RDWR - Earnings call transcript Q3 2021

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Operator

00:02 Good morning. Welcome to the Radware Conference Call discussing Third Quarter twenty twenty one Results and thank you all for holding. At this time, all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today. one. twenty twenty three, November XX:XX I to Radware. this over to now Erez, Director like Yisca at turn and call would Investor Relations Please go ahead.

Yisca Erez

Radware's operator. and one XX:XX morning, conference third to earnings you, twenty quarter Thank call. twenty Good welcome everyone

other turn such section third twenty to or Annual and twenty subject cause company's forecast statement of XX:XX the to I Factors well the are time Goldberger, risks forward-looking the our and to XX:XX in to such the we from business the company Roy of contribute amount general last changes circumstances regarding from kit as of events A to order of on the are President Finance. Investor materially with of after actual April address any forward-looking furnishes are Report and and undertake and demand release call and time-to-time now one. or company. the industry, XX:XX made. and We that Executive the estimates. changes our not to to, the the reflect We Zisapel. today's Officer; in Form orders, filed no twenty, refer other ability limited you pandemic, investor Joining in me or press risks differ specifically will statements conditions, statements During for current to the Zisapel, filings. quarter and financial SEC, and XX:XX update as is Chief from in time products, uncertainties, the today's today future COVID-XX make in documents our copy future Roy financial impact may or revise Relations the Radware's differences are timing Michael XX-F detailed to files on date or Radware's could and commitment various available statements that VP, include, statements, results website. for events as call, These but forward-looking could performance from projections

Roy Zisapel

Yisca XX:XX us and joining Thank you thank for all you, today.

strong three across financial to We seventy yet quarter, record another This growth. revenue represents dollars beating third percent revenue. metrics. are another of we year-over-year report with major pleased million our set double-digit In key seventeen quarter the growth

In percent growth diligently business is working ARR impressive three increase through we top driven is The cloud steady two addition, application grew our in are so grew on earning supported per improved each thirty in by retention cloud percent of year-over-year to be quarter. our million and closer on more and customer and of the cloud business. customers XX:XX security increasing can and our expanding percent grew nine consistent to growth subscription by We're a point share which quarters opening We seven previous rates dollars the in faster. by grow business the DDoS, basis. with same of momentum security, number points application being six presence was ARR, The as zero cloud twenty and ARR XX:XX total sequentially year-over-year. two the ARR. dollars and percentage

We I in to are strong strong offering. the of so new the do breadths coming of the fundamentals, XX:XX our already combination continue to ports and to opening ability to one The world and attributed each product the market performance quarter outlined plan to innovate quarters. across is two just our

cyber-attacks. to is in the that of the number of consistent flavor One the market drive forces in play continue our

attacks, thirty year, creating most number capabilities availability, One attacks. levels, web To bad driving share and SSL our at record business no customers, brand, meet more percent the compromise to are becoming assets. lead XX:XX XX:XX In and privacy as their needs automation bot more the defenses is year. to the we larger and complex. algorithms they’re to the levels more innovation many compliance. three attacks we protection attacks twenty our quarter, times of the is with evolving and attacks During XX:XX twice DDoS our organizations to want at customer and new and the several detect one, regulatory out we critical XX:XX HTTPS longer sophisticated twenty more fact, invested strengthen third protocol application I of During advanced last in to want third using and complexity blocked to example, In mitigate They period invest implications urgency compared the the rising, and The last to superior same protection. market around technology. of requests [indiscernible]. the growing the given and using and continue quarter rolled

adoption dtnet with the of the using the are attackers activities increases in As increased clock to their by encryption it blending traffic.

the high the DDoS ninety attacks than one less DDoS our Our not lower exposed sensitivity. network. volume mitigation by same time ability service Another accuracy. newest blocked offering description. are large at the easily new and be greater without gig a to solutions even due with at lack are of of challenge cloud algorithms and SSL within bandwidth detect According percent attacks this cloud to of scale providers traditional will And XX:XX is requiring generation to facing attacks than research detection more

