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1. |
Radware Reports First Quarter 2023 Financial Results, dated May 3, 2023
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RADWARE LTD.
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|||
Date: May 3, 2023
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By:
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/s/ Gadi Meroz | |
Name: Gadi Meroz | |||
Title: Vice President & General Counsel | |||
Exhibit Number
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Description of Exhibits
|
|
|
|
• |
Revenue of $69.0 million, down 6% year-over-year
|
|
• |
Total ARR of $201.4, up 5% year-over-year
|
|
• |
Non-GAAP gross margin of 82.3% compared to 83.2% in the first quarter of 2022
|
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• |
Non-GAAP EPS of $0.14; GAAP net loss per share of $0.07
|
|
• |
Revenue in the Americas region was $27.1 million for the first quarter of 2023, a decrease of 8% from $29.5 million in the first quarter of 2022.
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|
• |
Revenue in the Europe, Middle East, and Africa (“EMEA”) region was $29.7 million for the first quarter of 2023, an increase of 6% from $28.1 million in the first
quarter of 2022.
|
|
• |
Revenue in the Asia-Pacific (“APAC”) region was $12.2 million for the first quarter of 2023, a decrease of 24% from $16.1 million in the first quarter of 2022.
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Radware Ltd.
|
Condensed Consolidated Balance Sheets
|
(U.S. Dollars in thousands)
|
|
March 31,
|
December 31,
|
||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
Assets
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
41,882
|
46,185
|
||||||
Available-for-sale marketable securities
|
60,693
|
44,180
|
||||||
Short-term bank deposits
|
220,287
|
207,679
|
||||||
Trade receivables, net
|
18,757
|
17,752
|
||||||
Other receivables and prepaid expenses
|
9,114
|
7,196
|
||||||
Inventories
|
11,279
|
11,428
|
||||||
|
362,012
|
334,420
|
||||||
|
||||||||
Long-term investments
|
||||||||
Available-for-sale marketable securities
|
72,476
|
90,148
|
||||||
Long-term bank deposits
|
23,711
|
43,765
|
||||||
Severance pay funds
|
2,106
|
2,146
|
||||||
|
98,293
|
136,059
|
||||||
|
||||||||
Property and equipment, net
|
20,750
|
21,068
|
||||||
Intangible assets, net
|
18,694
|
19,686
|
||||||
Other long-term assets
|
42,443
|
41,269
|
||||||
Operating lease right-of-use assets
|
21,891
|
23,078
|
||||||
Goodwill
|
68,008
|
68,008
|
||||||
Total assets
|
632,091
|
643,588
|
||||||
|
||||||||
Liabilities and shareholders' equity
|
||||||||
|
||||||||
Current Liabilities
|
||||||||
Trade payables
|
4,827
|
6,464
|
||||||
Deferred revenues
|
109,846
|
108,243
|
||||||
Operating lease liabilities
|
4,815
|
4,685
|
||||||
Other payables and accrued expenses
|
41,877
|
44,643
|
||||||
|
161,365
|
164,035
|
||||||
|
||||||||
Long-term liabilities
|
||||||||
Deferred revenues
|
71,362
|
72,219
|
||||||
Operating lease liabilities
|
18,358
|
19,461
|
||||||
Other long-term liabilities
|
19,095
|
19,430
|
||||||
|
108,815
|
111,110
|
||||||
|
||||||||
Shareholders' equity
|
||||||||
Share capital
|
733
|
732
|
||||||
Additional paid-in capital
|
506,746
|
498,168
|
||||||
Accumulated other comprehensive loss, net of tax
|
(4,719
|
)
|
(4,844
|
)
|
||||
Treasury stock, at cost
|
(316,467
|
)
|
(303,299
|
)
|
||||
Retained earnings
|
138,321
|
141,402
|
||||||
Total Radware Ltd. shareholder's equity
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324,614
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332,159
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||||||
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||||||||
Non–controlling interest
|
37,297
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36,284
|
||||||
|
||||||||
Total equity
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361,911
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368,443
|
||||||
|
||||||||
Total liabilities and shareholders' equity
|
632,091
|
643,588
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Radware Ltd.
