Slide 1: Investor Presentation
Investor Presentation February 2024
Slide 2: Safe Harbor
Safe Harbor This presentation 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
Slide 3: This is Radware
This is Radware Radware’s Core Business The Hawks’ Business Application Application Cloud Security SkyHawk Protection of application hosted Availability and Data As-a-Service in the public cloud Application delivery ↗ Alteon Center Mitigation of data centers, web applications, API and ↗ CSPM ↗ Alteo
Slide 4: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 2 3 4 Shifting Adopting Lacking Accelerating Threat Cloud Security Risk Landscape Skills with AI 4
Slide 5: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 2 3 4 Shifting Adopting Lacking Accelerating Threat Cloud Security Risk Landscape Skills with AI 5
Slide 6: Shifting Threat Landscape
Shifting Threat Landscape Shift in Shift to Shift to Attackers’ Attacks on the Automated Tools Motivations Application Layer 6
Slide 7: Russian/Ukraine Conflict Ignites New Cyber War Era
Russian/Ukraine Conflict Ignites New Cyber War Era Conflict extended beyond the two countries Pro-Russian Hacktivist Groups Religious Groups NoName057, Anonymous Sudan, Killnet cluster, Mysterious Team Anonymous Russia, Bangladesh, Passion Group, etc. DragonForce Malaysia, etc Attacking targets in c
Slide 8: Global Attack Campaigns by Pro-Russian Hacktivists
Global Attack Campaigns by Pro-Russian Hacktivists Canadian PM Credit Agricole Orange Spain Amazon Global (JUN 23) (JUN 23) (AUG 23) (JUN-SEP 23) 8
Slide 9: New Disruptive Web DDoS Tsunami Attacks
New Disruptive Web DDoS Tsunami Attacks Requires a behavioral-based approach for accurate detection & mitigation Higher in volume – Ultra high RPS Encrypted floods Appear to be legitimate requests Multiple, sophisticated evasion techniques (randomized headers, IP spoofing, etc) 9
Slide 10: Standard Protections are Not Effective
Standard Protections are Not Effective Network-Based DDoS protection cannot detect & mitigate L7 DDoS attacks Standard WAF solutions look for vulnerability exploits Rate-limiting techniques impact legit traffic Available mitigation tools ineffective in detecting & mitigating HTTP/S floods without im
Slide 11: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 2 3 4 Shifting Adopting Lacking Accelerating Threat Cloud Security Risk Landscape Skills with AI 11
Slide 12: Cloud Adoption Introduces Uncertainties
Cloud Adoption Introduces Uncertainties Multi-Cloud Creates 87% Use a combination of two or three types New Security Risks of environments 61% Think protection coverage between platforms is a problem Private Cloud 56% Think that security policy consistency is a problem Legacy Data Center Kubernetes
Slide 13: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 2 3 4 Shifting Adopting Lacking Accelerating Threat Cloud Security Risk Landscape Skills with AI 13
Slide 14: Lacking Security Skills
Lacking Security Skills +18% ~4M 67% 41% demand for Workforce gap businesses are can’t find cyber security worldwide facing skill enough experts (+12.6% YoY) shortages qualified talent Need for automated protections and fully managed services Sources: 2023 (ISC)² Cybersecurity Workforce Study & Surv
Slide 15: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 2 3 4 Shifting Adopting Lacking Accelerating Threat Cloud Security Risk Landscape Skills with AI 15
Slide 16: Accelerating Risks with AI
Accelerating Risks with AI Attackers & defenders become more powerful with Artificial Intelligence AI-powered tools used to craft automated & highly adaptive attacks AI helps identify and then weaponize zero-day vulnerabilities AI-driven botnets used to orchestrate massive DDoS attacks Fight AI with
Slide 17: Challenges to Maintaining Application Security
Challenges to Maintaining Application Security 1 Shifting Threat Landscape 2 Adopting Cloud • DDoS shift to the Web • Multi-cloud creates new security risks • Rise in web & bot based attacks • According to Radware’s survey most of the • More sophisticated, automated tools respondents think there is
Slide 18: What is Needed to Stay Ahead?
3° radware What is Needed to Stay Ahead?
Slide 19: What is Needed to Stay Ahead?
