Radware Earnings Call: Record Results, Cloud-Fueled Momentum
Radware ((RDWR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Radware’s latest earnings call delivered an upbeat message, with management highlighting record revenue, earnings, and recurring metrics alongside accelerating cloud and subscription growth. While some regional softness, lower annual cash flow, and looming FX and expense headwinds tempered the enthusiasm, executives stressed that product innovation and a strong balance sheet are powering durable momentum.
Record Revenue and EPS Milestones
Radware reported Q4 revenue of $80.0 million, up 10% year over year, and full‑year 2025 revenue of $302 million, also up 10%. Non‑GAAP diluted EPS reached record levels at $0.32 for Q4, an increase of 19%, and $1.15 for the full year, up 32%, underscoring strong operating leverage.
Cloud ARR Growth and Momentum
Cloud annual recurring revenue climbed 23% year over year and 7% sequentially in Q4 to $95 million, putting Radware within striking distance of its near‑term $100 million goal. Total ARR reached $251 million and grew 11%, signaling that the company’s recurring cloud model is gaining scale and improving revenue visibility.
Subscription Revenue Acceleration
Subscription revenue growth sharply accelerated to 21% in 2025, compared with 12% in the prior year, driven by strong demand for product subscriptions. Management cited robust cycles for its DefensePro X platform and competitive displacements as key catalysts, indicating that customers are increasingly adopting Radware’s subscription offerings.
Strong Bookings and Expanding RPO
Remaining performance obligations hit a record $400 million, rising nearly $50 million and 13% year over year, reflecting strong bookings throughout the year. The expanding RPO base provides improved visibility into future revenue and gives Radware a solid runway as it enters 2026.
Profitability and EBITDA Improvement
Gross margin was a healthy 82.2% in Q4, supporting an expanded operating margin that improved by 240 basis points in the quarter and 330 basis points for the year. Adjusted EBITDA rose 25% in Q4 to $13.7 million and 37% for 2025 to $47.4 million, and excluding Hawks, adjusted EBITDA reached $58.8 million with a 19.5% margin.
Cash Strength and Capital Allocation
Radware ended the quarter with about $461 million in cash, cash equivalents, bank deposits, and marketable securities, giving it ample strategic flexibility. The company repurchased roughly $10.5 million of shares in Q4, signaling confidence in its valuation while preserving capacity for future investment and M&A.
Product and Technology Leadership
Management emphasized product innovation, including the launch of Radware API Security and the acquisition of Pynt Security to deliver full lifecycle API protection. The company also introduced an Agentic AI Protection Solution to address AI agent risks and expanded cloud mitigation capacity toward 30 Tb to counter rising attack volumes.
Regional Strength in EMEA and APAC Trends
EMEA stood out as a growth engine, with Q4 revenue up 38% year over year to $32 million and full‑year revenue up 18% to $111 million. APAC showed moderate full‑year growth of 5% to $66 million despite a slight Q4 decline, indicating mixed but overall positive momentum in that region.
Americas and APAC Q4 Weakness
The Americas region saw Q4 revenue decline 4% year over year to $32 million, even though bookings were robust, due to timing differences between bookings and revenue recognition. APAC also posted a 3% Q4 revenue decline to $16 million, revealing pockets of softness that somewhat offset strength elsewhere.
Full‑Year Cash Flow Pressure
Despite better quarterly performance, full‑year 2025 operating cash flow fell to $50.1 million from $71.6 million in 2024, a notable drop in annual cash generation. Q4 operating cash flow improved to $17.3 million from $12.7 million a year earlier, suggesting recent trends are moving in the right direction even as the annual comparison remains challenging.
Higher Near‑Term OpEx and FX Headwinds
Management cautioned that non‑GAAP operating expenses will rise near term as Radware invests more in innovation and go‑to‑market initiatives. Q1 2026 guidance also embeds an estimated $1.5 million headwind from a weaker U.S. dollar, which will weigh on profitability even as the company continues to grow revenue.
Reporting Changes and Hawks Business Impact
The company outlined reporting changes tied to its Hawks initiatives, with SkyHawk to be treated as a discontinued operation and excluded from non‑GAAP figures starting Q1 2026. EdgeHawk is expected to begin generating revenue in 2026, and management will stop providing an EBITDA breakdown as Hawks’ marginally negative EBITDA contribution adds some short‑term opacity to margin trends.
Forward‑Looking Guidance and Outlook
For Q1 2026, Radware guided to revenue of $78.0 million to $79.0 million and non‑GAAP diluted EPS of $0.28 to $0.29, with non‑GAAP operating expenses of $54.0 million to $55.0 million. Management expects the effective tax rate to remain around 15%, sees lower financial income in 2026, and forecasts RPO growth to track roughly in line with revenue as the company transitions its reporting framework.
Radware’s call painted a picture of a company balancing strong operational execution with manageable growing pains from investment and reporting changes. Record revenue, EPS, ARR, and RPO, coupled with a robust cash position and product leadership in API security and AI protection, suggest a constructive story, even as investors watch regional trends, cash flow, and new disclosure practices closely.
