RDWR - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to the Radware conference call discussing second quarter 2024 results. [Operator Instructions] As a reminder, this conference is being recorded July 31, 2024. I would now like to turn this call over to Yisca Erez, Director, Investor Relations, at Radware. Please go ahead.

Yisca Erez

Thank you, operator. welcome Second and Conference XXXX everyone, Call. morning, to Quarter Radware's Earnings Good

are and available of Zisapel, and me the our well Roy Joining today website. kit investor President Investor and statements Chief for Relations Officer. as of the release quarter Guy Financial Chief the A press copy are today's second financial as in Avidan, Officer; Executive section

economic the statements now products, refer company. cause SEC, and to annual filings. after on time and we and industry, are the results circumstances contribute detailed Form from this may Radware's Radware's risks company's time the the documents forward-looking in impact changes any changing address to to uncertainties, ability conditions, call financial revise orders from We date of make regarding forward-looking forward-looking that the such future call, furnishes and We report the such differences pandemic, to other the company on time future XX-F and the or with turn events that forecast global to as March or our files undertake today's of timing filed last the specifically you or general business the is other amount update reflect not to current subject During to statements XXXX. XX, no could performance could will our made. I changes events are COVID-XX commitment Roy in Zisapel. statement conditions order limited or in of These statements risks include, from but in to the or projections from for and estimates. Factors differ various severe materially actual demand to and or

Roy Zisapel

per and ARR results from driven the Thank cost generated you, of also earnings with cloud $XX all revenues by guidance. million XXXX. to year-over-year, These security exceeding half business, protection, second of of contributed We operations continued Yisca, $XX thank joining quarter OpEx strong were and first ended flow X for non-GAAP of DDoS the of you high-end share $X.XX, our XXXX the We today. of second the in in with both us and cloud acceptance to control quarter cash performance. XX% million growing of $XX million our DefensePro our our

and to detection to log Euro To attacks. analysis risks Paris block in includes AI. more other and Elections, second and new the This EPIC-AI such to identify rise generative numbers, words, in climb algorithm. scale significantly first XXXX business AI-powered with and in year, greater resolution. and to AI conflicts DDoS It our for tools, EPIC-AI continuously false-positive surge organizations attackers automated new that, continue both protection also that complexity. is algorithms, XXXX. all and our our reducing AI AI platform. Leveraging recommendations, introduces Radware and to protection rely introduce business accelerate actors EPIC-AI worldwide attacks, the to we time on to cross-module customers remediation powers events, continue DDoS During progression, solutions a algorithms and fight influenced digits attack Network the AI-powered and months past address using and face to autocorrection. of of AI-enabled correlation, infuses With to Games. With AI-powered six capabilities, by proud new international was behavioral increased significantly to state-of-the-art customer Olympic particular, capabilities and cyberattacks are challenges, these intelligence which half automatically, this improve designed security logic attack our Parliament time attacks' attack as and attacks double their attack competitive algorithms and and geopolitical API detection AI of solutions attack EU layers the Unlike generative to operations. layer need mitigation AI web API real-time over quadrupling bad works in to like the and protection,

to optimized our into customers, protection For and translates significantly this faster resolve. time

top We Report. score the detection Radware to that the for currently of XXXX only we in May, the AI-enhanced this vulnerability to earn the In is GigaOm stated vendor Radware in and criterion. announce In includes XX our on the Application for protection report, GigaOm Security everything in analysis AI are future. capabilities. pleased the recognize look in our evaluated a that space analysts AI providers of capabilities API the strength security Radar

performer, Gartner's pace Customer are the infrastructure In meet continue customers Web Protection for us cloud and of customers' addition, noting XXXX willing strong named that our of evolving a Radware. To of recommend to and Peer Report accelerated to needs, Insights XX% our Application security we API Voice innovation.

