Radware Ltd. · NASDAQ:RDWR
Radware — Q3 2022 Earnings Presentation
31 slides from Radware's earnings presentation, November 2022
Slide 1: Investor Presentation
Investor Presentation November 2022
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 at a Glance
Radware at a Glance $70.5M ~1,300 >12,500 >40 24% Revenue* Employees Customers Countries Fortune 50 Customers * For the 3 months period ended September 30, 2022 3
Slide 4: We Secure Digital Experiences
We Secure Digital Experiences All the Time Everywhere
Slide 5: This is Radware: Complete Mitigation Suite
This is Radware Complete Mitigation Suite Radware’s Core Business The Hawks Business Application Application and SkyHawk Cloud Security Protection of application Availability Data Center As-a-Service hosted in the public cloud Application delivery Security Mitigation of data centers, web Mitigation
Slide 6: We Mitigate Diversified Cyber Attacks
We Mitigate Diversified Cyber Attacks Carpet DNS Burst Encrypted IoT Bombing Attacks Attacks Attacks Botnets Attacks Automated Behavioral DNS Behavioral-Based Burst Integrated Real-time intelligence feed Protection attack protection 0-Latency to block active attackers Amplification for authoritative
Slide 7: Cyber Attacks Campaigns
Cyber Attacks Campaigns “Most Severe’ Cyberattack Since Russian Invasion Crashes Ukraine Internet Provider Russian cyber-attacks in Ukraine have peaked, says State Special Communications Service Ukraine's postal service hit by cyberattack after Moskva warship stamp goes on sale online rN Russian hac
Slide 8: Cyber Attacks Campaigns
Cyber Attacks Campaigns Home Israel News Israeli Government Sites Crash in Cyberattack A defense establishment source claims that this is the largest-ever cyberattack carried out against Israel The websites of the interior, health, justice and welfare ministries had been taken offline, as was that o
Slide 9: Radware Evolution
Radware Evolution 1997 1998 1999 2003 2004 2005 2009 2012 2013 2014 2017 2019 2020 2020 2021 2022 2022 Founded IPO ADC Acquired Started Acquired Acquired Shield Launched Bot Launched Leader Alteon Cloud Biz. Seculert Square Manager SkyHawk First LB Launched Acquired OEM OEM Launched Launched Acquire
Slide 10: Investment Highlights: Why Radware?
Investment Leading Differentiated Technology Highlights Large Market Opportunity Growth Acceleration Opportunities Why Radware? Strong Financials 10
Slide 11: Differentiated Technology: Broad and Deep Offering
Investment Highlights Differentiated Technology: Broad and Deep Offering with Innovative Technology DDoS Web Application Bot API Security Protection Protection Management Behavioral-based Protection against OWASP Behavioral and ML to Auto-discovery of APIs detection top 10 threats and Zero- identify
Slide 12: Differentiated Technology: Industry Recognition
Investment Highlights Differentiated Technology: Industry Recognition API & DevOps USE CASE 2022 DDOS MITIGATION SOLUTION Q1 2021 SPARK MATRIX: DDOS MITIGATION 2022 SPARK MATRIX: BOT MANAGEMENT 2021 12
Slide 13: Differentiated Technology: Industry Recognition
Investment Highlights Differentiated Technology: Industry Recognition APPLICATION AND API PROTECTION 2022 WEB APPLICATION FIREWALLS 2022 13
Slide 14: Large Market Opportunities in Radware's Core Business
Investment Highlights Large Market Opportunities in Radware’s Core Business 11% Application 23% CAGR* Modernization CAGR* Attack Intensity Work from home Grows Cloud Transition 24% 1.4% CAGR* CAGR* Digital Transformation 14 * Estimates of IDC, Gartner and Forrester for 2019-2025
Slide 15: Total Addressable Market
Investment Highlights Total Addressable Market* (Radware’s Core Business: $Billion) DDoS DDoS ADC $3.70 $2.70 $9.3B $3.75 $13B $3.60 TAM TAM Today $1.75 ADC WAF 2025 $3.30 $1.25 $2.30 Bot Manager WAF Bot Manager * Estimates of IDC, Gartner and Forrester 15
