Radware (RDWR) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 revenue of $69.5M, up 13% year-over-year, with strong growth in cloud ARR and improved profitability, exceeding guidance.

• Non-GAAP EPS rose to $0.23, more than tripling from Q3 2023, and GAAP diluted EPS improved to $0.07 from $(0.16) year-over-year.

• Cloud security business saw record new customer additions, with cloud ARR up 15% year-over-year to $71.6M–$72M, and total ARR reaching $223.6M–$224M.

• Significant wins included a multi-million-dollar cloud DDoS deal with a major U.S. communication provider, strong OEM partner performance, and the launch of the EPIC-AI platform.

• Industry recognition included top ratings in DDoS mitigation, WAF, and application/API security, and ESG performance rated in the top 15% by EcoVadis.

Financial highlights

• Q3 2024 revenue reached $69.5M, up from $61.6M–$62M in Q3 2023 (+13% YoY).

• Non-GAAP gross margin expanded to 82.3%, up 120 basis points year-over-year.

• Operating income was $7.2M (non-GAAP), reversing a prior year loss; adjusted EBITDA was $9.2M.

• Net income more than tripled to $10.2M (non-GAAP), with diluted EPS at $0.23 versus $0.07 in Q3 2023.

• Cash flow from operations was $14.7M–$15M, compared to negative $9.8M–$10M in Q3 2023; cash, equivalents, and marketable securities totaled $411.7M at quarter end.

Outlook and guidance

• Q4 2024 revenue expected between $71M and $72M.

• Q4 2024 non-GAAP operating expenses projected at $50.5M to $51.5M.

• Q4 2024 non-GAAP diluted EPS expected between $0.23 and $0.24.