RADCOM Delivers 20% YoY Revenue Growth and EPS up by 120%

Reaffirming Company’s Commitment to Profitable Growth and Long-Term Shareholder Value

Highest quarterly revenues of $14.8 million
Record half-year revenue and profitability
Peak cash level of $86.1 million

TEL AVIV, Israel, Aug. 7, 2024 /PRNewswire/ — RADCOM Ltd. (Nasdaq: RDCM), an industry leader in automated assurance and intelligent analytics for telecom operators transitioning to 5G, announced today its financial results for the second quarter ended June 30, 2024.

Hilik Itman, RADCOM’s interim Chief Executive Officer, commented, “This quarter, we continued to execute our strategy to drive profitable growth and long-term shareholder value. We achieved record quarterly revenues of $14.8 million, up 20% from the second quarter of 2023.

“Our net income increased by approximately 120%, driven by strong revenue growth. We maintained our positive cash flow generation, achieving a new milestone with our cash and cash equivalents reaching a record high of $86.1 million. We are on track to meet our 2024 financial guidance and deliver revenue and profitability growth.

“Since the start of the year, we have secured over $50 million in new 5G contracts, including several seven-digit contracts across various geographic markets, while maintaining significant recurring revenues. This shows the demand for our leading solutions and boosts our revenues as telecom operators transition to 5G.”

Key highlights Q2 2024:

Total revenues for the second quarter were $14.8 million, compared to $12.4 million in the second quarter of 2023, representing a 20% year-over-year growth, a new company record.
GAAP net income for the second quarter was $1.7 million, or $0.11 diluted EPS, compared to $0.8 million, or $0.05 diluted EPS, for the second quarter of 2023, representing an approximately 120% year-over-year increase compared to the second quarter of 2023.
Non-GAAP net income for the period was $3.1 million, or $0.20 diluted EPS, compared to $2.1 million, or $0.13 diluted EPS, for the second quarter of 2023.
As of June 30, 2024, the Company had cash, cash equivalents, and short-term bank deposits of $86.1 million and no debt, ending the quarter with its highest-ever cash levels.

Key highlights H1 2024

Total revenues for the first six months were $28.9 million, compared to $24.4 million in the first six months of 2023, representing a 19% year-over-year growth.
GAAP net income for the first six months was $2.5 million, or $0.16 diluted EPS, compared to $1.4 million, or $0.09 diluted EPS for the first six months of 2023.
Non-GAAP net income for the first six months was $6.0 million, or $0.38 diluted EPS, compared to $3.9 million, or $0.25 diluted EPS, for the first six months of 2023.

Mr. Itman concluded, “The efficient growth we achieved in the first six months of 2024 provides a strong foundation for our continued success in the remaining six months of 2024, and we believe the best is yet to come. We are witnessing increasing demand for our solutions across multiple regions, particularly in North America. The heightened demand is reflected in our expanding sales pipeline, which has the potential to drive further growth and enhance shareholder returns.

“This gives us the confidence to raise our 2024 revenue guidance to $58 to $61 million (from $57 to $60 million).”

Earnings conference call and webcast

RADCOM’s management will hold an interactive conference call on the same day at 8:00 AM Eastern Time (3:00 PM Israel Daylight Time) to discuss the results and answer participants’ questions.

Live webcast: A live webcast of the presentation will be available at https://Veidan.activetrail.biz/radcomq2-2024. The webcast will be archived for 90 days following the live presentation.
Joining the interactive call: Please dial in 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

A conference call replay will be available a few hours after the call on RADCOM’s investor relations webpage at https://radcom.com/investor-relations.

For all investor inquiries, please contact:

Investor Relations:Miri Segal
MS-IR LLC
917-607-8654
[email protected]

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

About RADCOM

RADCOM (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 in accordance with ASC Topic 718, financial income (expenses), 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 2024 revenue guidance, market trends, and demand for the Company’s products and services,  expanding its sales pipeline, profitability, growth, and enhancing shareholder returns, it uses 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, loss of market share and pressure on prices resulting from competition and the effects of the war in Israel. 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
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Revenues

$             14,801

$            12,372

$           28,924

$       24,395

Cost of revenues

3,794

3,480

7,545

6,828

Gross profit

11,007

8,892

21,379

17,567

Research and development, gross

4,621

4,952

9,214

9,721

Less – royalty-bearing participation

180

180

389

442

Research and development, net

4,441

4,772

8,825

9,279

Sales and marketing

4,325

3,351

8,610

6,664

General and administrative

1,361

1,215

3,374

2,444

Total operating expenses

10,127

9,338

20,809

18,387

Operating income (loss)

880

(446)

570

(820)

Financial income, net

854

1,260

1,959

2,286

Income before taxes on income

1,734

814

2,529

1,466

Taxes on income

(27)

(33)

(60)

(64)

Net income

$               1,707

$                 781

$               2,469

$         1,402

Basic and diluted net income per ordinary share

$                 0.11

$                0.05

$                 0.16

$           0.09

Weighted average number of ordinary shares used in computing
 basic net income per ordinary share

