Radware (RDWR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $67.3 million, up 3% year-over-year and exceeding guidance, driven by 19% cloud ARR growth and strong DefensePro X and EPIC-AI momentum.

• Non-GAAP EPS was $0.20, doubling year-over-year, with non-GAAP net income at $8.8 million and strong operational cash flow of $23 million.

• Cloud ARR grew to $70 million, now 32% of total ARR, reflecting robust cloud security demand.

• New AI-powered EPIC-AI platform launched, enhancing detection and mitigation across all security layers.

• Customer spending is recovering but not yet at pre-slowdown levels; strong pipeline and faster closure rates observed, especially for on-prem solutions.

Financial highlights

• Total revenue up 3% year-over-year to $67.3 million in Q2 2024.

• Net income nearly doubled to $8.8 million from $4.5 million year-over-year.

• Diluted non-GAAP EPS doubled to $0.20 from $0.10 in Q2 2023.

• Adjusted EBITDA was $8.3 million, up from $4.1 million year-over-year.

• Gross margin stable at 82.2% (non-GAAP); GAAP gross margin at 80.6%.

Outlook and guidance

• Q3 2024 revenue expected between $67.5 million and $69 million.

• Q3 non-GAAP operating expenses projected at $49.5–$50.5 million.

• Q3 non-GAAP diluted EPS expected between $0.19–$0.21.

• Long-term cloud ARR growth target remains 20–25%.

• Management optimistic for H2 2024, citing new product launches and strong cloud security demand.