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01/11 03:13
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlighted strong financial performance with an 8% revenue growth, a significant increase in EPS, and robust cloud security ARR growth. The Q&A section reinforced a positive outlook, with management expressing optimism about operations and competitive positioning, particularly in North America. Despite some regional revenue declines and negative cash flow from operations, the company's strategic focus on cloud security and AI capabilities, along with optimistic guidance for Q4, supports a positive sentiment. Consequently, a stock price movement in the positive range (2% to 8%) is expected.
Revenue $75 million, representing 8% year-over-year growth. Growth driven by sustained demand in cloud security business.
Non-GAAP Earnings Per Share $0.28, climbed 22% year-over-year. Reflects steady progress in strategic priorities.
Cloud Security ARR $89 million, up from $72 million in Q3 last year, showing 24% year-over-year growth. Growth driven by demand for cloud security offerings and accelerated growth in North America.
Subscription Revenue Grew 21% year-over-year, now 52% of total revenue compared to 47% last year. Driven by shift to subscription revenue model and cloud security growth.
Total ARR $240 million, up 8% year-over-year. Reflects momentum in revenue growth.
Americas Revenue $35.4 million, up 28% year-over-year, representing 47% of total revenue. Growth driven by ramped-up team and strong OEM partnerships.
EMEA Revenue $22.8 million, down 10% year-over-year, accounting for 30% of total revenue. Decline not elaborated.
APAC Revenue $17.1 million, up 3% year-over-year, contributing 23% of total revenue. Modest growth.
Gross Margin 82.2%, similar to Q3 2024. Reflects operational efficiency.
Operating Income $9.6 million, up 34% year-over-year from $7.2 million in Q3 2024. Growth achieved alongside continued investment in cloud initiatives.
Adjusted EBITDA $11.4 million, up 25% year-over-year from $9.2 million in Q3 2024. Excluding Hawks business, adjusted EBITDA was $14.4 million, representing a 19.1% EBITDA margin.
Financial Income $5.3 million, up from $4.9 million in Q3 2024. Increase due to higher interest rates.
Net Income $12.6 million, up 24% year-over-year from $10.2 million in Q3 2024. Reflects strong financial performance.
Cash Flow from Operations Negative $4.2 million, down from positive $14.7 million in Q3 2024. Decline due to timing of cash collections and decrease in deferred revenue.
Cash and Equivalents $465 million, reflects strong balance sheet.
Cloud Security ARR: Climbed to $89 million, up from $72 million in Q3 last year, showing 24% year-over-year growth.
API Security: Radware is driving innovation in API security with AI-powered protection and analytics capabilities, positioning it as the third wave in their cloud security growth strategy.
DefensePro X: Achieved a 40% year-over-year growth in refresh cycle, with several 7-digit deals secured.
North America Revenue Growth: Revenue in the Americas grew 28% year-over-year, driven by a fully ramped team and strong OEM partnerships.
EMEA and APAC Performance: EMEA revenue decreased by 10% year-over-year, while APAC posted a modest 3% growth.
Subscription Revenue Growth: Grew 21% year-over-year, now accounting for 52% of total revenue, up from 47% last year.
Gross Margin: Remained strong at 82.2%, consistent with Q3 2024.
Operating Income: Increased 34% year-over-year to $9.6 million, highlighting scalability and resilience.
Cloud Security Centers: Opened 2 additional centers in Q3 and plans to open 3 more in Q4, totaling 8 centers in 2025.
Partnerships and Strategic Wins: Secured strategic wins in EMEA and the U.S. through partnerships with Cisco, including deals with telecom providers and healthcare systems.
Global Economic Conditions: Potential adverse impacts from changing or severe global economic conditions were mentioned as a risk to the company's financial performance.
Demand Variability: Changes in demand for products and the timing and amount of orders were highlighted as factors that could negatively affect the company's operations.
Regional Revenue Decline: EMEA revenue decreased by 10% year-over-year, which could indicate challenges in maintaining market share or demand in this region.
Cash Flow Challenges: Cash flow from operations was negative $4.2 million in Q3 2025, primarily due to timing of cash collections and a decrease in deferred revenue, which could impact liquidity.
Regulatory Risks: The company acknowledged risks related to regulatory hurdles as a potential challenge to its operations and strategic objectives.
Supply Chain and Infrastructure Scaling: Scaling global cloud infrastructure and resources to meet growing demand could pose operational challenges and risks.
Cloud ARR Growth: Cloud ARR growth accelerated from 21% in Q2 2025 to 24% year-over-year in Q3 2025, reaching $89 million. This growth is expected to drive higher total ARR growth and faster company revenue growth.
Total ARR: Total ARR rose to $240 million, up 8% year-over-year. The company expects the scaling of the cloud security business to drive total ARR growth higher.
Regional Revenue Growth: The Americas region is expected to continue leading growth, with revenue rising 28% year-over-year in Q3 2025. EMEA and APAC regions showed mixed results, with EMEA declining by 10% and APAC growing modestly by 3%.
Profitability and Margins: Gross margin remained strong at 82.2%. Operating income grew 34% year-over-year to $9.6 million. Adjusted EBITDA increased by 25% to $11.4 million. The company expects continued investment in cloud initiatives to capture rising demand.
Cash Flow and RPO: Cash flow from operations in Q3 2025 was negative $4.2 million but is expected to return to positive in Q4 2025. RPO at year-end is anticipated to exceed the level at the end of 2024.
Q4 2025 Revenue Guidance: Total revenue for Q4 2025 is expected to be in the range of $78 million to $79 million.
Q4 2025 Operating Expenses: Non-GAAP operating expenses for Q4 2025 are expected to be between $52.5 million to $53.5 million.
Q4 2025 Earnings Per Share: Non-GAAP diluted net earnings per share for Q4 2025 are expected to be between $0.29 and $0.30.
The selected topic was not discussed during the call.
The earnings call highlighted strong financial performance with an 8% revenue growth, a significant increase in EPS, and robust cloud security ARR growth. The Q&A section reinforced a positive outlook, with management expressing optimism about operations and competitive positioning, particularly in North America. Despite some regional revenue declines and negative cash flow from operations, the company's strategic focus on cloud security and AI capabilities, along with optimistic guidance for Q4, supports a positive sentiment. Consequently, a stock price movement in the positive range (2% to 8%) is expected.
The earnings call reflects strong financial performance, with significant growth in net income, operating income, and ARR, alongside stable gross margins. The company's strategic investments in AI and cloud security, combined with promising early returns from sales and marketing, bolster a positive outlook. The Q&A reveals confidence in product differentiation and market opportunities. Despite some uncertainties in the competitive landscape, the overall sentiment is positive, suggesting a likely stock price increase in the short term.
The earnings call summary highlights strong financial performance with significant revenue and EPS growth, a robust cloud security business, and strategic expansion efforts. The guidance is optimistic, and there are no major negative indicators. The Q&A session did not reveal significant concerns, maintaining a positive outlook. Despite some risks, the company's strategic initiatives and market position suggest a positive sentiment, likely leading to a stock price increase in the short term.
The earnings call indicates strong financial performance with a 13% YoY revenue growth, improved gross margins, and significant net income increase. The introduction of EPIC-AI and new partnerships with Cisco and Check Point are positive. However, risks like cautious customer spending and competitive pressures exist. Q&A insights show confidence in product upgrades and market expansion, although some management responses were unclear. Overall, the positive financial metrics and optimistic guidance outweigh the risks, suggesting a positive stock price movement.
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