RADCOM Reports Third Quarter 2023 Results
- Record quarterly revenue of $13.2 million, up 10% year-over-year
- Seventeenth consecutive quarter of year-over-year revenue growth
- Company on track to exceed $50 million annual revenue
- Non-GAAP net income for the third quarter was $2.4 million, or $0.15 per diluted share, compared to a non-GAAP net income of $1.0 million or $0.06 per diluted share for the third quarter of 2022
- As of September 30, 2023, the Company had cash, cash equivalents, and short-term bank deposits of $78.6 million and no debt
- None.
- Record quarterly revenue of
$13.2 million - Significantly improved profitability
- 17th consecutive quarter of year-over-year revenue growth
- On track to exceed
$50 million
Management comments:
Eyal Harari, RADCOM's Chief Executive Officer, commented, "We achieved record quarterly revenues of
"We believe fourth quarter 2023 revenue growth and profitability improvements will continue and extend into 2024, as we provide operators with AI-powered analytics to ensure excellent customer experiences. This reinforces our guidance estimate that we will deliver a fourth consecutive year of growth in 2023 and scale up to a mid-size software company for the first time in the Company's history.
"Operators continue to roll out 5G and invest in their networks. The market direction is clear, while the pace may vary. We are engaged in multiple opportunities at different stages of maturity. These engagements include a mix of new and current customers as operators continue their 5G transformation. Therefore, we increase our investment in sales and marketing to meet the expected demand for our carrier-grade solutions.
Mr. Harari concluded, "The progress we have made in our overall business strategy and sales engagements demonstrates the value of our advanced technology and the strength of our business. Therefore, we are reiterating our 2023 guidance, expecting revenue to be in the range of
Financial highlights:
- Total revenue for the third quarter was
$13.2 million $12.0 million - GAAP net loss for the third quarter was
$0.3 million $1.3 million - GAAP net loss for the third quarter was
$0.3 million $0.02 $0.4 million $0.03 - Non-GAAP net income for the third quarter was
$2.4 million $0.15 $1.0 million $0.06 - GAAP net income for the first nine months was
$1.1 million $0.07 $2.2 million $0.15 - Non-GAAP net income for the first nine months was
$6.3 million $0.40 $1.6 million $0.11 - As of September 30, 2023, the Company had cash, cash equivalents, and short-term bank deposits of
$78.6 million
Earnings Conference Call
RADCOM's management will hold an interactive conference call today at 8:00 am Eastern Time (3:00 pm Israel 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
From other locations: +972-3-918-0644
For those unable to listen to the call, a replay of the conference call 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
About RADCOM
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, acquisition-related expenses, and amortization of intangible acquisitions assets, 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 2023 revenue guidance, further increase to revenues and profitability in 2024, the potential to scale up to a mid-size software company, its ability to extend RADCOM's market availability to further potential customers, market trends in the adoption of 5G networks, its momentum, opportunities, expected demand, and potential growth as well as its expectation to increase in expenses on sales and marketing, it is using 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 | ||||
Unaudited | ||||
(thousands of | ||||
Three months ended | Nine months ended | |||
2023 | 2022 | 2023 | 2022 | |
Revenues | $ 13,195 | $ 12,011 | $ 37,590 | $ 33,762 |
Cost of revenues | 3,510 | 3,308 | 10,338 | 9,323 |
Gross profit | 9,685 | 8,703 | 27,252 | 24,439 |
Research and development, gross | 5,527 | 5,285 | 15,248 | 16,193 |
Less - royalty-bearing participation | 104 | 187 | 546 | 602 |
Research and development, net | 5,423 | 5,098 | 14,702 | 15,591 |
Sales and marketing | 4,208 | 3,205 | 10,872 | 8,989 |
General and administrative | 1,317 | 1,207 | 3,761 | 3,235 |
Total operating expenses | 10,948 | 9,510 | 29,335 | 27,815 |
Operating loss | (1,263) | (807) | (2,083) | (3,376) |
Financial income, net | 1,023 | 448 | 3,309 | 1,265 |
(Loss) income before taxes on income | (240) | (359) | 1,226 | (2,111) |
Taxes on income | (41) | (30) | (105) | (120) |
Net (loss) income | $ (281) | $ (389) | $ 1,121 | (2,231) |
Basic and diluted net income (loss) per ordinary share | $ (0.02) | $ (0.03) | $ 0.07 | $ (0.15) |
Weighted average number of ordinary shares used in computing basic net income (loss) per ordinary share | 15,143,221 | 14,563,841 | 15,033,508 | 14,460,865 |
Weighted average number of ordinary shares used in computing diluted net income (loss) per ordinary share | 15,143,221 | 14,563,841 | 15,691,545 | 14,460,865 |
RADCOM LTD. | ||||||||
Reconciliation of GAAP to Non-GAAP Financial Information | ||||||||
Unaudited | ||||||||
