Radware's Q1 2025 Earnings Call: Unpacking Contradictions in Customer Behavior and Market Focus

Customer spending behavior, focus on cloud security and U.S. market expansion, customer buying behavior and market conditions, expansion and market focus, customer buying behavior are the key contradictions discussed in Radware's latest 2025Q1 earnings call.



Strong Revenue and Cloud Security Growth:
- Radware reported an 11% year-over-year increase in the first quarter of 2025, with a non-GAAP earnings per share increase of 69% to $0.27.
- This growth was primarily attributed to the scale and potential of Radware's cloud security business, which saw a 19% year-over-year increase in ARR to $80 million.

Cloud Security and AI Innovation:
- Radware's cloud security ARR is expected to approach $100 million by the end of 2025, with a focus on achieving a 20% ARR growth rate.
- The company's AI innovation and algorithms are proving to be competitive advantages, driving market-leading detection and mitigation results for customers.

OEM Partnership and Market Expansion:
- OEM partnerships with Cisco and Checkpoint generated strong results, growing more than 20% year-over-year.
- This growth was supported by successful cross-selling and expanding service offerings, along with strategic market expansion, including new cloud service centers in Peru, India, and Kenya.

Recurring Revenues and Regional Growth:
- Recurring revenues grew to 82% of total revenue in Q1 2025, compared to 79% and 78% in Q1 2024 and Q4 2024 respectively.
- The Americas saw a 14% year-over-year growth in revenue for the 12 trailing months, while EMEA showed a 11% year-over-year growth for the same period.

Investment in Sales, Marketing, and R&D:
- Radware plans to increase investments in sales, marketing, and R&D, focusing on cloud security expansion, AI innovation, and strengthening its presence in North America.
- The company's strong leverage in its business model allows it to support future top-line growth while improving profitability.