INVESTOR PRESENTATION

Transcription

1 INVESTOR PRESENTATION Jefferies Technology Conference May 2018

2 Safe Harbor 2 Safe Harbor Disclaimer This presentation may contain forward-looking information with respect to plans, projections, or future performance of Radware and its subsidiaries, the occurrence of which involves certain risks and uncertainties, including, but not limited to, general business conditions, changes in product demand, product development, profitability and other risks detailed in Radware's reports filed from time to time with the Securities and Exchange Commission, including Radware's annual report on Form 20-F. Radware disclaims any duty to update such forward looking statements.

3 Intro 3 Is a worldwide leader in APPLICATION SECURITY & DELIVERY Across Datacenter and Cloud

4 intro 4 Impact of digital transformation Cloud migration New delivery models require new capabilities Datacetner complexity Virtualization, private/hybrid cloud, multiple vendors Rapid changes require agility User experience focus expectations for flawless availability Anytime, Everywhere

5 Current state of cyber attacks 5 Current state of cyber attacks INTENSIFYING THREATS Attackers sophistication + Attack tools availability + platforms variety Increasing attack complexity and size SKILL SHORTAGE Scarce security expertise Need for automation and fully managed services WIDENING THREATS Attack motivation variety + Attacked industry diversity Increasing attack frequency and abundance

6 Current state of cyber attacks 6 Current state of cyber attacks INTENSIFYING THREATS 24% of organizations report being under cyber attacks daily or weekly Source: Radware ERT Report and Web Application Security Report SKILL SHORTAGE Only 33% of security officers feel confident they can mitigate application-layer DDoS attacks. 50% feel confident they can protect against networklayer DDoS attacks WIDENING THREATS 45% of organizations experienced a data breach over the past year

7 intro 7 Our Mission: Securing The Digital User Experience For every business model. Through continued innovation. With a comprehensive offering.

8 Intro 8 Solutions Architecture Wherever it is located On premise Private cloud From Physical Appliances on Perpetual License Hyper cloud Public cloud Hybrid To Physical or Virtual Appliances, on premise, cloud and Hybrid Will protect it

9 Intro 9 Comprehensive Secured Delivery Behavioral-based detection Using big data analytics and machine learning Advanced automation for attack life-cycle management and mitigation of unknown attacks Synchronized messaging to improve detection and mitigation response and accuracy. High performance Device mitigation capacity of up to 400Gbps; SSL throughput of up to 40G

10 Intro 10 Radware Solution Strategy Big Data Machine Learning RealTime Analytic Feed Management & Visibility Cloud Portal Vision Reporting Module Control Plane vdirect Orchestration DefenseFlow Automation Data Plane DefensePro Alteon 3.5Tbps DDoS/WAFaaS

11 Success factors 11 SUCCESS FACTORS What makes it work

12 Success factors 12 Supporting Assets Leading Technology Market RECOGNITION Strategic BUSINESS PARTNERS Industry leading TECHNOLOGY PARTNERS

13 Success factors Supporting Assets Over 12,500 Customers % 30-35% 8 Of Top 12 World s Stock Exchanges 11 Of Top 20 World s Banks 25-30% 10 Of Top 10 World Telecom Companies 3 Of Top 8 N. American Application Software Companies Carriers & Service Providers Banking, Finance & Government Other

14 Supporting Assets Global Presence 14 27% 46% 2017 Revenues 27% Americas EMEA APAC BALANCED Geographic Exposure OVER 3.5Tbps Of Global Mitigation Capacity ~1,000 Employees 35 Offices Success factors Radware Cloud Security PoP Regional Cloud Scrubbing Center

15 Strategy Our Business Strategy For Growth 15 ORGANIC GROWTH 4 Expand our business THROUGH ACQUISITIONS 2 Cloud & Security Aggressive Investment in Portfolio & Market Share 1 Data center ADC and AMS Solutions 3 Market Foot Print: OEM Partners Alliances Global SIs Cloud Providers

16 financials 16 FINANCIALS Updated for Q1 2018

17 Financials 17 SUMMARY Q Revenues of $54.5M up 11% Book to bill significantly larger than 1 Total Deferred Revenues of $148M up 15% Strong Cash Generation and Cash Position Cloud and Subscriptions a Material part of the Business Model

18 Financials 18 Back to Growth Post Business Model Transition Annual Revenues ($M) % 197-9% 211 8% Q1 17 Q1 18

19 Financials 19 Shift to Subscriptions (1) Recurring Revenues as % of Total 70% Business Mix Provides Us With Visibility & Confidence For Future Financial Performance 65% 60% 55% 50% 45% 42% 54% 56% >60% 40% 35% 30% Q1 18 Radware s Recurring Revenues include support, cloud services and product Subscription

20 Financials 20 Shift to Subscriptions (2) Total Deferred Revenues ($M) 60-65% of Total Deferred Revenues is scheduled to be recognized as revenues within 12 months Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17. Mar-17 Mar-18 Balance Sheet Uncollected billed amounts offset vs. Accounts Receivables (off balance sheet) Q2 17-Q1 18 Q2 18-Q1 19

21 Financials 21 Continuous Strong Cash Generation Operating Cash Flow in Last 12 Months of $37.3M Cash Balance ($M) Readiness to Put Cash Balance to Work and Expand our business THROUGH ACQUISITIONS

22 22 The Market Is Ready For A STRONG 2018 FY2018 ASSUMPTIONS for the Market G Revenues $211M 8-10% growth Non-GAAP Gross Margin 82.2% Stable Non-GAAP Operating Expenses $170M Modest increase: Headcount: flat FX: moderately negative impact Sales commissions: flat to low singledigit growth Non-GAAP Tax Rate 18% ~14% Non-GAAP EPS $0.17 Growth Total Deferred Revenue* $148M Higher growth than revenues *As defined by the Company

23 Financials Goals Revenues of > $270 Total Deferred Revenues CAGR Higher than revenue Subscriptions >30% of Bookings Revenues CAGR > 9% Gross margins > 83% Operating margins > 15% (from 2% in 17) Operating Cash Flow > $60M Well positioned for sustainable organic growth in Bookings Operational margins leverage Continued strong cash generation

24 Summary Why Radware 24 Fast growing, critical market Clear Vision and Strategy Leading attack mitigation technology, customers, partners Fast expanding subscription and cloud business Excellent visibility into 2018 and beyond Well positioned for continued long term growth

25 THANK YOU