Radware Ltd.

Welcome to the RADWARE conference call discussing fourth quarter and full year 2024 results, and thank you all for holding. At this time, our participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded February 12, 2025. I would now like to turn the call over to Yuska Erez. Director, Investor Relations at Radware. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Radware's first quarter and full year 2024 earnings conference call. Joining me today are Roy Zisopel, President and Chief Executive Officer, and Guy Avidan, Chief Financial Officer. A copy of today's press release and financial statements, as well as the investor kit for the first quarter, are available in the Investor Relations sector 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 RADRO's current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to, impact from 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 RADOS filing. 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 20F as filed on March 18, 2024. 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 Zisapel.

Thank you, Yiska, and thank you all for joining us today. I'm pleased to report a strong finish to 2024, with both our top and bottom line exceeding our fourth quarter guidance. During the fourth quarter, we achieved 12% of revenue growth and more than doubled our non-GAAP earning per share. A strong testament to the high leverage in our business model. A key driver of our growth in the quarter was our cloud security business. I'm pleased to report our focus here continues to pay off. In the fourth quarter, we accelerated cloud ARR growth to 19% up from 15% in the third quarter of 2024. We also achieved double-digit growth in cloud bookings and customer acquisition and surpassed 1,000 production customers in the cloud. In 2025, we will increase our investment in our cloud security business on multiple fronts. First, we plan to open a record number of new cloud security centers to expand our presence. Second, we intend to invest more in cloud R&D to continue to lead the market by the strength of our security capabilities. And finally, we plan to continue to grow our OEM and MSSP partnerships to accelerate our market share gains in cloud security. Through these combined efforts, we believe we can exceed a 20% ARR growth rate and establish close to $100 million ARR cloud security business by the end of 2025. Our growth last year was achieved amid a rapidly evolving cybersecurity landscape. 2024 was marked by a sharp escalation in both the frequency and sophistication of cyber attacks. This was driven primarily by major geopolitical tensions and rapid adoption of Gen AI by threat actors. Countries like the US, Israel, and Ukraine were among the most targeted nations, with attackers leveraging AI power tools to automate and enhance the precision of their attacks. AI power tools effectively lowered the barrier to entry for attackers while simultaneously raising the urgency for organizations to strengthen the cyber defenses. In parallel, throughout 2024, we made significant strides in fusing AI across our security offering with our Epic AI framework, giving us a distinct advantage in an evolving threat landscape. We are literally fighting AI with AI. The recent release of our AI SOC Expert is the latest addition to Epic AI. The new cloud service offers SOC teams precisely tailored automated remediation plans for data center security incidents. It has already been well received by customers, cutting mean time to resolution by up to 95%. We have a comprehensive set of AI-driven capabilities in our release pipeline for 2025. ensuring our customers stay ahead of emerging threats with the most advanced protection available. Moving to Defense Pro X, our DDoS protection solution, I'm happy to report a continuous, steady uptake in adoption of Defense Pro X by our customers, driven by its exceptional detection and blocking of sophisticated attacks. We recently expanded our Defense Pro X portfolio with new platforms complementing the full lineup, We are still in the early stages of DefenseProX refreshes for our existing install base and see significant growth opportunities in the coming two years. A good example is a seven-digit win in a European internet service provider. Initially planned for late 2025, this DefenseProX refresh was expedited after a massive cyber attack disrupted access to several of the services and critical customers. Similarly, we closed the seven-digit deal with a U.S. service provider for a hybrid Cloud DDoS deal combining Defense Pro X and Cloud DDoS protection and completely displacing the incumbent Cloud DDoS provider. This win is a great example of the significant competitive advantage we have with hybrid DDoS, which enhances both the customer security posture and network latency. Collaboration with our OEM partners further amplified our success in 2024. Cisco and Check Point sustained double-digit growth in the fourth quarter, setting a new annual record for total OEM bookings. As we move forward, a recently expanded offering included in Cisco Enterprise Agreement will unlock even more new growth opportunities and further streamline purchasing and license management for Cisco Radware customers. These important partnerships produce some notable deals during the fourth quarter. For example, in partnership with Check Point, we closed a seven-digit deal with one of the largest banks in the world. As a long-standing Radware customer, the bank relies on our DDoS solution as a critical line of defense against attacks. In partnership with Cisco, we secured new logo win with a US IoT solution provider. After a DDoS attack in October 2024 and dissatisfaction with their incumbent Cloud DDoS provider response, the customers sought alternatives. We won the deal by offering the most comprehensive and automated Cloud DDoS solution in the market. In addition to customers, industry analysts continue to reinforce our position as a trusted innovator in the cybersecurity space. In the fourth quarter, Radu was named a leader and fast mover in the GigaOM radar for application and API security. The report highlights our strength in vulnerability detection, account takeover protection, and bot management. In summary, I'm pleased to report a strong fourth quarter and a solid 2024. Last year, we made a significant progress advancing our cloud security business and OEM partnerships, both key drivers of our success. We accelerated our transition to subscription and cloud business model, achieving high levels in bookings and cash flow from operations. Looking ahead to 2025, our focus is on accelerating growth, with total ARR growth remaining the leading indicator of our revenue trajectory. We are committed to investing in the expansion of our security business, particularly in cloud security. Additionally, our AI-driven capabilities will fuel innovation and strengthen our security offerings. We are confident in our strategy to deliver strong near-term performance and long-term success, and I am excited about the opportunities that lie ahead. Before I close, I want to take this opportunity to thank our employees for their dedication and commitment in making our achievements in 2024 possible. With that, I will turn the call over to Guy.