With While resources, are service down our innovating bandwidth providers algorithms In new level these launched cost Our gone from intercept completely and Recently, floods and Radware configuration as in have we complex leader bring report. process industry detection, The this Quantiles in extensive This of now hard XX:XX this a Mitigation recognitions critical high from Quadrant to firms. manual it's a to pinpoint them We solutions the traffic granular sold new the Matrix: unnoticed. first, incoming market in that named threshold research fund historically XX:XX space. capability specific that ongoing tuning. automatically device SPARK continue eliminates will exceed carriers, superior are of segments attacks network. Quantiles. in into DDoS

cloud our the company success We Radware. the immediately customer of an protection with a demonstrated this cloud DDoS. deals attacks packing stack. of application the a proven DDoS Another service The purchased based of that a cloud an deal the deal scrubbing and received deal during expertise ABC highest performance This security. that demand ransomware cyber-attacks. amongst and groups. we in few vendors excellence provider U.S. solution ranking also increased on quarter our cloud of Gartner, and We a company brought diverted web for XX:XX we followed use cloud infrastructure sufficient. parameters Finally, the coupled application security volumetric Let to by technology XX:XX DDoS able Group. protection. is strengthen witness the coverage. the Global ISP was we the XX:XX leading of cloud for We high third large large our by and outages. strong the signed for third We provider multinational exceptional [indiscernible] Radware a a Mitigation this with marked capabilities also was recognized attack security volumes the This with In ranked Financial for new one Radware critical API Global impact, offering existing a strength customer the want XX:XX won solution was vendors They service share the logo the across mitigation their the their was continue and security because to with from relationship examples our deal that with DDoS API experienced are for our was deal expanded was The other We surpassed the solution. And cloud center. market relationship were company of the a and from the an as with letter this we protection with among you us mitigation of impact of number This winning the and DDoS closed with positioned realized capabilities us which was into level back-hauling in security attack capacity. fourteen We large test. two solid to quarter. ISP our won when report. summary, XX:XX security European major the the by longstanding were the and customer security Market. and U.S. to not in eleven Services technology financial technology and chose This current cases causing me application in by technical XX:XX an twenty its solution, twenty With strength our expansion offering. wins. signed Gartner want checkpoints. satisfaction included The this deal translate letter from as we We customer of to traffic leader top our of a scale successfully experienced one quarter major

confident with We coupled that are quarters. for this now offering security the to And will fuel our Michael. XX:XX the growth coming demand broad

Michael Goldberger

for marking Reconciliations our press results the the representing GAAP point from double-digit line Thank percent would quarter growth. financial in pleased results the a of twenty detailed had our exceeding are results quarter of the and third role recorded and one subscription. for otherwise between type four most a twenty in top remind day, we XX:XX provide for you and million bottom dominantly results strong the of Roy financial Roy XX:XX the of business release. As you, I seventeen net good was seventy quarter quarter everyone. analysis The one. and indicated record was to increase year-over-year non-GAAP are I'm growth non-GAAP. Revenue of and all twenty quarter third the expectations. that all performance revenue three like an twenty are dollars outlined, to our third of with XX:XX

grew Gross of our thirty and in twenty compared XX:XX in twenty percent growth twenty revenue percent in cloud two expand the compared of which expenses revenue and now percent twenty We nine total margin eighty accounts increased discuss percent the same quarter. in one one twenty last profit. third grew the quarter of eighty reflected two compared are grew year. percent as ARR to to six a QX last QX of in subscription grew strong period six third percent point primary nineteen and twenty twenty twenty total to APAC to which represents increased percent revenue twenty twenty will QX to QX the of remaining Looking total quarter point twenty. last of in subscription The period year. the for two forty the to region, at which twenty two continue one year. and one compared of which reported for in XX:XX nine compared one period eighteen percent percent total QX We represents EMEA ARR, revenue, and nine the percent same in Americas same business twenty twenty geographies, specifically,

as sixty margin as a leverage of million of twenty QX expenses marketing twenty well due is eleven COVID-XX. headwind Operating QX, increased strong despite percent compared margin point percent fifteen can quarter-to-quarter, to last impacts that million and forty to nine The percent six twenty twenty point In products up ten FX. result twenty mix. the increase gross Our geographic percent eleven and twenty from from a the year. in and XX:XX lower is QX to nine in and in one expanded the travel as operating from as QX model fluctuate to QX operating result FX dollars eight in due dollars, income expenses

four operating XX:XX impact, percent. dollars have been of FX compared and two Financial income dollars would dollars point last thirteen to million year. in nine point two income million margin have was seventeen point been million eight Excluding one would point operating QX

