IB Net Payout Yields Model

Nice Results from Radware

After disappointing results from Riverbed Tech (RVBD) and F5 Networks (FFIV) in the cloud networking space, Radware (RDWR) came through with excellent numbers today. RDWR continues to be the under the radar play in this general sector partly because they maintain a reasonable growth rate of only 17% half that of the numbers reported by RVBD.

RDWR reported earnings of $.32 that beat estimates by $.03. Revenue of $41.1M was also slightly ahead of estimates. More importantly, RDWR guided to $.33 - .35 versus the $.33 analyst estimate. Not to mention that the CEO provided the tidbit that the numbers were conservative.

RDWR is taking advantage of the move to cloud computing and data center consolidation. They also are in the process of opening up some key OEM relationships that could lead to a further revenue surge.

It remains a core holding in our Opportunistic models and based on these results they should stay that way for a long time. Our goal is to hold these stocks for years if the numbers remain compelling, therefore, reducing trading costs and taxable transactions.

Details from Q2 report:

  • reported record quarterly revenues of $41.1 million for the second quarter of 2011. This represents an increase of 17% compared with revenues of $35.2 million for the second quarter of 2010, and an increase of 6% compared with revenues of $38.6 million in the first quarter of 2011.
  • Net income on a Non-GAAP basis for the second quarter of 2011 was $7.3 million or $0.32 per diluted share, compared with net income of $4.3 million or $0.21 per diluted share in the second quarter of 2010.
  • During the second quarter 2011 Radware generated $11 million in cash and ended the quarter with $204 million in cash, cash equivalents, deposits and marketable securities.
  • Guidance (per CC) of $.33 - $.35 and $42 - $43M with upside potential from OEM sales. 


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