on balance sheet items included in financial
income |
432 |
|
(729) |
|
255 |
|
77 |
Non-GAAP
finance income |
1,919 |
|
1,419 |
|
5,132 |
|
3,972 |
|
|
|
|
|
|
|
|
|
GAAP income
(loss) before taxes on income |
4,291 |
|
(752) |
|
6,077 |
|
(8,567) |
|
Stock-based
compensation |
3,066 |
|
3,270 |
|
9,256 |
|
9,814 |
|
Acquisition costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of
intangible assets |
232 |
|
402 |
|
715 |
|
1,121 |
|
Litigation costs |
214 |
|
357 |
|
627 |
|
1,976 |
|
Exchange rate
differences, net on balance sheet items included in financial
income |
432 |
|
(729) |
|
255 |
|
77 |
Non-GAAP
income before taxes on income |
8,235 |
|
2,548 |
|
16,930 |
|
4,761 |
|
|
|
|
|
|
|
|
|
GAAP net
income (loss) |
3,113 |
|
(1,477) |
|
3,792 |
|
(9,614) |
|
Stock-based
compensation |
3,066 |
|
3,270 |
|
9,256 |
|
9,814 |
|
Acquisition costs |
- |
|
- |
|
- |
|
340 |
|
Amortization of
intangible assets |
232 |
|
402 |
|
715 |
|
1,121 |
|
Litigation costs |
214 |
|
357 |
|
627 |
|
1,976 |
|
Exchange rate
differences, net on balance sheet items included in financial
income |
432 |
|
(729) |
|
255 |
|
77 |
Non-GAAP
net income |
7,057 |
|
1,823 |
|
14,645 |
|
3,714 |
|
|
|
|
|
|
|
|
|
GAAP Net
earnings (loss) per diluted share |
0.06 |
|
(0.03) |
|
0.08 |
|
(0.22) |
|
Stock-based
compensation |
0.06 |
|
0.07 |
|
0.19 |
|
0.22 |
|
Acquisition costs |
0.00 |
|
0.00 |
|
0.00 |
|
0.01 |
|
Amortization of
intangible assets |
0.01 |
|
0.01 |
|
0.02 |
|
0.03 |
|
Litigation costs |
0.01 |
|
0.01 |
|
0.01 |
|
0.04 |
|
Exchange rate
differences, net on balance sheet items included in financial
income |
0.01 |
|
(0.02) |
|
0.01 |
|
0.00 |
Non-GAAP
Net earnings per diluted share |
0.15 |
|
0.04 |
|
0.31 |
|
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used to compute Non-GAAP diluted net
earnings per share |
48,519,880 |
|
45,210,495 |
|
48,012,407 |
|
44,431,570 |
|
|
|
|
|
|
|
|
|
Radware
Ltd. |
Condensed Consolidated
Statements of Cash Flow |
(U.S. Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended |
|
For the nine months
ended |
|
|
September
30, |
|
September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
3,113 |
|
(1,477) |
|
3,792 |
|
(9,614) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
2,433 |
|
2,861 |
|
7,380 |
|
8,667 |
Stock based compensation |
|
3,066 |
|
3,270 |
|
9,256 |
|
9,814 |
Amortization of premium, accretion of discounts and accrued
interest on available-for- sale marketable securities, net |
|
192 |
|
450 |
|
882 |
|
1,081 |
Accrued interest on bank deposits |
|
(1,217) |
|
(720) |
|
(1,429) |
|
812 |
Increase (decrease) in accrued severance pay, net |
|
(8) |
|
44 |
|
134 |
|
220 |
Decrease (increase) in trade receivables, net |
|
107 |
|
5,324 |
|
(2,494) |
|
7,226 |
Decrease (increase) in other receivables and prepaid expenses and
other long-term assets |
|
(206) |
|
(459) |
|
4,493 |
|
379 |
Decrease (increase) in inventories |
|
(2,020) |
|
731 |
|
(1,691) |
|
(1,610) |
Increase (decrease) in trade payables |
|
680 |
|
(1,415) |
|
57 |
|
(1,551) |
Increase (decrease) in deferred revenues |
|
(2,774) |
|
2,713 |
|
4,392 |
|
17,662 |
Increase (decrease) in other payables and accrued expenses |
|
5,465 |
|
(5,483) |
|
(1,217) |
|
(9,579) |
Net cash provided by operating activities |
|
8,831 |
|
5,839 |
|
23,555 |
|
23,507 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(1,595) |
|
(1,240) |
|
(4,870) |
|
(5,597) |
Proceeds from (investment in) other long-term assets, net |
|
0 |
|
(4) |
|
38 |
|
12 |
Investment in bank deposits, net |
|
(15,000) |
|
(2,074) |
|
(41,067) |
|
(37,200) |
Proceeds from (investment in) sale, redemption of and purchase of
available-for-sale marketable securities ,net |
|
(1,035) |
|
485 |
|
(2,907) |
|
(1,538) |
Payment for acquisition of subsidiary, net of cash acquired |
|
0 |
|
0 |
|
0 |
|
(8,269) |
Net cash used in investing activities |
|
(17,630) |
|
(2,833) |
|
(48,806) |
|
(52,592) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
6,688 |
|
851 |
|
19,579 |
|
3,389 |
Repurchase of shares |
|
0 |
|
(413) |
|
0 |
|
(413) |
Net cash provided by financing activities |
|
6,688 |
|
438 |
|
19,579 |
|
2,976 |
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
(2,111) |
|
3,444 |
|
(5,672) |
|
(26,109) |
Cash and cash equivalents at the beginning of the period |
|
61,676 |
|
50,086 |
|
65,237 |
|
79,639 |
Cash and cash equivalents at the end of the period |
|
59,565 |
|
53,530 |
|
59,565 |
|
53,530 |
|
|
|
|
|
|
|
|
|
RADWARE (NASDAQ:RDWR)
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From Mar 2024 to Apr 2024
RADWARE (NASDAQ:RDWR)
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From Apr 2023 to Apr 2024