one and twenty dollars investments period of previous eighteen deposits. twenty operations is one. and to financial we financial compared to Turning the million percent last was seven sheet at thirteen fifty attributed the the fifteen XX:XX the one the twenty cash twenty for to share point twenty percent third dollars quarter XX:XX dollars. year Tax sixteen million third in yield three twenty the Earnings full point quarter Roy compared marketable and twenty in thirty twenty. As year. rates twenty of declining highlighted the last to and year. QX was the hundred QX items. percent for quarter in flow end the decrease flows the seven call balance the the The percent two rate expected quarters, for of of of to approximately same compared twenty per fifteen one dollars I is million was to securities income XX:XX in and twenty one September diluted Cash outlook increased quarter percent. in six for two back cash two zero return point the for twenty to first four to discuss Total tax

Roy Zisapel

you, XX:XX Michael. Thank

fourth Before opening for Q&A, will the for quarter. call the our guidance I provide

twenty twenty the expected XX:XX of continued We two one hundred twenty Shekel. million diluted of the and dollars, year of dollars over expect fifty in dollars. range one eighty full range of is fully total two the total XX:XX diluted now twenty seventy the between million the be be QX strengthening call one be in twenty revenue six eighty Israeli operator two twenty four point I negative be fully the fifty share in start including XX:XX one the and increased the fourth in two. the to from four be to one one investments zero to our to dollars twenty the earnings zero range to and six operating expect And dollars one, point business, two dollars million to million expenses eight With the to range Q&A. in two will eight to earnings twenty seventy zero QX per We with and that, quarter full per point impact coupled point dollars. million to expected zero of to hundred year is dollars revenue to million turn share

Operator

comes Instructions] question line Your from [Operator first with of Jefferies. Notter the George XX:XX

Your open. is line

George Notter

maybe XX:XX Hi, guess I start. guys. very Thanks would I much.

underway You and terms that would then kind And a made was I'd effort? North I you guys. in hiring sales in think ramping see that I CFO one the well. guys ask Thanks I just of guys of into push have thought there a on I more search are folks also guess where America about as check-in sales front.

Roy Zisapel

bidding The XX:XX challenging. So thanks, George. (ph) is environment

hiring We yet are U.S. we plan. the not are versus But in our full

the further. people, twenty doubling we from We're increase our somewhat increased planning but level are are So of going and that we heading We've where into far twenty even to efforts there. it’s two. still sales

in have that we So lot of a do work front. to

we but announce We we but when are search, like have we obviously Regarding we XX:XX publicly progressing, report it the it. accelerate would CFO to to have, yet, nothing will immediately.

George Notter

it. XX:XX Got

how environment it how that there sounds do then And Okay. the you guys still -- of you're terms the you there mean, deals. think deals have I like this about in are out the marketplace in aren't much the about seeing. do what think you -- sense you really ability up address might market Any opportunity to point? you ramp or as your at the force for guys sales

Roy Zisapel

hedging XX:XX The And just in immense surface. opportunity security. is obviously, cloud we're the

and to market prestigious represented our to to the the and and the now force also channels. everything in the we sales but we're certain end, logos, high both other well hiring are our below think Asia-Pacific approach capacity simply increasing mid-size organically date of have don't through are I a as degree most across in in very we predominantly North go-to-market globe, efforts EMEA America, we increased as but through

George Notter

Okay. very Thanks XX:XX much.

Operator

question XX:XX line Your Chris with comes from of Barclays. next Reimer the

Your line is open.

Chris Reimer

with the This are the my Can OEMs? Rosner. provide Thank for Hi. traction some taking questions. you seeing Tavy on is XX:XX you Chris you on color for

Roy Zisapel

XX:XX Yeah.

are solutions So providing to logos, their they perform us, customers. specifically, marketing every us the existing new are for as quarter, OEMs continue to many they with our

solutions our further. that We for so twenty Difficulty] see but going even the OEMs did [Technical working the now with was quarter, penetrate around world, business this to and call also large and on the us grow two, referring European brought I further. checkpoint further to into customer it one we we believe ways more are to increase even activity twenty to continue there's definitely opportunity by them an

Chris Reimer

APAC Americas Can seeing was And in dynamics regions? Okay. some the this XX:XX the EMEA, you're moderate. different you across quarter. of comment across growth delivered strong the geographies, just looking on kind of you