(thousands of | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
GAAP gross profit | $ | 9,685 | $ | 8,703 | $ | 27,252 | $ | 24,439 |
Stock-based compensation | 207 | 101 | 370 | 292 | ||||
Amortization of intangible assets | 51 | - | 94 | - | ||||
Non-GAAP gross profit | $ | 9,943 | $ | 8,804 | $ | 27,716 | $ | 24,731 |
GAAP research and development, net | $ | 5,423 | $ | 5,098 | $ | 14,702 | $ | 15,591 |
Stock-based compensation | 1,185 | 641 | 2,266 | 1,895 | ||||
Non-GAAP research and development, net | $ | 4,238 | $ | 4,457 | $ | 12,436 | $ | 13,696 |
GAAP sales and marketing | $ | 4,208 | $ | 3,205 | $ | 10,872 | $ | 8,989 |
Stock-based compensation | 813 | 361 | 1,449 | 1,026 | ||||
Amortization of intangible assets | 27 | - | 48 | - | ||||
Non-GAAP sales and marketing | $ | 3,368 | $ | 2,844 | $ | 9,375 | $ | 7,963 |
GAAP general and administrative | $ | 1,317 | $ | 1,207 | $ | 3,761 | $ | 3,235 |
Stock-based compensation | 335 | 249 | 849 | 612 | ||||
Acquisition related expenses | 20 | - | 57 | - | ||||
Non-GAAP general and administrative | $ | 962 | $ | 958 | $ | 2,855 | $ | 2,623 |
GAAP total operating expenses | $ | 10,948 | $ | 9,510 | $ | 29,335 | $ | 27,815 |
Stock-based compensation | 2,333 | 1,251 | 4,564 | 3,533 | ||||
Amortization of intangible assets | 27 | - | 48 | - | ||||
Acquisition related expenses | 20 | - | 57 | - | ||||
Non-GAAP total operating expenses | $ | 8,568 | $ | 8,259 | $ | 24,666 | $ | 24,282 |
GAAP operating loss | $ | (1,263) | $ | (807) | $ | (2,083) | $ | (3,376) |
Stock-based compensation | 2,540 | 1,352 | 4,934 | 3,825 | ||||
Amortization of intangible assets | 78 | - | 142 | - | ||||
Acquisition related expenses | 20 | - | 57 | - | ||||
Non-GAAP operating income | $ | 1,375 | $ | 545 | $ | 3,050 | $ | 449 |
RADCOM LTD. | |||||||
Reconciliation of GAAP to Non-GAAP Financial Information | |||||||
Three months ended September 30, | Nine months ended September 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
GAAP income (loss) before taxes on income | $ (240) | $ (359) | $ 1,226 | $ (2,111) | |||
Stock-based compensation | 2,540 | 1,352 | 4,934 | 3,825 | |||
Amortization of intangible assets | 78 | - | 142 | - | |||
Acquisition related expenses | 66 | - | 132 | - | |||
Non-GAAP income before taxes on income | $ 2,444 | $ 993 | $ 6,434 | $ 1,714 | |||
GAAP net income (loss) | $ (281) | $ (389) | $ 1,121 | $ (2,231) | |||
Stock-based compensation | 2,540 | 1,352 | 4,934 | 3,825 | |||
Amortization of intangible assets | 78 | - | 142 | - | |||
Acquisition related expenses | 66 | - | 132 | - | |||
Non-GAAP net income | $ 2,403 | $ 963 | $ 6,329 | $ 1,594 | |||
GAAP net income (loss) per diluted share | $ (0.02) | $ (0.03) | $ 0.07 | $ (0.15) | |||
Stock-based compensation | 0.17 | 0.09 | 0.31 | 0.26 | |||
Amortization of intangible assets | (*) | - | 0.01 | - | |||
Acquisition related expenses | (*) | - | 0.01 | - | |||
Non-GAAP net income per diluted share | $ 0.15 | $ 0.06 | $ 0.40 | $ 0.11 | |||
Weighted average number of shares used to compute diluted net income per share | 15,843,711 | 14,971,391 | 15,691,545 | 14,886,509 | |||
(*) Less than | |||||||
RADCOM Ltd. Consolidated Balance Sheets Unaudited (thousands of | |||
As of | As of | ||
September 30, 2023 | December 31, 2022 | ||
Current Assets | |||
Cash and cash equivalents | $ 8,458 | $ 9,527 | |
Short-term bank deposits | 70,106 | 64,130 | |
Trade receivables, net | 13,677 | 11,074 | |
Inventories | 390 | 795 | |
Other accounts receivable and prepaid expenses | 1,245 | 1,928 | |
Total Current Assets | 93,876 | 87,454 | |
Non-Current Assets | |||
Long-term bank deposits | - | 4,002 | |
Severance pay fund | 3,006 | 3,524 | |
Other long-term receivables | 1,711 | 2,557 | |
Property and equipment, net | 817 | 1,010 | |
Operating lease right-of-use assets | 1,680 | 2,457 | |
Goodwill and intangible assets, net | 3,036 | - | |
Total Non-Current Assets | 10,250 | 13,550 | |
Total Assets | $ 104,126 | $ 101,004 | |
Liabilities and Shareholders' Equity | |||
Current Liabilities | |||
Trade payables | $ 2,360 | $ 2,708 | |
Deferred revenues and advances from customers | 2,620 | 7,037 | |
Employee and payroll accruals | 4,910 | 5,198 | |
Operating lease liabilities | 907 | 1,024 | |
Other liabilities and accrued expenses | 9,604 | 6,829 | |
Total Current Liabilities | 20,401 | 22,796 | |
Non-Current Liabilities | |||
Accrued severance pay | 3,806 | 3,973 | |
Operating lease liabilities | 681 | 1,452 | |
Other liabilities | 655 | - | |
Total Non-Current Liabilities | 5,142 | 5,425 | |
Total Liabilities | $ 25,543 | $ 28,221 | |
Shareholders' Equity | |||
Share capital | $ 728 | $ 706 | |
Additional paid-in capital | 153,521 | 148,610 | |
Accumulated other comprehensive loss | (3,162) | (2,908) | |
Accumulated deficit | (72,504) | (73,625) | |
Total Shareholders' Equity | 78,583 | 72,783 | |
Total Liabilities and Shareholders' Equity | $ 104,126 | $ 101,004 | |
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SOURCE RADCOM Ltd.
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