RADCOM Reports Second Quarter 2023 Results - Shanghai EPS Machine Co.,Ltd

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02 Aug, 2023, 14:12 IDT

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TEL AVIV, Israel, Aug. 2, 2023 /PRNewswire/ -- RADCOM Ltd. (Nasdaq: RDCM) announced financial results for the second quarter ended June 30, 2023.

Eyal Harari, RADCOM's Chief Executive Officer, commented, "This quarter, we achieved several all-time financial records and continued investing in our solutions to drive future growth. Revenues for the second quarter were $12.4 million, the 16th consecutive quarter of year-over-year growth.

"We significantly improved our bottom line, achieving net income for the second quarter and first six months of 2023 that hit a 5-year high (on both GAAP and non-GAAP basis). The improvements in our profitability KPIs continued our strong momentum and are driven by strong execution and revenue increase.

"Last month, we announced the launch of our 5G assurance solution on Google Cloud as we continue integrating our solution with leading public cloud providers. Launching on Google Cloud will extend our market availability to further potential customers and offer a leading 5G assurance solution to simplify 5G rollouts. Additionally, as previously announced, we completed the acquisition of Continual Ltd. during the quarter. We believe that adding Continual's core assets will enrich our solution and create new opportunities for RADCOM in top-tier customers.

Mr. Harari concluded, "We remain confident in our ability to cross the $50 million annual revenue threshold and scale up to a mid-size software company for the first time in the Company's history in 2023 and deliver a fourth consecutive year of growth. Therefore, we are reiterating the 2023 revenue guidance of $50 million to $53 million."

Second quarter 2023 financial highlights:

First six months of 2023 financial highlights:

Earnings Conference CallRADCOM's management will hold an interactive conference call today at 8:30 am Eastern Time (3:30 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 SegalMS-IR LLC917-607-8654[email protected]

Company Contact: Hadar RahavCFO+972-77-7745062[email protected]

About RADCOMRADCOM (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 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 2023 revenue guidance, the potential to scale up to a mid-size software company, extend RADCOM's market availability to further potential customers, and offer a leading 5G assurance solution to simplify 5G rollouts, the expectation that adding Continual's core assets will create new opportunities for RADCOM, its momentum and potential growth, 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, and loss of market share and pressure on prices resulting from competition. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the U.S. Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.

RADCOM Ltd.

Consolidated Statements of Operations

Unaudited

(thousands of U.S. dollars, except share and per share data)

Three months ended

Six months ended

June 30,

2023

2022

2023

2022

Revenues

$ 12,372

$ 11,127

$ 24,395

$ 21,751

Cost of revenues

3,480

3,178

6,828

6,015

Gross profit

8,892

7,949

17,567

15,736

Research and development, gross

4,952

5,349

9,721

10,908

Less - royalty-bearing participation

180

197

442

415

Research and development, net

4,772

5,152

9,279

10,493

Sales and marketing

3,351

2,879

6,664

5,784

General and administrative

1,215

1,007

2,444

2,028

Total operating expenses

9,338

9,038

18,387

18,305

Operating loss

(446)

(1,089)

(820)

(2,569)

Financial income (loss), net

1,260

(130)

2,286

817

Income (loss) before taxes on income

814

(1,219)

1,466

(1,752)

Taxes on income

(33)

(31)

(64)

(90)

Net income (loss)

$ 781

$ (1,250)

$ 1,402

$ (1,842)

Basic and diluted net income (loss) per ordinary share

$ 0.05

$ (0.09)

$ 0.09

$ (0.13)

15,063,112

14,462,749

14,977,743

14,408,524

Weighted average number of

ordinary shares used in computing basic net income (loss) per ordinary share

Weighted average number of

15,658,748

14,462,749

15,614,553

14,408,524

ordinary shares used in computing diluted net income (loss) per ordinary share

RADCOM LTD.Reconciliation of GAAP to Non-GAAP Financial InformationUnaudited

(thousands of U.S. dollars, except share and per share data)

