Radware Ltd. · NASDAQ:RDWR
Radware — Q4 2022 Earnings Presentation
36 slides from Radware's earnings presentation, February 2023
Slide 1: Investor Presentation
Investor Presentation February 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 at a Glance
Radware at a Glance $293M ~1,300 >12,500 >40 24% Revenue* Employees Customers Countries Fortune 50 Customers * For the 12-month period ended December 31, 2022 3
Slide 4: 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 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: 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 7: Growing Demand for Cyber Security
Growing Demand for Cyber Security
Slide 8: Organizations Top of Mind
Organizations Top of Mind 1 Growing Threat Landscape 2 Cloud Transition Introduces Uncertainties 3 Accelerated Digital Transformation 4 Shortage in Security Experts & Skills 8
Slide 9: Threat Landscape
Threat 23,480K +232% DDoS Attacks blocked in FY 2022 YoY Landscape 5,481M +128% Web Application Attack Transactions blocked in FY 2022 YoY 73,355M +105% Bad Bot Requests Detected in FY 2022 YoY 9
Slide 10: 2022 New Norm: 400Gbps – 1.1Tbps
2022 New Norm: 1.1Tbps Attack on US Infrastructure US Service Provider under attack for over 36 hours 400Gbps – 1.1Tbps DDoS Attacks Ukraine Gov’t Under Attack Nation-State attacks peaking at 235Gbps & over 400Gbps Cyber Attack on Israeli Gov’t Combination of DDoS and Web attacks on various gov’t si
Slide 11: Cloud Transition Introduces Uncertainties
Cloud Transition Introduces Uncertainties 2 Pace & Final Multi-Cloud Creates New Deployment Unknown Security Risks Need for consistent security across all clouds 11
Slide 12: Accelerated Digital Transformation
Accelerated Digital Transformation 3 Working From Home Applications at Center Time to market and agility are critical to stay competitive Online Consumption of Business of Goods Need frictionless security that does not hold you back 12
Slide 13: Shortage in Security Experts & Skills
Shortage in Security Experts & Skills 4 +25% ~3.4M 70% 43% demand for open positions business are can’t find cyber security worldwide facing skill enough qualified experts shortages talent Need for automated protections and fully-managed services * Sources: 2022 (ISC)² Cybersecurity Workforce Study
Slide 14: Organizations Challenge
Organizations Challenge STATE OF THE ART FRICTIONLESS Protection from the most Security operations that advanced threats enables business agility Organizations Shouldn’t Have to Choose 14
Slide 15: Radware Solution
Radware Solution
Slide 16: Comprehensive Offering with Innovative Technology
Comprehensive Offering with Innovative Technology DDoS Web Application Bot API Security Protection Protection Management • Behavioral-based • Protection against • Behavioral and ML to • Auto-discovery of APIs detection using ML OWASP top 10 threats identify Bot patterns • Generates security • Real-t
Slide 17: The Radware Difference
The Radware Difference Combining State-of-the-Art & Frictionless Security State-of–the-Art Protection Frictionless Security Widest Coverage Agnostic, Consistent ALL APP SURFACES, ALL VECTORS ACROSS ALL CLOUDS Highest Accuracy Adaptive, Automated MACHINE LEARNING ALGORITHMS NO HUMAN INTERVENTION REQU
Slide 18: Winning Industry Recognition
Winning Industry Recognition BOT MANAGEMENT 2022 WAF 2022 LEADER LEADER APP & API PROTECTION 2022 DDoS MITIGATION WAVE 2021 LEADER & OUTPERFORMER LEADER BOT DETECTION MATRIX, 2022 BEST IN CLASS WAF LEADERSHIP “The largest global financial COMPASS 2022 institutions, brokerage firms, OVERALL LEADER an
Slide 19: Winning Industry Recognition
Winning Industry Recognition CRITICAL CAPABILITIES FOR CLOUD WEB APPLICATION AND API PROTECTION (WAAP), 2022 #2 IN HIGH SECURITY & API USE CASES “Radware Cloud WAF Service is a “Radware offers one of the good candidate, especially for stronger API security offerings the high-security use case” on th
