Fourth Quarter 2021 Results and Financial Highlights
- Record revenue of $76.6 million, up 11% year-over-year, exceeding high end of guidance
- Non-GAAP operating income of $11 million, an increase of 21% year-over-year
- Non-GAAP EPS of $0.22; GAAP net loss per share of $0.12
- Record cash flow from operations of $29 million
Full Year 2021 Results and Financial Highlights
- Record revenue of $286.5 million, up 15% year-over-year, exceeding high end of guidance
- ARR of $190 million, up 9% year-over-year
- Non-GAAP operating income of $38.9 million, an increase of 55% year-over-year
- Non-GAAP EPS of $0.81; GAAP EPS of $0.16
- Record cash flow from operations of $72 million
Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the fourth quarter and the full year ended December 31, 2021.
"We are very pleased with our performance in the fourth quarter and 2021. We executed well, achieving double digit revenue growth each quarter and for the full year, and record revenue for Q4 and 2021. We also grew our subscription business to more than 30% of total revenue, achieved healthy operating income and earnings per share, and generated record cash flow from operations," said Roy Zisapel, president and CEO, Radware. "In 2021, we witnessed an increased demand for our security solutions. The total addressable market is large and offers tremendous opportunities in the future. We believe that in light of the investments we are making in innovation and infrastructure, we are well positioned to enjoy continued growth."
Financial Highlights for the Fourth Quarter and Full Year of 2021
Revenue for the fourth quarter and full year of 2021 totaled $76.6 million and $286.5 million respectively:
- Revenue in the Americas region was $31.2 million for the fourth quarter of 2021, up 14% from $27.5 million in the fourth quarter of 2020.
Revenue in the Americas region was $128.8 million for the full year of 2021, up 13% from $114.4 million in the full year of 2020.
- Revenue in the Europe, Middle East and Africa (“EMEA”) region was $29.7 million for the fourth quarter of 2021, up 23% from $24.2 million in the fourth quarter of 2020.
Revenue in the Europe, Middle East and Africa (“EMEA”) region was $98.4 million for the full year of 2021, up 26% from $78.4 million for the full year of 2020.
- Revenue in the Asia-Pacific (“APAC”) region was $15.7 million for the fourth quarter of 2021, down 10% from $17.4 million in the fourth quarter of 2020.
Revenue in the Asia-Pacific (“APAC”) region was $59.3 million for the full year of 2021, up 4% from $57.3 million in the full year of 2020.
GAAP net loss for the fourth quarter of 2021 was $5.6 million, or net loss of $0.12 per diluted share, compared to GAAP net income of $2.8 million, or $0.06 per diluted share, for the fourth quarter of 2020.
GAAP net income for the full year of 2021 was $7.8 million, or $0.16 per diluted share, compared to GAAP net income of $9.6 million, or $0.20 per diluted share, for the full year of 2020.
Non-GAAP net income for the fourth quarter of 2021 was $10.3 million, or $0.22 per diluted share, compared to non-GAAP net income of $9.8 million, or $0.21 per diluted share, for the fourth quarter of 2020.
Non-GAAP net income for the full year of 2021 was $38.3 million, or $0.81 per diluted share, compared to non-GAAP net income of $30.8 million, or $0.64 per diluted share, for the full year of 2020.
As of December 31, 2021, the Company had cash, cash equivalents, short-term and long-term bank deposits and marketable securities of $465.8 million. Net cash provided by operating activities was $28.9 million in the fourth quarter of 2021 and $71.8 million in 2021.
In the fourth quarter of 2021, the Company took advantage of a special program initiated by the Israeli Tax Authority that allowed Israeli companies to release “trapped profits” at a discounted tax rate. As a result, the Company reported a GAAP tax expense of $10.0 million. Due to the one-time nature of this expense, the Company excluded the tax expense related to the “trapped profits” from the non-GAAP results. The total tax amount related to the release of the “trapped profits” was $8.2 million.
Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, exchange rate differences, net on balance sheet items included in financial income, other loss adjustment, tax settlement and tax related adjustments. A reconciliation of each of the Company’s non-GAAP measures to the most directly comparable GAAP measure is included at the end of this press release.
Conference Call
Radware management will host a call today, February 9, 2022, at 8:30 a.m. EST to discuss its fourth quarter and full year 2021 results and the Company’s outlook. To participate in the call, please use the following numbers:
Participants in the US call: Toll Free 888-510-2008
Participants Internationally call: 1 646-960-0306
Conference ID: 1864701
A replay will be available for two days, starting two hours after the end of the call, on telephone number +1-647-362-9199 or (US toll-free) 800-770-2030. Passcode 1864701.
The call will be webcast live on 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, as applicable, stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, exchange rate differences, net on balance sheet items included in financial income, other loss adjustment, tax settlement and tax related 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 measure is 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 revenue ("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.” 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 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 fourth-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; real or perceived shortcomings, defects or vulnerabilities in our products or solutions, or if we or our end-users experience security breaches; the availability of components and manufacturing capacity; our reliance on a single managed security service provider to provide us with scrubbing center services; 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 fourth 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.
About Radware
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.
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