15,608,402

15,063,112

15,517,958

14,977,743

Weighted average number of ordinary shares used in computing
 diluted net income per ordinary share

15,978,799

15,658,748

15,922,855

15,614,553

Three months 
ended June 30, 

 

Six months
ended June 30,

 

2024

2023

2024

2023

GAAP gross profit                                                                                                                                           

$              11,007

$               8,892

$            21,379

$        17,567

     Stock-based compensation

99

74

183

163

     Amortization of intangible assets

56

43

112

43

Non-GAAP gross profit

$              11,162

$               9,009

$            21,674

$        17,773

GAAP research and development, net

$                4,441

$               4,772

$              8,825

$          9,279

     Stock-based compensation

525

536

1,062

1,081

Non-GAAP research and development, net

$                3,916

$               4,236

$              7,763

$          8,198

GAAP sales and marketing

$                4,325

$               3,351

$              8,610

$          6,664

     Stock-based compensation

$                   485

328

989

636

     Amortization of intangible assets

$                     29

21

58

21

Non-GAAP sales and marketing

$                3,811

$               3,002

$              7,563

$          6,007

GAAP general and administrative

$                1,361

$               1,215

$              3,374

$          2,444

     Stock-based compensation

202

249

1,041

514

     Acquisition related expenses

37

37

Non-GAAP general and administrative

$                1,159

$                  929

$              2,333

$          1,893

GAAP total operating expenses

$              10,127

$               9,338

$            20,809

$        18,387

     Stock-based compensation

1,212

1,113

3,092

2,231

     Amortization of intangible assets

29

21

58

21

     Acquisition related expenses

37

37

Non-GAAP total operating expenses

$                8,886

$               8,167

$            17,659

$        16,098

GAAP operating income (loss)

$                   880

$                (446)

$                 570

$            (820)

     Stock-based compensation

1,311

1,187

3,275

2,394

     Amortization of intangible assets

85

64

170

64

     Acquisition related expenses

37

37

Non-GAAP operating income

$                2,276

$                  842

$              4,015

$          1,675

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,

2024

2023

2024

2023

 

GAAP income before taxes on income

$               1,734

$                 814

$               2,529

$            1,466

Stock-based compensation

1,311

1,187

3,275

2,394

Amortization of intangible assets

85

64

170

64

Acquisition related expenses

34

66

71

66

Non-GAAP income before taxes on income

$               3,164

$              2,131

$               6,045

$            3,990

 

GAAP net income 

$               1,707

$                 781

$               2,469

$            1,402

Stock-based compensation

1,311

1,187

3,275

2,394

Amortization of intangible assets

85

64

170

64

Acquisition related expenses

34

66

71

66

Non-GAAP net income

$               3,137

$              2,098

$               5,985

$            3,926

 

GAAP net income per diluted share

$                 0.11

$                0.05

$                 0.16

$              0.09

Stock-based compensation

0.08

0.08

0.21

0.16

Amortization of intangible assets

0.01

(*)

0.01

(*)

Acquisition related expenses

(*)

(*)

(*)

(*)

Non-GAAP net income per diluted share

$                 0.20

$                0.13

$                 0.38

$              0.25

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

15,978,799

15,658,748

15,922,855

15,614,553

(*) Less than $ 0.01

RADCOM Ltd.

Consolidated Balance Sheets

Unaudited
(thousands of U.S. dollars)

As of

As of

June 30,

2024

December 31,

2023

Current Assets

    Cash and cash equivalents

$                  15,248

$                 10,892

    Short-term bank deposits

70,864

71,273

    Trade receivables, net

18,071

13,412

    Inventories

695

246

    Other accounts receivable and prepaid expenses

1,353

1,592

Total Current Assets

106,231

97,415

Non-Current Assets

    Severance pay fund

3,006

3,142

    Other long-term receivables

3,353

1,573

    Property and equipment, net

772

798

    Operating lease right-of-use assets

1,148

1,651

    Goodwill and intangible assets, net

2,780

2,950

Total Non-Current Assets

11,059

10,114

Total Assets

$                117,290

$               107,529

Liabilities and Shareholders’ Equity

Current Liabilities

       Trade payables

$                    3,400

$                   2,640

    Deferred revenues and advances from customers

4,140

1,469

       Employee and payroll accruals

5,397

5,400

    Operating lease liabilities

627

1,062

    Other liabilities and accrued expenses

10,449

9,540

Total Current Liabilities

24,013

20,111

Non-Current Liabilities

    Accrued severance pay       

3,680

3,728

    Operating lease liabilities

472

561

    Other liabilities and accrued expenses

653

638

Total Non-Current Liabilities

4,805

4,927

Total Liabilities

$                  28,818

$                 25,038

Shareholders’ Equity

     Share capital

$                       755

$                      736

     Additional paid-in capital

157,954

154,697

        Accumulated other comprehensive loss

(2,794)

(3,030)

     Accumulated deficit

(67,443)

(69,912)

Total Shareholders’ Equity

88,472

82,491

Total Liabilities and Shareholders’ Equity

$                117,290

$               107,529

SOURCE RADCOM Ltd.


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