Radware(US:RDWR)2019-07-31 19:21Financial Data and Key Metrics Changes - Revenues for Q2 2019 were $60.5 million, up 6% year-over-year, while revenues for the first half of 2019 were $122 million, growing 9% over the first half of 2018 [8][12] - Gross margin for Q2 2019 grew to 83.2% from 82.4% in Q2 last year, benefiting from a higher proportion of subscription revenues [11] - Q2 net income was $8.9 million or $0.18 per share diluted, up from $5.0 million and $0.10 per share diluted in Q2 last year [13] Business Line Data and Key Metrics Changes - Revenues from the Americas represented 46% of total Q2 2019 revenues and increased 16% from Q2 2018 [8] - Revenues from EMEA decreased 15% from Q2 last year and represented 28% of total revenues [8] - Revenues from Asia-Pacific grew 17% from Q2 last year and represented 26% of the total [8] Market Data and Key Metrics Changes - For the last 12 months, Americas revenue increased 3%, EMEA revenues increased 19%, and Asia-Pacific revenues increased 10% [10] Company Strategy and Development Direction - The company is focused on expanding its subscription and cloud services, aiming for subscriptions to exceed 30% of total bookings by 2020 [19] - The company is enhancing its product offerings, including DDoS protection, web security, and encrypted traffic security, to provide integrated solutions for data center security [18][24] - The company is investing in broadening its competitive advantage, particularly in cloud and security capabilities [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year targets, citing robust business activity and strategic initiatives [18] - The company remains cautious about the European market, particularly in Germany and the U.K., despite some improvement in bookings [31] - Management highlighted the importance of partnerships, particularly with Cisco, in driving future growth [30][41] Other Important Information - The company ended the quarter with approximately $414 million in cash and financial investments, and spent $10 million on share repurchases [15] - Deferred revenue balance was approximately $172 million, up 12% from June 2018, with expectations to recognize approximately $105 million as revenue within the next 12 months [14] Q&A Session Summary Question: Revenue guidance for Q3 - The company expects revenues to be between $62 million and $64 million for Q3 [27] Question: Details on Cisco partnership - Cisco is enhancing the product portfolio from Radware, leading to increased activity and bookings, with expectations for continued growth [30][41] Question: EMEA bookings outlook - While bookings improved, management remains cautious about the overall outlook for Europe [31] Question: Metrics on traditional vs. security and SaaS business - The company sees strong growth in cloud and product subscriptions, aiming for subscriptions to be 30% of total bookings [33] Question: Enterprise business performance - The enterprise segment showed flat year-over-year growth, attributed to the transition to subscription models and regional weaknesses [35] Question: Third-party reseller arrangements - The company has over 100 traditional channel partners and is focusing on strategic partnerships with OEMs like Cisco and Checkpoint [37] Question: Deferred revenue trends - Management advised looking at the total deferred revenue balance and its recognition as revenue within the next 12 months [48] Question: Acquisition pipeline - The company is actively looking for acquisition opportunities but has no specific targets to announce at this time [50]