RADCOM Reports Second Quarter 2018 Financial Results

August 7, 2018

Q2 Revenues up 19% Year-Over-Year to $10.6 million

Cash, cash equivalents and short-term bank deposit of $71.4 million and No Debt 

TEL AVIV, Israel, Aug. 7, 2018 – RADCOM Ltd. (NASDAQ: RDCM), today reported its financial results for the second quarter ended June 30, 2018.

“Our solid second quarter results highlight the strength of our continued focus on top-tier network transformations and the ongoing demand for our NFV solutions as operators prepare their 5G-ready clouds,” commented Mr. Yaron Ravkaie, RADCOM’s CEO. “The Company is focused on supporting top-tier carriers as they accelerate their network virtualization transformations to prepare for 5G rollouts. Based on our current outlook, we are reiterating our 2018 revenue guidance of $43-$47 million.”

Second Quarter 2018 Financial Highlights:

  • Revenues: Total revenues for the second quarter were $10.6 million, up 19% compared to $8.9 million in the second quarter of 2017
  • Net Income/(Loss): GAAP net income for the period was $0.8 million, or $0.05 per diluted share, compared to GAAP net loss of $(0.2) million, or a loss of $(0.02) per diluted share for the second quarter of 2017
  • Non-GAAP Net Income: Non-GAAP net income for the period was $1.4 million, or $0.10 per diluted share, compared to non-GAAP net income of $0.4 million, or $0.03 per diluted share for the second quarter of 2017
  • GAAP and non-GAAP results for the second quarter of 2018 included $754,000, or $0.05 per diluted share, related to grants from the Israel Innovation Authority, compared to $312,000, or $0.03 per diluted share, in the second quarter of 2017
  • Balance sheet: As of June 30, 2018, the Company had cash, cash equivalents and short-term bank deposit of $71.4 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): + 1-866-229-7198

From other locations: +972-3-918-0687

For those unable to listen to the call at the time, a replay will be available from August 8, 2018, on RADCOM’s website.


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, and expected demand for the Company’s NFV solutions, the trend of preparing for 5G-ready cloud and the future success of the Company’s approach and its differentiation from competitors and the Company’s pipeline, 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 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.

Consolidated Statement of Operations

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

 Three months ended June 30,          Six months ended June 30,  
 2018 2017 2018 2017
 (unaudited) (unaudited) (unaudited) (unaudited)
Revenues$10,639 $8,917 $21,542 $16,957
Cost of revenues2,877 2,643 5,767 4,665
Gross profit7,762 6,274 15,775 12,292
Research and development, gross3,752 2,739 7,496 5,227
Less – royalty-bearing participation754 312 754 312
Research and development, net2,998 2,427 6,742 4,915
Sales and marketing, net3,084 2,989 6,324 5,886
General and administrative992 1,098 1,990 2,158
Total operating expenses7,074 6,514 15,056 12,959
Operating income (loss)688 (240) 719 (667)
Financial income, net71 41 373 150
Income (loss) before taxes on income759 (199) 1,092 (517)
Taxes on income(2) (5) (13) (23)
Net income (loss)$757 $(204) $1,079 $(540)
Basic net income (loss) per ordinary share$0.06 $(0.02) $0.08 $(0.05)
Diluted net income (loss) per ordinary share$0.05 $(0.02) $0.08 $(0.05)
Weighted average number of ordinary shares used in computing basic
net income (loss) per ordinary share
13,600,323 11,695,750 13,549,494 11,673,240
Weighted average number of ordinary
shares used in computing diluted net
income (loss) per ordinary share
13,849,488 11,695,750 13,817,995 

Reconciliation of GAAP to Non-GAAP Financial Information

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

 Three months ended June 30,    Six months ended June 30,
 2018 2017 2018 2017
GAAP gross profit                                                                                                                             7,762 6,274 15,775 12,292
Stock-based compensation37 20 77 67
Non-GAAP gross profit7,799 6,294 15,852 12,359
GAAP research and development, net2,998 2,427 6,742 4,915
Stock-based compensation 203 133 411 242
Non-GAAP research and development, net2,795 2,294 6,331 4,673
GAAP sales and marketing, net3,084 2,989 6,324 5,886
Stock-based compensation233 144 462 272
Non-GAAP sales and marketing, net2,851 2,845 5,862 5,614
GAAP general and administrative992 1,098 1,990 2,158
Stock-based compensation193 323 392 659
Non-GAAP general and administrative799 775 1,598 1,499
GAAP total operating expenses7,074 6,514 15,056 12,959
Stock-based compensation629 600 1,265 1,173
Non-GAAP total operating expenses6,445 5,914 13,791 11,786
GAAP operating income (loss)688 (240) 719 (667)
Stock-based compensation666 620 1,342 1,240
Non-GAAP operating income1,354 380 2,061 573
GAAP income (loss) before taxes on income759 (199) 1,092 (517)
Stock-based compensation666 620 1,342 1,240
Non-GAAP income before taxes on income1,425 421 2,434 723
GAAP net income (loss)757 (204) 1,079 (540)
Stock-based compensation666 620 1,342 1,240
Non-GAAP net income1,423 416 2,421 700
GAAP net income (loss) per diluted share0.05 (0.02) 0.08 (0.05)
Stock-based compensation0.05 0.05 0.10 0.11
Non-GAAP net income per diluted share 0.10 0.03 0.18 0.06
Weighted average number of shares used to compute diluted net income per share 13,849,488 12,032,429 13,817,995 11,992,539

Consolidated Balance Sheets

(thousands of U.S. dollars) 

  As of June 30, 2018(unaudited)      As of December 31, 3017
Current Assets   
Cash and cash equivalents$31,438 $22,575
Restricted bank deposit  36
Short-term bank deposit40,000 40,000
Trade receivables, net14,393 20,266
Inventories 119 1,199
Other receivables2,635 2,685
Total Current Assets88,585 
Severance pay fund   
Other long-term receivables   
Property and equipment, net   
Total Assets$93,823 $91,909
Liabilities and Shareholders’ Equity   
Current Liabilities    
Trade payables $1,879 $1,828
Deferred revenues 1,021 2,601
Employee and payroll accruals 4,052 4,062
Other payables and accrued expenses 2,275 3,428
 9,227 11,919
Total Current Liabilities
Long-Term Liabilities    
Deferred revenues100 21
Accrued severance pay        3,513 3,573
 3,613 3,594
Total Long-Term Liabilities
Total Liabilities$12,840 $15,513
Shareholders’ Equity    
Share capital $640 $628
Additional paid-in capital 134,734 131,491
Accumulated other comprehensive loss(2,604) (2,520)
Accumulated deficit (51,787) (53,203)
Total Shareholders’ Equity80,983 76,396
 $93,823 $91,909
Total Liabilities and Shareholders’ Equity

For all investor enquiries, please contact:
Ran Vered 

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Mark Rolston 
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