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Condensed Consolidated Statements of Income (loss)
|
(U.S Dollars in thousands, except share and per share data)
|
|
For the three months ended
|
|||||||
|
March 31,
|
|||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
|
||||||||
Revenues
|
69,041
|
73,708
|
||||||
Cost of revenues
|
13,306
|
12,941
|
||||||
Gross profit
|
55,735
|
60,767
|
||||||
|
||||||||
Operating expenses, net:
|
||||||||
Research and development, net
|
21,150
|
20,370
|
||||||
Selling and marketing
|
31,919
|
30,283
|
||||||
General and administrative
|
8,247
|
6,527
|
||||||
Total operating expenses, net
|
61,316
|
57,180
|
||||||
|
||||||||
Operating income (loss)
|
(5,581
|
)
|
3,587
|
|||||
Financial income, net
|
3,491
|
1,698
|
||||||
Income (loss) before taxes on income
|
(2,090
|
)
|
5,285
|
|||||
Taxes on income
|
991
|
1,515
|
||||||
Net income (loss)
|
(3,081
|
)
|
3,770
|
|||||
|
||||||||
Basic net earnings (loss) per share
|
(0.07
|
)
|
0.08
|
|||||
|
||||||||
Weighted average number of shares used to compute basic net earnings (loss) per share
|
44,053,402
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45,666,813
|
||||||
|
||||||||
Diluted net earnings (loss) per share
|
(0.07
|
)
|
0.08
|
|||||
|
||||||||
Weighted average number of shares used to compute diluted net earnings (loss) per share
|
44,053,402
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47,122,247
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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,
|
|||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
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(Unaudited)
|
||||||
GAAP gross profit
|
55,735
|
60,767
|
||||||
Share-based compensation
|
113
|
90
|
||||||
Amortization of intangible assets
|
992
|
464
|
||||||
Non-GAAP gross profit
|
56,840
|
61,321
|
||||||
|
||||||||
GAAP research and development, net
|
21,150
|
20,370
|
||||||
Share-based compensation
|
1,959
|
1,809
|
||||||
Non-GAAP Research and development, net
|
19,191
|
18,561
|
||||||
|
||||||||
GAAP selling and marketing
|
31,919
|
30,283
|
||||||
Share-based compensation
|
3,394
|
1,849
|
||||||
Non-GAAP selling and marketing
|
28,525
|
28,434
|
||||||
|
||||||||
GAAP general and administrative
|
8,247
|
6,527
|
||||||
Share-based compensation
|
3,531
|
668
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Non-GAAP general and administrative
|
4,703
|
4,717
|
||||||
|
||||||||
GAAP total operating expenses, net
|
61,316
|
57,180
|
||||||
Share-based compensation
|
8,884
|
4,326
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Non-GAAP total operating expenses, net
|
52,419
|
51,712
|
||||||
|
||||||||
GAAP operating income (loss)
|
(5,581
|
)
|
3,587
|
|||||
Share-based compensation
|
8,997
|
4,416
|
||||||
Amortization of intangible assets
|
992
|
464
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Non-GAAP operating income
|
4,421
|
9,609
|
||||||
|
||||||||
GAAP financial income, net
|
3,491
|
1,698
|
||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(775
|
)
|
(894
|
)
|
||||
Non-GAAP financial income, net
|
2,716
|
804
|
||||||
|
||||||||
GAAP income before taxes on income (loss)
|
(2,090
|
)
|
5,285
|
|||||
Share-based compensation
|
8,997
|
4,416
|
||||||
Amortization of intangible assets
|
992
|
464
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(775
|
)
|
(894
|
)
|
||||
Non-GAAP income before taxes on income
|
7,137
|
10,413
|
||||||
|
||||||||
GAAP taxes on income
|
991
|
1,515
|
||||||
Tax related adjustments
|
62
|
62
|
||||||
Non-GAAP taxes on income
|
1,053
|
1,577
|
||||||
|
||||||||
GAAP net income (loss)
|
(3,081
|
)
|
3,770
|
|||||
Share-based compensation
|
8,997
|
4,416
|
||||||
Amortization of intangible assets
|
992
|
464
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(775
|
)
|
(894
|
)
|
||||
Tax related adjustments
|
(62
|
)
|
(62
|
)
|
||||
Non-GAAP net income
|
6,084
|
8,836
|
||||||
|
||||||||
GAAP diluted net earnings (loss) per share
|
(0.07
|
)
|
0.08
|
|||||
Share-based compensation
|
0.20
|
0.09
|
||||||
Amortization of intangible assets
|
0.02
|
0.01
|
||||||
Litigation costs
|
0.00
|
0.00
|
||||||
Acquisition costs
|
0.00
|
0.02
|
||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(0.02
|
)
|
(0.02
|
)
|
||||
Tax related adjustments
|
(0.00
|
)
|
(0.00
|
)
|
||||
Non-GAAP diluted net earnings per share
|
0.14
|
0.19
|
||||||
|
||||||||
Weighted average number of shares used to compute non-GAAP diluted net earnings per share
|
44,762,161
|
47,122,247
|
Radware Ltd.