Slide 20: What Customers Say About Us
What Customers Say About Us “Full featured & robust security service for cloud“ – CLOUD WAF CUSTOMER “The best Bot Mitigation Solution that provides all-round coverage!” – BOT MANAGER CUSTOMER “Technology behind the Cloud WAF solution is extremely 98% WOULD RECOMMEND efficient in detecting and block
Slide 21: Market and Growth Opportunities
Market and Growth Opportunities
Slide 22: Large and Growing TAM ($B)
Large and Growing TAM ($B) $4.4B Web $3.3B DDoS Mitigation Application $2.7B Firewall Mitigation of $1.75B denial-of-service Mitigation of attacks applications attacks Gartner: Forecast Analysis – Information Security and Risk Source: DDoS Mitigation Study, Forecast, 2019–2026, Frost & Sullivan, Aug
Slide 23: From On-Prem to Cloud
From On-Prem to Cloud Cloud & Subscription Revenue ($M) Cloud & Subscription as % of Total Bookings 37% 38% 35% $105 31% $93 $72 23% $55 18% $42 $30 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 23
Slide 24: Global Cloud Security Network Enables Geographic Expansion
Global Cloud Security Network Enables Geographic 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 24
Slide 25: Loyal Install Base, Partners, Diversified Verticals
Loyal Install Base Our Partners Diversified Verticals Financial & Tech & Insurance Consulting ~30-35% ~10% Government ~15% Other Service ~15% Providers ~30% 25
Slide 26: Loyal Install Base
Loyal Install Base 6 Of Top 10 7 Of Top 10 6 Of Top 12 4 Of Top 10 4 Of 10 World’s World Telecom World’s Stock World’s Most Widely Used Banks Companies Exchanges eCommers SaaS Applications companies 26
Slide 27: Why Radware?
Why Radware? Cyber attacks increase Leading differentiated Large and technology WHY growing TAM RADWRE? Cloud and Strong subscription financials acceleration 27
Slide 28: Financial Overview
Financial Overview
Slide 29: Q4 2022 Highlights
Q4 2022 Highlights $74.1M 68% $202M 14% YoY 82.7% Revenue Recurring Revenue Total ARR Cloud and Gross margin 3% decrease YoY Compared to 64% 7% increase YoY Subscription ARR Compared to last year Growth 82.4% last year * ARR includes the annualized value of booked orders for term-based cloud service
Slide 30: Full Year 2022 Highlights
Full Year 2022 Highlights $293M 68% 13% YoY 41% 83.0% Revenue Recurring Revenue Cloud and Sub. Cloud and Gross margin 2% increase YoY Compared to 66% Revenue growth Subscription Compared to last year compared to 2021 Of total bookings 82.4% last year * ARR includes the annualized value of booked ord
Slide 31: Revenue Trends ($M)
Revenue Trends ($M) CAGR 7% $293 $286 $252 $250 CAGR 5% $234 $211 $77 $74 $67 $69 $64 $58 Q4 2017 Q4 2018 Q4 2019 Q4 2020 Q4 2021 Q4 2022 2017 2018 2019 2020 2021 2022 31
Slide 32: Annual Recurring Revenue Trends ($M)
Annual Recurring Revenue Trends ($M) CAGR 9% $202 $195 $195 $190 $192 $185 $176 $177 $174 $169 $163 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 * ARR includes the annualized value of booked orders for term-based cloud services, subscription licenses and ma
Slide 33: Revenue ($M) and EPS Growth ($)
Revenue ($M) and EPS Growth ($) $293 $77 $74 $286 -3% 2% Q4 2021 Q4 2022 2021 2022 $0.81 -23% $0.68 $0.22 $0.17 -16% Q4 2021 Q4 2022 2021 2022 33
Slide 34: Revenue Breakdown by Geographies
Q4 2022 APAC Revenue +14% YoY $18 Breakdown by Geographies EMEA $32 AMERICAS +2% YoY ($M) -18% YoY $24 Full Year 2022 APAC +10% YoY $65 $124 AMERICAS -4% YoY $104 EMEA +6% YoY 34
Slide 35: Cash Generation and Balance Sheet ($M)
Cash Generation and Balance Sheet ($M) Cash & $32 Equivalents $29 $46 $18 $432M As of Dec 31, 2022 $134 $9 $10 $252 Deposits $2 Marketable Securities -$10 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 35
Slide 36: Thank You!
Thank You!