|
1. |
Radware Reports Third Quarter 2023 Financial Results, dated November 1, 2023
|
RADWARE LTD.
|
|||
Date: November 1, 2023
|
By:
|
/s/ Gadi Meroz
|
|
Gadi Meroz
|
|||
Vice President & General Counsel
|
Exhibit Number
|
Description of Exhibits
|
|
|
|
• |
Revenue of $61.6 million, down 13% year-over-year
|
|
• |
Cloud ARR of $62.5 million, up 25% year-over-year
|
|
• |
Non-GAAP EPS of $0.07; GAAP net loss per diluted share of $0.16
|
|
• |
Revenue in the Americas region was $24.9 million for the third quarter of 2023, a decrease of 24% from $32.9 million in the third quarter of 2022.
|
|
• |
Revenue in the Europe, Middle East, and Africa (“EMEA”) region was $19.3 million for the third quarter of 2023, a decrease of 13% from $22.2 million in the third quarter of 2022.
|
|
• |
Revenue in the Asia-Pacific (“APAC”) region was $17.4 million for the third quarter of 2023, an increase of 12% from $15.5 million in the third quarter of 2022.
|
Radware Ltd.
|
|||
Condensed Consolidated Balance Sheets
|
|||
(U.S. Dollars in thousands)
|
|
September 30,
|
December 31,
|
||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
Assets
|
||||||||
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
32,422
|
46,185
|
||||||
Available-for-sale marketable securities
|
85,409
|
44,180
|
||||||
Short-term bank deposits
|
203,913
|
207,679
|
||||||
Trade receivables, net
|
12,372
|
17,752
|
||||||
Other receivables and prepaid expenses
|
10,915
|
7,196
|
||||||
Inventories
|
12,994
|
11,428
|
||||||
|
358,025
|
334,420
|
||||||
|
||||||||
Long-term investments
|
||||||||
Available-for-sale marketable securities
|
49,898
|
90,148
|
||||||
Long-term bank deposits
|
0
|
43,765
|
||||||
Severance pay funds
|
2,061
|
2,146
|
||||||
|
51,959
|
136,059
|
||||||
|
||||||||
Property and equipment, net
|
19,321
|
21,068
|
||||||
Intangible assets, net
|
16,710
|
19,686
|
||||||
Other long-term assets
|
40,047
|
41,269
|
||||||
Operating lease right-of-use assets
|
20,132
|
23,078
|
||||||
Goodwill
|
68,008
|
68,008
|
||||||
Total assets
|
574,202
|
643,588
|
||||||
|
||||||||
Liabilities and shareholders' equity
|
||||||||
|
||||||||
Current Liabilities
|
||||||||
Trade payables
|
6,069
|
6,464
|
||||||
Deferred revenues
|
106,109
|
108,243
|
||||||
Operating lease liabilities
|
4,439
|
4,685
|
||||||
Other payables and accrued expenses
|
33,206
|
44,643
|
||||||
|
149,823
|
164,035
|
||||||
|
||||||||
Long-term liabilities
|
||||||||
Deferred revenues
|
63,258
|
72,219
|
||||||
Operating lease liabilities
|
15,956
|
19,461
|
||||||
Other long-term liabilities
|
20,172
|
19,430
|
||||||
|
99,386
|
111,110
|
||||||
|
||||||||
Shareholders' equity
|
||||||||
Share capital
|
733
|
732
|
||||||
Additional paid-in capital
|
521,196
|
498,168
|
||||||
Accumulated other comprehensive loss, net of tax
|
(4,174
|
)
|
(4,844
|
)
|
||||
Treasury stock, at cost
|
(356,969
|
)
|
(303,299
|
)
|
||||
Retained earnings
|
125,662
|
141,402
|
||||||
Total Radware Ltd. shareholder's equity
|
286,448
|
332,159
|
||||||
|
||||||||
Non–controlling interest
|
38,545
|
36,284
|
||||||
|
||||||||
Total shareholders' equity
|
324,993
|
368,443
|
||||||
|
||||||||
Total liabilities and shareholders' equity
|
574,202
|
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 nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
|
||||||||||||||||
Revenues
|
61,612
|
70,521
|
196,260
|
219,343
|
||||||||||||
Cost of revenues
|
12,838
|
