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PRESS RELEASES

RADCOM Reports First Quarter 2017 Financial Results

May 4, 2017

Q1 Revenues up 23% Year-Over-Year to $8.0 million

Cash and Cash Equivalents of $40.7 million and No Debt as of March 31, 2017

TEL-AVIV, Israel – May 4, 2017– RADCOM Ltd. (NASDAQ: RDCM) today reported its financial results for the first quarter ended March 31, 2017.

“We were pleased with our strong first quarter execution highlighted by our relationship with AT&T and with other top tier carriers globally,” commented Mr. Yaron Ravkaie, RADCOM’s CEO.  “During the quarter, our hybrid approach of enabling a path to NFV and future proofing purchasing decisions continued to resonate with carriers.  Given our visibility for the remainder of the year, we are reiterating our 2017 revenue guidance of $36-$39 million.”

First Quarter 2017 Financial Highlights

  • Revenues: Total revenues for the first quarter were $8.0 million, up 23% compared to $6.5 million in the first quarter of 2016.  
  • Net Income/(Loss): GAAP net loss for the period was $(0.3) million, or a loss of $(0.03) per diluted share, compared to net income of $0.9 million, or $0.10 per diluted share for the first quarter of 2016.
  • Non-GAAP Net Income:  Non-GAAP net income for the period was $0.3 million, or $0.02 per diluted share, compared to net income of $1.3 million, or $0.14 per diluted share for the first quarter of 2016.

GAAP and non-GAAP results for both the first quarter of 2017 and 2016, included no benefits related to grants from the Israel Innovation Authority (formerly Office of the Chief Scientist).

  • Balance sheet: As of March 31, 2017, the Company had cash and cash equivalents of $40.7 million and no debt.   

Earnings Conference Call
RADCOM’s management will hold an interactive conference call today at 8:00 AM Eastern Time (15:00 Israel 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): + 1-888-668-9141

From other locations: +972-3-918-0609

For those unable to listen to the call at the time, a replay will be available from May 5th on RADCOM’s website.

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About RADCOM

RADCOM (NASDAQ: RDCM) is a first-mover and leading provider of NFV-ready service assurance and customer experience management solutions for Communications Service Providers (CSPs). RADCOM’s software – MaveriQ – continuously monitors network performance and quality of services, to optimize user experience for CSPs’ subscribers. RADCOM specializes in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS and others. MaveriQ enables CSPs to smoothly migrate their networks to NFV by assuring physical, NFV-based and hybrid networks. For more information, please visit www.radcom.com.

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 2017 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 Statements of Operations                                            (thousands of U.S. dollars, except share and per share data)
 Three months ended  
  March 31,  
 2017 2016
Revenues$8,040  $6,547 
Cost of revenues2,022 1,693
Gross profit6,018 4,854
Research and development, gross2,488 1,836
Less – royalty-bearing participation  –  
Research and development, net2,488 1,836
Sales and marketing, net2,897 1,527
General and administrative1,060 871
Total operating expenses6,445 4,234
Operating (loss) income-427 620
Financing income, net109 289
(loss) Income before taxes-318 909
Taxes-18 -6
Net (loss) income($336) $903 
    
Basic net (loss) income per   
ordinary share ($0.03)   $0.10 
Diluted net (loss) income per($0.03) $0.10 
ordinary share   
    
Weighted average number of    
    ordinary shares used in   
    computing basic net income (loss) per ordinary share11,650,479 8,729,891
    
Weighted average number of    
    ordinary shares used in   
    computing diluted net income (loss) per ordinary share11,650,479 9,307,539

RADCOM LTD.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

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

 Three months ended    
 March 31,                  
 2017 2016
GAAP gross profit                                                                                                                                           $6,018  $4,854 
Stock-based compensation47 14
Non-GAAP gross profit6,065 4,868
  2,488 1,836
GAAP Research and development, net    
Stock-based compensation109 171
Non-GAAP Research and development, net2,379 1,665
  2,897 1,527
GAAP sales and marketing, net    
Stock-based compensation128 20
Non-GAAP selling and marketing, net2,769 1,507
  1,060 871
GAAP general and administrative    
Stock-based compensation336 232
Non-GAAP general and administrative724 639
  6,445 4,234
GAAP total operating expenses    
Stock-based compensation573 423
Non-GAAP total operating expenses5,872 3,811
  -427 620
GAAP operating (loss) income    
Stock-based compensation620 437
Non-GAAP operating income193 1,057
  -318 909
GAAP (loss) income before taxes on income    
Stock-based compensation620 437
Non-GAAP income before taxes on income302 1,346
  -336 903
GAAP net (loss) income    
Stock-based compensation620 437
Non-GAAP net income284 1,340
  -0.03 0.1
GAAP Net (loss) income per diluted share    
Stock-based compensation0.05 0.04
Non-GAAP Net income per diluted share$0.02  $0.14 
Weighted average number of shares used to compute diluted net earnings per share   
   
11,952,399 9,307,539
 
RADCOM Ltd.   
Consolidated Balance Sheets   
(thousands of U.S. dollars)   
 As of As of
 March 31, December 31,
 2017 2016
Current Assets   
     Cash and cash equivalents$40,749  $42,886 
     Restricted bank deposits34 32
     Trade receivables, net3,958 4,388
     Inventories513 623
     Other receivables1,598 1,960
    
Total Current Assets46,852 49,889
Severance pay fund2,973 2,788
    
Other long-term receivables306  375
    
Property and equipment, net1,642 1,516
    
Total Assets$51,773  $54,568
    
                            
Liabilities and Shareholders’ Equity   
Current Liabilities   
      Trade payables$1,291  $2,820 
    Deferred revenue and advances from customers1,017 2,593
       Employee and payroll accruals3,258 3,541
    Other payables and accrued expenses1,710 2,081
    
Total Current Liabilities7,276 11,035
Long-Term Liabilities   
    Deferred revenue143 123
    Accrued severance pay       3,526 3,267
    
Total Long-Term Liabilities 3,669 3,390
    
Total Liabilities10,945 14,425
    
Shareholders’ Equity   
     Share capital525 523
     Additional paid-in capital99,242 98,283
       Accumulated other comprehensive loss-2,499 -2,559
     Accumulated deficit-56,440 -56,104
Total Shareholders’ Equity40,828  40,143
    
    
Total Liabilities and Shareholders’ Equity$51,773  $54,568 
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