Inve US ▾
RDRDWR

Radware (RDWR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Jul 29, 2026

Source: earnings call transcript

Executive summary

Radware Q2 FY26 — Record Revenue Driven by Cloud Security and AI-Driven Threat Protection

Radware delivered a strong quarter with record revenue, driven by robust cloud security demand and strategic investments in AI-powered threat protection. The company is capitalizing on the evolving cybersecurity landscape, particularly the urgency created by AI-driven vulnerability exploitation, while expanding its platform and strengthening its go-to-market execution in key regions.

Highlights

4

  • Achieved record revenue of $82.3 million, an 11% increase year-over-year.

  • Cloud ARR exceeded $100 million, growing 22% year-over-year and representing 40% of total ARR.

  • Americas revenue grew 24% year-over-year to $37.2 million, contributing 45% of total revenue.

  • Non-GAAP diluted EPS would have been $0.40, up 25% year-over-year, excluding the unfavorable impact of Israeli shekel appreciation.

Concerns

4

  • Gross margin slightly decreased to 81.8% from 82.4% year-over-year, impacted by foreign exchange headwinds and supply chain costs.

  • Operating income declined to $10.9 million from $11.4 million year-over-year, primarily due to the strengthening Israeli shekel.

  • Diluted earnings per share from continued operations decreased to $0.30 from $0.32 in Q2 2025.

  • Financial income decreased to $4.4 million from $5.2 million year-over-year due to lower market interest rates and reduced cash balances.

Guidance & targets

CategoryTargetConfidence
Total Revenue
$82.5 million to $83.5 million
high materiality
High
Non-GAAP Operating Expenses
$57 million to $58 million
medium materiality
High
Non-GAAP Diluted Earnings Per Share
$0.28 and $0.29
high materiality
High
Effective Tax Rate
14% to 15%
medium materiality
High
Cloud ARR Growth
25%
high materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Americas
Remains the largest region and an important contributor to overall growth profile.
% of total revenue: 45%Trailing 12-month revenue growth: 21% YoY
$37.2M24%——
EMEA
% of total revenue: 33%Trailing 12-month revenue growth: 3% YoY
$27.3M-2%——
APAC
Beginning to see positive returns from go-to-market investments.
% of total revenue: 22%Trailing 12-month revenue growth: 2% YoY
$17.8M9%——

Product announcements

ProductTypeDetails
Xploit Shieldlaunch
Cloud-augmented protection capabilities for DefensePro Xupdate

Deals & partnerships

Two leading financial service providers API security solution deployment

Selected Radware's API security solution in Asia Pacific due to strength of API discovery, runtime protection, and bot management capabilities. Existing customers expanding business by adding API security.

Global leader in business and financial information DefensePro X deployment and subscriptions 7-digit deal multiyear

Selected DefensePro X for a worldwide refresh of its DDoS protection infrastructure across the U.S., U.K., and Japan, along with multiyear application and network protection subscriptions.

Risks & headwinds

Foreign exchange headwind Q2 FY26, expected to modestly impact H2 FY26

Approximately $4.5 million unfavorable impact on non-GAAP net income and diluted EPS

Supply chain cost pressure Q2 FY26

Impacted gross margin (down to 81.8% from 82.4%)

Lower market interest rates and reduced cash balances Q2 FY26, expected to modestly impact H2 FY26

Financial income decreased to $4.4 million from $5.2 million

Acceleration of AI-driven vulnerability discovery and exploitation Ongoing

Shrinking window between vulnerability disclosure and widespread exploitation

Mitigation:Launch of Xploit Shield to provide tailored protection and critical time for remediation.

What to watch in Q3 FY26

Cloud ARR growth rate

next quarter
Current 22%
Target 25%

Why it matters

Cloud ARR is a key indicator of the company's strategic shift and future growth potential.

Our target is to get it to 25% as a first step and then beyond, the opportunity is there. It's up for us to execute.

Find out whether RDWR delivers this. Inve re-checks your case every morning.

Q&A highlights

Are customers changing buying behaviors for on-premise solutions due to supply chain issues, leading to pull-forwards or push-outs?

Some delays are observed for new data center deployments due to global supply chain issues (servers, switches), but it's not critical. On-prem DDoS mitigation sales are less impacted as they can be added to existing infrastructure or for upgrades, not necessarily new data centers.

“We do see some delays not because of our supply chain, but because of global supply chain issues in moving to, I would say, new data centers, et cetera, because -- servers delays, switches delays, et cetera. But I wouldn't say it's of any critical nature.”

asked by Joseph Gallo · answered by Roy Zisapel

2 min read 5 chapters

Detailed narrative

Cloud Security Platform Momentum

Radware's cloud security business demonstrated strong performance, with Cloud ARR surpassing $100 million, marking a 22% year-over-year increase. This growth was fueled by continued demand for cloud security services, effective execution within the MSSP channel, and increasing adoption of new API security solutions. The company highlighted customer wins, POCs, and pipeline opportunities for API security, including two leading financial service providers in Asia Pacific.

On-Premise Security Strength and Enhancements

The on-premise security solution, DefensePro X, delivered another strong quarter, benefiting from ongoing refresh cycles as customers upgrade infrastructure against sophisticated DDoS attacks. Radware enhanced its on-prem platform with cloud-augmented protection capabilities, combining AI-powered cloud intelligence with on-prem enforcement, differentiating its offering for hybrid environments. A 7-digit deal with a global financial information leader for a worldwide DDoS protection refresh was cited as an example.

AI-Driven Threat Landscape and Xploit Shield Launch

The cybersecurity market is rapidly evolving due to AI-driven attack tools, accelerating vulnerability discovery and exploitation. Radware noted the shrinking window between vulnerability disclosure and exploitation, citing examples like Anthropic Mythos. To address this, the company launched Xploit Shield, a first-to-market solution that automatically creates tailored protection shields for applications, allowing organizations critical time to remediate vulnerabilities while maintaining business continuity.

Go-to-Market Execution and Regional Growth

North America remains a strategic focus, with revenue in the Americas growing 24% year-over-year to $37.2 million, representing 45% of total revenue. This growth reflects successful investments in the region's go-to-market strategy, including a hunter-farmer sales model. Encouraging results were also observed in Asia Pacific, with revenue up 9% year-over-year, indicating positive returns from regional investments.

Financial Performance and Currency Impact

While achieving record revenue, profitability was impacted by external factors. Gross margin saw a slight decline to 81.8% due to foreign exchange headwinds and supply chain costs. Operating income and diluted EPS were also negatively affected by the appreciation of the Israeli shekel against the U.S. dollar. Excluding this FX impact, non-GAAP operating income would have increased 41% and non-GAAP diluted EPS 25% year-over-year.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.