13,138
|
38,886
|
39,967
|
||||||||||||
Gross profit
|
48,774
|
57,383
|
157,374
|
179,376
|
||||||||||||
|
||||||||||||||||
Operating expenses, net:
|
||||||||||||||||
Research and development, net
|
20,614
|
22,083
|
62,905
|
64,076
|
||||||||||||
Selling and marketing
|
30,532
|
31,416
|
94,368
|
93,989
|
||||||||||||
General and administrative
|
7,824
|
7,278
|
24,378
|
19,542
|
||||||||||||
Total operating expenses, net
|
58,970
|
60,777
|
181,651
|
177,607
|
||||||||||||
|
||||||||||||||||
Operating income (loss)
|
(10,196
|
)
|
(3,394
|
)
|
(24,277
|
)
|
1,769
|
|||||||||
Financial income, net
|
3,778
|
1,350
|
10,688
|
6,034
|
||||||||||||
Income (loss) before taxes on income
|
(6,418
|
)
|
(2,044
|
)
|
(13,589
|
)
|
7,803
|
|||||||||
Taxes on income
|
433
|
920
|
2,151
|
3,845
|
||||||||||||
Net income (loss)
|
(6,851
|
)
|
(2,964
|
)
|
(15,740
|
)
|
3,958
|
|||||||||
|
||||||||||||||||
Basic net earnings (loss) per share
|
(0.16
|
)
|
(0.07
|
)
|
(0.36
|
)
|
0.09
|
|||||||||
|
||||||||||||||||
Weighted average number of shares used to compute basic net earnings (loss) per share
|
42,261,637
|
44,623,247
|
43,232,405
|
45,063,925
|
||||||||||||
|
||||||||||||||||
Diluted net earnings (loss) per share
|
(0.16
|
)
|
(0.07
|
)
|
(0.36
|
)
|
0.09
|
|||||||||
|
||||||||||||||||
Weighted average number of shares used to compute diluted net earnings (loss) per share
|
42,261,637
|
44,623,247
|
43,232,405
|
46,189,437
|
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 nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
GAAP gross profit
|
48,774
|
57,383
|
157,374
|
179,376
|
||||||||||||
Share-based compensation
|
177
|
103
|
403
|
287
|
||||||||||||
Amortization of intangible assets
|
992
|
992
|
2,976
|
2,712
|
||||||||||||
Non-GAAP gross profit
|
49,943
|
58,478
|
160,753
|
182,375
|
||||||||||||
|
||||||||||||||||
GAAP research and development, net
|
20,614
|
22,083
|
62,905
|
64,076
|
||||||||||||
Share-based compensation
|
2,064
|
1,775
|
6,200
|
5,219
|
||||||||||||
Non-GAAP Research and development, net
|
18,550
|
20,308
|
56,705
|
58,857
|
||||||||||||
|
||||||||||||||||
GAAP selling and marketing
|
30,532
|
31,416
|
94,368
|
93,989
|
||||||||||||
Share-based compensation
|
2,134
|
3,356
|
9,065
|
8,248
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Non-GAAP selling and marketing
|
27,125
|
28,060
|
84,030
|
85,741
|
||||||||||||
|
||||||||||||||||
GAAP general and administrative
|
7,824
|
7,278
|
24,378
|
19,542
|
||||||||||||
Share-based compensation
|
2,884
|
2,397
|
9,483
|
3,941
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Non-GAAP general and administrative
|
4,729
|
4,881
|
14,126
|
14,459
|
||||||||||||
|
||||||||||||||||
GAAP total operating expenses, net
|
58,970
|
60,777
|
181,651
|
177,607
|
||||||||||||
Share-based compensation
|
7,082
|
7,528
|
24,748
|
17,408
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Non-GAAP total operating expenses, net
|
50,404
|
53,249
|
154,861
|
159,057
|
||||||||||||
|
||||||||||||||||
GAAP operating income (loss)
|
(10,196
|
)
|
(3,394
|
)
|
(24,277
|
)
|
1,769
|
|||||||||
Share-based compensation
|
7,259
|
7,631
|
25,151
|
17,695
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Amortization of intangible assets
|
992
|
992
|
2,976
|
2,712
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Non-GAAP operating income
|
(461
|
)
|
5,229
|
5,892
|
23,318
|
|||||||||||
|
||||||||||||||||
GAAP financial income, net
