RDWR - Earnings call transcript Q4 2024

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Operator

Welcome to the Radware conference call discussing fourth quarter and full year 2024 results. [Operator Instructions] As a reminder, this conference is being recorded, February 12, 2025.

I would now like to turn the call over to Yisca Erez, Director, Investor Relations at Radware. Please go ahead.

Yisca Erez

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

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

to, projections performance During economic or or from the we risks severe changing today's make and other events statements our the financial filings. cause may regarding and limited impact the industry, actual conditions in forward-looking and various products, of the statements differences from conditions, These other materially time results future to business in orders to include, global could detailed address changes and forecast or that in risks of estimates. changes current timing uncertainties, forward-looking Radware's time company. could amount future ability to to subject our contribute differ are call, are or general Radware's for but Factors demand from not and such and

in documents commitment to to files on revise or specifically no the to to furnishes date any from as made. events and order filed statements of time reflect after XX-F statement Form the We is you company's last refer XXXX. such XX, time undertake We the SEC, the or report with company the annual on circumstances forward-looking March update

the Roy turn to now will call I Zisapel.

Roy Zisapel

both top our pleased to all for to and you bottom guidance. us report XXXX fourth Yisca, quarter I'm finish exceeding and today. you, thank Thank line a strong our with joining

here A share, revenue strong model. quarter, fourth XX% in in from business. continues In During I'm we driver per of in the our to doubled ARR up pleased than the quarter fourth to of third achieved our quarter, our growth testament the cloud our to non-GAAP business focus accelerated earnings XX% off. key leverage our the the report growth XX%, cloud quarter and security was XXXX. pay high a year-over-year to more we growth

achieved also and X,XXX customer in the surpassed customers production bookings cloud acquisition growth and cloud. We in double-digit

our XXXX, security our we In will fronts. in on multiple cloud increase investment business

we plan First, presence. a our of centers expand number to open cloud new record to security

we million XXXX. Through we cloud in our market gains our partnerships MSSP invest in to cloud a believe R&D cloud share continue of the by rate combined continue and Second, market OEM intend these more finally, plan lead to end And by accelerate the exceed capabilities. of XX% to to our business ARR the to establish we and to strength close to $XXX security. efforts, security grow growth security we ARR can

like raising leveraging barrier defenses. the to Ukraine cyber most to the the tools to enhance tools Israel attackers attacks. strengthen while automate and the simultaneously U.S., nations effectively entry were of with precision attackers among the for targeted Our lowered growth was adoption achieved tensions sharp was and a rapidly actors. escalation cybersecurity This primarily in geopolitical amid attacks. was by last of by Countries sophistication the threat and evolving AI of year cyber a marked major gen landscape. rapid both by frequency the organizations and urgency AI-powered their for driven XXXX AI-powered

with infusing giving security landscape. made across AI EPIC-AI In evolving in advantage offering our a us our XXXX, parallel, an significant strides throughout we threat framework, distinct

to XX%. data teams incidents. to received been remediation AI. cutting of new The up recent center with SOC customers, well plans already automated precisely service It is latest time security We release fighting our are the for mean AI cloud Xpert The addition SOC by to AI literally EPIC-AI. resolution offers has by tailored,

of We release stay most for of protection capabilities ensuring with a XXXX, available. our comprehensive the have emerging advanced AI-driven threats customers set ahead pipeline our in

protection Moving of its DefensePro detection to recently customers, X lineup. DDoS DefensePro by platforms our sophisticated continuous driven steady happy in X blocking uptake exceptional portfolio solution. new X, our attacks. and our complementing I'm the to by a We with expanded adoption DefensePro of report full

