|
1. |
Radware Reports Second Quarter 2023 Financial Results, dated August 2, 2023
|
RADWARE LTD.
|
|||
Date: August 2, 2023
|
By:
|
/s/ Gadi Meroz
|
|
Gadi Meroz
|
|||
Vice President & General Counsel
|
Exhibit Number
|
Description of Exhibits
|
|
|
•
|
Revenue of $65.6 million, down 13% year-over-year
|
•
|
Total ARR of $208.3 million, up 7% year-over-year
|
•
|
Non-GAAP gross margin of 82.3% compared to 83.3% in the second quarter of 2022
|
•
|
Non-GAAP EPS of $0.10; GAAP net loss per diluted share of $0.13
|
•
|
Revenue in the Americas region was $26.8 million for the second quarter of 2023, a decrease of 10% from $29.7 million in the second quarter of 2022.
|
•
|
Revenue in the Europe, Middle East, and Africa (“EMEA”) region was $22.6 million for the second quarter of 2023, a decrease of 24% from $29.7 million in the second quarter of 2022.
|
•
|
Revenue in the Asia-Pacific (“APAC”) region was $16.2 million for the second quarter of 2023, an increase of 3% from $15.7 million in the second quarter of 2022.
|
Radware Ltd.
|
Condensed Consolidated Balance Sheets
|
(U.S. Dollars in thousands)
|
|
June 30,
|
December 31,
|
||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
Assets
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
42,644
|
46,185
|
||||||
Available-for-sale marketable securities
|
77,222
|
44,180
|
||||||
Short-term bank deposits
|
222,769
|
207,679
|
||||||
Trade receivables, net
|
16,820
|
17,752
|
||||||
Other receivables and prepaid expenses
|
9,815
|
7,196
|
||||||
Inventories
|
12,323
|
11,428
|
||||||
|
381,593
|
334,420
|
||||||
|
||||||||
Long-term investments
|
||||||||
Available-for-sale marketable securities
|
59,375
|
90,148
|
||||||
Long-term bank deposits
|
0
|
43,765
|
||||||
Severance pay funds
|
2,092
|
2,146
|
||||||
|
61,467
|
136,059
|
||||||
|
||||||||
Property and equipment, net
|
20,224
|
21,068
|
||||||
Intangible assets, net
|
17,702
|
19,686
|
||||||
Other long-term assets
|
41,168
|
41,269
|
||||||
Operating lease right-of-use assets
|
20,776
|
23,078
|
||||||
Goodwill
|
68,008
|
68,008
|
||||||
Total assets
|
610,938
|
643,588
|
||||||
|
||||||||
Liabilities and shareholders' equity
|
||||||||
|
||||||||
Current Liabilities
|
||||||||
Trade payables
|
7,847
|
6,464
|
||||||
Deferred revenues
|
111,309
|
108,243
|
||||||
Operating lease liabilities
|
4,633
|
4,685
|
||||||
Other payables and accrued expenses
|
36,391
|
44,643
|
||||||
|
160,180
|
164,035
|
||||||
|
||||||||
Long-term liabilities
|
||||||||
Deferred revenues
|
70,369
|
72,219
|
||||||
Operating lease liabilities
|
17,210
|
19,461
|
||||||
Other long-term liabilities
|
18,809
|
19,430
|
||||||
|
106,388
|
111,110
|
||||||
|
||||||||
Shareholders' equity
|
||||||||
Share capital
|
733
|
732
|
||||||
Additional paid-in capital
|
514,743
|
498,168
|
||||||
Accumulated other comprehensive loss, net of tax
|
(4,680
|
)
|
(4,844
|
)
|
||||
Treasury stock, at cost
|
(336,953
|
)
|
(303,299
|
)
|
||||
Retained earnings
|
132,513
|
141,402
|
||||||
Total Radware Ltd. shareholder's equity
|
306,356
|
332,159
|
||||||
|
||||||||
Non–controlling interest
|
38,014
|
36,284
|
||||||
|
||||||||
Total shareholders' equity
|
344,370
|
368,443
|
||||||
|
||||||||
Total liabilities and shareholders' equity
|
610,938
|
643,588
|
Radware Ltd.