Roy Zisapel

and performed overall, good. high APAC all however, numbers, to slight regions increase, our on EMEA when on a our North is from in specific know want particular. to level, looking revenue, and I booking it shows adopt they case the our America slower solutions I comment And think in I make regions cloud and are more At in Yeah. different so perspective to cloud in depends obviously flat APAC in were on solutions the is well, within stronger APAC one XX:XX bit general a that cloud market I'm if security booking translates to

it early in scenario that rates therefore, limit achieve. might more we're greenfield can growth and there we So the

believe where security large Latin North data centers Pacific. the should world. America, across we very we also in it's We opportunity able it's to is that in it's in are and America, think in nicely we look forward. potential the grow as but regions that you all And However, Asia be if go cloud Europe, a globally opening

Chris Reimer

Thank me. you. That's Okay. it for XX:XX

Operator

line Andrew XX:XX Your from next question of with Colliers comes the Securities. King

open. is line Your

Andrew King

XX:XX great questions question. Congrats my quarter. Two on Hey, guys. for the taking for Thanks me.

strong if been also you new you you start the a impacted break that processes? sales just also that's out off, with then traditional that how called out just onboarding down little XG versus how carriers by First by emergency can was how customers, you layering opportunities could of into that And -- the new COVID? bit, much -- driven to how growth, expect parse and

Roy Zisapel

XX:XX Yeah.

particular et versus network cetera. are that care first generation networks Today, I disaggregated refer actively is XG calls. examples to deployment network, the don't have some carriers to projects regarding in and a in XG, next security, we my see for in that we XG So opportunity broader

a eighteen growth the don't the XG So focus as months. for -- driver coming we specifically on for

think a are as are that IoT, autonomous opportunity with and do security more -- foray, and And scars broader is rise bigger are application XG of carrier cases seeing use several for the this much driver see here carrier the the us think characterize today a edge. networks. the short-term, on XX:XX of QX growth However, XG a than would seeing we so I that global XG outside at specific opportunity less had in segment being as deploy we we require the QX for we I to we're in rise or whole. emergency onboarding, the specific growth as we I But had than think would in and networks had we this not built potential the but quarter, Regarding (ph) massively for what year.

they not gave So by the in see and some passed, since I script is onboarding. that triggered protect specific the to to my that did attacker many attack We went search an customers failed down, growth and a solution. in emergency had they but QX had for however they failed given examples

are existing incumbent to and very So as to this protect or but call solution. upgrade change onboarding is solutions topologies driver onboarding we're the strong definitely attack, we them emergency failure don't -- a to not specific of and there

So this we've seen third multiple the quarter. across the in world examples

Andrew King

XX:XX Great. Thanks questions. for taking my

Operator

Your Instructions] Alex [Operator the line question Henderson from with comes Needham. next XX:XX of

is open. Your line

Alex Henderson

Thanks. XX:XX

making bit narrow So and with a you partners I verticals. various, describe you're could more what I was progress your would hoping service across about the technology little that resell other is provider to talk signing you're the

a [indiscernible] the to ramp. Those in one with instance, when revenues, large be they in to the or but once longer have For could start quite projects show obviously duration up Brazil in programs the those potentially transaction Spain.

of us that timing any can ramp. more got with share that, you sense have that those experience So, you some will how the of gives

like sixteen months? seventeen I last or over the eighteen think month ended of the you’ve

Roy Zisapel

XX:XX Yeah.

providers Alex, specialty We security. continue hosting development today application a on And customers CDN, for right. us focus everyone source that You're see to that. hosting of and good new believe needs provider and is we carriers very

provider would to your hosting be to able If secure you're application. environment, that you that somewhere, expect

is with part your solutions security seen on the and that of partners to to is relying impactful very to application. those coupled are that application part our XX:XX provide solutions. transaction, And you them what relationship sell can as transaction of expect able an very, or If the part third-party of their would you you specific be with sometimes a we've ability business be for hosting

customers start to them ramping not quarter, all them bundling We that them we're are that customers. what they solutions and or seeing their are active, we from this coming sometimes actively are successful, with but of are plan more leading calling resellers more every our

relationship, already customer have with did couple. example, for So we quarter another last the you've know a and mentioned, this closed we've quarter, I Asian

the and have to and I think progress overlap in continuous it incremental operating the different we they these bring, definitely the I is Each don't more think in So markets, verticals market different one other. completely bring of we now. we each to and arguments more channels

