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, 2022.
“We are excited to report strong first quarter results with
double-digit revenue and income growth that was fueled by our cloud
and subscription business,” said Roy Zisapel, Radware’s president
and CEO. “We made great progress executing on our cloud initiative.
We just announced the spinoff of our Cloud Native Protector
business to form a new company called SkyHawk Security. We
successfully integrated SecurityDam, our cloud DDoS scrubbing
center provider. In addition, we continue to innovate and develop
cloud solutions as well as grow our global cloud footprint to
ensure our customers are protected against a mounting number of
cyber-attacks. We intend to continue to capitalize on the fast
growing market in front of us and the future opportunities it
presents to Radware.”
Financial Highlights
for the First
Quarter of
2022Revenue for the first quarter of 2022 totaled $73.7
million:
- Revenue in the Americas region was $29.5 million for the first
quarter of 2022, down 12% from $33.7 million in the first quarter
of 2021.
- Revenue in the Europe, Middle East, and Africa (“EMEA”) region
was $28.1 million for the first quarter of 2022, up 33% from $21.1
million in the first quarter of 2021.
- Revenue in the Asia-Pacific (“APAC”) region was $16.1 million
for the first quarter of 2022, up 34% from $12.0 million in the
first quarter of 2021.
GAAP net income for the first quarter of 2022
was $3.8 million, or $0.08 per diluted share, compared to GAAP net
income of $3.9 million, or $0.08 per diluted share, for the first
quarter of 2021.
Non-GAAP net income for the first quarter of
2022 was $8.8 million, or $0.19 per diluted share, compared to
non-GAAP net income of $8.0 million, or $0.17 per diluted share,
for the first quarter of 2021.
As of March 31, 2022, the Company had
cash, cash equivalents, short-term and long-term bank deposits, and
marketable securities of $397.5 million. Cash flow from operations
was negative $10.5 million in the first quarter of 2022.
Non-GAAP results are calculated excluding, as
applicable, the impact of stock-based compensation expenses,
amortization of intangible assets, litigation costs, acquisition
costs, exchange rate differences, net on balance sheet items
included in financial income 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 3, 2022, at 8:30 a.m. EDT to
discuss its first quarter 2022 results and the Company’s outlook.
To participate in 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 +1-647-362-9199 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, income before taxes on income, taxes on income,
net income and 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, exchange rate differences, net
on balance sheet items included in financial income 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 and volatility of the market
for our products; natural disasters and public health crises, such
as the coronavirus disease 2019 (COVID-19) pandemic; 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; our ability to successfully
implement our strategic initiative to accelerate our cloud
business; our ability to expand our operations effectively; timely
availability and customer acceptance of our new and existing
solutions; 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 cyber security and
application delivery solutions and in our industry in general, and
changes in the competitive landscape; 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 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 realize our investment
objectives for our cash and liquid investments; 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 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, Twitter, YouTube, and
Radware Mobile for iOS and Android.
©2022 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 Contacts:Gerri Dyrek,
gerri.dyrek@radware.com
|
Radware
Ltd. |
Condensed
Consolidated Balance Sheets |
(U.S.
Dollars in thousands) |
|
|
|
|
|
March
31, |
December 31, |
|
2022 |
|
2021 |
|
(Unaudited) |
