• Cash, Cash Equivalents and Short-Term Bank Deposit of $67.6 million and No Debt
• Reiterating 2018 revenue guidance of $33-$35 million
TEL AVIV, Israel – November 7, 2018 − RADCOM Ltd. (NASDAQ: RDCM), today reported its financial results for the third quarter ended September 30, 2018.
“RADCOM continues to be a leading player in Network Function Virtualization. We are delivering successfully on our project commitments and operators continue to benefit from our advanced cloud-native technology” commented Mr. Yaron Ravkaie, RADCOM’s CEO. “The Company continues to support its existing customers, advance its R&D activities, and focus its sales efforts on top-tier operators. Our strong balance sheet enables our continued investment in innovative technology designed to meet the needs of our leading clients and the forthcoming transition to NFV and 5G.”
Third Quarter 2018 Financial Highlights:
• Revenues: Total revenues for the third quarter were $8.5 million, down 12% compared to $9.6 million in the third quarter of 2017
• Net Income: GAAP net income for the period was $0.6 million, or $0.05 per diluted share, compared to GAAP net income of $1.2 million, or $0.10 per diluted share for the third quarter of 2017
• Non-GAAP Net Income: Non-GAAP net income for the period was $1.0 million, or $0.07 per diluted share, compared to non-GAAP net income of $1.7 million, or $0.14 per diluted share for the third quarter of 2017
Both GAAP and non-GAAP results for the third quarter of 2018 included a $528,000, or $0.04 per diluted share, benefit related to grants from the Israel Innovation Authority compared to $155,000, or $0.01 per diluted share, in the third quarter of 2017
• Balance sheet: As of September 30, 2018, the Company had cash, cash equivalents and short-term bank deposit of $67.6 million and no debt
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 to 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): +1-866-229-7198
From other locations: +972-3-918-0687
For those unable to listen to the call at the time, a replay will be available from November 8th on RADCOM’s website.
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About RADCOM
RADCOM (NASDAQ: RDCM) is the leading expert in cloud-native Network Intelligence for telecom operators transitioning to SDN/NFV. Providing a critical first step in an operator’s NFV transformation, RADCOM’s Network Intelligence delivers end-to-end network visibility from virtual tapping point to network insights. Comprised of RADCOM Service Assurance, RADCOM Network Visibility and RADCOM Network Insights, RADCOM’s Network Intelligence portfolio provides operators with complete visibility across their virtual and hybrid networks. RADCOM Network Intelligence is automated, cost-efficient, and provides on-demand functionality that is specifically designed for the needs of telecom operators. RADCOM specializes in assuring next-generation, high capacity networks, including LTE, Advanced-LTE, 5G, IMS, SDN/NFV and others. 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, 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”, “predict”, ”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 revenue guidance for 2018, continued investment in technology to meet the needs of its clients and transition to NFV as well as success in focusing on sales to top-tier operators, it is using foward-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 the 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 Statement of Operations
(thousands of U.S. dollars, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||
| 2018 | 2017 | 2018 | 2017 | ||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||
| Revenues | $8,519 | $9,645 | $30,061 | $26,602 | |||
| Cost of revenues | 1,660 | 3,163 | 7,427 | 7,828 | |||
| Gross profit | 6,859 | 6,482 | 22,634 | 18,774 | |||
| Research and development, gross | 3,933 | 2,280 | 11,429 | 7,507 | |||
| Less – royalty-bearing participation | 528 | 155 | 1,282 | 467 | |||
| Research and development, net | 3,405 | 2,125 | 10,147 | 7,040 | |||
| Sales and marketing, net | 2,401 | 2,333 | 8,725 | 8,219 | |||
| General and administrative | 657 | 991 | 2,647 | 3,149 | |||
| Total operating expenses | 6,463 | 5,449 | 21,519 | 18,408 | |||
| Operating income | 396 | 1,033 | 1,115 | 366 | |||
| Financial income, net | 282 | 175 | 655 | 325 | |||
| Income before taxes on income | 678 | 1,208 | 1,770 | 691 | |||