expanded During cloud our with and management. for our numerous NoKey the protection, DNS-as-a-Service with quarter, capabilities second we to security privacy storage new and platform We cloud our platform. capability solution added

service believe than security launch X EPIC-AI value and comply and The to modules application We and XX business we XX increased will PCI regulation for compliance in starting DDoS our local DSS cloud application also centers our that of growing help to with increased end requirements. and a cloud offers customers customers' the XX, service extract additional visibility additional centers protection X.X our will customers in the facility launched our mandatory the on We PCI controls, base, a XXXX. To new customer cloud introduced process attack The streamline security This extensive cloud to reports. requirements. The dedicated by plan across from data navigate service new Paris. We help capacity XX, mitigation security easily cloud privacy the web platform went easy-to-access center XXXX. become of into organizations and extends and our X worldwide. DSS our support resiliency open solutions. March meeting to solution effect terabyte new March XXXX, more pillar

will also DefensePro momentum. these we for DDoS traction gaining our X benefits security capabilities superior stickiness. In with offerings, expect market generate its and encouraging web more ARR platform increase enhance see mitigation our business, DNS is strong forward, and our on-prem Going traction. we

closed with deal web example, need customer recognized largest performance protect convinced to network necessity attacks. multimillion-dollar The upgrade exchanges The one of their DDoS both of a new Europe. the DefensePro the and of to For them infrastructure. and with the the stock current in our protection we from volumetric X combination AI-powered DNS applications

the up to a the good key their also interested in enhancing European in institution. motivating sophisticated The Our logos example attacks was without the customer another over X purchasing new DDoS insurance certificates and ability is need factor DefensePro X mitigate earned hand Layer to the was decision. services not to their of levels, incumbent X not we deal patterns for yet provided for was part quarter. previous delivered protection could although crucial the DefensePro and broader protection that offer. returned solid second a spending Cisco results have project. In This and infrastructure, customer summary,

the in business our particularly security the We well our our about as security on-prem in advancements are strategy, cloud new excited momentum of as EPIC-AI. the with launch

will are and to our second growth focused increased business future the on half accelerating cloud into out over XXXX, that, we Guy. positioned and turn well for I we profitability. With of believe remain call the Looking

Guy Avidan

outlook second to I'm quarter for well the day, quarter good as analysis XXXX our the financial and of and for as this our of provide of results XXXX. pleased everyone. Roy, third you, the Thank performance

million cloud overview, beginning you growth driven period in by business carriers are XX% reached to business accounted same of available reflected quarter ARR, cloud the Before otherwise non-GAAP. X of the results XXXX. GAAP last remind is which large the in financial the all A indicated, of success Investors is and press of basis from total reconciliation on period XX% earnings expansion I'd and our today quarter issued customers. to on financial up compared unless and like of second year-over-year non-GAAP a and in security DefensePro XX% The for the approximately that full results in in second for section was million earlier our year. million expansion $XX.X cloud release and with $XX the mainly the the This enterprise XXXX security was ARR XXXX, $XX.X in website. Revenue increase our of same of

$XXX growth period the reached over of year. same Our total adjusted approximately representing X% ARR last million,

revenue second for XX% reached decreased spending, breakdown, America a accounted XX.X% of of Operating our quarter, revenue. revenue Operating to decreased revenue. of X% $XX X% X% APAC in revenue APAC accounted end On year-over-year. was XXXX EMEA million On year-over-year. the million, similar same accounted consecutive the compared XX.X%, basis, which in decrease of revenue XX% regional profits year-over-year few year. the to of was revenue signs witnessed trailing recovery the XX% increased past we million basis, million, same XX% of decreased lower EMEA representing in the a income not second total of was $XX second a in of and XXXX total in trailing and approximately million for XX% discuss XX-month year-over-year. I'll total the quarter has to expenses. revenue On $XX.X trailing X% the a now margin and year-over-year Gross quarter QX and customer $XX.X XXXX represented year-over-year it the $X.X yet On in increase Americas XX-month period from period at basis, a XXXX. revenue. guidance. XX-month quarters, of although in expenses million in $X.X to last the year-over-year million Over previous for XX% for XXXX of second levels. $XX.X to grew of returned quarter