We are and growth years. our early X stages refreshes installed the X still in for in base coming existing opportunities significant DefensePro the of see

for DefensePro service a a for security a cloud incumbent massive win refresh which is closed protection Similarly, significant advantage DefensePro example deal is win the in and completely have a was hybrid customers. of and deal cloud combining X-digit DDoS X with customer posture expedited of provider. displacing the DDoS attack competitive X DDoS, great late DDoS the enhances provider This example the European we network planned services cyber disrupted a with hybrid latency. good this service both a Internet critical to and A we X-digit several Initially after U.S. XXXX, access a provider. cloud and

our quarter, new the and bookings. a for Collaboration growth OEM our record amplified sustained fourth setting success in annual with in Cisco further double-digit Point XXXX. partners OEM Check total

management expanded move in Agreement Cisco for we Cisco will recently offering As Enterprise opportunities new further purchasing more unlock included streamline our and Radware and growth even forward, license customer.

during notable fourth partnerships quarter. deals the produced important These some

of Check we world. with the deal with For banks closed one X-digit largest in example, the in Point, a partnership

DDoS attacks. Radware sought the won provider comprehensive response, the a a IoT new DDoS solution attack customer with and by long-standing most automated dissatisfaction with market. with Cisco, solution and in October the as line offering secured cloud win After bank against defense a cloud in we XXXX provider. critical We the relies deal on a incumbent our their U.S. logo alternatives. customer, DDoS In solution of the partnership As DDoS

as continue and and protection industry detection, The API Radware in customers, named a to the was reinforce bot position and report account in cybersecurity GigaOm trusted highlights for in takeover application Radar management. fourth fast strength addition In the In security. a vulnerability innovator the our analysts space. to quarter, leader mover our

In our key and advancing and bookings cloud a summary, business quarter and year, and drivers pleased subscription partnerships, from cloud business We of in model, a both XXXX. strong to we Last accelerated success. our significant levels operations. high a flow cash achieving security I'm to progress report fourth solid transition our made OEM

Looking XXXX, our growth growth, ahead to our indicator on trajectory. leading is with ARR of total accelerating focus the remaining revenue

expansion We security are investing cloud the particularly business, our to in security. committed in of

innovation fuel Additionally, strengthen our our will AI-driven capabilities security and offerings.

deliver long-term success, ahead. in and confident are our the that strategy opportunities near-term We lie strong to about I'm excited performance and

their thank our achievements making close, XXXX commitment for our want Before in take possible. dedication to I and opportunity I this in to employees

With call will over the that, I turn to Guy.

Guy Avidan

and and to the I'm quarter business full day, Roy, good outlook of our you, year quarter performance XXXX as of pleased of for for first and XXXX. the analysis well fourth our the Thank the financial everyone. as results provide

overview, website. I today like results of the non-GAAP you that financial non-GAAP. in unless financial beginning section Investors basis reconciliation all and GAAP Before is of release would on our remind available to our otherwise on indicated, are a the to earlier issued the press Full results earnings

revenue DefensePro the was refresh X our to in contribution increased fourth growth by increased the while year Revenue $XXX fueled This by and from year-over-year to strong million, the grew XX% cloud momentum OEM our $XX quarter XXXX for XXXX full partnerships. successful million. security of X% business,

XX% last to $XX.X with and XX% $XXX in revenue XX% ARR ARR QX X% million, cloud total in propelled grew full compared from XX% Total ARR QX year. both to and million This period accelerating rising subscription year year-over-year of for to growth cloud in XX% XXXX. to growth revenue the

Additionally, the in quarter XXXX. increase for recurring our is revenue XX% revenue, full XX% year the total the fourth for which accounted reflected for the of in and

Throughout our steady XX% the of XXXX, year-over-year a achieving Americas, XXXX, quarter strong revenue regional fourth to accounting where million. highlighted XX% total in million, year-over-year the the Americas demonstrated of $XXX.X XX% for to performance progress, growth In increased $XX.X growth revenue.

year-over-year revenue EMEA, Full million, for in year. X% of revenue. $XX.X was from contributing previous total down In $XX.X XX% revenue million, year came EMEA decline X% QX a at

