Radware Ltd. (NASDAQ: RDWR), a leading provider of cybersecurity and application delivery solutions, saw its stock price plummet by 5.12% on November 1, 2024, despite reporting solid third-quarter results. The company's shares declined despite posting a 13% year-over-year increase in revenue and a significant surge in net income and earnings per share (EPS) compared to the same period last year.

According to the Q3 2024 earnings report, Radware's revenue reached $69.5 million, driven by a 15% growth in its cloud annual recurring revenue (ARR). The company's net income more than tripled to $10.2 million, resulting in diluted EPS of $0.23, compared to $0.07 in Q3 2023. Additionally, Radware's gross margin expanded by 120 basis points to 82.3%, and it generated positive cash flow from operations of $14.7 million.

Despite the strong financial performance, Radware's stock price experienced a significant decline. One potential factor contributing to the sell-off could be the company's cautious outlook regarding customer spending due to the challenging economic environment. Radware acknowledged the need for increased investment in sales and marketing to sustain growth, which may impact short-term profitability.