Financial News

Radware Reports 11% Revenue Growth for The First Quarter 2021

First Quarter 2021 Results and Financial Highlights

  • Total revenues of $67 million, up 11% year over year, exceeding high end of the guidance
  • Americas revenues grew 15% year over year and accounts for 50% of total revenues
  • Record ARR of $176 million, up 10% year over year
  • Non-GAAP operating income increased 55% year over year to $7.5 million
  • Non-GAAP EPS of $0.17, exceeding high end of the guidance; GAAP EPS of $0.08
  • Cash flow from operations of $59 million in the last twelve months

TEL AVIV, Israel, May 05, 2021 (GLOBE NEWSWIRE) -- Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter ended March 31, 2021.

“We are pleased to start the year with a strong quarter, highlighted by double-digit growth in total revenue and earnings per share. We continue to execute on our growth pillars, focusing on our security and cloud offerings,” said Roy Zisapel, President and CEO, Radware.

Mr. Zisapel continued, “We are facing a new reality with an increased level of infrastructure and application attacks. As a result, organizations are seeking innovative and sophisticated solutions to protect their assets and applications. The business climate is very positive and given the breadth of our product offering, we are well positioned to capture the opportunities ahead of us.”

Financial Highlights for the First Quarter of 2021

Revenues for the first quarter of 2021 totaled $66.8 million:

  • Revenues in the Americas region were $33.7 million for the first quarter of 2021, up 15% from $29.2 million in the first quarter of 2020.
  • Revenues in the Europe, Middle East and Africa (“EMEA”) region were $21.1 million for the first quarter of 2021, up 16% from $18.2 million in the first quarter of 2020.
  • Revenues in the Asia-Pacific (“APAC”) region were $12.0 million for the first quarter of 2021, down 5% from $12.6 million in the first quarter of 2020.

GAAP net income for the first quarter of 2021 was $3.9 million, or $0.08 per diluted share, compared to GAAP net income of $2.6 million, or $0.05 per diluted share, for the first quarter of 2020.

Non-GAAP net income for the first quarter of 2021 was $8.0 million, or $0.17 per diluted share, compared to non-GAAP net income of $6.6 million, or $0.14 per diluted share, for the first quarter of 2020.

Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, litigation costs, exchange rate differences, net on balance sheet items included in finance income, other loss adjustment and tax related adjustments. A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release.

As of March 31, 2021, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $435.3 million, up from $427.3 million as of March 31, 2020. Net cash provided by operating activities in the first quarter of 2021 totaled $16.2 million. Net cash spent on share repurchases in the first quarter of 2021 totaled $30.2 million.

Conference Call
Radware management will host a call today, May 5, 2021 at 8:30 a.m. ET to discuss its first quarter 2021 results and the Company’s outlook. To participate in the call, please use the following numbers:
Participants in the US call: Toll Free 833-968-2213
Participants Internationally call: +1-778-560-2898
Conference ID: 5036077

A replay will be available for 2 days, starting 2 hours after the end of the call, on telephone number +1-416-621-4642 or (US toll-free) 800-585-8367.
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 Indicators
In 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 stock-based compensation expenses, amortization of intangible assets, litigation costs, exchange rate differences, net on balance sheet items included in finance income, other loss adjustment 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 revenues ("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 COVID-19 pandemic; 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; real or perceived shortcomings, defects or vulnerabilities in our solutions or if we or our end-users experience security breaches; the availability of components and manufacturing capacity; our reliance on a single managed security service provider to provide us with scrubbing center services; 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 .

About Radware
Radware® (NASDAQ: RDWR), is a global leader of cyber security and application delivery solutions for physical, cloud, and software defined data centers. Its award-winning solutions portfolio secures the digital experience by providing infrastructure, application, and corporate IT protection and availability services to enterprises globally. Radware’s solutions empower enterprise and carrier customers worldwide to adapt to market challenges quickly, maintain business continuity and achieve maximum productivity while keeping costs down. For more information, please visit www.radware.com.

©2021 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.

CONTACTS
Investor Relations:
Yisca Erez, +972-72-3917211, ir@radware.com

Media Contacts:
Joel Arabia, +1 201-4945988, joel.arabia@radware.com


Radware Ltd.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
    
 March 31, December 31,
 2021 2020
 (Unaudited) (Unaudited)
Assets   
    
Current assets   
Cash and cash equivalents38,979  54,771 
Available-for-sale marketable securities70,215  64,684 
Short-term bank deposits205,554  191,038 
Trade receivables, net9,908  16,848 
Other receivables and prepaid expenses10,190  6,526 
Inventories13,411  13,935 
 348,257  347,802 
    
Long-term investments   
Available-for-sale marketable securities62,690  66,836 
Long-term bank deposits57,829  71,421 
Severance pay funds2,312  2,453 
 122,831  140,710 
    
    
Property and equipment, net22,124  22,976 
Intangible assets, net12,125  12,588 
Other long-term assets31,139  30,222 
Operating lease right-of-use assets26,892  27,823 
Goodwill41,144  41,144 
Total assets604,512  623,265 
    
    
Liabilities and shareholders' equity   
    
Current Liabilities   
Trade payables4,126  3,882 
Deferred revenues99,595  92,127 
Operating lease liabilities5,165  5,224 
Other payables and accrued expenses36,520  42,514 
 145,406  143,747 
    
Long-term liabilities   
Deferred revenues56,251  54,797 
Operating lease liabilities23,197  24,851 
Other long-term liabilities11,494  11,409 
 90,942  91,057 
    