$X.X Financial in tax was million, our second of the go-to-market managing Hawks efficiency doubled and growth to in $XX million in accelerate to period excluding or and the second The last increase in same the million we adding quarter. EPS are the expenses. Radware's quarter year. EBITDA adjusted our We for the period business the to selectively security investments dedicated last XXXX year. quarter moat, million R&D diligently infrastructure. technology business was second has of $X.X XX.X% $X.X the and $X.X for rate compared Hawks to or growth excluding in compared to to Yet same cloud XX.X% million driving income remain

compared share $X.XX XXXX We the year. in expect tax same in same to to period income in per versus the the million last as to doubled nearly had quarter. we rate million doubled approximately $X.X QX earnings XXXX. to Net next QX $X.X for $X.XX Diluted quarter the second remain

operations strong of in cash in the performance net quarter flow flow in income, to XXXX and flow Turning flow in cash the was $XX of compared Cash cash million $X.X million of operations from year-to-date to sheet. billing second from $XX.X improvement from balance the with million. last is to to operation flow mainly cash The from period the attributed This the statement in year. operation brings increase QX the same along XXXX.

June securities. I'll of XXXX, remarks the We with $XXX As remained ended cash, my guidance. cash equivalent, repurchase plan. our conclude million second $XX share and XX, in with approximately bank quarter approximately in million marketable deposits

third expect total of of to revenue to $XX.X the the We quarter be $XX for XXXX range million. million in

We million. between expect QX $XX.X million to expenses $XX.X operating to non-GAAP be XXXX

per and diluted be call non-GAAP please. XXXX over the Operator, turn questions. QX now between expect net for We the $X.XX. I'll earnings share operator $X.XX to to

Operator

Our Needham. Instructions] comes question [Operator first from Henderson from Alex

Alex Henderson

signs hope indicated. healthy signs is that your more those sizes? Can of of my you're that question Is I you around at mentioned? it the Is Radware closure express families. deal that me dive bit Let hit it just and you improved the Is little rates? wanted and safe into signs what first larger recovery stronger you to What pipeline? it a everybody are recovery seeing?

Roy Zisapel

lot, a Alex. Thanks

a it's So along platform, past, quarter. all and is noted, in Where think seen it's saw also what in normal, momentum, the weakness of ones. deals, see of of evident the a strong security to types we very rates, is strong strong on as on to closure the the this security see offerings this cloud At new starting more we business. of I we DefensePro need still also see activity. refresh to side how seeing, pickup some platform especially But heightened quickly we our closures. and have. We're I on-prem on distinguish still would large as given and them, we've we faster translate are on-prem starting between growth on the the well cycle, acceleration not to bit X, pipeline, as much We mainly challenges Obviously, the the are momentum deals. CapEx to the we've back talked those that of monitor we some revenues. definitely, we

Alex Henderson

in helpful. you revenue visibility that you're specifically, address If the could streams partnership and what would terms seeing of be there, very

Roy Zisapel

Yes.

It's them both. for in level I still the together, Our of see OEM partners with strong quarter. and performance. at better to opportunities partnership look execute if actually our well the continued, very high We

So I We're adding solutions cloud new et more DefensePro our for to customer example, them also our X, seeing them, of here, adopting think base. security seeing we're their cetera.

are aligned of innovation numbers, capabilities they're training, sales that with and their and price So we're they in new bringing, webinars the exposing all on. so spot list, all

think The partners for I there's at X starting potential in for and record traction. potential. we that's definitely, more So we're level immense now believe get more is to obviously us, much those a and with least

Operator

next question comes from Chris Our from Barclays. Reimer

Chris Reimer

strong on Congratulations the results.

