Fourth Quarter 2023 Financial Results and Highlights
Revenue of $65.0 million, down 12% year–over–year
Cloud ARR of $64.9 million, up 22% year-over-year
Non-GAAP EPS of $0.13; GAAP net loss per diluted share of $0.14
Full Year 2023 Financial Results and Highlights
Revenue of $261.3 million, down 11% year-over-year
Non-GAAP EPS of $0.43; GAAP net loss per diluted share of $0.50
TEL AVIV, Israel, Feb. 07, 2024 (GLOBE NEWSWIRE) — Radware® (NASDAQ:RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the fourth quarter and full year ended December 31, 2023.
“We closed 2023 on a positive note with our cloud security business delivering 22% year-over-year ARR growth,” said Roy Zisapel, Radware’s president and CEO. “As we look ahead, we remain cautiously optimistic in 2024. We intend to build upon early signs of improvement in the macro environment and capitalize on the growth in our cloud security business and partner channels, while remaining committed to cost discipline. We believe we are well positioned to return to revenue growth and improve profitability in 2024.”
Financial Highlights for the Fourth Quarter and Full Year 2023
Revenue for the fourth quarter and full year of 2023 totaled $65.0 million and $261.3 million, respectively:
Revenue in the Americas region was $24.6 million for the fourth quarter of 2023, a decrease of 23% from $31.9 million in the fourth quarter of 2022. Revenue in the Americas region for the full year of 2023 was $103.4 million, a decrease of 17% from $123.9 million in the full year of 2022.
Revenue in the Europe, Middle East, and Africa (“EMEA”) region was $24.9 million for the fourth quarter of 2023, an increase of 2% from $24.3 million in the fourth quarter of 2022. Revenue in the EMEA region for the full year of 2023 was $96.5 million, a decrease of 7% from $104.2 million for the full year of 2022.
Revenue in the Asia-Pacific (“APAC”) region was $15.5 million for the fourth quarter of 2023, a decrease of 13% from $17.9 million in the fourth quarter of 2022. Revenue in the APAC region for the full year of 2023 was $61.4 million, a decrease of 6% from $65.3 million for the full year of 2022.
GAAP net loss for the fourth quarter of 2023 was $5.9 million, or $(0.14) per diluted share, compared to GAAP net loss of $4.1 million, or $(0.09) per diluted share, for the fourth quarter of 2022. GAAP net loss for the full year of 2023 was $21.6 million, or $(0.50) per diluted share, compared to GAAP net loss of $0.2 million, or $0.00 per diluted share, for the full year of 2022.
Non-GAAP net income for the fourth quarter of 2023 was $5.5 million, or $0.13 per diluted share, compared to non-GAAP net income of $7.7 million, or $0.17 per diluted share, for the fourth quarter of 2022. Non-GAAP net income for the full year of 2023 was $18.9 million, or $0.43 per diluted share, compared to non-GAAP net income of $31.3 million, or $0.68 per diluted share, for the full year of 2022.
As of December 31, 2023, the Company had cash, cash equivalents, short-term bank deposits, and marketable securities of $363.7 million. Cash flow from operating activities was $2.7 million in the fourth quarter of 2023 and negative at $3.5 million for the full year of 2023.
Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax-related adjustments. A reconciliation of each of the Company’s non-GAAP measures to the most directly comparable GAAP measure is included at the end of this press release.
Conference Call
Radware management will host a call today, February 7, 2024, at 8:30 a.m. EST to discuss its fourth quarter and full year 2023 results and the Company’s first quarter 2024 outlook. To participate on the call, please use the following numbers:
U.S. participants call toll free: 888-510-2008
International participants call: 1 646-960-0306
Conference ID: 1864701
A replay will be available for two days, starting two hours after the end of the call, on telephone number +1-647-362-9199 or (US toll-free) 800-770-2030. Passcode 1864701.
The call will be webcast live on the Company’s website at: http://www.radware.com/IR/. The webcast will remain available for replay during the next 12 months.
Use of Non-GAAP Financial Information and Key Performance 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, net, income before taxes on income, taxes on income, net income and diluted earnings per share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax–related adjustments. Management believes that exclusion of these charges allows for meaningful comparisons of operating results across past, present, and future periods. Radware’s management believes the non-GAAP financial measures provided in this release are useful to investors for the purpose of understanding and assessing Radware’s ongoing operations. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included with the financial information contained in this press release. Management uses both GAAP and non-GAAP financial measures in evaluating and operating the business and, as such, has determined that it is important to provide this information to investors.
Annual recurring revenue (“ARR”) is a key performance indicator defined as the annualized value of booked orders for term-based cloud services, subscription licenses, and maintenance contracts that are in effect at the end of a reporting period. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations. We consider ARR a key performance indicator of the value of the recurring components of our business.
