Radware Ltd.

all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded on May 7, 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 RADWR's first quarter 2025 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 first 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 RADWR's 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 RADWATS 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 20-F as filed on March 28, 2025. 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 a strong start to 2025 exceeding our guidance. Our first quarter revenue increased 11% year-over-year to $72 million. This is the third quarter in a row of double-digit revenue growth. Our non-gap earning per share rose 69% to 27 cents, demonstrating the high leverage in our business model. And finally, cash flow from operations was $22 million. A major driver of our success is attributed to our cloud security business, which continues to grow in scale and potential. Cloud security ARR increased by 19% in over a year to $80 million. We also achieved double-digit growth in our total number of cloud customers, driven primarily by a rapid increase in new cloud application security bookings. Given these strong metrics, we continue to believe that FocusOn, an investment in this business, will position us to exceed a 20% ARR growth rate, and achieved close to $100 million in cloud security ARR by end of this year. Our results also highlight the solid progress we've made against our strategy to lead as the best of breed provider in application and data center security. Our growth strategy continues to be centered around three pillars, win significant market share in cloud security, lead through AI innovation and automation, and enhance our go-to-market footprint. As we highlighted last quarter, we are expanding our cloud security infrastructure in order to further scale our business. Recently, we opened new cloud service centers in Peru, India, and Kenya, and have plans to expand in other regions in the near future. Today, we support a network of over 50 cloud security service centers worldwide with a mitigation capacity of up to 15 terabit. This network enables customers to keep applications and data within their borders to meet strict data privacy regulations and provide excellent performance for local users. Our hybrid cloud security offering is another important business enabler for our customers. This offering has become a major competitive differentiator for us translated into continued strong ARR growth. While some customers may favor cloud-only models, which we offer, many large enterprises clearly have a requirement for hybrid security across all their assets, those that are located in the cloud and those that are located in the private data centers, and our pipeline proves it. We continue to see steady healthy demand that includes our Defense Pro X refresh. With the push towards vendor consolidation, a rather hybrid approach for DDoS and application security, which offers both cloud services and on-prem solutions with integrated and consistent security capabilities, is giving us a clear edge. I'm pleased to report that our AI innovation efforts are also proving to be a competitive advantage. Our advanced AI-based algorithms and algorithms' first approach to security are delivering market-leading detection and mitigation results for our customers, making our solutions the preferred choice for many. We're seeing this firsthand as we continue to replace the competition in bigger ticket deals. Between the fourth quarter of 2024 and first quarter of this year, the total contract value of our competitive takeouts doubled. For example, we took out two competitors with our DDoS protection and web application firewall to close a seven-digit deal with a government IT company in Asia Pacific. The win provides another proof point of the strength of our security offering in web application security and DDoS mitigation under a unified SecOps platform. Last quarter, we won our largest cloud security agreement to date. The multi-year, eight-digit deal broadened our relationship with a U.S. Fortune 500 financial services and payments company. They are significantly expanding with our full suite of cloud DDoS and application protection services to safeguard thousands of applications and billions of digital transactions. Our OEM channel also produced some major wins and continues to play an important role in our growth strategy. During the first quarter, our partnership with Cisco and Check Point once again generated strong results, both growing more than 20% year-over-year. Together with Cisco, we won a million-dollar five-year cloud deal with a UK retailer. At the end of 2024, the retailer was the target of a series of cyber attacks that disrupted its primary data centers and operations. Following emergency onboarding onto our Cloud DDoS protection service, we successfully mitigated the attacks. With successful cross-selling, we expanded the deal to include our threat intelligence services, as well as our web application and API protection. So really a great platform save. In another partner win, we worked with Check Point to close the Cloud DDoS and application protection deal with a central bank in Latin America. Our win was based on our superior DDoS technology, strong SLAs, and solid relationships. Given our double digit growth over the past three quarters, strong demand for our security offerings, and market opportunities ahead, particularly in cloud security, we plan to increase investments in sales, marketing, and R&D. These efforts will focus on scaling our cloud security business, accelerating AI-driven innovation, and strengthening our presence in North America. This morning, we announced plans to accelerate our expansion in the US market, led by new leadership team with deep experience in driving ARR for SaaS companies. We are confident this team has the expertise to deliver meaningful results for our cloud business. In summary, in the first quarter of 2025, we demonstrated steady execution with progress across all financial parameters. In addition, we continue to scale our cloud security business, win marquee accounts, and drive cloud ARR, which is now at $80 million. Looking forward, we intend to accelerate our cloud ARR growth by securing new logos, collaborating with our OEM and channel partners, and driving AI innovation and automation. Additionally, by strengthening our presence in the US market, We believe we will be well positioned to gain additional market share and accelerate our overall growth and consequently our profitability. With that, I will turn the call over to Guy.