Radware Ltd.

Welcome to the Radware conference call discussing second quarter 2021 results, and thank you all for holding. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. As a reminder, this conference is being recorded July 28, 2021. If you require any further assistance, please press star 0. I would now like to turn the call over to Yiska Erez. Director of Investor Relations at Radware. Please go ahead.

Thank you, Christy. Good morning, everyone, and welcome to Radware's second quarter 2021 earnings conference call. Joining me today are Roy Zisopel, President and Chief Executive Officer, and Michael Goldberger, VP Finance. A copy of today's press release and financial statement, as well as the investor kit for the second quarter, are available in the Investor Relations section of our website. During today's call, we may make projection or other forward-looking statements regarding future events or future financial performance of the company. These forward-looking statements are subject to various risks and uncertainties, and actual results could differ materially from what was currently forecast and estimated. Factors that could cause or contribute to such differences include, but are not limited to, impacts from the COVID-19 pandemic, general business conditions, and our ability to address changes in our industry, changes in demand for products, the timing in the amount of orders, and other risk details from time to time in rather wide filings. We refer you to the documents the company files and furnishes from time to time with the SEC, specifically the company's last annual report on Form 20-F as filed on April 20, 2021. We undertake no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date of such statement is made. I will now turn the call to Roy Zisakel.

Thank you, Iska, and thank you all for joining us today. I'm excited to report a strong second quarter that exceeded our expectations with record revenue and accelerated growth. Our strong performance extended across all business lines and all geographies, including growth in large deals, record new customer business, and record in new cloud levels. Our achievements demonstrate the continued expansion of our cloud and application security businesses, our ability to execute on strong demand to our solutions, and our ongoing success helping our customers protect their critical applications. Second quarter revenue was a record $70 million, representing year-over-year growth of 19%, and one of the fastest growth rates we had in recent years. Cloud and subscription ARR continued to grow strongly at 27% in the second quarter, reaching another record quarter. These results are underpinned by the accelerated transformation of enterprises to digital, and the increase in global cyber attacks that make it critical for our customers to ensure they have the best possible cybersecurity solution for their business and applications. In the second quarter, the strong demand for our solutions led to solid growth in bookings, and we earned some impressive wins. So why do we win? First, we are winning because of our superior technology. At the core of our technology are sophisticated algorithms. They combine machine learning, fuzzy logic algorithms, as well as various behavioral-based detection and protection algorithms. Combined, these technologies enable our solutions to automatically adapt to the changing threat landscape and differentiate between legit and attack traffic. That, in turn, positions us to deliver the widest, fastest, and most accurate security protection in an environment of constant attacks. One example is a large video gaming company in Asia Pacific, which experienced a complicated DDoS attack both inside and outside the country. When their existing security solution couldn't mitigate the attack, and since time was of essence to prevent a severe disruption to their customers, they turned to us for an emergency Cloud DDoS solution. Shortly thereafter, they expanded their solution to a hybrid Cloud DDoS by placing our defense pro appliances at the edge of their data centers. Another example is a Fortune 500 company, which is one of the largest rental companies in the US. This company received a ransomware letter which was followed immediately by a DDoS attack that exceeded their internet capacity and brought them down. Our partner Cisco reached out to us and we mitigated the attack. Following our success, the customer chose hardware hybrid cloud DDoS protection based on our unique ability to manage these threats. These are just two examples that demonstrate the strength of our technology and our ability to successfully mitigate complex cyber attacks in real time. The second reason we are winning new business is because of the breadth of the cloud security offering. Hackers are utilizing a large set of attack tools, And enterprises are looking for sophisticated security solutions to protect their applications and mitigate these cyber attacks. Our broad cloud security offering provides end-to-end protection for their assets and applications. We offer fully managed, integrated web application protection, bot attack mitigation, API security, and DDoS protection cloud service coupled with public cloud security. There are two notable cloud wings I'd like to share from the second quarter. We signed a very large cloud application security and did deal with one of the largest construction equipment manufacturers in the world. This Fortune 500 company was facing challenges protecting their applications. They chose Radware because of our deep security expertise and our ability to execute and deliver web application security in any form factor. In the end, it became evident that Radu offered the best solution for securing several thousands of applications over many different environments. The second major cloud win that we signed in the second quarter was with the largest service provider in Latin America for a suite of application security solutions, web application security, bot management, and DDoS. The customer was severely impacted by bot attacks and DDoS activity. After failing to contain the attacks using rate-limiting solutions, we walked the customers through the right way to approach them. We offered the best protection and proved it from day one in real traffic proof of concept. The third reason we are winning new business is because of our proven reputation and our ability to expand our business across our existing customer base. Our customers continue to acknowledge our industry leadership and our ability to keep their applications safe and protected. For example, one of the largest e-commerce companies in the world, a long-time customer of our DDoS appliances, added last year our Cloud DDoS solution. In the second quarter, they decided to strengthen their application security by adding our bot manager to their solution to meet their growing security needs. Fourth, we continue to win new business because of our partnerships. In the last couple of years, we've been working on expanding our channel relationships. We continue to invest in training and educating our partners and expect these investments to bear fruits over time. In the second quarter, we signed a deal with a large US hospital, which was looking for more visibility and reporting. With the help of our partner Checkpoint, we presented the hospital our latest capabilities and upgraded their solutions. We also faced a large deal with a global online fashion retailer. This retailer was planning to extend their network, a move that potentially increased their exposure to DDoS attacks and threatened their ability to deliver goods to their customers without disruptions. We replaced this retailer's incumbent solution with our hybrid cloud DDoS solution. The key success factor in closing this deal was not only the strength of our protection, but also our close relationships with Check Point. In summary, the momentum in our business continues to be strong across the board, supported by significant growth in our cloud security business. Our pipeline is robust. With the accelerating pace in digital transformation and the shift to the cloud, the market provides many opportunities for us. And we are confident in our ability to execute on them. Before turning the call to Michael, I would like to take this opportunity to thank our customers and partners for their trust in us. And I would like to thank our employees for their great efforts and dedication. Michael.