What is Needed to Stay Ahead? Intelligent Consistent Expert Security Protections Defense Automated, real-time 360-degree, consistent Access to security protections based on AI protection across all experts 24/7 during + ML-based algorithms environments and attack and in that evolve as the entry poin
Slide 20: Radware 360 Application Protection
Radware 360 Application Protection Dedicated to Protecting Your Applications SUPPLY CHAIN BAD BOTS ATTACKS KNOWN BAD ACTORS UNWANTED IPs WEB ATTACKS Mobile & Web Applications APIs DDOS ATTACKS API ABUSE 20
Slide 21: The Radware Difference
The Radware Difference Intelligent Security, Consistent Protections, Expert Defense. Intelligent Consistent Expert Security Protections Defense • Automated AI & ML based • Any environment – on-prem, • Managed services detection & mitigation private and public clouds, K8S • 24/7 ERT security experts
Slide 22: Global Cloud Services Network
Global Cloud Services Network Dual local PoP for reduced latency and regulations compliance Scrubbing 19 centers Worldwide of global 12 Tbps mitigation capacity AppSec PoPs 40 + With Global Coverage DDoS MITIGATION SCRUBBING CENTER CLOUD WAF PoP BOT MANAGER SERVICE CENTER 22
Slide 23: Reduce TCO With Fully Managed Services
Reduce TCO With Fully Managed Services Take the Burden Off Your Shoulders Under Attack Security Policy Outsource to Immediate Service Configuration Radware’s 24/7 & Tuning Security Experts 23
Slide 24: Winning Industry Recognition 2023
Winning Industry Recognition 2023 DDoS Mitigation 2023 Bot Management 2023 Web Application Firewall 2023 LEADER LEADER TECH LEADER 24
Slide 25: Market Leaders in Customer Recognition
Market Leaders in Customer Recognition Truly exceptional protection ML & AI technology for threat for web apps & APIs detection & mitigation Telecommunication industry, company size $1B–3B Manufacturing industry, company size $3B–10B Fortifying our online presence against the rising threat of DDoS a
Slide 26: Large Enterprise and Service Providers Customers
Large Enterprise and Service Providers Customers 6 10 8 10 5 10 2 5 2 5 OF TOP OF TOP OF TOP OF TOP OF TOP WORLD’S WORLD’S TELECOM WORLD’S STOCK WORLD’S MOST WIDELY BANKS COMPANIES EXCHANGES ECOMMERCE USED SAAS COMPANIES APPLICATIONS 26
Slide 27: Environment, Social, Governance
Environment, Social, Governance Protecting the Promoting Investing in Environment Human Rights Community • Implemented KPIs for • Published Human Rights • Building strong relationship reduction in the use of and Labor Standard with the community with water, power and paper Policy various projects •
Slide 28: Financial Overview
3° radware Financial Overview
Slide 29: Q4 2023 Highlights
Q4 2023 Highlights Gross EPS Revenue Cloud ARR $65 million $65 million Margin $0.13 82.0% -12% YoY +22% YoY -72bp YoY -24% YoY * Total ARR includes the annualized value of booked orders for services, subscription licenses and maintenance contracts that are in effect at the end of a reporting period
Slide 30: 2023 Highlights
2023 Highlights Gross EPS Revenue Total ARR $261 million $211 million Margin $0.43 81.9% -11% YoY +4% YoY -110bp YoY -37% YoY * Total ARR includes the annualized value of booked orders for services, subscription licenses and maintenance contracts that are in effect at the end of a reporting period 3
Slide 31: Total ARR Driven by Cloud ARR
Total ARR Driven by Cloud ARR +8% $211M $65M $202M $190M $174M $53M +27% $155M $145M $44M $34M $23M $19M Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 * Total ARR includes the annualized value of booked orders for services, subscription licenses and
Slide 32: Total ARR Excluding Customer Termination Agreement
Total ARR Excluding Customer Termination Agreement Total ARR ($M) Total ARR Excluding Customer ($M) +8% $211M +9% $211M $202M $197M $190M $185M $174M $169M $155M $145M $148M $138M Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 * Total ARR includes the
Slide 33: Q4 2023 Financial Data
Q4 2023 Financial Data Revenue Gross Margin Operating Expenses ($M) Diluted Earnings Per Share -12% -72bp $74M 82.7% 82.0% $65M -9% -24% $55M $50M $0.17 $0.13 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 * All numbers are non-GAAP 33
Slide 34: 2023 Financial Data
2023 Financial Data Revenue Gross Margin Operating Expenses ($M) Diluted Earnings Per -11% Share -110bp $293M $261M 83.0% 81.9% -4% -37% $214M $205M $0.68 $0.43 2022 2023 2022 2023 2022 2023 2022 2023 * All numbers are non-GAAP 34
Slide 35: Geography Breakdown ($M)
Geography Breakdown ($M) APAC APAC $15.5M, -13% YoY $61.4M, -6% YoY 24% 23% AMERICAS AMERICAS 38% $24.6M, -23% YoY 40% $103.4M, -17% YoY Q4 2023 2023 38% 37% EMEA EMEA $24.9M, +2% YoY $96.5M, -7% YoY 35
Slide 36: Cash Generation
Cash Generation OCF FCF CapEx Buyback Cash & Equivalents $72M $66M $64M Deposits $70.6M $55M $32M $23M $173.7M $364 Million -$6M -$4M -$5M -$9M -$9M -$9M $119.5M -$45M -$52M -$59M Marketable Securities -$63M 2020 2021 2022 2023 * Numbers are rounded 36
Slide 37: Thank you!
? 7 Le o r . A ase Thank you -° radware