Radware Ltd.

Welcome to the RADWARE conference call discussing third quarter 2024 results, and thank you all for holding. As a reminder, this conference is being recorded October 31, 2024. I would now like to turn this call over to Iska Erez, Director, Investor Relations at RADWARE. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to RADWA's third quarter 2024 earnings conference call. Joining me today are Roy Zisopel, President and Chief Executive Officer, and Gaya Vidhan, Chief Financial Officer. A copy of today's press release and financial statements, as well as the investor kit for the third quarter, are available in the investor relations section of our website. During today's call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. These forward-looking statements are subject to various risks and uncertainties, and actual results could differ materially from models, current forecasts, and estimates. Factors that could cause or contribute to such differences include, but are not limited to, impact from the changing or severe global economic conditions, 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 risks detailed from time to time in weathered filings. We refer you to the documents the company files and furnishes from time to time in the SEC, specifically the company's last annual report on Form 20-S as filed on March 18, We undertake no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date of such statement is made. I will now turn the call to Roy Zisopel.

Thank you, Iska, and thank you all for joining us today. I'm pleased to report another solid quarter which exceeded our guidance. We achieved 13% zero-value revenue growth while successfully managing our operating expense. Given the strong leverage in our business model, we recorded substantial increase in non-GAAP EPS in the quarter, delivering earnings of 23 cents per share, more than triple the EPS recorded in the third quarter of 2023. These results underscore the significant progress we are making in executing against our strategy, despite the challenging economic environment and cautious spending behavior of our customers. We continue to see strong traction across multiple areas of our business. To start, our cloud security business continues to grow. During the third quarter, we added a record number of new cloud customers, contributing to 15% year-over-year growth in cloud ARR. Our cloud security business represents a significant long-term market opportunity and a key growth driver. We are focused on accelerating growth by expanding our channel, expanding our global cloud security network, further broadening our cloud security suite, and aligning our organization to support these efforts. One of our key cloud wings is a multi-million dollar cloud DDoS deal with a major U.S. communication provider, replacing their incumbent vendor. A few years ago, after suffering a costly DDoS attack, the customer has turned to a different provider, but faced service issues and limited traffic blocking granularity. This led them to initially implement an on-premise DDoS mitigation with Radware. Last quarter, we expanded the relationship to include cloud data services, consolidating the infrastructure and the hardware. In addition to cloud ARR, total subscription revenue also grew double digits and now accounts for 47% of our total revenue. As a reminder, our subscription revenue is comprised of product subscriptions and cloud subscriptions. During the third quarter, we saw significant strength in our security product subscriptions. This momentum was driven by our Defense Pro X refresh, which carries more content of software subscriptions. The third quarter was also marked by a strong performance among our OEM partners. Both Cisco and Check Point are setting records for total bookings and are on track to achieve record yearly results. In addition, our cloud application security was added to the Cisco Enterprise Agreement. The expanded agreement will streamline purchasing and licensing for Cisco customers and unlock future growth opportunities for others. One example of our collaboration with Cisco is a significant deal with a major railway company. Following a DDoS attack that bypassed the customer incumbent provider, we demonstrated the superiority of our solutions and secure the Cloud Security Suite deal. This includes Defense Pro X for on-premise application and network protection, Cloud DDoS service, Web DDoS for Layer 7 application DDoS, firewall as a service, and network analytics. This deal demonstrates the breadth and effectiveness of our platform, reinforcing the value and stickiness of our solution. We continue to see more customers upgrading the security posture with Defense Pro X. Our AI-powered solution stands out in detecting and blocking web DDoS attacks while ensuring legitimate traffic flows uninterrupted. With less than 20% of our install base already migrated to Defense Pro X, the growth potential of this product refresh cycle is substantial. not to mention additional opportunities with new customers and prospects. In the third quarter, we closed several significant Defense Pro X deals, including a multi-million dollar agreement with a leading financial group, building on a successful cloud expansion in the first quarter. Similarly, we secured a Defense Pro X and web application firewall deal with a major internet and telephony provider in EMEA, demonstrating our technical leadership. During the third quarter, our solution continued to earn us recognition by industry analysts. For the fourth consecutive year, Quadrant Knowledge Solutions named Radwer a technology leader in their Spark Matrix analysis for the web application firewall market. We received the highest rating in technology excellence. Additionally, We were named the leader in the 2024 Spark Matrix for Bot Management, ranking strongest in both technology excellence and customer impact. On the product front, one of our strategic initiatives is to continue to broaden our cloud security platform. In the last quarter, we introduced a new cloud service, the Threat Intelligence Service. With this new service, we are opening the door for customers to access the high-value attack data lake that we use internally. SOC teams can use the real-time intelligence and preemptive warning about potential attacks and attack sources to make more informed decisions about application and data center threats. Additionally, we're launching our AI SOC Expert for DDoS services following last quarter's Epic AI release. which integrates advanced AI and generative AI algorithms in our cloud security stack. The new AI SOC Expert automatically detects unmitigated attacks and creates remediation and mitigation plans, significantly reducing response time. We're excited about the opportunities this framework presents to us and our customers and the impact it will bring going forward. In summary, We are pleased with our third quarter results, continued ARR growth and double-digit revenue gains despite the current business environment. Our cloud security business remains robust and the strong momentum behind Defense Pro X with its high subscription component continues to drive double-digit growth in subscription revenue, now nearly 50% of total revenue. As we close out the year, we remain focused on executing our strategy to sustain growth and position ourselves for long-term success. With that, I will turn the call over to Guy.