| Taxes on income | (44) | (25) | (57) | (48) | |||
| Net income | $634 | $1,183 | $1,713 | $643 | |||
| Basic net income per ordinary share | $0.05 | $0.10 | $0.13 | $0.05 | |||
| Diluted net income per ordinary share | $0.05 | $0.10 | $0.12 | $0.05 | |||
| Weighted average number of ordinary shares usedin computing basic net income per ordinary share | 13,701,844 | 11,747,443 | 13,600,849 | 11,698,246 | |||
| Weighted average number of ordinary shares usedin computing diluted net income per ordinary share | 13,916,306 | 12,070,080 | 13,851,324 | 12,018,658 |
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 | Nine months ended | ||||||
| September 30, | September 30, | ||||||
| 2018 | 2017 | 2018 | 2017 | ||||
| GAAP gross profit | $6,859 | $6,482 | $22,634 | $18,774 | |||
| Stock-based compensation | 25 | 67 | 102 | 134 | |||
| Non-GAAP gross profit | $6,884 | $6,549 | $22,736 | $18,908 | |||
| GAAP research and development, net | $3,405 | $2,125 | $10,147 | $7,040 | |||
| Stock-based compensation | 210 | 97 | 621 | 339 | |||
| Non-GAAP research and development, net | $3,195 | $2,028 | $9,526 | $6,701 | |||
| GAAP sales and marketing, net | $2,401 | $2,333 | $8,725 | $8,219 | |||
| Stock-based compensation | 121 | 122 | 583 | 394 | |||
| Non-GAAP sales and marketing, net | $2,280 | $2,211 | $8,142 | $7,825 | |||
| GAAP general and administrative | $657 | $991 | $2,647 | $3,149 | |||
| Stock-based compensation | 10 | 200 | 402 | 859 | |||
| Non-GAAP general and administrative | $647 | $791 | $2,245 | $2,290 | |||
| GAAP total operating expenses | $6,463 | $5,449 | $21,519 | $18,408 | |||
| Stock-based compensation | 341 | 419 | 1,606 | 1,592 | |||
| Non-GAAP total operating expenses | $6,122 | $5,030 | $19,913 | $16,816 | |||
| GAAP operating income | $396 | $1,033 | $1,115 | $366 | |||
| Stock-based compensation | 366 | 486 | 1,708 | 1,726 | |||
| Non-GAAP operating income | $762 | $1,519 | $2,823 | $2,092 | |||
| GAAP income before taxes on income | $678 | $1,208 | $1,770 | $691 | |||
| Stock-based compensation | 366 | 486 | 1,708 | 1,726 | |||
| Non-GAAP income before taxes on income | $1,044 | $1,694 | $3,478 | $2,417 | |||
| GAAP net income | $634 | $1,183 | $1,713 | $643 | |||
| Stock-based compensation | 366 | 486 | 1,708 | 1,726 | |||
| Non-GAAP net income | $1,000 | $1,669 | $3,421 | $2,369 | |||
| GAAP net income per diluted share | $0.05 | $0.10 | $0.12 | $0.05 | |||
| Stock-based compensation | 0.02 | 0.04 | 0.12 | 0.15 | |||
| Non-GAAP net income per diluted share | $0.07 | $0.14 | $0.24 | $0.20 | |||
| Weighted average number of shares used to compute diluted net income per share | 13,916,306 | 12,070,080 | 13,851,324 | 12,018,658 |
RADCOM Ltd.
Consolidated Balance Sheets
(thousands of U.S. dollars)
| As of | As of | ||
| September 30,2018 | December 31,2017 | ||
| (unaudited) | |||
| Current Assets | |||
| Cash and cash equivalents | $27,576 | $22,575 | |
| Restricted bank deposit | – | 36 | |
| Short-term bank deposit | 40,000 | 40,000 | |
| Trade receivables, net | 18,485 | 20,266 | |
| Inventories | 350 | 1,199 | |
| Other receivables | 1,733 | 2,685 | |
| Total Current Assets | 88,144 | 86,761 | |
| Severance pay fund | 3,103 | 3,052 | |
| Other long-term receivables | 302 | 172 | |
| Property and equipment, net | 1,841 | 1,924 | |
| Total Assets | $93,390 | $91,909 | |
| Liabilities and Shareholders’ Equity | |||
| Current Liabilities | |||
| Trade payables | $1,539 | $1,828 | |
| Deferred revenues | 811 | 2,601 | |
| Employee and payroll accruals | 3,403 | 4,062 | |
| Other payables and accrued expenses | 1,796 | 3,428 | |
| Total Current Liabilities | 7,549 | 11,919 | |
| Long-Term Liabilities | |||
| Deferred revenues | 100 | 21 | |
| Accrued severance pay | 3,600 | 3,573 | |
| Total Long-Term Liabilities | 3,700 | 3,594 | |
| Total Liabilities | $11,249 | $15,513 | |
| Shareholders’ Equity | |||
| Share capital | $642 | $628 | |
| Additional paid-in capital | 135,274 | 131,491 | |
| Accumulated other comprehensive loss | (2,622) | (2,520) | |
| Accumulated deficit | (51,153) | (53,203) | |
| Total Shareholders’ Equity | 82,141 | 76,396 | |
| Total Liabilities and Shareholders’ Equity | $93,390 |
For all investor enquiries, please contact:
Investor Relations:
Miri Segal
MS-IR LLC
917-607-8654
msegal@ms-ir.com
Company Contact:
Amir Hai
CFO
+972-77-774-5011
amir.hai@radcom.com