Radware (RDWR) Q3 2026 earnings summary

Executive summary

• Record Q3 revenue of $84.364M, up 12% YoY; total ARR reached $266M, up 11%, while cloud ARR rose 21% to $107M, or 41% of total ARR.

• Recurring revenue was 76%; reported financial results were on a continuing-operations basis and excluded SkyHawk.

• Robust application-security demand, cloud bookings and large deals supported growth; AI security capabilities are expanding across the platform.

Financial highlights

• Revenue was $84.364M versus $75.273M in Q3 2025; gross profit was $68.7M, up 11% YoY.

• Non-GAAP gross margin was 81.4%, down 100 bps YoY; non-GAAP operating margin was 14.1%, down 180 bps.

• Non-GAAP net income from continuing operations was $13.915M versus $14.825M; diluted EPS was $0.32 versus $0.33. Excluding $4.6M of unfavorable FX impact, net income was $17.8M and EPS was $0.41.

• GAAP net income from continuing operations was $4.510M versus $8.233M; GAAP diluted EPS was $0.11 versus $0.19.

• Operating cash flow from continuing operations was $15.5M versus cash used of $2.1M in Q3 2025; free cash flow was $12.4M.

Outlook and guidance

• Q4 2026 revenue guidance was $88M-$90M; non-GAAP operating expenses were guided to $57M-$58M and non-GAAP diluted EPS to $0.34-$0.35.

• Cloud ARR growth target is 25%; strategic plan calls for sustained double-digit growth.

• API and AI-related products are expected to contribute to revenue and ARR in 2027, with emerging AI security offerings expected to reach greater scale next year.

• Q4 effective tax rate expected at 14%-15%; lower interest rates and reduced cash after buybacks are expected to modestly weigh on finance income through year-end.