|
Condensed Consolidated Statements of Income (loss)
|
(U.S Dollars in thousands, except share and per share data)
|
|
For the three months ended
|
For the six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
||||||||||||||||
Revenues
|
65,607
|
75,114
|
134,648
|
148,822
|
||||||||||||
Cost of revenues
|
12,742
|
13,888
|
26,048
|
26,829
|
||||||||||||
Gross profit
|
52,865
|
61,226
|
108,600
|
121,993
|
||||||||||||
|
||||||||||||||||
Operating expenses, net:
|
||||||||||||||||
Research and development, net
|
21,141
|
21,623
|
42,291
|
41,993
|
||||||||||||
Selling and marketing
|
31,917
|
32,290
|
63,836
|
62,573
|
||||||||||||
General and administrative
|
8,307
|
5,737
|
16,554
|
12,264
|
||||||||||||
Total operating expenses, net
|
61,365
|
59,650
|
122,681
|
116,830
|
||||||||||||
|
||||||||||||||||
Operating income (loss)
|
(8,500
|
)
|
1,576
|
(14,081
|
)
|
5,163
|
||||||||||
Financial income, net
|
3,419
|
2,986
|
6,910
|
4,684
|
||||||||||||
Income (loss) before taxes on income
|
(5,081
|
)
|
4,562
|
(7,171
|
)
|
9,847
|
||||||||||
Taxes on income
|
727
|
1,410
|
1,718
|
2,925
|
||||||||||||
Net income (loss)
|
(5,808
|
)
|
3,152
|
(8,889
|
)
|
6,922
|
||||||||||
|
||||||||||||||||
Basic net earnings (loss) per share
|
(0.13
|
)
|
0.07
|
(0.20
|
)
|
0.15
|
||||||||||
|
||||||||||||||||
Weighted average number of shares used to compute basic net earnings (loss) per share
|
43,400,635
|
44,914,427
|
43,725,443
|
45,288,463
|
||||||||||||
|
||||||||||||||||
Diluted net earnings (loss) per share
|
(0.13
|
)
|
0.07
|
(0.20
|
)
|
0.15
|
||||||||||
|
||||||||||||||||
Weighted average number of shares used to compute diluted net earnings (loss) per share
|
43,400,635
|
45,835,440
|
43,725,443
|
46,476,687
|
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
|
For the six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
GAAP gross profit
|
52,865
|
61,226
|
108,600
|
121,993
|
||||||||||||
Share-based compensation
|
113
|
94
|
226
|
184
|
||||||||||||
Amortization of intangible assets
|
992
|
1,256
|
1,984
|
1,720
|
||||||||||||
Non-GAAP gross profit
|
53,970
|
62,576
|
110,810
|
123,897
|
||||||||||||
|
||||||||||||||||
GAAP research and development, net
|
21,141
|
21,623
|
42,291
|
41,993
|
||||||||||||
Share-based compensation
|
2,177
|
1,635
|
4,136
|
3,444
|
||||||||||||
Non-GAAP Research and development, net
|
18,964
|
19,988
|
38,155
|
38,549
|
||||||||||||
|
||||||||||||||||
GAAP selling and marketing
|
31,917
|
32,290
|
63,836
|
62,573
|
||||||||||||
Share-based compensation
|
3,537
|
3,043
|
6,931
|
4,892
|
||||||||||||
Non-GAAP selling and marketing
|
28,380
|
29,247
|
56,905
|
57,681
|
||||||||||||
|
||||||||||||||||
GAAP general and administrative
|
8,307
|
5,737
|
16,554
|
12,264
|
||||||||||||
Share-based compensation
|
3,068
|
876
|
6,599
|
1,544
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
-
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Non-GAAP general and administrative
|
4,694
|
4,861
|
9,397
|
9,578
|
||||||||||||
|
||||||||||||||||
GAAP total operating expenses, net
|
61,365
|
59,650
