• Revenue (Q4 2024): $73 million, 12% year-over-year growth.
• Full-Year Revenue (2024): $275 million, 5% increase.
• Total ARR: $227 million, 8% year-over-year growth.
• Cloud ARR: $77.3 million, 19% growth.
• Gross Margin (Q4 2024): 82.4%, up 40 basis points from Q4 2023.
• Operating Income (Q4 2024): $9 million, nearly tripled from $3.4 million in Q4 2023.
• Net Income (Q4 2024): $11.9 million, more than doubled from $5.5 million in Q4 2023.
• Diluted EPS (Q4 2024): $0.27, up from $0.13 in Q4 2023.
• Cash Flow from Operations (Q4 2024): $12.7 million, up from $2.7 million in Q4 2023.
• Cash and Equivalents: Approximately $420 million at the end of Q4 2024.
• Revenue Guidance (Q1 2025): $70 million to $71 million.
• Non-GAAP EPS Guidance (Q1 2025): $0.22 to $0.23.

• Warning! GuruFocus has detected 5 Warning Signs with DENN.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Radware Ltd (NASDAQ:RDWR) reported a strong finish to 2024, with both top and bottom lines exceeding fourth-quarter guidance.
• The company achieved 12% year-over-year revenue growth and more than doubled its non-GAAP earnings per share.
• Cloud security business was a key growth driver, with cloud ARR growth accelerating to 19% in Q4 2024.
• Radware Ltd (NASDAQ:RDWR) plans to increase investment in cloud security, aiming to exceed a 20% ARR growth rate and establish a $100 million ARR cloud security business by the end of 2025.
• Strong partnerships with OEMs like Cisco and Check Point contributed to double-digit growth in OEM bookings, setting a new annual record.

Negative Points

• EMEA region experienced a 6% year-over-year decline in Q4 revenue, contributing to a 2% decline for the full year.
• Despite strong performance in the Americas, there is cautious spending by large enterprise customers globally.
• The competitive environment remains challenging with strong competitors like Cloudflare and Akamai.
• Radware Ltd (NASDAQ:RDWR) plans to increase R&D investment, which may impact operating expenses.
• The company is still in the early stages of refreshing its DefensePro X product line, indicating potential delays in realizing full growth opportunities.

Q & A Highlights

Q: Can you describe the environment in different regions, particularly the Americas, and how customer behavior is impacting decisions? A: Roy Zisapel, CEO, explained that while large enterprises remain cautious with spending, the rise in sophisticated cyber attacks is driving investment in cybersecurity. The Americas show strong market potential, and Radware is investing in this region. International markets also show promise, especially with OEM partnerships, which are expected to translate into revenue growth.

Q: Will the increased investment in R&D and new centers lead to higher R&D expenses, or will it be offset by other savings? A: Roy Zisapel, CEO, stated that investments in cloud security will increase beyond current levels. Other business investments will be managed through internal resource reallocation. The focus is on cloud security R&D and expanding market presence, which is expected to align with revenue growth.

Q: Is the reacceleration of cloud ARR related to changes in the go-to-market strategy in the Americas or channel efforts? A: Roy Zisapel, CEO, noted that the growth was broad-based, with contributions from North America and international markets. Strong activity with OEMs and channel partners in cloud security has led to increased pipeline growth and customer acquisition, setting a positive trajectory for 2025.

Q: How has the competitive environment changed over the past year, and what differentiates Radware in cloud security? A: Roy Zisapel, CEO, highlighted that Radware excels in security, automation, and algorithms, maintaining a competitive edge. The company has released new AI-driven algorithms, strengthening its position against competitors like Cloudflare and Akamai. Radware aims for close to $100 million ARR by the end of the year.

Q: Are customers looking for bundled solutions with CDN and compute, or do they prefer best-in-class offerings? A: Roy Zisapel, CEO, explained that while integrated solutions are a trend, Radware focuses on application and data center protection, offering bundled security services without crossing into compute. The company targets large enterprises where security is critical, and bundling compute is unnecessary.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.