Safe Harbor Statement
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware’s plans, outlook, beliefs, or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware’s current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions and volatility of the market for our products; the effects of the current attacks by the terrorist groups Hamas and Hezbollah, and the war between Israel and Hamas and Israel and Hezbollah; natural disasters and public health crises, such as the coronavirus disease 2019 (COVID-19) pandemic; a shortage of components or manufacturing capacity could cause a delay in our ability to fulfill orders or increase our manufacturing costs; our business may be affected by sanctions, export controls, and similar measures, targeting Russia and other countries and territories, as well as other responses to Russia’s military conflict in Ukraine, including indefinite suspension of operations in Russia and dealings with Russian entities by many multi-national businesses across a variety of industries; our ability to successfully implement our strategic initiative to accelerate our cloud business; our ability to expand our operations effectively; timely availability and customer acceptance of our new and existing solutions; risks and uncertainties relating to acquisitions or other investments; the impact of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; intense competition in the market for cyber security and application delivery solutions and in our industry in general, and changes in the competitive landscape; changes in government regulation; outages, interruptions, or delays in hosting services or our internal network system; compliance with open source and third-party licenses; the risk that our intangible assets or goodwill may become impaired; our dependence on independent distributors to sell our products; long sales cycles for our solutions; changes in foreign currency exchange rates; undetected defects or errors in our products or a failure of our products to protect against malicious attacks; the availability of components and manufacturing capacity; the ability of vendors to provide our hardware platforms and components for our main accessories; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; changes in tax laws; our ability to realize our investment objectives for our cash and liquid investments; our ability to attract, train, and retain highly qualified personnel; and other factors and risks over which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, refer to Radware’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Radware’s public filings are available from the SEC’s website at www.sec.gov or may be obtained on Radware’s website at www.radware.com.
About 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 the Radware website.
Radware encourages you to join our community and follow us on: Facebook, LinkedIn, Radware Blog, Twitter, YouTube, and Radware Mobile for iOS and Android.
©2024 Radware Ltd. All rights reserved. Any Radware products and solutions mentioned in this press release are protected by trademarks, patents, and pending patent applications of Radware in the U.S. and other countries. For more details, please see: https://www.radware.com/LegalNotice/. All other trademarks and names are property of their respective owners.
Radware believes the information in this document is accurate in all material respects as of its publication date. However, the information is provided without any express, statutory, or implied warranties and is subject to change without notice.
The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.
CONTACTS
Investor Relations:
Yisca Erez, +972-72-3917211, ir@radware.com
Media Contact:
Gerri Dyrek, gerri.dyrek@radware.com
Radware Ltd.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
December 31,
December 31,
2023
2022
(Unaudited)
(Unaudited)
Assets
Current assets
Cash and cash equivalents
70,538
46,185
Marketable securities
86,372
44,180
Short-term bank deposits
173,678
207,679
Trade receivables, net
18,959
17,752
Other receivables and prepaid expenses
10,015
7,196
Inventories
15,544
11,428
375,106
334,420
Long-term investments
Marketable securities
33,131
90,148
Long-term bank deposits
–
43,765
Other assets
2,166
2,146
35,297
136,059
Property and equipment, net
18,221
21,068
Intangible assets, net
15,718
19,686
Other long-term assets
39,161
41,269
Operating lease right-of-use assets
20,777
23,078
Goodwill
68,008
68,008
Total assets
572,288
643,588
Liabilities and equity
Current liabilities
Trade payables
4,298
6,464
Deferred revenues
103,703
108,243
Operating lease liabilities
4,684
4,685
Other payables and accrued expenses
41,650
44,643
154,335
164,035
Long-term liabilities
Deferred revenues
60,499
72,219
Operating lease liabilities
16,020
19,461
Other long-term liabilities
18,160
19,430
94,679
111,110
Equity
Radware Ltd. equity
Share capital
733
732
Additional paid-in capital
529,218
498,168
Accumulated other comprehensive income (loss)
77
(4,844
)
Treasury stock, at cost
(365,749
)
(303,299
)
Retained earnings
119,812
141,402
Total Radware Ltd. shareholder’s equity
284,091
332,159
Non–controlling interest
39,183
36,284
Total equity
323,274
368,443
Total liabilities and equity
572,288
643,588
Radware Ltd.
Condensed Consolidated Statements of Income
(U.S Dollars in thousands, except share and per share data)
For the three months ended
For the year ended
December 31,
December 31,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenues
65,032
74,083
261,292
293,426
Cost of revenues
12,824
13,917
51,710
53,884
Gross profit
52,208
60,166
209,582
239,542
Operating expenses, net:
Research and development, net
19,712
22,486
82,617
86,562
Selling and marketing
31,869
32,544
126,237
126,533
General and administrative
8,030
10,244
32,408
29,786
Total operating expenses, net
59,611
65,274
241,262
242,881
Operating loss
(7,403
)
(5,108
)
(31,680
)
(3,339
)
Financial income, net
3,239
2,018
13,927
8,052
Income (Loss) before taxes on income
(4,164
)
(3,090
)
(17,753
)
4,713
Taxes on income
1,686
1,034
3,837
4,879
Net loss
(5,850
)
(4,124
)
(21,590
)
(166
)
Basic net loss per share attributed to Radware Ltd.’s shareholders
(0.14
)
(0.09
)
(0.50
)
(0.00
)
Weighted average number of shares used to compute basic net loss per share
41,806,042
44,586,590
42,871,770
44,943,168
Diluted net loss per share attributed to Radware Ltd.’s shareholders
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