X% to million, revenue, revenue for X% contributing QX of APAC, grew XX% year-over-year $XX.X full the increased revenue to In and year, APAC $XX.X total million.

was profit basis points margin XXXX. to XXXX and expansion now QX an of expenses. compared Gross XX I'll in QX discuss XX.X%,

XX.X% to $X XXXX year margin gross XX.X% XXXX, of same full of income sorry, was X.X year. compared Operating of to XXXX. nearly quarter to the in compared million -- period For the in fourth last in the million tripled $X.X

to of income the nearly $X.X million XXXX, $XX.X For full and operational to a discipline. compared efficiency million XXXX, our for testament year tripled cost to also operating

profitability. enhancing maintained fueling existing we driving revenue enabled us expenses, XXXX, top while operating on to costs leverage focusing managing approach has This efficiency, resources strategy growth growth. line reducing and to disciplined Throughout a

security. Looking especially this cloud targeted ahead, continued to support we remain committed approach with disciplined to growth, investment in

to last Radware's for in million quarter period the Hawks EBITDA to for of and for in doubled $X.X $XX.X XXXX of year Radware's XXXX. Radware's core million EBITDA XX.X% period $X.X XXXX. adjusted EBITDA the Hawks fourth the compared was respectively. fourth adjusted Hawks the excluding compared $XX.X the year the in XXXX million XXXX, the million year. quarter year. same year fourth compared of business adjusted million of were excluding of and Radware's EBITDA the in the to to the for was Radware's XXXX million last the full compared nearly business $XX.X $XX to quarter million adjusted excluding $XX.X EBITDA for XXXX adjusted same of million to margin, doubled $XX.X business XX.X% of full full

the fourth Financial $X.X fourth compared period income $XX.X XX.X% of to $XX.X for year compared XX.X% the quarter The of million in rate in same respectively. and fourth the was and of of year. full million the respectively, in million year XXXX, full last tax quarter was $X and quarter and million XXXX XXXX, to

tax rate compared year XX.X% period also XXXX, XX.X% was For year. the same of full the of last in to

rate expect approximately the tax We same to remain next quarter. the

period fourth the in compared the quarter to income year. $XX.X than in million million doubled last same Net more $X.X to

income $X.XX per Diluted share compared compared full XXXX for increased year, QX in we to the $X.XX doubled $XX.X for XXXX. in million the For had to $XX.X net to million XXXX QX XXXX. to earnings

the For earnings share XXXX. $X.XX full $X.XX per doubled year, in from to diluted

same to million last from compared cash Cash operations the Cash statement We $XXX bank approximately deposits sheet. in from was the securities. of the to $X.X balance negative period cash operations $XX.X to year. equivalents, the reached flow compared cash, in ended million with the XXXX $X.X million for in quarter in flow cash and from marketable XXXX. QX flow million $XX.X flow Turning XXXX fourth million operations and

to guidance, XX% $XXX our of and with RPO I concluding future strong a revenue with commitment. we highlight our underscoring million, XXXX would like growth entering that Before representing are year-over-year solid

line growth like solutions. support long-term top driving high cloud and in on security predominantly through strategic potential Our areas investments remains focus that expansion, AI-driven

While our prioritizing with all excellence. revenue operational growth, performance, maintaining align to profitability OpEx line expenses strong commitment we our top and remain ensuring disciplined with while

And move guidance. now I'll to

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

$XX.X to be $XX.X non-GAAP we net expenses non-GAAP We expect share XXXX operating per be between expect $X.XX And QX and XXXX between to QX million diluted to earnings million. $X.XX.

over the call Operator, the please. for turn to now questions. operator I'll

Operator

[Operator Instructions] question comes with Chris Our Barclays. Reimer first from