|
122,681
|
116,830
|
||||||||||||
Share-based compensation
|
8,782
|
5,554
|
17,666
|
9,880
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
-
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Non-GAAP total operating expenses, net
|
52,038
|
54,096
|
104,457
|
105,808
|
||||||||||||
|
||||||||||||||||
GAAP operating income (loss)
|
(8,500
|
)
|
1,576
|
(14,081
|
)
|
5,163
|
||||||||||
Share-based compensation
|
8,895
|
5,648
|
17,892
|
10,064
|
||||||||||||
Amortization of intangible assets
|
992
|
1,256
|
1,984
|
1,720
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
-
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Non-GAAP operating income
|
1,932
|
8,480
|
6,353
|
18,089
|
||||||||||||
|
||||||||||||||||
GAAP financial income, net
|
3,419
|
2,986
|
6,910
|
4,684
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(32
|
)
|
(1,920
|
)
|
(807
|
)
|
(2,814
|
)
|
||||||||
Non-GAAP financial income, net
|
3,387
|
1,066
|
6,103
|
1,870
|
||||||||||||
|
||||||||||||||||
GAAP income before taxes on income (loss)
|
(5,081
|
)
|
4,562
|
(7,171
|
)
|
9,847
|
||||||||||
Share-based compensation
|
8,895
|
5,648
|
17,892
|
10,064
|
||||||||||||
Amortization of intangible assets
|
992
|
1,256
|
1,984
|
1,720
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
-
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(32
|
)
|
(1,920
|
)
|
(807
|
)
|
(2,814
|
)
|
||||||||
Non-GAAP income before taxes on income
|
5,319
|
9,546
|
12,456
|
19,959
|
||||||||||||
|
||||||||||||||||
GAAP taxes on income
|
727
|
1,410
|
1,718
|
2,925
|
||||||||||||
Tax related adjustments
|
61
|
61
|
123
|
123
|
||||||||||||
Non-GAAP taxes on income
|
788
|
1,471
|
1,841
|
3,048
|
||||||||||||
|
||||||||||||||||
GAAP net income (loss)
|
(5,808
|
)
|
3,152
|
(8,889
|
)
|
6,922
|
||||||||||
Share-based compensation
|
8,895
|
5,648
|
17,892
|
10,064
|
||||||||||||
Amortization of intangible assets
|
992
|
1,256
|
1,984
|
1,720
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
-
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(32
|
)
|
(1,920
|
)
|
(807
|
)
|
(2,814
|
)
|
||||||||
Tax related adjustments
|
(61
|
)
|
(61
|
)
|
(123
|
)
|
(123
|
)
|
||||||||
Non-GAAP net income
|
4,531
|
8,075
|
10,615
|
16,911
|
||||||||||||
|
||||||||||||||||
GAAP diluted net earnings (loss) per share
|
(0.13
|
)
|
0.07
|
(0.20
|
)
|
0.15
|
||||||||||
Share-based compensation
|
0.20
|
0.12
|
0.40
|
0.22
|
||||||||||||
Amortization of intangible assets
|
0.02
|
0.03
|
0.05
|
0.04
|
||||||||||||
Litigation costs
|
0.00
|
0.00
|
0.00
|
0.00
|
||||||||||||
Acquisition costs
|
0.01
|
0.00
|
0.01
|
0.02
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
(0.00
|
)
|
(0.04
|
)
|
(0.02
|
)
|
(0.06
|
)
|
||||||||
Tax related adjustments
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
(0.00
|
)
|
||||||||
Non-GAAP diluted net earnings per share
|
0.10
|
0.18
|
0.24
|
0.36
|
||||||||||||
|
||||||||||||||||
Weighted average number of shares used to compute non-GAAP diluted net earnings per share
|
44,268,786
|
45,835,440
|
44,513,899
|
46,476,687
|
Radware Ltd.
