Slide 1: Investor Presentation
Investor Presentation November 2023
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: Radware Complete Mitigation Suite
Radware Complete Mitigation Suite Radware’s Core Business The Hawks Business Application Application and Cloud Security SkyHawk Protection of application Availability Data Center As-a-Service hosted in the public cloud Application delivery Security Mitigation of data centers, web applications, API a
Slide 4: Why Radware?
Leading Critical Cyber Security Vendor Large Growing TAM and SAM Leading Differentiated Technology Why Radware? Large Enterprise and Carriers Customer Base Fast Growing Cloud Security Business Sustainable Growth and Profitability 4
Slide 5: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills 5
Slide 6: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills Critical, Need State-of-the-Art Security 6
Slide 7: Growing Threat Landscape
Growing Threat Landscape Shift in Shift to Shift to Attackers’ Attacks on Automated Motivation Application Tools Layer (incl. Web DDoS) 7
Slide 8: Attack Campaign On Health Care February 2023
Attach Campaign On Health Care February 2023 https://www.scmagazine.com/news/threat-intelligence/killnet- https://www.malwarebytes.com/blog/news/2023/02/killnet ddos-attacks-inflicting-damage-on-healthcare-this-is-war -group-targets-us-and-european-hospitals-with-ddos-attacks 8
Slide 9: Claimed Attacks on Telegram: Global
Claimed Attacks on Telegram: Global Canadian PM (June 2023) UPS (April, June & Sept. 2023) Wells Fargo (Sept. 2023) 9
Slide 10: #OpIsrael 2023: Anonymous Sudan Joins the Islamic Jihad
#OpIsrael 2023: Anonymous Sudan Joins the Islamic Jihad Launches cyber attacks against Israeli sites (gov’t, utilities, energy, civil defense) Israeli Early Israeli News Portal: Rotter.net Warning App May’23: (Red Colour) Attack bypassed Cloudflare; site went down Sept’23: Attack blocked by Radware
Slide 11: New Disruptive Web DDoS Tsunami Attacks
New Disruptive Higher in volume – Ultra high RPS Web DDoS Tsunami Encrypted floods Attacks Requires a Appear to be legitimate requests behavioral-based approach for accurate detection & mitigation Multiple, sophisticated evasion techniques (randomized headers, IP spoofing, etc) 11
Slide 12: 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 13: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills Critical, Need State-of-the-Art Security Consistent Security Across Clouds 13
Slide 14: Cloud Transition Introduces Uncertainties
Cloud Transition Introduces Uncertainties Pace & Final Deployment Unknown Multi-Cloud Creates 99% Deploy Applications in at Least One Public Cloud New Security Risks 69% Experienced Data Exposure Due to Inconsistencies Between Platforms Private Cloud Legacy Data Center Kubernetes 70% Aren’t Confiden
Slide 15: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills Critical, Need Consistent State-of-the-Art Security Security Across Clouds Frictionless Security 15
Slide 16: Accelerated Digital Transformation
Accelerated Digital Transformation Multiple End- Users & Partners Distributed Applications Workforce at Center Increased Use Time to market and agility of APIs of Business are critical to staying competitive Online Consumption of Goods Need frictionless security that does not hold you back 16
Slide 17: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills Critical, Need Consistent Frictionless State-of-the-Art Security Security Automated Security Across Clouds Protection and Fully Ma
Slide 18: Shortage in Security Experts & Skills
Shortage in Security Experts & Skills +25% ~3.4M 70% 43% demand for open positions businesses are can’t find enough cyber security worldwide facing skill qualified talent experts shortages Need for automated protections and fully managed services * Sources: 2022 (ISC)² Cybersecurity Workforce Study
Slide 19: Industry Trends
Industry Trends Leading Critical Cyber Security Vendor Growing Accelerated Shortage Threat Cloud Digital in Security Landscape Transition Transformation Experts & Skills Critical, Need Consistent Frictionless Automation State-of-the-Art Security Security Fully Managed Security Across Clouds 19
Slide 20: What is Needed to Stay Ahead?