Chris Reimer

Congratulations could describe on regions. in solid you wondering I the quarter. the if was a different environment

forward, how making at over of the you could we should were and growth I especially of looking impacting they some X maybe let's looking seeing, some versus them, wondering say, describe had you be going maybe there regions last some ago. if for customer X decisions, the was the behaviors different example, how at the years what's are strong Americas, behavior Just, quarters. you've the

Roy Zisapel

Yes.

lot, Okay. Chris. Thanks a

what in in seeing and cyber With So these large by consistently think across impact their rising cautious customers. are that, we're world the activity first, some attacks on and critical still I enterprise enterprises. cyber spending was the the the sophistication

and want So And and centers. we enterprise moving to the security mission-critical we purchases. those seeing cybersecurity data protecting applications remind, on are cloud I are

jewels crown customers. So are the of really protecting we our

are because seeing necessity. them this moving high We of

there's if of ahead they incidents the to they they sometimes are threats, simply and need sometimes landscape. make sure to or allocate budget So threat immediate need

So even time. all I we of behavior this think sometimes really the extent, budgets, the even our as or real-time markets, to dealing not is some with correlated IT are budgets the security protection driving to

growth. in side, that translate seen to market, that leveraging into flow in strong specifically revenues. time, We mentioned international At huge potential half continue market. in do think we second for the can MSSPs, same we the saw for It and in in America some OEM opportunity we we've growth. would in booking of North Now In invest international say, us there's the my as points and I we in market we believe the partners, the would to some remarks, revenue QX. performance, are I've market the good the

As year Guy mentioned, It cetera. also would flow revenue the are in into RPO the et the high, recognition. coming

Chris Reimer

Great. That's color. good

your comments this kind R&D referring OpEx about R&D and by Should in of looking be of your at year? offset intention to to we investment would that Just other new increase be levels from the Or increased savings? centers. especially

Roy Zisapel

Yes.

as as accelerated to bit given So growth I make we invest would we're in the think, across investments and general, of a expenses for go-to in that investments resources well market. R&D centers cloud Other we higher current want and we seeing look more specifically, do for growth, and reallocation the for in through in potential also internally. above would we and the But will business, levels.

I with we our do MSSPs. do can we partners, think OEM some more of more can with the --

going put also revenue So cloud it more growth investment, match we security specifically, we're to believe well. and would as

Operator

The from next question Ryan Koontz Company. Needham & with comes

Ryan Koontz

Very time? to go some had the made market the is related quarter. Americas? you've of Is -- some you Nice maybe to more cloud this to or for see ARR And in related to the and this reaccelerating specifically underway nice channels efforts here. to changes

Roy Zisapel

you. Thank Yes.

So I broad-based. think it was

only more our North Some had the OEMs with with of from channel couple mentioned from I general, of of and appliances. had but Obviously, international. that we of large we our more came activity and Point of wins partners only cloud. more it the security embedded not and in ones, and came Cisco. and In and very we're some highlighted Check I in our of America. teams some seeing channels strong sales geographies cloud a

double-digit quarter-over-quarter, growth. seeing, more more pipeline I customer mentioned definitely -- bookings, we're more So growth, and double-digit

in of a cloud lot So the direction. actually in pointing were indicators the right

both internal obviously the even our that's runway, have everyone still with for our to our current we channels security cloud and have in And engaged think I capacity organization, plan with more XXXX. sales.

Ryan Koontz

That's really great. logical. very sounds It

On of then, compared like the environment kind ago are to, front any you? year say, differentiation? the seeing What's now a competitive competitive further for you

Roy Zisapel

et is for ratings So I industry data that the from and you so think and security applications our it and see in analyst the that cloud in also analyst had centers, really -- year the position, ratings In we security, we very respect, the I the excelling of in are security, good a on, think level in automation, algorithms, the cetera. XXXX.

We released many next-generation new algorithms, algorithms.

