RADCOM Delivers Strong Fourth Quarter and Record Full Year 2023 Results with Revenue Growth and Accelerated Profitability
- Record fourth quarter revenue of $14.0 million, 14% year-over-year growth
- Full-year revenue of $51.6 million, 12% year-over-year growth
- Non-GAAP net income of $3.8 million for the fourth quarter and $10.2 million for the full year
- Cash and cash equivalents, short-term bank deposits of $82.2 million, and no debt as of December 31, 2023
- Confident in delivering a fifth consecutive year of revenue growth and increasing profitability in 2024
- None.
Insights
Examining the financial highlights from RADCOM's recent report, a few key metrics stand out. The year-over-year revenue growth of 14% in Q4 and 12% for the full year suggests a solid trajectory in sales performance. More importantly, the swing from a GAAP net loss in 2022 to a GAAP net income in 2023 indicates a significant improvement in profitability. The non-GAAP net income figures, which exclude certain one-time and non-cash expenses, provide an even more robust picture of financial health with a substantial increase from the previous year.
The absence of debt and a strong cash position of $82.2 million are indicative of a sound financial strategy and provide the company with operational flexibility. Investors should note that these factors can serve as a buffer against market volatility and enable the company to invest in growth opportunities or weather economic downturns without the immediate need for external financing.
From a market perspective, RADCOM's announcement of being one of the first assurance vendors to harness GenAI for 5G networks is significant. The 5G technology space is rapidly expanding and RADCOM's positioning in this market could be a key driver of sustained growth. The ability to provide solutions for real-time and efficient management of 5G networks aligns with the increasing demand for advanced network technologies as the world becomes more connected.
Furthermore, the company's confident revenue guidance for 2024 suggests that their market strategy and product offerings are well-received. Investors should consider the potential of RADCOM's technology in the broader context of the telecommunications industry's evolution towards 5G and beyond.
Looking at RADCOM's financial results through an economic lens, the company's performance may be reflective of broader economic trends. The technology sector has been experiencing growth and RADCOM's successful financial year aligns with this pattern. The company's ability to increase profitability while scaling up operations is a positive sign of efficient management and operational leverage.
However, it's important to consider macroeconomic factors such as interest rate changes, inflation and economic cycles that could impact the company's future performance. The strong cash reserves and lack of debt provide a cushion, but external economic pressures can still affect demand for RADCOM's products and services.
Fourth quarter revenue of
Record fourth quarter of
non-GAAP full year net income
Fourth Quarter 2023 Financial Highlights:
- Total revenues for the fourth quarter were
$14.0 million $12.3 million 14% year-over-year growth. - GAAP net income for the fourth quarter was
$2.6 million $0.17 $0.03 million $0.00 - Non-GAAP net income for the period was
$3.8 million $0.25 $1.3 million $0.09 - As of December 31, 2023, the Company had cash and cash equivalents, short-term bank deposits of
$82.2 million
Full Year 2023 Financial Highlights:
- Total revenues for the full year were
$51.6 million $46.1 million - GAAP net income for the full year was
$3.7 million $0.24 $2.3 million $0.16 - Non-GAAP net income for the full year amounted to
$10.2 million $0.67 $2.9 million $0.19
Management Comments:
Eyal Harari, RADCOM's Chief Executive Officer, commented on the results: "2023 was an exceptional, record year for RADCOM, continuing the last four years of growth momentum. We achieved a fourth consecutive year of growth with record revenue of
"We crossed the
"Recently, we proudly announced our position as one of the first assurance vendors to harness the power of GenAI for real-time and efficient management of 5G networks. Our market-leading solutions thoughtfully align with operators' needs, providing a unique technology to address critical network challenges. This underscores the significance of our industry-leading solutions in the rapidly expanding 5G market. We are confident that our offerings will drive sustained growth.
Mr. Harari concluded, "Our record results and positive momentum demonstrate the value of our advanced technology and the strength of our business model. Looking at 2024, thanks to our strong execution and current visibility, we are confident in delivering a fifth consecutive year of revenue growth and increasing our profitability. Our full-year 2024 revenue guidance is
Earnings Conference Call
RADCOM's management will hold an interactive conference call today at 8:00 am Eastern Time (3:00 pm Israel Standard Time) to discuss the results and answer participants' questions. To join the call, please call one of the following numbers approximately five minutes before the call is scheduled to begin:
From the US (toll-free): +1-866-652-8972 or +1-888-281-1167
From other locations: +972-3-918-0644
For those unable to listen, a conference call replay will be available a few hours later in the investor relations section on the Company's website at https://radcom.com/investor-relations/.
