Radware Reports Rocky Q2

Delayed orders from customers slam the switch vendor's Q2 results, but CEO Roy Zisapel says that things are now looking up

July 20, 2005

2 Min Read
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Application switching vendor Radware Ltd. (Nasdaq: RDWR) posted second-quarter revenues of $17.5 million, up 7 percent on the same period last year. But the company's shares fell $0.11 (0.65%) to $16.84, as its results were still shy of analysts' expectations (see Radware Reports Q2).

Radware reported a second-quarter profit of $1 million, or 5 cents a share, compared with year-ago earnings of $3 million, or 16 cents a share. Analysts were expecting the company to report revenues of $18.5 million and earnings of 7 cents a share.

Execs on a conference call this morning blamed the M&A market for some delayed orders, implying that companies weren't buying as briskly while in the process of digesting new acquisitions. Specifically cited were acquisitions by Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (Nasdaq: JNPR), and Citrix Systems Inc. (Nasdaq: CTXS) in the networking space (see Cisco Chomps FineGround, Juniper Takes Two: Peribit & Redline, and Citrix to Buy NetScaler for $300M).

Roy Zisapel, Radwares CEO, said that, despite a degree of initial confusion from end-users and channel partners, particularly during June, the situation is now calming down. “We now have a good estimate of when and where things should close,” he said. “We’re already seeing some good signs of improvement in the channel and end-users.”

Radware says it will increase its marketing investment by between $1 million and $1.5 million over the coming quarters, according to the CEO.Zisapel says Radware is planning a slew of product announcements during the second half of this year, including an Application Switch IV device, which will be targeted at large enterprises and carriers. It will also debut a new offering in the DefensePro family of security products.

Radware is also planning new application services to run on its SynApps architecture, according to Zisapel, and what he described as “a new Layer 4 to 7 solution.” Although he would not provide any specific details, Zisapel did confirm that two out of the four new products planned for later this year are currently in beta testing.

Also interesting is that Radware seemed open to the possibility of acquiring a company itself. In response to an analyst question about M&A, Zisapel said: “Generally we’re looking for companies in adjacent markets... with an enterprise customer base that we can leverage.”

— James Rogers, Site Editor, Next-Gen Data Center Forum

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