Shareholders' equity   
Share capital723  721 
Additional paid-in capital449,542  443,018 
Accumulated other comprehensive income, net of tax978  1,517 
Treasury stock, at cost(220,741) (190,552)
Retained earnings137,662  133,757 
Total shareholders' equity368,164  388,461 
    
Total liabilities and shareholders' equity604,512  623,265 


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,
  2021
 2020
  (Unaudited)
 (Unaudited)
       
Revenues 66,769  60,012 
Cost of revenues 12,266  10,689 
Gross profit 54,503  49,323 
       
Operating expenses, net:      
Research and development, net 17,735  15,832 
Selling and marketing 28,991  28,202 
General and administrative 5,196  4,712 
Total operating expenses, net 51,922  48,746 
       
Operating income 2,581  577 
Financial income, net 2,670  2,724 
Income before taxes on income 5,251  3,301 
Taxes on income 1,346  727 
Net income 3,905  2,574 
       
Basic net earnings per share 0.08  0.05 
       
Weighted average number of shares used to compute basic net earnings per share 46,225,882  46,921,344 
       
Diluted net earnings per share 0.08  0.05 
       
Weighted average number of shares used to compute diluted net earnings per share 47,607,518  48,225,688 


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,
 2021 2020
 (Unaudited) (Unaudited)
GAAP gross profit54,503  49,323 
Stock-based compensation47  38 
Amortization of intangible assets464  498 
Non-GAAP gross profit55,014  49,859 
    
GAAP research and development, net17,735  15,832 
Stock-based compensation1,339  809 
Non-GAAP Research and development, net16,396  15,023 
    
GAAP selling and marketing28,991  28,202 
Stock-based compensation2,052  1,886 
Non-GAAP selling and marketing26,939  26,316 
    
GAAP general and administrative5,196  4,712 
Stock-based compensation936  903 
Litigation costs63  119 
Non-GAAP general and administrative4,197  3,690 
    
GAAP total operating expenses, net51,922  48,746 
Stock-based compensation4,327  3,598 
Litigation costs63  119 
Non-GAAP total operating expenses, net47,532  45,029 
    
GAAP operating income2,581  577 
Stock-based compensation4,374  3,636 
Amortization of intangible assets464  498 
Litigation costs63  119 
Non-GAAP operating income7,482  4,830 
    
GAAP financial income, net2,670  2,724 
Other loss adjustment-  247 
Exchange rate differences, net on balance sheet items included in financial income, net(724) (307)
Non-GAAP financial income, net1,946  2,664 
    
GAAP income before taxes on income5,251  3,301 
Stock-based compensation4,374  3,636 
Amortization of intangible assets464  498 
Litigation costs63  119 
Other loss adjustment-  247 
Exchange rate differences, net on balance sheet items included in financial income, net(724) (307)
Non-GAAP income before taxes on income9,428  7,494 
    
GAAP taxes on income1,346  727 
Tax related adjustments62  122 
Non-GAAP taxes on income1,408  849 
    
GAAP net income3,905  2,574 
Stock-based compensation4,374  3,636 
Amortization of intangible assets464  498 
Litigation costs63  119 
Other loss adjustment-  247 
Exchange rate differences, net on balance sheet items included in financial income, net(724) (307)
Tax related adjustments(62) (122)
Non-GAAP net income8,020  6,645 
    
GAAP diluted net earnings per share0.08  0.05 
Stock-based compensation0.09  0.08 
Amortization of intangible assets0.01  0.01 
Litigation costs0.00  0.00 
Other loss adjustment0.00  0.01 
Exchange rate differences, net on balance sheet items included in financial income, net(0.02) (0.01)
Tax related adjustments(0.00) (0.00)
Non-GAAP diluted net earnings per share0.17  0.14 
    
    
Weighted average number of shares used to compute Non-GAAP diluted net earnings per share47,607,518  48,225,688 


Radware Ltd.
Condensed Consolidated Statements of Cash Flow
(U.S. Dollars in thousands)
     
  For the three months ended
  March 31,
  2021 2020
  (Unaudited) (Unaudited)
Cash flow from operating activities:    
     
Net income 3,905  2,574 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization 2,648  2,630 
Stock based compensation 4,374  3,636 
Amortization of premium, accretion of discounts and accrued interest on marketable securities, net 408  196 
Other loss (gain) (2) 163 
Accrued interest on bank deposits (781) (195)
Increase in accrued severance pay, net 225  216 
Decrease (increase) in trade receivables, net 6,940  (4,029)
Increase in other receivables and prepaid expenses and other long-term assets (4,462) (459)
Decrease (increase) in inventories 524  (914)
Increase (decrease) in trade payables 244  (1,416)
Increase in deferred revenues 8,922  20,030 
Decrease in other payables and accrued expenses (5,993) (621)
Operating lease liabilities, net (782) (838)
Net cash provided by operating activities 16,170  20,973 
     
Cash flows from investing activities:    
     
Purchase of property and equipment (1,333) (2,452)
Proceeds from (investment in) other long-term assets, net 42  (2)
Investment in bank deposits, net (143) (4,506)
Proceeds from (investment in) sale, redemption of and purchase of marketable securities, net (2,491) 2,523 
Net cash used in investing activities (3,925) (4,437)
     
Cash flows from financing activities:    
     
Proceeds from exercise of stock options 2,152  1,589 
Repurchase of shares (30,189) (18,669)
Net cash used in financing activities (28,037) (17,080)
     
Decrease in cash and cash equivalents (15,792) (544)
Cash and cash equivalents at the beginning of the period 54,771  40,751 
Cash and cash equivalents at the end of the period 38,979  40,207 



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