or And last First that see about this management some at quarters, ask off how about, we of playing out nice the is some level we've you've off, decreases been expenses. I seen declines talking in to be strict the towards the point? to continued should few year? at looking wanted rest Considering might the going operating cost we

Roy Zisapel

we So already it. mentioned

not to are decline. really the continue planning We

the contrary, and we lot great to product have of see a generative some mentioned EPIC-AI, the the and regarding in increase may open opportunity from think AI a competition the seeing like. We go-to-market. we're On we opportunities gap

grow continue to OpEx slightly. will So probably

Chris Reimer

from? in has the that Americas kind terms quarter, what Was built that can stemming that, quarter, any you the managed give Was customers? the growth that on closures specific was that -- of this in around there? that color new what that And just growth of how you on growth

Roy Zisapel

Yes.

that on have it's about the nice quarter but of some, look think to we because period. and a on more want would is projects, we everyone this or XX-month CapEx might first, region downs We revenues, to for we had So remind a speak territory ups it's growth way nice and I et in always cetera. a I growth, normalizes say,

actually months, Americas. very do customers do improve a long we there on significant it's good existing on see saw have as the Americas And clearly we from still can commits to We place. general, work So we XX In solutions. with a to results. business our our

there's we So Americas. upside significant a the believe in

Guy are investments the region. obviously that of alluded on Some to that focused

we As place in as see But we accelerate it's growth first revenues in. then can to going be Americas expenses. we definitely, mentioned, a and growth a

Operator

Notter Our next from question George Jefferies. comes from

George Notter

I some ask wanted about cycle. refresh to X DefensePro questions the

curious you mixture the about pacing earnest, be would can of are relative getting. you give But I can what rollout, it think, in started Any interesting. think really the kind I of traction DefensePro earlier you on of us year. this DefensePro progress the to X guys on I'm appliances? metrics there sense maybe us historical Any more give

Roy Zisapel

Yes.

very think So growth strong and indicators The our and for I now see in you're are very customers. real that bit large started contribution is QX in reason main also more right, QX. strong pipeline engagement we aspects. a several The with in on the

the a next appliance would took every ago. move over that years from announcement like place First, refresh cycle, to X, year need customers X

have the more to attacks. without TLS, story. traffic. that its are advancement I bigger algorithms. encrypted DDoS complicated that that critical are the is to able or is new are the do we some, DNS, or such we're X, all The a and the a hackers seeing block, smaller say, of in existing would That's market seeing I mentioned is that part comes, have attacks time attacks we X what now. Obviously, be pushed web were DefensePro example, now, when is developed DNS I waves DefensePro of very customers that mentioned we as we've might more are of to attacks forward waves for the obviously, to But all unique block seeing part these algorithms, capabilities battery web what the the that So the need going. And looking to we we open where in layer there. significant

protect. clear So DefensePro starting need or many a these see of large to there's the infrastructure answer that. customers their to obviously are best and is for our X on experience attacks

per ability designed very are own DefensePro new strong one landscape It's to challenge we that performance the only in on across packets XXX platform improvements is attack speed traffic, that that X, basically we our our FPGAs do FPGA the many and use that [indiscernible] wire X the to to sessions, Xx parameters. not It's gig providing third in ability attackers. a have So contributor. And for. any is

capacity that transactions. So in their scaling customer that increases, matches experience what our are session networks in

attacks, to very this Maybe the capabilities coming that protection year. customers refresh better So that are needed, large time attacks, strong this are significantly year and critical together budget that those capacities a as we've time better less seen that bigger performance, price more with maybe last all of cycle. think a more on attack performance, We line, bit together is result, year, that and environment. of in

what strong that we us. of is All see really a as driving opportunity for

George Notter

what's the then this historical products? to relative And X terms the appliance of in mix of quarter DefensePro shipments your

