Radware Announces Fourth Quarter and Full Year 2020 Earnings
02/10/2021 | 06:00am EDT
Fourth Quarter 2020 Results and Financial Highlights
RecordRevenues of $69million
Record Cloud and Subscriptions ARR growing 35% year over year
Record year end ARR of $174 million, up 12% year over year
Non-GAAP EPS of $0.21; GAAP EPS of $0.06
Full Year 2020 Results and Financial Highlights
Revenues of $250million
Non-GAAP EPS of $0.64; GAAP EPS of $0.20
Record net cash provided by operating activities of $62 million
TEL AVIV, Israel, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the quarter and year ended December 31, 2020.
“In the fourth quarter we enjoyed strong business performance in our security offerings, cloud and subscription businesses that are reflected in record ARR, bookings and revenues,” said Roy Zisapel, Radware’s President & CEO. “With accelerated digital transformation and the need to increase online availability of core business applications, comes the critical need to secure and protect these applications. This, coupled with a very active cyberthreat landscape, creates a strong business environment for Radware. Leveraging our market leading attack mitigation solutions which span DDoS Protection, Web Application Firewall, API security, Bot Management and Cloud Posture Security; and the strength and scale of our strategic partners, we have broadened our reach to yet more top tier customers and are protecting their mission-critical applications.”
Financial Highlights for the FourthQuarter of 2020 Revenues for the fourth quarter of 2020 totaled $69.0 million:
Revenues in the Americas region were $27.5 million for the fourth quarter of 2020, down 7% from revenues of $29.7 million in the fourth quarter of 2019.
Revenues in the Europe, Middle East and Africa (“EMEA”) region were $24.2 million for the fourth quarter of 2020, up 17% from revenues of $20.6 million in the fourth quarter of 2019.
Revenues in the Asia-Pacific (“APAC”) region were $17.4 million for the fourth quarter of 2020, up 2% from revenues of $17.1 million in the fourth quarter of 2019.
Net income on a GAAP basis for the fourth quarter of 2020 was $2.8 million, or $0.06 per diluted share, compared with net income of $7.3 million, or $0.15 per diluted share, for the fourth quarter of 2019.
Non-GAAP net income for the fourth quarter of 2020 was $9.8 million, or $0.21 per diluted share, compared with non- GAAP net income of $10.9 million, or $0.23 per diluted share, for the fourth quarter of 2019.
Financial Highlights for the Full Year of 2020 Revenues for the full year of 2020 totaled $250 million:
Revenues in the Americas region were $114 million for the full year of 2020, up 8% from revenues of $106 million in the full year of 2019.
Revenues in the EMEA region were $78.4 million for the full year of 2020, up 4% from revenues of $75.3 million in the full year of 2019.
Revenues in the APAC region were $57.3 million for the full year of 2020, down 19% from revenues of $70.4 million in the full year of 2019.
Net income on a GAAP basis for the full year of 2020 was $9.6 million, or $0.20 per diluted share, compared with net income of $22.6 million, or $0.47 per diluted share, for the full year of 2019.
Non-GAAP net income for the full year of 2020 was $30.8 million, or $0.64 per diluted share, compared with non-GAAP net income of $40.6 million, or $0.84 per diluted share, for the full year of 2019.
Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, acquisition costs, litigation costs, exchange rate differences, net on balance sheet items included in finance income, other loss (gain) adjustment and tax related adjustments. A reconciliation of each of the Company’s non-GAAP measures to the comparable GAAP measure is included at the end of this press release.
As of December 31, 2020, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $449 million, up from $428 million as of December 31, 2019. Net cash provided by operating activities in the fourth quarter of 2020 totaled $16.1 million. Net cash provided by operating activities in the full year of 2020 totaled $61.8 million. Net cash spent on share repurchases in 2020 totaled $45.3 million.
Radware management will host a call on Wednesday, February 10, 2021 at 8:30 a.m. ET to discuss its fourth quarter and full year 2020 results and the Company’s outlook for the first quarter of 2021.
Participants in the US call: Toll Free 833-665-0598
A replay will be available for 2 days, starting 2 hours after the end of the call, on telephone number +1-855-859-2056 or (US toll-free) 800-585-8367.
A live webcast of the conference call can also be heard by accessing the Company's website at: http://www.radware.com/IR/. The webcast will remain available for replay during the next 12 months.
Use of Non-GAAP Financial Information and Key Performance Indicators In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of gross profit, research and development expense, selling and marketing expense, general and administrative expense, total operating expenses, operating income, financial income, income before taxes on income, taxes on income, net income and earnings per share, which are adjustments from results based on GAAP to exclude stock-based compensation expenses, amortization of intangible assets, acquisition costs, litigation costs, exchange rate differences, net on balance sheet items included in finance income, otherloss(gain) adjustment and taxrelated adjustments. Management believes that exclusion of these charges allows for meaningful comparisons of operating results across past, present and future periods. Radware’s management believes the non-GAAP financial measures provided in this release are useful to investors for the purpose of understanding and assessing Radware’s ongoing operations. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measureis included with the financial information contained in this press release. Management uses both GAAP and non-GAAP financial measures in evaluating and operating the business and, as such, has determined that it is important to provide this information to investors.
Annual recurring revenues ("ARR") is a key performance indicator defined as the annualized value of booked orders for term-based cloud services, subscription licenses and maintenance contracts that are in effect at the end of a reporting period. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations. We consider ARR a key performance indicator of the value of the recurring components of our business.
Safe Harbor Statement
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware’s plans, outlook, beliefs or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.”For example, when we discuss the strong growth in our cloud and subscriptions business including annual recurring revenues, we are using forward-looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware’s current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions and volatility of the market for our products; natural disasters and public health crises, such as the coronavirus disease 2019 (COVID-19) pandemic; our ability to expand our operations effectively; timely availability and customer acceptance of our new and existing solutions; risks and uncertainties relating to acquisitions or other investments; the impact of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; intense competition in the market for cyber security and application delivery solutions and in our industry in general and changes in the competitive landscape; changes in government regulation; outages, interruptions or delays in hosting services or our internal network system; compliance with open source and third-party licenses; the risk that our intangible assets or goodwill may become impaired; our dependence on independent distributors to sell our products; long sales cycles for our solutions; changes in foreign currency exchange rates; undetected defects or errors in our products or a failure of our products to protect against malicious attacks; the availability of components and manufacturing capacity; the ability of vendors to provide our hardware platforms and components for our main accessories; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; changes in tax laws; our ability to realize our investment objectives for our cash and liquid investments; our ability to attract, train and retain highly qualified personnel; and other factors and risks over which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, refer to Radware’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Radware’s public filings are available from the SEC’s website at www.sec.gov or may be obtained on Radware’s website at www.radware.com.
Radware® (NASDAQ: RDWR), is a global leader of cyber security and application delivery solutions for physical, cloud, and software defined data centers. Its award-winning solutions portfolio secures the digital experience by providing infrastructure, application, and corporate IT protection and availability services to enterprises globally. Radware’s solutions empower enterprise and carrier customers worldwide to adapt to market challenges quickly, maintain business continuity and achieve maximum productivity while keeping costs down. For more information, please visit www.radware.com.