|
3,778
|
1,350
|
10,688
|
6,034
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
37
|
1,100
|
(770
|
)
|
(1,714
|
)
|
||||||||||
Non-GAAP financial income, net
|
3,815
|
2,450
|
9,918
|
4,320
|
||||||||||||
|
||||||||||||||||
GAAP income before taxes on income (loss)
|
(6,418
|
)
|
(2,044
|
)
|
(13,589
|
)
|
7,803
|
|||||||||
Share-based compensation
|
7,259
|
7,631
|
25,151
|
17,695
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Amortization of intangible assets
|
992
|
992
|
2,976
|
2,712
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
37
|
1,100
|
(770
|
)
|
(1,714
|
)
|
||||||||||
Non-GAAP income before taxes on income
|
3,354
|
7,679
|
15,810
|
27,638
|
||||||||||||
|
||||||||||||||||
GAAP taxes on income
|
433
|
920
|
2,151
|
3,845
|
||||||||||||
Tax related adjustments
|
62
|
62
|
185
|
185
|
||||||||||||
Non-GAAP taxes on income
|
495
|
982
|
2,336
|
4,030
|
||||||||||||
|
||||||||||||||||
GAAP net income (loss)
|
(6,851
|
)
|
(2,964
|
)
|
(15,740
|
)
|
3,958
|
|||||||||
Share-based compensation
|
7,259
|
7,631
|
25,151
|
17,695
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Amortization of intangible assets
|
992
|
992
|
2,976
|
2,712
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
37
|
1,100
|
(770
|
)
|
(1,714
|
)
|
||||||||||
Tax related adjustments
|
(62
|
)
|
(62
|
)
|
(185
|
)
|
(185
|
)
|
||||||||
Non-GAAP net income
|
2,859
|
6,697
|
13,474
|
23,608
|
||||||||||||
|
||||||||||||||||
GAAP diluted net earnings (loss) per share
|
(0.16
|
)
|
(0.07
|
)
|
(0.36
|
)
|
0.09
|
|||||||||
Share-based compensation
|
0.17
|
0.17
|
0.57
|
0.38
|
||||||||||||
Acquisition costs
|
0.00
|
0.00
|
0.02
|
0.00
|
||||||||||||
Amortization of intangible assets
|
0.03
|
0.02
|
0.07
|
0.06
|
||||||||||||
Litigation costs
|
0.00
|
0.00
|
0.00
|
0.03
|
||||||||||||
Restructuring costs
|
0.03
|
0.00
|
0.03
|
0.00
|
||||||||||||
Exchange rate differences, net on balance sheet items included in financial income, net
|
0.00
|
0.02
|
(0.02
|
)
|
(0.04
|
)
|
||||||||||
Tax related adjustments
|
0.00
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
||||||||||
Non-GAAP diluted net earnings per share
|
0.07
|
0.15
|
0.31
|
0.51
|
||||||||||||
|
||||||||||||||||
Weighted average number of shares used to compute non-GAAP diluted net earnings per share
|
43,163,159
|
45,623,336
|
44,058,549
|
46,189,437
|
Radware Ltd.
|
Condensed Consolidated Statements of Cash Flow
|
(U.S. Dollars in thousands)
|
|
For the three months ended
|
For the nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
Cash flow from operating activities:
|
||||||||||||||||
|
||||||||||||||||
Net income (loss)
|
(6,851
|
)
|
(2,964
|
)
|
(15,740
|
)
|
3,958
|
|||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
3,025
|
3,097
|
9,216
|
8,814
|
||||||||||||
Share-based compensation
|
7,259
|
7,631
|
25,151
|
17,695
|
||||||||||||
Amortization of premium, accretion of discounts and accrued interest on marketable securities, net
|
161
|
193
|
1,116
|
1,579
|
||||||||||||
Loss (gain) related to securities, net
|
0
|
(4
|
)
|
244
|
(64
|
)
|
||||||||||
Decrease in accrued interest on bank deposits
|
(2,289
|
)
|
(1,128
|
)
|
(3,814
|
)
|
(1,056
|
)
|
||||||||
Decrease in accrued severance pay, net
|
(401
|
)
|
(176
|
)
|
(506
|
)
|
(82
|
)
|
||||||||
Decrease (increase) in trade receivables, net
|
4,448
|
(1,509
|
)
|
5,380
|
(160
|
)
|
||||||||||