Slide 16: Critical Market with Tailwinds from Growth in Cyber Attacks
Investment 7,003K +279% DDoS Attacks blocked in Q3 2022 YoY Highlights 1,547M +84% Web Application Attack Transactions blocked in Q3 2022 YoY Critical Market with Tailwinds from Growth in Cyber Attacks 27,844M +167% Bad Bot Request Detected in Q3 2022 YoY 16
Slide 17: Growth Acceleration Opportunities: From on-prem to Cloud AppSec
Investment Highlights Growth Acceleration Opportunities: From on-prem to Cloud AppSec Subscription Revenue ($M) Subscription as % of Total Bookings 37% $93 35% 31% $72 23% $55 18% $42 14% $30 $18 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 17
Slide 18: Global Cloud Security Network Enables Geographic Expansion
Investment Highlights Growth Acceleration Opportunities Global Cloud Security Network Enables Geographic Expansion 40+ WITH GLOBAL COVERAGE AppSec PoPs 10 Tbps OF GLOBAL MITIGATION CAPACITY DDoS MITIGATION SCRUBBING CENTER CLOUD WAF PoP BOT MANAGER SERVICE CENTER 16 Worldwide SCRUBBING CENTERS 18
Slide 19: Growth Acceleration Opportunities: Loyal Install Base
Investment Highlights Growth Acceleration Opportunities: Loyal Install Base Our Partners Diversified Verticals Financial & Tech & Insurance Consulting ~35% ~10% Government ~15% Other Service ~15% Providers ~30% 19
Slide 20: Growth Acceleration Opportunities: Loyal Install Base
Investment Highlights Growth Acceleration Opportunities: Loyal Install Base 16 Of Top 20 9 Of Top 10 5 Of Top 12 5 Of Top 10 3 Of 10 World’s World Telecom World’s Stock World’s Most Widely Used Banks Companies Exchanges Retailers SaaS Applications 20
Slide 21: Strong Financials
Investment Highlights Strong Financials Cash, Deposits and Marketable Securities Cash Flow and Capital Allocation $72 $64 $66 $466 $449 $428 $401 $53 $55 $52 $344 $49 $45 $45 $40 $31 $24 $25 $4 $0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Operating Cash Flow Free Cash Flow Buyback 21
Slide 22: Growth Strategy
Growth Strategy Acquisitions Cloud Services GTM Expand through Data & Solutions acquisitions Center OEM Partners Alliances Global SIs Aggressive Investment Cloud Providers Cyber Security in Portfolio & Market Share and Application Move to Subscription/ARR Delivery Solutions 22
Slide 23: 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 24: Financial Overview
Financial Overview
Slide 25: Q3 2022 Highlights
Q2 2022 Highlights $70.5M 71% $195M 12% YoY 82.9% Revenue Recurring Revenue Total ARR Cloud and Gross margin 4% decrease YoY Compared to 65% 10% increase YoY Subscription ARR Compared to last year Growth 82.6% last year * ARR includes the annualized value of booked orders for term-based cloud servic
Slide 26: Revenue Trends ($M)
Revenue Trends ($M) CAGR 6% $73 $71 $63 $63 $59 $53 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2022 26
Slide 27: Annual Recurring Revenue Trends ($M)
Annual Recurring Revenue Trends ($M) CAGR 8% $195 $195 $192 $190 $185 $176 $177 $174 $169 $163 $160 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 * ARR includes the annualized value of booked orders for term-based cloud services, subscription licenses and ma
Slide 28: Revenue ($M) and EPS Growth
Revenue ($M) and EPS Growth $0.23 $73 $71 -35% -4% $0.15 Q3 2021 Q3 2022 Q3 2021 Q3 2022 28
Slide 29: Revenue Breakdown by Geographies
APAC Revenue +10% YoY Breakdown by $15.5 Geographies ($M) $32.9 AMERICAS -8% YoY EMEA $22.1 -6% YoY 29
Slide 30: Cash Generation and Balance Sheet ($M)
Cash Generation and Balance Sheet ($M) Cash & $32 Equivalents $29 $42 $18 $434M $136 As of Sep 30, 2022 $9 $256 Deposits $2 Marketable Securities -$10 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 30
Slide 31: Thank You!
Thank You!