Radware ((RDWR)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Radware’s latest earnings call showcased a strong performance, highlighting significant revenue and earnings growth, primarily driven by the cloud security segment and strategic wins. Despite facing challenges such as reduced cash flow from operations and prolonged sales cycles in North America, the overall sentiment remains positive, supported by strategic achievements and robust growth metrics.
Strong Revenue Growth
Radware reported its fourth consecutive quarter of double-digit revenue growth, achieving a 10% year-over-year increase to $74 million in the second quarter of 2025. This consistent growth underscores the company’s ability to maintain momentum in a competitive market.
Significant Increase in Earnings
The company saw a substantial rise in non-GAAP earnings per share, which increased by 39% year-over-year to $0.28. This improvement reflects Radware’s enhanced scalability and operational efficiency.
Robust Cash Flow
Radware generated $14.5 million in cash flow from operations, demonstrating its operational strength and ability to generate cash even amidst market challenges.
Cloud ARR Growth Acceleration
The cloud Annual Recurring Revenue (ARR) growth accelerated from 19% to 21% year-over-year, reaching $85 million. This acceleration highlights the increasing demand for Radware’s cloud services.
Major Wins in Cloud Security
The company secured significant 7-digit deals with a major global event organization, a European government, and a leading U.S. financial technology company. These wins were driven by Radware’s AI-powered SOC and cloud security platforms.
Expanding Partner Ecosystem
Radware’s partner and channel ecosystem contributed to multiple 7-digit deals, including a notable agreement with one of Latin America’s largest data center providers, showcasing the strength of its partnerships.
Strong Regional Performance
The EMEA region saw a 22% year-over-year revenue growth, while the APAC region experienced a 30% increase, reflecting Radware’s strong international presence.
High Gross Margin and Operating Income
The company’s gross margin remained robust at 82.2%, and operating income grew more than 50% year-over-year to $9.5 million, indicating strong financial health.
Reduced Cash Flow from Operations
Despite the overall positive performance, Radware experienced a decrease in cash flow from operations to $14.5 million, down from $23 million in the same quarter last year, highlighting a potential area of concern.
Long Sales Cycles in North America
Radware reported challenges with long sales cycles and budget constraints in the North American large enterprise market, which could impact future growth in this region.
Forward-Looking Guidance
Looking ahead, Radware projects revenue between $74.5 million and $75.5 million for the third quarter of 2025, with non-GAAP diluted net earnings per share expected to be between $0.26 and $0.27. The company’s growth is anticipated to be driven by cloud security, AI-driven innovation, and an expanded go-to-market strategy.
In conclusion, Radware’s earnings call painted a picture of robust growth and strategic success, despite some operational challenges. The company’s strong performance in cloud security and international markets, coupled with its forward-looking strategies, positions it well for continued success.