AI DDoS, are LLMs SOC Xpert Some mentioned. I them of APIs for AI gen based and for AI this on and and

mathematical other are Some algorithms.

security we think leading our in or I So best respect, really advantage market. strengthened this competitive with that security

by towards can good I've are ARR very of end see, think well. Akamai. million Cloudflare year. our have We competitors, doing I we're and as this mentioned you But we eye to putting $XXX close

So we feel about competitive positioning. good our very

Ryan Koontz

you're terms that maybe are any customers, you're your of commentary. you into all or are of at ecosystem great terms interfaces broader market Northbound you're helping delivering there to that integrations on? in that working in selling That's And partners your with

Roy Zisapel

Yes.

integration we are existing And partners, the and have So of first, integrations. on Check and with same our the set cases with so forth. Point. some example, enhancing constantly whole We're then but set to I've platforms for into systems. constantly so Cisco mentioned stuff use on enhancing of, the routing with Cisco, we a SIEM

and to released and we and So on. Splunk cloud security SIEM our for both from integration so AWS Azure

security ecosystem. into systems So integrating our we the are constantly broader

customers and our really by we protection our lot is very by your And the our also intelligence makes It's need threat large more you're through welcome customers. us, as or see great our capabilities. sticky. doing that. specific us we these of system." makes And telling more It complete are A application It obviously, part large do and enjoying really "What your -- is, way, it of pointing us strategic. customers we requests

So to definitely, work we continue that's on. something

Operator

from Oppenheimer. The Instructions] Horan comes Tim question with [Operator next

Timothy Horan

think a are trend with a With your very that's they're other Or competitors, and they focused customers la and you Akamai high direct what being how And else on then carte kind at want that elaborate Do did improve sales on can here? best-in-class or do a specifically level? on with the compute. CDN of you you Cloudflare more it go-to-market networking primary for? looking could and you bundling from

Roy Zisapel

Yes.

we is protection. center what the see delivering definitely, we the and we niche or is So security target, data the trend should platformization the are in in application of market. And that believe integrated the we solution same which broader

integrated like and So as into API it's apps our load bot. we've DNS, web the a network balancing the firewall, And service, analytics. DDoS, the capabilities, application, CDN cloud

So in need it's application, the in our bundled solution. everything you order already deliver to

carte, number packages And you advanced we we is that approach. And a really standard, tiered of capacity and a being scale of applications sell. the that's then It's platform. of set. pricing a actually need, la It's not how have complete on the based what and this

added and last, those So service, we're since a these the and firewall quarters, we're actually as I definitely packages. as there. each capabilities, quarter in X it seeing part customers And network of we've purchasing using the think, additional every analytics the

What or, or centers. feel data or with in We line large compute still the on to side, cross don't with cloud compute. should do, regular we cloud is we providers the the the rely private enterprises don't same public

do large security we So service security, not It's the the core everything have. nice where application, very mainly and And are we that's to provider being delivering what key. in with enterprises is and about platform. securing the targeting

that's over bundle we compute. and set security, we at see the not all where customers, And So regard. in that They're don't in excelling. to our in there, good is enough need good all are

for that's the question. first So

do farming channel channels with for And We some direct OEMs, MSSPs, across scale that a one record the And and are North OEM are go-to-market together as touch being we record efforts in motion approaches. way, organization. and approach, that at record OEMs, by America the more that, We I year channels, -- into world. mentioned the to as separately in for the business. MSSPs did strengthen both each and into the we Regarding general, are think on to in least scale seeing sales have go-to-market especially hunting well. more putting we a all scale,

So of and effect. through scale we taking the seeing are channels, MSSPs OEMs start that

Operator

in further for would no to time. management call questions at turn queue are I There to comments. the this like back closing

Roy Zisapel

Thank have you, and day. a everyone, great for attending,

Operator

This does today's teleconference. conclude

You your day. participation, may disconnect have Thank lines this your you and at time. great a for

Radware (RDWR) 12 Feb 252024 Q4 Earnings call transcript