(Unaudited) |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
Cash and
cash equivalents |
54,483 |
|
92,513 |
Available-for-sale marketable securities |
25,219 |
|
39,497 |
Short-term
bank deposits |
138,337 |
|
155,879 |
Trade
receivables, net |
19,045 |
|
13,191 |
Other
receivables and prepaid expenses |
11,978 |
|
8,046 |
Inventories |
11,255 |
|
11,580 |
|
260,317 |
|
320,706 |
|
|
|
|
Long-term investments |
|
Available-for-sale marketable securities |
104,579 |
|
98,224 |
Long-term
bank deposits |
74,868 |
|
79,708 |
Severance
pay funds |
2,372 |
|
2,454 |
|
181,819 |
|
180,386 |
|
|
|
|
|
|
|
|
Property and
equipment, net |
20,380 |
|
20,240 |
Goodwill and
intangible assets, net |
93,911 |
|
51,875 |
Other
long-term assets |
37,926 |
|
37,334 |
Operating
lease right-of-use assets |
23,724 |
|
24,829 |
Total
assets |
618,077 |
|
635,370 |
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
Current Liabilities |
|
|
Trade
payables |
8,153 |
|
4,310 |
Deferred
revenues |
99,609 |
|
99,922 |
Operating
lease liabilities |
4,695 |
|
5,090 |
Other
payables and accrued expenses |
39,206 |
|
56,565 |
|
151,663 |
|
165,887 |
|
|
|
|
Long-term liabilities |
|
Deferred
revenues |
69,814 |
|
67,065 |
Operating
lease liabilities |
21,213 |
|
22,360 |
Other
long-term liabilities |
22,630 |
|
10,065 |
|
113,657 |
|
99,490 |
|
|
|
|
Shareholders' equity |
|
Share
capital |
731 |
|
730 |
Additional
paid-in capital |
476,150 |
|
471,173 |
Accumulated
other comprehensive loss, net of tax |
(2,640) |
|
(455) |
Treasury
stock, at cost |
(266,822) |
|
(243,023) |
Retained
earnings |
145,338 |
|
141,568 |
Total
shareholders' equity |
352,757 |
|
369,993 |
|
|
|
|
Total
liabilities and shareholders' equity |
618,077 |
|
635,370 |
|
|
|
|
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, |
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Revenues |
|
73,708 |
|
66,769 |
Cost of revenues |
12,941 |
|
12,266 |
Gross profit |
60,767 |
|
54,503 |
|
|
|
|
|
Operating expenses, net: |
|
|
Research and
development, net |
|
20,370 |
|
17,735 |
Selling and
marketing |
|
30,283 |
|
28,991 |
General and
administrative |
|
6,527 |
|
5,196 |
Total
operating expenses, net |
|
57,180 |
|
51,922 |
|
|
|
|
|
Operating income |
3,587 |
|
2,581 |
Financial
income, net |
|
1,698 |
|
2,670 |
Income
before taxes on income |
|
5,285 |
|
5,251 |
Taxes on income |
1,515 |
|
1,346 |
Net income |
3,770 |
|
3,905 |
|
|
|
|
|
Basic net
earnings per share |
|
0.08 |
|
0.08 |
|
|
|
|
|
Weighted
average number of shares used to compute basic net earnings per
share |
|
45,666,813 |
|
46,225,882 |
|
|
|
|
|
Diluted net
earnings per share |
|
0.08 |
|
0.08 |
|
|
|
|
|
Weighted
average number of shares used to compute diluted net earnings per
share |
|
47,122,247 |
|
47,607,518 |
|
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, |
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
(Unaudited) |
GAAP gross profit |
60,767 |
|
54,503 |
|
Stock-based
compensation |
90 |
|
47 |
|
Amortization
of intangible assets |
464 |
|
464 |
Non-GAAP gross profit |
61,321 |
|
55,014 |
|
|
|
|
|
GAAP research and development, net |
20,370 |
|
17,735 |
|
Stock-based
compensation |
1,809 |
|
1,339 |
Non-GAAP Research and development, net |
18,561 |
|
16,396 |
|
|
|
|
|
GAAP selling and marketing |
30,283 |
|
28,991 |
|
Stock-based
compensation |
1,849 |
|
2,052 |
Non-GAAP selling and marketing |
28,434 |
|
26,939 |
|
|
|
|
|
GAAP general and administrative |
6,527 |
|
5,196 |
|
Stock-based
compensation |
668 |
|
936 |
|
Litigation
costs |
- |
|
63 |
|
Acquisition
costs |
1,142 |
|
- |
Non-GAAP general and administrative |
4,717 |
|
4,197 |
|
|
|
|
|
GAAP total operating expenses, net |
57,180 |
|
51,922 |
|
Stock-based
compensation |
4,326 |
|
4,327 |
|
Litigation
costs |
- |
|
63 |
|
Acquisition
costs |
1,142 |
|
- |
Non-GAAP total operating expenses, net |
51,712 |
|
47,532 |
|
|
|
|
|
GAAP operating income |
3,587 |
|
2,581 |
|
Stock-based
compensation |
4,416 |
|
4,374 |
|
Amortization
of intangible assets |
464 |
|
464 |
|
Litigation
costs |
- |
|
63 |
|
Acquisition
