Radware Ltd. Q3 FY2024 earnings call

• Cloud security business continues to grow with 15% Y/Y growth in cloud ARR and record new cloud customers added. Key cloud win is a multi-million dollar cloud DDoS deal with a major US communication provider. - Total subscription revenue is 47% of total revenue, driven by strength in security product subscriptions due to DefensePro X refresh. - Strong OEM partnerships with Cisco and Check Point setting records for bookings. Cloud application security added to Cisco Enterprise Agreement. - Recognized in industry analysts' reports as a technology leader in web application firewall and bot management. - Launched new cloud services like Threat Intelligence Service and AI SOC expert for DDoS, enhancing capabilities.

Revenue for the third quarter of 2024 was $69.5 million, up 13% year-over-year. Cloud security business saw 15% year-over-year growth in cloud ARR. Total subscription revenue grew double-digits and accounts for 47% of total revenue. Americas revenue in Q3 2024 was $27.7 million (40% of total, 11% Y/Y growth). EMEA revenue was $25.2 million (36% of total, 30% Y/Y growth). APAC revenue was $16.6 million (24% of total, -5% Y/Y growth).

• Expect Q4 2024 total revenue to be in the range of $71 million to $72 million. - Q4 2024 non-GAAP operating expenses expected to be between $50.5 million to $51.5 million. - Q4 2024 non-GAAP diluted net earnings per share expected to be between $0.23 and $0.24.

• Impact from changing or severe global economic conditions. - General business conditions and ability to address industry changes. - Changes in demand for products, timing and amount of orders, as detailed in SEC filings.

Q: Curious about DefensePro X upgrade, shipment mix, and end of sale date.

A: DefensePro X has significant security advantages. 60-70% of DefensePro line was announced end of sale in 90-180 days, with some platforms going end of sale in Q1/Q2 next year. Shipment mix shows more than half of hardware sales are DefensePro X.

Q: Whether 47% subscription revenue was quarterly or YTD.

A: 47% is Q3 number, 46% is YTD.

Q: Strong traction in EMEA.

A: EMEA has diversified performance with strong cloud deals, good cooperation with Cisco and Check Point, and healthy mix of business including on-prem and carrier/govt deals.