For all investor inquiries, please contact:
Investor Relations:
Miri Segal
MS-IR LLC
917-607-8654
msegal@ms-ir.com
Company Contact:
Hadar Rahav
CFO
+972-77-7745062
hadar.rahav@radcom.com
RADCOM (NASDAQ: RDCM) is the leading expert in 5G ready cloud-native, network intelligence solutions for telecom operators transitioning to 5G. RADCOM Network Intelligence consists of RADCOM Network Visibility, RADCOM Service Assurance, and RADCOM Network Insights. The RADCOM Network Intelligence suite offers intelligent, container-based, on-demand solutions to deliver network analysis from the RAN to the core for 5G assurance. Utilizing automated and dynamic solutions with smart minimal data collection and on-demand troubleshooting, and cutting-edge techniques based on machine learning, these solutions work in harmony to provide operators with an understanding of the entire customer experience and allow them to troubleshoot network performance from a high to granular level while reducing storage costs and cloud resource utilization. For more information on how to RADCOMize your network today, please visit www.radcom.com, the content of which does not form a part of this press release.
Non-GAAP Information
Certain non-GAAP financial measures are included in this press release. These non-GAAP financial measures are provided to enhance the reader's overall understanding of the Company's financial performance. By excluding non-cash stock-based compensation that has been expensed in accordance with ASC Topic 718, financial income (expenses), acquisition-related expenses, and amortization of intangible assets related to acquisitions, the Company's non-GAAP results provide information to both management and investors that is useful in assessing the Company's core operating performance and in evaluating and comparing the Company's results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results and to plan and forecast future periods. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with GAAP.
Risks Regarding Forward-Looking Statements
Certain statements made herein that use words such as "estimate," "project," "intend," "expect," "'believe," "may," "might," " potential," "anticipate," "plan" or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. For example, when the Company discusses its full-year 2024 revenue guidance and expectations regarding its growth, including sustainable, profitable growth, momentum, and the potential of GenAI, it uses forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that could cause the actual results, performance, or achievements of the Company to be materially different from those that may be expressed or implied by such statements, including, among others, changes in general economic and business conditions and specifically, decline in demand for the Company's products, inability to timely develop and introduce new technologies, products, and applications, loss of market share and pressure on prices resulting from competition and the effects of the war in
RADCOM Ltd. | ||||||||
Consolidated Statements of Operations | ||||||||
(thousands of | ||||||||
Three months ended | Twelve months ended | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues | $ 14,010 | $ 12,289 | $ 51,600 | $ 46,051 | ||||
Cost of revenues | 3,435 | 3,391 | 13,773 | 12,714 | ||||
Gross profit | 10,575 | 8,898 | 37,827 | 33,337 | ||||
Research and development, gross | 4,327 | 5,290 | 19,575 | 21,483 | ||||
Less - royalty-bearing participation | 190 | 160 | 736 | 762 | ||||
Research and development, net | 4,137 | 5,130 | 18,839 | 20,721 | ||||
Sales and marketing | 3,720 | 3,281 | 14,592 | 12,270 | ||||
General and administrative | 1,297 | 1,225 | 5,058 | 4,460 | ||||
Total operating expenses | 9,154 | 9,636 | 38,489 | 37,451 | ||||
Operating income (loss) | 1,421 | (738) | (662) | (4,114) | ||||
Financial income, net | 1,248 | 751 | 4,557 | 2,016 | ||||
Income (loss) before taxes on income | 2,669 | 13 | 3,895 | (2,098) | ||||
Taxes on income | (77) | (39) | (182) | (159) | ||||
Net income (loss) | $ 2,592 | $ (26) | $ 3,713 | $ (2,257) | ||||
Basic net income (loss) per ordinary share | $ 0.17 | $ (0.00) | $ 0.25 | $ (0.16) | ||||
Diluted net income (loss) per ordinary share | $ 0.17 | $ (0.00) | $ 0.24 | $ (0.16) | ||||
Weighted average number of ordinary shares used in | 15,291,917 | 14,717,096 | 15,098,642 | 14,525,449 | ||||
Weighted average number of ordinary shares used in | 15,446,177 | 14,717,096 | 15,297,947 | 14,525,449 | ||||
RADCOM LTD. | |||||||
Reconciliation of GAAP to Non-GAAP Financial Information | |||||||
(thousands of | |||||||
Three months ended December 31, | Twelve months ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
GAAP gross profit | $ 10,575 | $ 8,898 | $ 37,827 | $ 33,337 | |||
Stock-based compensation | 71 | 100 | 441 | 392 | |||