costs |
1,142 |
|
- |
Non-GAAP operating income |
9,609 |
|
7,482 |
|
|
|
|
|
GAAP financial income, net |
1,698 |
|
2,670 |
|
Exchange
rate differences, net on balance sheet items included in financial
income, net |
(894) |
|
(724) |
Non-GAAP financial income, net |
804 |
|
1,946 |
|
|
|
|
|
GAAP income before taxes on income |
5,285 |
|
5,251 |
|
Stock-based
compensation |
4,416 |
|
4,374 |
|
Amortization
of intangible assets |
464 |
|
464 |
|
Litigation
costs |
- |
|
63 |
|
Acquisition
costs |
1,142 |
|
- |
|
Exchange
rate differences, net on balance sheet items included in financial
income, net |
(894) |
|
(724) |
Non-GAAP income before taxes on income |
10,413 |
|
9,428 |
|
|
|
|
|
GAAP taxes on income |
1,515 |
|
1,346 |
|
Tax related
adjustments |
62 |
|
62 |
Non-GAAP taxes on income |
1,577 |
|
1,408 |
|
|
|
|
|
GAAP net income |
3,770 |
|
3,905 |
|
Stock-based
compensation |
4,416 |
|
4,374 |
|
Amortization
of intangible assets |
464 |
|
464 |
|
Litigation
costs |
- |
|
63 |
|
Acquisition
costs |
1,142 |
|
- |
|
Exchange
rate differences, net on balance sheet items included in financial
income, net |
(894) |
|
(724) |
|
Tax related
adjustments |
(62) |
|
(62) |
Non-GAAP net income |
8,836 |
|
8,020 |
|
|
|
|
|
GAAP diluted net earnings per share |
0.08 |
|
0.08 |
|
Stock-based
compensation |
0.09 |
|
0.09 |
|
Amortization
of intangible assets |
0.01 |
|
0.01 |
|
Litigation
costs |
0.00 |
|
0.00 |
|
Acquisition
costs |
0.02 |
|
0.00 |
|
Exchange
rate differences, net on balance sheet items included in financial
income, net |
(0.02) |
|
(0.02) |
|
Tax related
adjustments |
(0.00) |
|
(0.00) |
Non-GAAP diluted net earnings per share |
0.19 |
|
0.17 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute non-GAAP diluted
net earnings per share |
47,122,247 |
|
47,607,518 |
|
|
|
|
|
Radware
Ltd. |
Condensed
Consolidated Statements of Cash Flow |
(U.S.
Dollars in thousands) |
|
|
|
|
|
|
|
For the
three months ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
|
|
(Unaudited) |
(Unaudited) |
Cash flow from operating activities: |
|
|
|
|
|
|
Net income |
3,770 |
|
3,905 |
Adjustments to reconcile net income to net cash provided by
operating activities: |
Depreciation
and amortization |
|
2,488 |
|
2,648 |
Stock-based
compensation |
|
4,416 |
|
4,374 |
Amortization
of premium, accretion of discounts and accrued interest on
marketable securities, net |
|
588 |
|
408 |
Gain related
to securities, net |
|
(59) |
|
(2) |
Accrued
interest on bank deposits |
|
33 |
|
(781) |
Increase in
accrued severance pay, net |
|
147 |
|
225 |
Decrease
(increase) in trade receivables, net |
|
(5,854) |
|
6,940 |
Increase in
other receivables and prepaid expenses and other long-term
assets |
|
(3,816) |
|
(4,460) |
Decrease in
inventories |
|
325 |
|
524 |
Increase in
trade payables |
|
3,843 |
|
244 |
Increase in
deferred revenues |
|
2,436 |
|
8,922 |
Decrease in
other payables and accrued expenses |
|
(18,332) |
|
(5,993) |
Operating
lease liabilities, net |
|
(437) |
|
(782) |
Net cash
provided by (used in) operating activities |
|
(10,452) |
|
16,172 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase of
property and equipment |
|
(2,164) |
|
(1,333) |
Proceeds
from (investment in) other long-term assets, net |
|
(55) |
|
42 |
Proceeds
from (investment in) bank deposits, net |
|
22,349 |
|
(143) |
Proceeds
from (investment in) sale, redemption of and purchase of marketable
securities, net |
|
4,556 |
|
(2,491) |
Payment for
the acquisition of intangible assets |
|
(30,000) |
|
0 |
Net cash
used in investing activities |
|
(5,314) |
|
(3,925) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
562 |
|
2,150 |
Repurchase
of shares |
|
(22,826) |
|
(30,189) |
Net cash
used in financing activities |
|
(22,264) |
|
(28,039) |
|
|
|
|
|
Decrease in
cash and cash equivalents |
|
(38,030) |
|
(15,792) |
Cash and
cash equivalents at the beginning of the period |
|
92,513 |
|
54,771 |
Cash and
cash equivalents at the end of the period |
|
54,483 |
|
38,979 |
|
|
|
|
|
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