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PRESS RELEASES

RADCOM Reports Second Quarter 2017 Financial Results

August 7, 2017

Q2 Revenues up 24% Year-Over-Year to $8.9 million

Cash and Cash Equivalents of $36.2 million and No Debt as of June 30, 2017

TEL-AVIV, Israel – August 7, 2017– RADCOM Ltd. (NASDAQ: RDCM) today reported its financial results for the second quarter ended June 30, 2017.

“Our strong second quarter results were driven by our relationship with AT&T, an expansion of our relationship with one of our strategic accounts in APAC, as well as ongoing momentum with other Tier 1 service providers globally,” commented Mr. Yaron Ravkaie, RADCOM’s CEO.  “During the quarter, we finalized an NFV trial with a top-tier service provider, which we expect to result in a new NFV project for the company.  Given the ongoing momentum, we are reiterating our 2017 revenue guidance of $36-$39 million.”

Second Quarter 2017 Financial Highlights

  • Revenues: Total revenues for the second quarter were $8.9 million, up 24% compared to $7.2 million in the second quarter of 2016.  
  • Net Income/(Loss): GAAP net loss for the period was $(0.2) million, or a loss of $(0.02) per diluted share, compared to net income of $1.7 million, or $0.17 per diluted share for the second quarter of 2016.
  • Non-GAAP Net Income:  Non-GAAP net income for the period was $0.4 million, or $0.03 per diluted share, compared to net income of $2.0 million, or $0.20 per diluted share for the second quarter of 2016.

Both GAAP and non-GAAP results for the second quarter of 2017 included a $312,000, or $0.03 per diluted share, benefit related to grants from the Israel Innovation Authority (formerly Office of the Chief Scientist) compared to $756,000, or $0.07 per diluted share, in the second quarter of 2016.

  • Balance sheet: As of June 30, 2017, the Company had cash and cash equivalents of $36.2 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: +972-3-918-0610

For those unable to listen to the call at the time, a replay will be available from August 8th 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 and expected new projects for the Company 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 Six months ended
June 30,June 30,
 2017 2016 2017 2016
 (unaudited) (unaudited) (unaudited) (unaudited)
Revenues$8,917 $7,200 $16,957 $13,747
Cost of revenues2,643 2,136 4,665 3,829
Gross profit6,274 5,064 12,292 9,918
Research and development, gross2,739 1,632 5,227 3,468
Less – royalty-bearing participation312 756 312 756
Research and development, net2,427 876 4,915 2,712
Sales and marketing, net2,989 1,732 5,886 3,259
General and administrative1,098 1,156 2,158 2,027
Total operating expenses6,514 3,764 12,959 7,998
Operating (loss) income-240 1,300 -667 1,920
Financial income, net41 447 150 736
 -199 1,747 -517 2,656
(Loss) income before taxes
Taxes-5 –  -23 -6
        
Net (loss) income($204) $1,747 ($540) $2,650
        
Basic net (loss) income per($0.02) $0.18 ($0.05) $0.28
     ordinary share
Diluted net (loss) income per($0.02) $0.17 ($0.05) $0.27
     ordinary share        
Weighted average number of 11,695,750 9,875,268 11,673,240 9,322,930
    ordinary shares used in
    computing basic net (loss) income 
per ordinary share
Weighted average number of 11,695,750 10,117,835 11,673,240 9,733,037
    ordinary shares used in
    computing diluted net (loss) income
per ordinary share
        
        
RADCOM LTD.       
Reconciliation of GAAP to Non-GAAP Financial Information       
(thousands of U.S. dollars, except share and per share data)       
        
 Three months ended   Six months ended
June 30,               June 30,               
 2017 2016 2017 2016
GAAP gross profit                                                                                                                                            6,274 5,064 12,292 9,918
Stock-based compensation20 27 67 42
Non-GAAP gross profit6,294 5,091 12,359 9,960
 2,427 876 4,915 2,712
GAAP Research and development, net
Stock-based compensation133 69 242 239
Non-GAAP Research and development, net2,294 807 4,673 2,473
 2,989 1,732 5,886 3,259
GAAP sales and marketing, net
Stock-based compensation144 31 272 51
Non-GAAP sales and marketing, net2,845 1,701 5,614 3,208
 1,098 1,156 2,158 2,027
GAAP general and administrative
Stock-based compensation323 123 659 355
Non-GAAP general and administrative775 1,033 1,499 1,672
 6,514 3,764 12,959 7,998
GAAP total operating expenses
Stock-based compensation600 223 1,173 645
Non-GAAP total operating expenses5,914 3,541 11,786 7,353
 -240 1,300 -667 1,920
GAAP operating (loss) income 
Stock-based compensation620 250 1,240 687
Non-GAAP operating income 380 1,550 573 2,607
 -199 1,747 -517 2,656
GAAP (loss) income before taxes on income
Stock-based compensation620 250 1,240 687
Non-GAAP income before taxes on income421 1,997 723 3,343
 -204 1,747 -540 2,650
GAAP net (loss) income 
Stock-based compensation620 250 1,240 687
Non-GAAP net income416 1,997 700 3,337
 -0.02 0.17 -0.05 0.27
GAAP Net (loss) income per diluted share
Stock-based compensation0.05 0.03 0.11 0.07
Non-GAAP Net income per diluted share0.03 0.2 0.06 0.34
Weighted average number of shares used to compute diluted net income per share12,032,429 10,117,835 11,992,539 9,733,037
RADCOM Ltd.
Consolidated Balance Sheets
(thousands of U.S. dollars) 
 As of As of
 June 30, December 31,
20172016
 (unaudited)  
Current Assets   
     Cash and cash equivalents36,164 42,886
     Restricted bank deposits36 32
     Trade receivables, net10,674 4,388
     Inventories 468 623
     Other receivables1,429 1,960
    
Total Current Assets48,77149,889
Severance pay fund   
3,0772,788
Other long-term receivables   
361375
Property and equipment, net   
1,6971,516
Total Assets   
53,90654,568
                              
Liabilities and Shareholders’ Equity   
Current Liabilities    
      Trade payables 2,008 2,820
    Deferred revenue and advances from customers805 2,593
       Employee and payroll accruals 3,515 3,541
    Other payables and accrued expenses 2,357 2,081
    
Total Current Liabilities8,68511,035
Long-Term Liabilities    
    Deferred revenue127 123
    Accrued severance pay        3,608 3,267
    
Total Long-Term Liabilities3,7353,390
    
Total Liabilities12,420 14,425
    
Shareholders’ Equity    
     Share capital 530 523
     Additional paid-in capital100,163 98,283
       Accumulated other comprehensive loss-2,563 -2,559
     Accumulated deficit-56,644 -56,104
Total Shareholders’ Equity   
41,48640,143
 53,906 54,568
 
Total Liabilities and Shareholders’ Equity
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