Radware Ltd. · NASDAQ:RDWR
Radware — Q1 2023 Earnings Presentation
36 slides from Radware's earnings presentation, May 2023
Slide 1: Investor Presentation
Investor Presentation May 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 DDoS Application New Attack Attacks Attacks Vectors Reaching Continue Challenging New Heights to Grow Defenses 7
Slide 8: Attack Campaign on Airports
Attack Campaign on Airports October 2022 8
Slide 9: 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 9
Slide 10: 2022 New Norm: Cyber Attacks on US Infrastructure
2022 New Norm: Cyber Attacks on US Infrastructure 400Gbps – Series of DDoS attacks by pro-Russian hacker groups, targeting US civilian infrastructure, such as websites of major airports 1.1Tbps DDoS Attacks 1.1Tbps Attack on Service Provider US service provider under attack for over 36 hours Ukraine
Slide 11: 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 11
Slide 12: 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 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 Consistent State-of-the-Art Security Security Across Clouds Frictionless Security 13
Slide 14: 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 14
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 Frictionless State-of-the-Art Security Security Automated Security Across Clouds Protection and Fully Ma
Slide 16: 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 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 Automation State-of-the-Art Security Security Fully Managed Security Across Clouds 17
Slide 18: The CISO Challenge
The CISO Challenge STATE OF THE ART FRICTIONLESS Protection from the most Security operations that advanced threats enables business agility Organizations Shouldn’t Have to Choose 18
Slide 19: The Radware Difference
The Radware Difference Combining State-of-the-Art & Frictionless Security State-of-the-Art Protection Frictionless Security From the Most Advanced Threats Enables business agility & lowers TCO Widest Coverage Agnostic, Consistent ALL APP SURFACES, ALL VECTORS ACROSS ALL CLOUDS, FULLY INTEGRATED High
Slide 20: State-of-the-Art Protection: Winning Industry Recognition in 2022
State-of-the-Art Protection: Winning Industry Recognition in 2022 APP & API PROTECTION 2022 DDoS MITIGATION WAVE 2021 BOT MANAGEMENT 2022 DDoS 2022 WAF 2022 LEADER & OUTPERFORMER LEADER LEADER LEADER LEADER BOT DETECTION MATRIX, 2022 BEST IN CLASS WAF LEADERSHIP “The largest global financial COMPASS
Slide 21: State-of-the-Art Protection: Winning Industry Recognition in 2022
State-of-the-Art Protection: Winning Industry Recognition in 2022 CRITICAL CAPABILITIES FOR CLOUD WEB APPLICATION AND API PROTECTION (WAAP), 2022 #2 IN HIGH SECURITY & API USE CASES 94% WOULD RECOMMEND Radware Cloud WAF Service 94% WOULD RECOMMEND Radware Cloud DDoS “Radware Cloud WAF “Radware offer
Slide 22: Growth Strategy: Profitable Growth Powered by Cloud Security
Growth Strategy: Profitable Growth Powered by Cloud Security
Slide 23: 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 23
Slide 24: 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 24
Slide 25: Solid and Balanced Business Model
Solid and Balanced Business Model Cloud • Large enterprises and mid-size enterprises Security • New logos • Growing and scaling ~$50M • Cloud ARR grew 21% YoY to $53M in 2022 On-Prem Business • Large enterprises and carriers • Loyal customer base and new logos ~$240M • Robust and highly profitable b
Slide 26: Radware 360 Application Protection
Radware 360 Application Protection Secure Your Apps. Regain Control. Enable Your Business. FORMJACKING KNOWN BAD ACTORS BAD BOTS UNWANTED IPs WEB ATTACKS API ABUSE Mobile & Web Applications APIs DDOS ATTACKS CLOUD THREATS 26
Slide 27: Global Cloud Security Network Enables Cloud Expansion
Global Cloud Security Network Enables Cloud Expansion 40+ WITH GLOBAL COVERAGE AppSec PoPs 12 Tbps OF GLOBAL MITIGATION CAPACITY DDoS MITIGATION SCRUBBING CENTER CLOUD WAF PoP BOT MANAGER SERVICE CENTER 19 Worldwide SCRUBBING CENTERS 27
Slide 28: 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 28
Slide 29: 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 30: Financial Overview
Financial Overview
Slide 31: Q1 2023 Highlights
Q1 2023 Highlights $69M 73% 82.3% $201M $55M Revenue Recurring Gross Margin Total ARR Cloud ARR 6% decrease Revenue Compared to 5% increase 21% increase YoY Compared to 83.2% last YoY YoY 68% last year year * Total ARR includes the annualized value of booked orders for term-based cloud services, sub
Slide 32: ARR Driven by Cloud ARR
ARR Driven by Cloud ARR Total ARR ($M) Cloud ARR ($M) 201 192 176 160 55 147 45 124 36 27 21 14 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 * Total ARR includes the annualized value of booked orders for term-based cloud services, subscription licen
Slide 33: Revenue ($M) and EPS ($)
Revenue ($M) and EPS ($) Total Revenue ($M) EPS ($) $73.7 $69.0 $0.19 $0.14 Q1 2022 Q1 2023 Q1 2022 Q1 2023 * Errors due to rounding 33
Slide 34: Revenue Breakdown by Geographies
APAC Revenue -24% YoY Breakdown by $12 Geographies ($M) $69 Million $27 AMERICAS -8% YoY EMEA +6% YoY $30 34
Slide 35: Cash Generation
Cash Generation Cash & OCF FCF Capex Buyback Acquisition Equivalents $42 21 19 16 15 $419M $133 -1 -1 $244 -2 -2 -3 -2 -10 -13 -13 -19 -23 Deposits -30 -30 Marketable Securities Q1 2020 Q1 2021 Q1 2022 Q1 2023 35
Slide 36: Thank You!
Thank You!