Alex Henderson

So and mean, like the arrow clearly there's seems lot it XX:XX wood in here arrow behind a of I the flights. in is

people So a do ramp, to their to these twelve partnerships hit revenues marketing the month how as it or out they of get these of steep how part do is you get and eighteen the build when six programs do costs or compensated it? share to part really process to

Roy Zisapel

Yeah. XX:XX

sites we on sales competitive somewhere checkpoints, And already regular customers to price for a them the I that a force teach serve that's in start like fiscal and expect the them and discount months business more close so critical in less market. strong to like independently. it's say, reseller, them get from cases. and depends with simple, it's on more it’s There's need for it's a in big reseller. and it's list middle, a model going global it able bringing The the deals passenger obviously But than to and certain up that of to list, is which the the some agree provides that margin the than then OEM around the operation. service So, six their price size being would

Alex Henderson

shin I to phases that to the trajectory getting are year next going S ramp in part? are XX:XX wins we early steep a of mean, over Given the going the be the driver? put the the big to of curve we of those

Roy Zisapel

It XX:XX next would global significantly numbers We component, our contribute. will are should low it in grow still numbers and still start rates. growth the It contributing be but a it early. will year, to but

Alex Henderson

XX:XX Okay.

growth you a you're Second like talk guide about your rate think What current percent looks question, expecting this little that cloud six in twenty the subscription whole and you bit can that period of year subscription for the do number? at the point. number

Roy Zisapel

it's you XX:XX around I I even would to and pretty said also think you look we look this area, continue. numbers that [indiscernible] consistent if scale the on previous quarters, as it's for if

I the think it. obviously into of more to continues rate we're faster much portion cloud the driver in growth investments pulling and was driven growth a

what So looking this forward. also going is would for be we

Alex Henderson

then, hardware. you had about self talk I know any come supply Okay. down, all. I the constraints here? you numbers, but mentioned So whether from first constraints? you call, XX:XX at do And [indiscernible] been can systems supply And on didn't within hasn't that's

a impacting So or can book-to-bill at or that's a whether the constraints whether little one what supply above talk below you all? one had and your costs bit about you at or one

Roy Zisapel

Yeah. XX:XX

we So everyone do like else.

course impact major ahead But well that's delays. supply on at appliance as don't this mainly that and it -- impact in on But lines, was a business. accessed do overall. of if I so and building it built of XX:XX and it of point, persist increases time, somewhat, impact security routing It but nodes, inventory public as if it's but keeps see on, bigger it's for at become completely the product I problem timeline us where we will our own persist. certain think third-parties appliances significant both switching well. could on think the We some less it bigger, cost as subscriptions or for some solutions or the definitely relatively minimal cloud cloud on software on it managing There's rely of we're it. I we cloud our to sometimes new an is mainly obviously the think unrelated constraints,

shape, a relative in course. overall, there definitely So industry. think good is the I to impact, know we're I of

Alex Henderson

like XX:XX then, So that you consistent was one around built? backlog sounds book-to-bill with it no

Roy Zisapel

more on. XX:XX Slightly one and deferral through we've the above built so or backlog

you We will that increasing. as backlog the report but it year, in see would of end our the total

Alex Henderson

And the impact I four XX:XX what half of or your had All month right. surprised the quarter, shekel the calculus? the impact much was last (ph) Q the an spiked guide, in so? in So in shekel it obviously then is in how and

Michael Goldberger

the it will less XX:XX around as of first year-over-year would quarter. Well be net for next the quarter, six it impact be hundred

Alex Henderson

the related this to And XX:XX twenty year be it level, in would for two? full

Roy Zisapel

think is point I two more EPS, the [indiscernible] zero it was quarter, zero the point XX:XX one or now thesis bit this dollars. a million one five

So it's is level at one quarter. two point but to this dollars forward, per more, quarter zero going dollars one point

Alex Henderson

helpful. cede floor. That's Thanks. XX:XX I'll the

Operator

to Zisapel, CEO. XX:XX will Mr. at There are back over no further questions this time. I now turn call the Roy

Roy Zisapel

you. today and day. very joining have you a Thank Thank us great much XX:XX for

Operator

XX:XX Ladies call. thank concludes gentlemen, today's participation. This your conference for and you

now may disconnect. You

Radware (RDWR) 3 Nov 212021 Q3 Earnings call transcript