Radware (RDWR) Q3 Earnings call transcript Oct 31, 2024

Radware, a leading provider of cloud security solutions, recently held its third quarter 2024 earnings call, showcasing a robust performance and a strategic focus on expanding its cloud security business. The call, led by CEO Roy Zisapel and CFO Guy Avidan, highlighted significant growth in cloud revenue and a strategic shift towards subscription-based models.

Strong Revenue Growth and Operational Efficiency

Radware reported a 13% year-over-year revenue growth, reaching $69.5 million in the third quarter of 2024. This growth was driven by the expansion of its cloud security business and the DefensePro X refresh, which more than tripled the company's EPS to $0.23 per share. The company's operational efficiency was also commendable, with a substantial increase in non-GAAP EPS and a reduction in operating expenses, despite the challenging economic environment.

Focus on Cloud Security and Subscription Revenue

A key theme during the call was the strategic focus on cloud security and the expansion of subscription revenue. Radware's cloud security business saw a record number of new cloud customers and a 15% year-over-year growth in cloud ARR. This growth underscores the significant potential of cloud security as a key growth driver for Radware. Additionally, subscription revenue now accounts for 47% of the company's total revenue, highlighting the shift towards recurring revenue models.

Strategic Partnerships and Market Expansion

Radware also highlighted its strategic partnerships with key industry players like Cisco and Check Point. These partnerships have led to significant growth opportunities, with Radware's cloud application security being added to Cisco's Enterprise Agreement and a major railway company securing a cloud security suite deal with Radware. These partnerships not only expand Radware's market reach but also demonstrate its technical leadership and the effectiveness of its solutions.

Investing for Future Growth

Looking ahead, Radware plans to invest in strengthening its sales and marketing capabilities and expanding its partner ecosystem to capitalize on new opportunities in the cybersecurity market. This strategic investment is expected to accelerate growth and extend Radware's market reach, better serving existing customers and capturing market share in high-growth areas.

Conclusion

Radware's Q3 2024 earnings call presented a positive outlook, with a focus on expanding its cloud security business and strategic partnerships. The company's strong revenue growth, operational efficiency, and strategic investments for future growth highlight its commitment to driving long-term success. With a clear focus on cloud security and subscription-based models, Radware is well-positioned to capitalize on the growing demand for cybersecurity solutions in today's digital economy.