Three months ended

June 30,

Six months ended

June 30,

2023

2022

2023

2022

GAAP gross profit

$ 8,892

$ 7,949

$ 17,567

$ 15,736

Stock-based compensation

163

191

Amortization of intangible assets

Non-GAAP gross profit

$ 9,009

$ 8,048

$ 17,773

$ 15,927

GAAP research and development, net

$ 4,772

$ 5,152

$ 9,279

$ 10,493

Stock-based compensation

536

643

1,081

1,254

Non-GAAP research and development, net

$ 4,236

$ 4,509

$ 8,198

$ 9,239

GAAP sales and marketing

$ 3,351

$ 2,879

$ 6,664

$ 5,784

Stock-based compensation

328

357

636

664

Amortization of intangible assets

Non-GAAP sales and marketing

$ 3,002

$ 2,522

$ 6,007

$ 5,120

GAAP general and administrative

$ 1,215

$ 1,007

$ 2,444

$ 2,028

Stock-based compensation

249

166

514

362

Acquisition related expenses

Non-GAAP general and administrative

$ 929

$ 841

$ 1,893

$ 1,666

GAAP total operating expenses

$ 9,338

$ 9,038

$ 18,387

$ 18,305

Stock-based compensation

1,113

1,166

2,231

2,280

Amortization of intangible assets

Acquisition related expenses

Non-GAAP total operating expenses

$ 8,167

$ 7,872

$ 16,098

$ 16,025

GAAP operating loss

$ (446)

$ (1,089)

$ (820)

$ (2,569)

Stock-based compensation

1,187

1,265

2,394

2,472

Amortization of intangible assets

Acquisition related expenses

Non-GAAP operating income (loss)

$ 842

$ 176

$ 1,675

$ (97)

RADCOM LTD.

Reconciliation of GAAP to Non-GAAP Financial Information

Unaudited

(thousands of U.S. dollars, except share and per share data)

Three months ended

June 30,

Six months ended

June 30,

2023

2022

2023

2022

GAAP income (loss) before taxes on income

$ 814

$ (1,219)

$ 1,466

$ (1,752)

Stock-based compensation

1,187

1,265

2,394

2,472

Amortization of intangible assets

Acquisition related expenses

Non-GAAP income before taxes on income

$ 2,131

$ 46

$ 3,990

$ 720

GAAP net income (loss)

$ 781

$ (1,250)

1,402

$ (1,842)

Stock-based compensation

1,187

1,265

2,394

2,472

Amortization of intangible assets

Acquisition related expenses

Non-GAAP net income

$ 2,098

$ 15

$ 3,926

$ 630

GAAP net income (loss) per diluted share

$ 0.05

$ (0.09)

0.09

$ (0.13)

Stock-based compensation

0.08

0.09

0.16

0.17

Amortization of intangible assets

(*)

Acquisition related expenses

(*)

Non-GAAP net income per diluted share

$ 0.13

(*)

$ 0.25

$ 0.04

Weighted average number of shares used to compute diluted net income per share

15,658,748

14,878,438

15,614,553

14,843,215

(*) Less than $ 0.01

RADCOM Ltd.

Consolidated Balance Sheets

Unaudited

(thousands of U.S. dollars)

As of

June 30,

2023

December 31,

2022

Current Assets

Cash and cash equivalents

$ 35,409

$ 9,527

Short-term bank deposits

42,901

64,130

Trade receivables, net

10,111

11,074

Inventories

396

795

Other accounts receivable and prepaid expenses

1,409

1,928

Total Current Assets

90,226

87,454

Non-Current Assets

Long-term bank deposits

4,002

Severance pay fund

3,278

3,524

Other long-term receivables

1,995

2,557

Property and equipment, net

884

1,010

Operating lease right-of-use assets

1,946

2,457

Goodwill and intangible assets, net

3,146

Total Non-Current Assets

11,249

13,550

Total Assets

$ 101,475

$ 101,004

Liabilities and Shareholders' Equity

Current Liabilities

Trade payables

$ 1,433

$ 2,708

Deferred revenues and advances from customers

4,359

7,037

Employee and payroll accruals

4,663

5,198

Operating lease liabilities

949

1,024

Other liabilities and accrued expenses

8,391

6,829

Total Current Liabilities

19,795

22,796

Non-Current Liabilities

Accrued severance pay

3,859

3,973

Operating lease liabilities

917

1,452

Other liabilities and accrued expenses

675

Total Non-Current Liabilities

5,451

5,425

Total Liabilities

$ 25,246

$ 28,221

Shareholders' Equity

Share capital

$ 724

$ 706

Additional paid-in capital

150,985

148,610

Accumulated other comprehensive loss

(3,259)

(2,908)

Accumulated deficit

(72,221)

(73,625)

Total Shareholders' Equity

76,229

72,783

Total Liabilities and Shareholders' Equity

$ 101,475

$ 101,004

SOURCE RADCOM Ltd.

RADCOM Ltd.