|
Condensed Consolidated Statements of Cash Flow
|
(U.S. Dollars in thousands)
|
|
For the three months ended
|
For the six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
Cash flow from operating activities:
|
||||||||||||||||
|
||||||||||||||||
Net income (loss)
|
(5,808
|
)
|
3,152
|
(8,889
|
)
|
6,922
|
||||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
3,113
|
3,229
|
6,191
|
5,717
|
||||||||||||
Share-based compensation
|
8,895
|
5,648
|
17,892
|
10,064
|
||||||||||||
Amortization of premium, accretion of discounts and accrued interest on marketable securities, net
|
718
|
798
|
955
|
1,386
|
||||||||||||
Loss (gain) related to securities, net
|
(1
|
)
|
(1
|
)
|
244
|
(60
|
)
|
|||||||||
Increase (decrease) in accrued interest on bank deposits
|
229
|
39
|
(1,525
|
)
|
72
|
|||||||||||
Increase (decrease) in accrued severance pay, net
|
(36
|
)
|
(53
|
)
|
(105
|
)
|
94
|
|||||||||
Increase in trade receivables, net
|
1,937
|
7,203
|
932
|
1,349
|
||||||||||||
Increase (decrease) in other receivables and prepaid expenses and other long-term assets
|
532
|
(509
|
)
|
(2,326
|
)
|
(4,325
|
)
|
|||||||||
Decrease (increase) in inventories
|
(1,044
|
)
|
(148
|
)
|
(895
|
)
|
177
|
|||||||||
Increase (decrease) in trade payables
|
3,020
|
(713
|
)
|
1,383
|
3,130
|
|||||||||||
Increase in deferred revenues
|
470
|
18,064
|
1,216
|
20,500
|
||||||||||||
Decrease in other payables and accrued expenses
|
(6,944
|
)
|
(3,850
|
)
|
(11,442
|
)
|
(22,182
|
)
|
||||||||
Decrease in operating lease liabilities, net
|
(215
|
)
|
(1,335
|
)
|
(1
|
)
|
(1,772
|
)
|
||||||||
Net cash provided by operating activities
|
4,866
|
31,524
|
3,630
|
21,072
|
||||||||||||
|
||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||
|
||||||||||||||||
Purchase of property and equipment
|
(1,595
|
)
|
(2,333
|
)
|
(3,363
|
)
|
(4,497
|
)
|
||||||||
Proceeds from other long-term assets, net
|
1
|
92
|
48
|
37
|
||||||||||||
Proceeds from (investment in) bank deposits, net
|
21,000
|
(42,550
|
)
|
30,200
|
(20,201
|
)
|
||||||||||
Proceeds from sale, redemption of and purchase of marketable securities, net
|
(3,857
|
)
|
(9,196
|
)
|
(1,881
|
)
|
(4,640
|
)
|
||||||||
Payment for the business acquisition of SecurityDAM Ltd.
|
0
|
0
|
0
|
(30,000
|
)
|
|||||||||||
Net cash provided (used in) investing activities
|
15,549
|
(53,987
|
)
|
25,004
|
(59,301
|
)
|
||||||||||
|
||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||
|
||||||||||||||||
Proceeds from exercise of stock options
|
88
|
239
|
308
|
801
|
||||||||||||
Repurchase of shares
|
(19,741
|
)
|
(18,060
|
)
|
(32,483
|
)
|
(40,886
|
)
|
||||||||
Proceeds from issuance of Preferred A shares in subsidiary
|
35,000
|
35,000
|
||||||||||||||
Net cash provided by (used in) financing activities
|
(19,653
|
)
|
17,179
|
(32,175
|
)
|
(5,085
|
)
|
|||||||||
|
||||||||||||||||
Increase (decrease) in cash and cash equivalents
|
762
|
(5,284
|
)
|
(3,541
|
)
|
(43,314
|
)
|
|||||||||
Cash and cash equivalents at the beginning of the period
|
41,882
|
54,483
|
46,185
|
92,513
|
||||||||||||
Cash and cash equivalents at the end of the period
|
42,644
|
49,199
|
42,644
|
49,199
|
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
|
For the six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
GAAP net income (loss)
|
(5,808
|
)
|
3,152
|
(8,889
|
)
|
6,922
|
||||||||||
Exclude: Financial income, net
|
(3,419
|
)
|
(2,986
|
)
|
(6,910
|
)
|
(4,684
|
)
|
||||||||
Exclude: Depreciation and amortization expense
|
3,113
|
3,229
|
6,191
|
5,717
|
||||||||||||
Exclude: Taxes on income
|
727
|
1,410
|
1,718
|
2,925
|
||||||||||||
EBITDA
|
(5,387
|
)
|
4,805
|
(7,890
|
)
|
10,880
|
||||||||||
|
||||||||||||||||
Share-based compensation
|
8,895
|
5,648
|
17,892
|
10,064
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
288
|
||||||||||||
Acquisition costs
|
545
|
-
|
558
|
1,142
|
||||||||||||
Adjusted EBITDA
|
4,053
|
10,453
|
10,560
|
22,374
|
|
For the three months ended
|
For the six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
||||||||||||||||
Amortization of intangible assets
|
992
|
1,256
|
1,984
|
1,720
|
||||||||||||
|
||||||||||||||||
Depreciation
|
2,121
|
1,973
|
4,207
|
3,997
|
||||||||||||
|
||||||||||||||||
|
3,113
|
3,229
|
6,191
|
5,717
|