Amortization of intangible assets | 57 | - | 151 | - | |||
Non-GAAP gross profit | $ 10,703 | $ 8,998 | $ 38,419 | $ 33,729 | |||
GAAP research and development, net | $ 4,137 | $ 5,130 | $ 18,839 | $ 20,721 | |||
Stock-based compensation | 424 | 602 | 2,690 | 2,497 | |||
Non-GAAP research and development, net | $ 3,713 | $ 4,528 | $ 16,149 | $ 18,224 | |||
GAAP sales and marketing | $ 3,720 | $ 3,281 | $ 14,592 | $ 12,270 | |||
Stock-based compensation | 370 | 361 | 1,820 | 1,387 | |||
Amortization of intangible assets | 29 | - | 77 | - | |||
Non-GAAP sales and marketing | $ 3,321 | $ 2,920 | $ 12,695 | $ 10,883 | |||
GAAP general and administrative | $ 1,297 | $ 1,225 | $ 5,058 | $ 4,460 | |||
Stock-based compensation | 319 | 283 | 1,169 | 895 | |||
Acquisition related expenses | - | - | 56 | - | |||
Non-GAAP general and administrative | $ 978 | $ 942 | $ 3,833 | $ 3,565 | |||
GAAP total operating expenses | $ 9,154 | $ 9,636 | $ 38,489 | $ 37,451 | |||
Stock-based compensation | 1,113 | 1,246 | 5,678 | 4,779 | |||
Amortization of intangible assets | 29 | - | 77 | - | |||
Acquisition related expenses | - | - | 56 | - | |||
Non-GAAP total operating expenses | $ 8,012 | $ 8,390 | $ 32,678 | $ 32,672 | |||
GAAP operating income (loss) | $ 1,421 | $ (738) | $ (662) | $ (4,114) | |||
Stock-based compensation | 1,184 | 1,346 | 6,119 | 5,171 | |||
Amortization of intangible assets | 86 | - | 228 | - | |||
Acquisition related expenses | - | - | 56 | - | |||
Non-GAAP operating income | $ 2,691 | $ 608 | $ 5,741 | $ 1,057 | |||
Three months ended December 31, | Twelve months ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
GAAP income (loss) before taxes on income | $ 2,669 | $ 13 | $ 3,895 | $ (2,098) | |||
Stock-based compensation | 1,184 | 1,346 | 6,119 | 5,171 | |||
Amortization of intangible assets | 86 | - | 228 | - | |||
Acquisition related expenses | - | - | 56 | - | |||
Financial (income) expenses | (15) | - | 60 | - | |||
Non-GAAP income before taxes on income | $ 3,924 | $ 1,359 | $ 10,358 | $ 3,073 | |||
GAAP net income (loss) | $ 2,592 | $ (26) | $ 3,713 | $ (2,257) | |||
Stock-based compensation | 1,184 | 1,346 | 6,119 | 5,171 | |||
Amortization of intangible assets | 86 | - | 228 | - | |||
Acquisition related expenses | - | - | 56 | - | |||
Financial (income) expenses | (15) | - | 60 | - | |||
Non-GAAP net income | $ 3,847 | $ 1,320 | $ 10,176 | $ 2,914 | |||
GAAP net income (loss) per diluted share | $ 0.17 | $ (0.00) | $ 0.24 | $ (0.16) | |||
Stock-based compensation | 0.08 | 0.09 | 0.43 | 0.35 | |||
Amortization of intangible assets | (*) | - | (*) | - | |||
Acquisition related expenses | (*) | - | (*) | - | |||
Non-GAAP net income per diluted share | $ 0.25 | $ 0.09 | $ 0.67 | $ 0.19 | |||
Weighted average number of shares used to compute diluted net income (loss) per share | 15,446,177 | 15,329,035 | 15,297,947 | 14,997,667 | |||
(*) Less than | |||||||
RADCOM Ltd. Consolidated Balance Sheets (thousands of | |||
As of | As of | ||
December 31, 2023 | December 31, 2022 | ||
Current Assets | |||
Cash and cash equivalents | $ 10,892 | $ 9,527 | |
Short-term bank deposits | 71,273 | 64,130 | |
Trade receivables, net | 13,412 | 11,074 | |
Inventories | 246 | 795 | |
Other accounts receivable and prepaid expenses | 1,592 | 1,928 | |
Total Current Assets | 97,415 | 87,454 | |
Non-Current Assets | |||
Long-term bank deposits | - | 4,002 | |
Severance pay fund | 3,142 | 3,524 | |
Other long-term receivables | 1,573 | 2,557 | |
Property and equipment, net | 798 | 1,010 | |
Operating lease right-of-use assets | 1,651 | 2,457 | |
Goodwill and intangible assets, net | 2,950 | - | |
Total Non-Current Assets | 10,114 | 13,550 | |
Total Assets | $ 107,529 | $ 101,004 | |
Liabilities and Shareholders' Equity | |||
Current Liabilities | |||
Trade payables | $ 2,640 | $ 2,708 | |
Deferred revenues and advances from customers | 1,469 | 7,037 | |
Employee and payroll accruals | 5,400 | 5,198 | |
Operating lease liabilities | 1,062 | 1,024 | |
Other liabilities and accrued expenses | 9,540 | 6,829 | |
Total Current Liabilities | 20,111 | 22,796 | |
Non-Current Liabilities | |||
Accrued severance pay | 3,728 | 3,973 | |
Operating lease liabilities | 561 | 1,452 | |
Other liabilities and accrued expenses | 638 | - | |
Total Non-Current Liabilities | 4,927 | 5,425 | |
Total Liabilities | $ 25,038 | $ 28,221 | |
Shareholders' Equity | |||
Share capital | $ 736 | $ 706 | |
Additional paid-in capital | 154,697 | 148,610 | |
Accumulated other comprehensive loss | (3,030) | (2,908) | |
Accumulated deficit | (69,912) | (73,625) | |
Total Shareholders' Equity | 82,491 | 72,783 | |
Total Liabilities and Shareholders' Equity | $ 107,529 | $ 101,004 | |
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SOURCE RADCOM Ltd.
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