|
Condensed Consolidated Statements of Cash Flow
|
(U.S. Dollars in thousands)
|
|
For the three months ended
|
|||||||
|
March 31,
|
|||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
Cash flow from operating activities:
|
||||||||
|
||||||||
Net income (loss)
|
(3,081
|
)
|
3,770
|
|||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,078
|
2,488
|
||||||
Share-based compensation
|
8,997
|
4,416
|
||||||
Amortization of premium, accretion of discounts and accrued interest on marketable securities, net
|
237
|
588
|
||||||
Loss (gain) related to securities, net
|
245
|
(59
|
)
|
|||||
Increase (decrease) in accrued interest on bank deposits
|
(1,754
|
)
|
33
|
|||||
Increase (decrease) in accrued severance pay, net
|
(69
|
)
|
147
|
|||||
Increase in trade receivables, net
|
(1,005
|
)
|
(5,854
|
)
|
||||
Increase in other receivables and prepaid expenses and other long-term assets
|
(2,858
|
)
|
(3,816
|
)
|
||||
Decrease in inventories
|
149
|
325
|
||||||
Increase (decrease) in trade payables
|
(1,637
|
)
|
3,843
|
|||||
Increase in deferred revenues
|
746
|
2,436
|
||||||
Decrease in other payables and accrued expenses
|
(4,498
|
)
|
(18,332
|
)
|
||||
Increase (decrease) in operating lease liabilities, net
|
214
|
(437
|
)
|
|||||
Net cash used in operating activities
|
(1,236
|
)
|
(10,452
|
)
|
||||
|
||||||||
Cash flows from investing activities:
|
||||||||
|
||||||||
Purchase of property and equipment
|
(1,768
|
)
|
(2,164
|
)
|
||||
Proceeds from (investment in) other long-term assets, net
|
47
|
(55
|
)
|
|||||
Proceeds from bank deposits, net
|
9,200
|
22,349
|
||||||
Proceeds from sale, redemption of and purchase of marketable securities, net
|
1,976
|
4,556
|
||||||
Payment for the acquisition of intangible assets
|
0
|
(30,000
|
)
|
|||||
Net cash provided (used in) investing activities
|
9,455
|
(5,314
|
)
|
|||||
|
||||||||
Cash flows from financing activities:
|
||||||||
|
||||||||
Proceeds from exercise of stock options
|
220
|
562
|
||||||
Repurchase of shares
|
(12,742
|
)
|
(22,826
|
)
|
||||
Net cash used in financing activities
|
(12,522
|
)
|
(22,264
|
)
|
||||
|
||||||||
Decrease in cash and cash equivalents
|
(4,303
|
)
|
(38,030
|
)
|
||||
Cash and cash equivalents at the beginning of the period
|
46,185
|
92,513
|
||||||
Cash and cash equivalents at the end of the period
|
41,882
|
54,483
|
||||||
|
Radware Ltd.
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-GAAP)
|
(U.S Dollars in thousands)
|
|
For the three months ended
|
|||||||
|
March 31,
|
|||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
GAAP net income (loss)
|
(3,081
|
)
|
3,770
|
|||||
Exclude: Financial expense (income), net
|
(3,491
|
)
|
(1,698
|
)
|
||||
Exclude: Depreciation and amortization expense
|
3,078
|
2,488
|
||||||
Exclude: Taxes on income
|
991
|
1,515
|
||||||
EBITDA
|
(2,503
|
)
|
6,075
|
|||||
|
||||||||
Share-based compensation
|
8,997
|
4,416
|
||||||
Litigation costs
|
-
|
-
|
||||||
Acquisition costs
|
13
|
1,142
|
||||||
Adjusted EBITDA
|
6,507
|
11,633
|
|
For the three months ended
|
|||||||
|
March 31,
|
|||||||
|
2023
|
2022
|
||||||
|
||||||||
Amortization of intangible assets
|
992
|
464
|
||||||
|
||||||||
Depreciation
|
2,086
|
2,024
|
||||||
|
||||||||
|
3,078
|
2,488
|