Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions, including as a result of the state of war declared in Israel in October 2023 and instability in the Middle East, the war in Ukraine, tensions between China and Taiwan, financial and credit market fluctuations (including elevated interest rates), impacts from tariffs or other trade restrictions, inflation, and the potential for regional or global recessions; our dependence on independent distributors to sell our products; our ability to manage our anticipated growth effectively; our business may be affected by sanctions, export controls, and similar measures, targeting Russia and other countries and territories, as well as other responses to Russia’s military conflict in Ukraine, including indefinite suspension of operations in Russia and dealings with Russian entities by many multi-national businesses across a variety of industries; the ability of vendors to provide our hardware platforms and components for the manufacture of our products; our ability to attract, train, and retain highly qualified personnel; intense competition in the market for cybersecurity and application delivery solutions and in our industry in general, and changes in the competitive landscape; our ability to develop new solutions and enhance existing solutions; the impact to our reputation and business in the event of real or perceived shortcomings, defects, or vulnerabilities in our solutions, if our end-users experience security breaches, or if our information technology systems and data, or those of our service providers and other contractors, are compromised by cyber-attackers or other malicious actors or by a critical system failure; our use of AI technologies that present regulatory, litigation, and reputational risks; risks related to the fact that our products must interoperate with operating systems, software applications and hardware that are developed by others; outages, interruptions, or delays in hosting services; the risks associated with our global operations, such as difficulties and costs of staffing and managing foreign operations, compliance costs arising from host country laws or regulations, partial or total expropriation, export duties and quotas, local tax exposure, economic or political instability, including as a result of insurrection, war, natural disasters, and major environmental, climate, or public health concerns; our net losses in the past and the possibility that we may incur losses in the future; a slowdown in the growth of the cybersecurity and application delivery solutions market or in the development of the market for our cloud-based solutions; long sales cycles for our solutions; risks and uncertainties relating to acquisitions or other investments; risks associated with doing business in countries with a history of corruption or with foreign governments; changes in foreign currency exchange rates; risks associated with undetected defects or errors in our products; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; laws, regulations, and industry standards affecting our business; compliance with open source and third-party licenses; complications with the design or implementation of our new enterprise resource planning ("ERP”) system; our reliance on information technology systems; our ESG disclosures and initiatives; and other factors and risks over which we may have little or no control.
S Dollars in thousands, except share and per share data) For the three months ended March 31, 2025 2024 (Unaudited) (Unaudited)GAAP gross profit58,089 52,273Share-based compensation120 79Amortization of intangible assets992 992Non-GAAP gross profit59,201 53,344 GAAP research and development, net18,776 18,896Share-based compensation1,223 1,722Non-GAAP Research and development, net17,553 17,174 GAAP selling and marketing31,281 29,701Share-based compensation3,076 2,551Non-GAAP selling and marketing28,205 27,150 GAAP general and administrative6,463 7,339Share-based compensation1,479 2,395Acquisition costs153 220Non-GAAP general and administrative4,831 4,724 GAAP total operating expenses, net56,520 55,936Share-based compensation5,778 6,668Acquisition costs153 220Non-GAAP total operating expenses, net50,589 49,048 GAAP operating income (loss)1,569 (3,663)Share-based compensation5,898 6,747Amortization of intangible assets992 992Acquisition costs153 220Non-GAAP operating income8,612 4,296 GAAP financial income, net4,875 3,608Exchange rate differences, net on balance sheet items included in financial income, net492 153Non-GAAP financial income, net5,367 3,761 GAAP income (loss) before taxes on income6,444 (55)Share-based compensation5,898 6,747Amortization of intangible assets992 992Acquisition costs153 220Exchange rate differences, net on balance sheet items included in financial income, net492 153Non-GAAP income before taxes on income13,979 8,057 GAAP taxes on income2,100 1,167Tax related adjustments62 62Non-GAAP taxes on income2,162 1,229 GAAP net income (loss)4,344 (1,222)Share-based compensation5,898 6,747Amortization of intangible assets992 992Acquisition costs153 220Exchange rate differences, net on balance sheet items included in financial income, net492 153Tax related adjustments(62) (62)Non-GAAP net income11,817 6,828 GAAP diluted net income (loss) per share0.10 (0.03)Share-based compensation0.14 0.16Amortization of intangible assets0.02 0.02Acquisition costs0.00 0.01Exchange rate differences, net on balance sheet items included in financial income, net0.01 0.00Tax related adjustments(0.00) (0.00)Non-GAAP diluted net earnings per share0.27 0.16 Weighted average number of shares used to compute non-GAAP diluted net earnings per share44,192,474 42,875,058 Radware Ltd.
Use of Non-GAAP Financial Information and Key Performance IndicatorsIn addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of gross profit, research and development expense, selling and marketing expense, general and administrative expense, total operating expenses, operating income, financial income, net, income before taxes on income, taxes on income, net income and diluted earnings per share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax-related adjustments.
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