What is Needed to Stay Ahead? REAL-TIME INTELLIGENT UNIVERSAL Immediate, real-time Automated protections based 360-degree, consistent protection from advanced, on AI + ML-based algorithms protection across all unknown threats that evolve as the attacks environments and entry points morph 20
Slide 21: Radware 360 Application Protection
Radware 360 Application Protection Dedicated to Your Application Protection. Real-Time, Intelligent & Universal. FORMJACKING KNOWN BAD ACTORS BAD BOTS UNWANTED IPs WEB ATTACKS API ABUSE Mobile & Web Applications APIs DDOS ATTACKS CLOUD THREATS 21
Slide 22: The Radware Difference
The Radware Difference Dedicated to Your Application Protection. Real-Time, Intelligent & Universal. REAL-TIME INTELLIGENT UNIVERSAL • Immediate Protection • AI & ML Algorithms • Agnostic, Consistent & • Behavioral-based Zero-Day • Adaptive & Continuous Integrated Attack Protection Learning • Across
Slide 23: State-of-the-Art Protection: Winning Industry Recognition
State-of-the-Art Protection: Winning Industry Recognition APP & API PROTECTION 2022 BOT MANAGEMENT 2023 DDoS 2023 WAF 2023 LEADER & OUTPERFORMER LEADER LEADER LEADER BOT DETECTION MATRIX, 2022 BEST IN CLASS WAF LEADERSHIP “The largest global financial COMPASS 2022 institutions, brokerage firms, OVER
Slide 24: State-of-the-Art Protection: Winning Industry Recognition
State-of-the-Art Protection: Winning Industry Recognition CRITICAL CAPABILITIES FOR CLOUD WEB APPLICATION AND API PROTECTION (WAAP), 2022 #2 IN HIGH SECURITY & API USE CASES 98% WOULD RECOMMEND Radware Cloud WAF Service 94% WOULD RECOMMEND Radware Cloud DDoS “Radware Cloud WAF “Radware offers one of
Slide 25: Growth Strategy: Profitable Growth Powered by Cloud Security
Growth Strategy: Profitable Growth Powered by Cloud Security
Slide 26: The Markets We Operate In
The Markets We Operate In Bot/API Bot/API $0.9B $3.9B ADC $2.3B WAF $1.1B 2027 2023 $7.2B $3.7B $10.7B $1.8B $1.6B DDoS ADC $2.7B WAF DDoS Source: IDC: Worldwide Application Protection and Availability Forecast, 2022–2026: Security Powers the Digital Experience, November 2022 26
Slide 27: Large Enterprise and Service Providers
Large Enterprise and Service Providers Blue Chip Customers 6 10 7 10 6 12 4 10 4 10 OF TOP OF TOP OF TOP OF TOP OF TOP WORLD’S WORLD TELECOM WORLD’S STOCK WORLD’S MOST WIDELY BANKS COMPANIES EXCHANGES ECOMMERCE USED SAAS COMPANIES APPLICATIONS 27
Slide 28: Global Cloud Services Network Worldwide
Global Cloud Services Network 19 Worldwide SCRUBBING CENTERS 12 Tbps OF GLOBAL MITIGATION CAPACITY DDoS MITIGATION SCRUBBING CENTER CLOUD WAF PoP BOT MANAGER SERVICE CENTER 40+PoPs AppSec WITH GLOBAL COVERAGE 28
Slide 29: Radware Strategy Summary
Radware 1 On-Prem Business Strategy TAM is growing, best of breed required Summary 2 Critical Areas Large, strong and profitable Accelerating Cloud Security Business 3 Strong growth, expanding SAM, SaaS business model 4 Leverage in the Model Driving profitable growth with OpEx leverage 29
Slide 30: 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 31: Financial Overview
Financial Overview
Slide 32: Q3 2023 Highlights
Q3 2023 Highlights $62M 79% 81.1% $204M $63M Revenue Recurring Gross Margin Total ARR Cloud ARR 13% decrease Revenue Compared to 5% increase 25% increase YoY Compared to 82.9% last YoY* YoY 71% last year year * Total ARR includes the annualized value of booked orders for services, subscription licen
Slide 33: ARR Driven by Cloud ARR ($M)
ARR Driven by Cloud ARR ($M) Total ARR ($M) Cloud ARR ($M) 204 195 185 63 168 150 50 137 42 31 22 18 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 * Total ARR includes the annualized value of booked orders for services, subscription licenses and main
Slide 34: Total ARR Excluding Customer Termination Agreement
Total ARR Excluding Customer Termination Agreement Total ARR ($M) Total ARR Excluding Customer ($M) 204 204 190 195 179 185 163 168 143 150 130 137 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 * Total ARR includes the annualized value of booked orde
Slide 35: Recurring Revenue (%) Driven by Cloud ARR
Recurring Revenue (%) Driven by Cloud ARR ($M) 35% 90% 79% 80% 30% 71% 31% 64% 65% 65% 70% 25% 61% 26% 60% 23% 20% 50% 18% 15% 40% 15% 13% 30% 10% 20% 5% 10% 0% 0% Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 Q3 2023 Cloud ARR as % of Total ARR Recurring Revenue 35
Slide 36: Non-GAAP Financial Data
Non-GAAP Financial Data Total Revenue ($M) Gross Margin $70.5 82.9% 81.1% $61.6 Q3 2022 Q3 2023 Q3 2022 Q3 2023 Operating Expenses ($M) EPS ($) $53.2 $50.4 $0.15 $0.07 Q3 2022 Q3 2023 Q3 2022 Q3 2023 36
Slide 37: Q3 2023 Revenue Breakdown by Geographies
Q3 2023 APAC Revenue +12% YoY Breakdown by $17.3 Geographies ($M) $61.6 Million $24.9 AMERICAS -24% YoY EMEA -13% YoY $19.4 37
Slide 38: Cash Generation
Cash Generation OCF FCF Capex Buyback Cash & Equivalents 18 $32 16 7 5 2 0 $204 $371.6M $135 0 -1 -1 -2 -1 -3 -6 -10 -11 -16 Deposits Marketable -21 Securities Q3 2020 Q3 2021 Q3 2022 Q3 2023 38
Slide 39: Thank You!
Thank You!