Decrease (increase) in other receivables and prepaid expenses and other long-term assets
|
(215
|
)
|
3,852
|
(2,541
|
)
|
(473
|
)
|
|||||||||
Decrease (increase) in inventories
|
(671
|
)
|
549
|
(1,566
|
)
|
726
|
||||||||||
Increase (decrease) in trade payables
|
(1,778
|
)
|
(670
|
)
|
(395
|
)
|
2,460
|
|||||||||
Increase (decrease) in deferred revenues
|
(12,311
|
)
|
(8,609
|
)
|
(11,095
|
)
|
11,891
|
|||||||||
Increase (decrease) in other payables and accrued expenses
|
644
|
1,463
|
(10,798
|
)
|
(20,719
|
)
|
||||||||||
Decrease in operating lease liabilities, net
|
(804
|
)
|
(209
|
)
|
(805
|
)
|
(1,981
|
)
|
||||||||
Net cash provided by (used in) operating activities
|
(9,783
|
)
|
1,516
|
(6,153
|
)
|
22,588
|
||||||||||
|
||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||
|
||||||||||||||||
Purchase of property and equipment
|
(1,130
|
)
|
(2,549
|
)
|
(4,493
|
)
|
(7,046
|
)
|
||||||||
Proceeds from other long-term assets, net
|
29
|
69
|
77
|
106
|
||||||||||||
Proceeds from (investment in) bank deposits, net
|
21,145
|
1,000
|
51,345
|
(19,201
|
)
|
|||||||||||
Proceeds from sale, redemption of and purchase of marketable securities, net
|
2,228
|
(862
|
)
|
347
|
(5,502
|
)
|
||||||||||
Payment for the business acquisition of SecurityDAM Ltd.
|
(2,063
|
)
|
0
|
(2,063
|
)
|
(30,000
|
)
|
|||||||||
Net cash provided (used in) investing activities
|
20,209
|
(2,342
|
)
|
45,213
|
(61,643
|
)
|
||||||||||
|
||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||
|
||||||||||||||||
Proceeds from exercise of stock options
|
0
|
401
|
308
|
1,202
|
||||||||||||
Repurchase of shares
|
(20,648
|
)
|
(6,305
|
)
|
(53,131
|
)
|
(47,191
|
)
|
||||||||
Proceeds from issuance of Preferred A shares in subsidiary
|
0
|
0
|
0
|
35,000
|
||||||||||||
Net cash used in financing activities
|
(20,648
|
)
|
(5,904
|
)
|
(52,823
|
)
|
(10,989
|
)
|
||||||||
|
||||||||||||||||
Decrease in cash and cash equivalents
|
(10,222
|
)
|
(6,730
|
)
|
(13,763
|
)
|
(50,044
|
)
|
||||||||
Cash and cash equivalents at the beginning of the period
|
42,644
|
49,199
|
46,185
|
92,513
|
||||||||||||
Cash and cash equivalents at the end of the period
|
32,422
|
42,469
|
32,422
|
42,469
|
Radware Ltd.
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTE EBITDA (NON-GAAP)
|
(U.S Dollars in thousands)
|
|
For the three months ended
|
For the nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
GAAP net income (loss)
|
(6,851
|
)
|
(2,964
|
)
|
(15,740
|
)
|
3,958
|
|||||||||
Exclude: Financial income, net
|
(3,778
|
)
|
(1,350
|
)
|
(10,688
|
)
|
(6,034
|
)
|
||||||||
Exclude: Depreciation and amortization expense
|
3,025
|
3,097
|
9,216
|
8,814
|
||||||||||||
Exclude: Taxes on income
|
433
|
920
|
2,151
|
3,845
|
||||||||||||
EBITDA
|
(7,171
|
)
|
(297
|
)
|
(15,061
|
)
|
10,583
|
|||||||||
|
||||||||||||||||
Share-based compensation
|
7,259
|
7,631
|
25,151
|
17,695
|
||||||||||||
Litigation costs
|
-
|
-
|
-
|
1,142
|
||||||||||||
Restructuring costs
|
1,273
|
-
|
1,273
|
-
|
||||||||||||
Acquisition costs
|
211
|
-
|
769
|
-
|
||||||||||||
Adjusted EBITDA
|
1,572
|
7,334
|
12,132
|
29,420
|
|
For the three months ended
|
For the nine months ended
|
||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
|
||||||||||||||||
Amortization of intangible assets
|
992
|
992
|
2,976
|
2,712
|
||||||||||||
|
||||||||||||||||
Depreciation
|
2,033
|
2,105
|
6,240
|
6,102
|
||||||||||||
|
||||||||||||||||
|
3,025
|
3,097
|
9,216
|
8,814
|