Guy Avidan

not disclosing We're this metric. really

George Notter

EPIC-AI one with how just Okay. more to love your Is scrubbing just Is the market you And in that? services? it. there I'd now how capability. then in X? and Can the that monetizing me about Fair I going had to you're was on DefensePro are other cloud hear now you that the remind monetization enough. embedded guys

Roy Zisapel

Okay.

as for the the cloud of the is our of framework to is X initial protection. on-prem going instances all span capabilities place DefensePro application AI the security in taking well DDoS this and So both WAF the solutions, that cloud, API, and modules in as

will predictive see and across the the to and in coming solutions, all modules years. like AI the cross-correlation you're Additional our announcements going the AI be agents, SOC SOC

will initially, revenues. existing layer an significant it's improvement for our benefit all So going to forward, is all and our But benefit our all in to cloud. we that add-on a security going as Obviously, that DPX be solutions. see impacting

George Notter

charging Are that is API or you rolled software existing a into bot, that basis an la guys for the DDoS carte on capabilities?

Roy Zisapel

depends the It capability. on

bundle. appears only it highest first, our So in

we to to So adoption complete bundle it call what drives start with.

is the Second, AI to SOC, the going as be SOC well. charged predictive separately

on higher is everything that the so SOC and on. or both to across AI the or plus for end packages it's moving or of So modules add-on customers cross-correlation multi-module management

Operator

comes Henderson Needham. from next from Our question Alex

Alex Henderson

need little you think further What's of center CapEx expansion the bit I of in terms data talk a that how and could the hoping like? plans expenditures your you much and go? rollout CapEx was about where use cash we look are to or cloud you

Guy Avidan

to number throughout locations CapEx to of million. earlier year. X we was that expect a which we grow increase So than bit quarter, between will it to mentioned this $X was close X the more little

$X locations, we to it's can Based this going in new for demand, So grow think be quarter. closer based to be XXXX. That's on the going impact. million to on number

Alex Henderson

as scale? much -- build to continue And at you a are relative you coverage coverage, the the current think Is given that how the to looking out where process X-year X-, X-, need your this you're you to geographies?

Roy Zisapel

the for partnership countries, in, based say, adding are overall, market, now, we're capabilities we additional regulation. on specific we What or think I global local doing are covered. I well would

So doing the of scale I I it's think XX the think platform is well. very terabyte,

mentioned, worldwide. locations As XX we've we're

with cloud we're et the covering business local those countries remote countries, do assume and that. we pops, the see opportunities, especially well. let's But GXX partnership So pretty do extend we then to cetera, through already or all

our very, scale good. is as the think As we pops overall I customers, on very ROI those Guy mentioned,

and obviously that So I when it's builds we business, it that have well. global decision. we partners network, a with the very But good think business do

Alex Henderson

points. case? talk do at actually why couple expect that's decelerated I to growth, cloud about the it a you a If bit it little of look reaccelerate? And you Can percentage the

Roy Zisapel

And also both PCI the platform. alluded we as I've mentioned I locations see, compliance I well you I the the wanted capabilities you that Yes, mentioned definitely investing in but in DNS-as-a-Service, we're modules. to, reaccelerate. and as NoKey, think to DSS as strengthening mentioned

So the company. obviously, in we have programs

we accelerate a and let's But back go definitely heading. are investing want in in, we strong where opportunity. end growth we think we We were I that's to the see It's We're can more first where that. to how it. year.

Alex Henderson

XX% So type growth think business should term? it XX% about as longer we to a

Roy Zisapel

we about there. think we it, back get how That's and to need

Operator

now question-and-answer are Zisapel, We our like for I'd to remarks. concluding back now session. final to Roy hand over

Roy Zisapel

everyone, great you, and a day. have Thank

Operator

attending Thank call. today's for you

You may a day. now disconnect. Have wonderful

Radware (RDWR) 31 Jul 242024 Q2 Earnings call transcript