Radware NASDAQ: RDWR reported record third-quarter 2026 revenue of $84.4 million, up 12% from a year earlier, as cloud-security demand and sales of its DefensePro X products supported growth. The company said the result marked its eighth quarter of double-digit growth during the past nine quarters.
Non-GAAP diluted earnings per share were $0.32. Total annual recurring revenue reached approximately $266 million, an 11% year-over-year increase, while cloud ARR rose 21% to approximately $107 million. Cloud represented 41% of total ARR, compared with 37% in the third quarter of 2025.
President and Chief Executive Officer Roy Zisapel said customers are seeking unified security platforms that protect applications, APIs, infrastructure and emerging AI environments. He said Radware’s cloud-security platform remains the company’s primary growth driver, while its on-premise business is benefiting from an infrastructure refresh cycle.
AI Security and API Demand
Zisapel said the use of AI by attackers is increasing the pace of vulnerability discovery and exploit development, prompting customers to strengthen their web application firewall, API-security and DDoS defenses. Radware’s first-half 2026 threat analysis found web DDoS attacks increased 110% year over year, while malicious web and API activity more than doubled, he said.
The company highlighted demand for API security during the quarter, including a competitive replacement deal with a payment-infrastructure provider in the Americas. The customer consolidated WAF, API and DDoS protection on Radware’s platform, according to Zisapel.
Radware also said it secured its first large Xploit Shield transaction with a telecommunications provider in Asia. Xploit Shield is intended to provide runtime protection against newly discovered exploits while customers evaluate and remediate application-code vulnerabilities. Zisapel said the carrier selected Radware as its primary cloud application-security platform after a competitive evaluation, with Xploit Shield serving as a key differentiator.
The company has expanded its AI-related offerings with MCP Server Protection, designed to secure integrations between AI agents and enterprise systems, and Agent Trust Management, also called Serve AI, which assesses agent identity, intent and trust and controls permitted actions. Zisapel said Radware already has production customers using MCP Server Protection.
During the question-and-answer session, Zisapel said AI-related demand has several dimensions. AI-powered vulnerability discovery is already supporting demand for existing WAF, API and DDoS products, while security offerings for new AI environments are generating pipeline activity and initial customer adoption. He said the company views broader scale for those newer AI products as more of a 2027 opportunity.
Regional Growth and Profitability
Chief Financial Officer Guy Avidan said all geographic regions posted double-digit revenue growth in the third quarter. Americas revenue increased 12% to $39.6 million, representing 47% of total revenue. Revenue in Europe, the Middle East and Africa rose 12% to $25.6 million, while Asia-Pacific revenue grew 12% to $19.2 million.
Gross profit rose 11% to $68.7 million, while gross margin declined to 81.4% from 82.4% a year earlier. Avidan attributed the margin change primarily to foreign-exchange pressure, product mix and supply-chain costs.
Operating income was $11.9 million, compared with $12 million in the prior-year period. Avidan said the appreciation of the Israeli shekel against the U.S. dollar affected the comparison. Excluding that currency effect, he said operating income would have been $16.5 million, or 37% above the third quarter of 2025.
Net income from continuing operations was $13.9 million, down 6% year over year, and diluted earnings per share from continuing operations were $0.32, compared with $0.33 a year earlier. Excluding the $4.6 million unfavorable impact from shekel appreciation, Avidan said non-GAAP net income from continuing operations would have been $17.8 million and non-GAAP diluted EPS would have been $0.41.
Cash Flow, Buybacks and Infrastructure Investment
Operating cash flow from continuing operations totaled $15.5 million, compared with negative $2.1 million in the year-earlier quarter. Radware repurchased approximately $13.7 million of shares during the quarter, bringing year-to-date repurchases to about $62 million.
The company ended the quarter with $421.5 million in cash equivalents, bank deposits and marketable securities.
Zisapel said Radware continues to add points of presence and expand mitigation capacity, including the opening of a Bangkok location and plans for another site in Indonesia. He said the company executed its plan to double mitigation capacity during the year and is building larger points of presence while expanding localized application-security capacity.
Avidan said capital expenditures rose to $3.1 million from $1.9 million a year earlier as the company added capacity and points of presence. He said free cash flow was $12.4 million, close to operating cash flow, which he described as an advantage of Radware’s infrastructure model.
Fourth-Quarter Outlook
For the fourth quarter of 2026, Radware forecast revenue of $88 million to $90 million. The company expects non-GAAP operating expenses of $57 million to $58 million and non-GAAP diluted earnings per share of $0.34 to $0.35.
Avidan said the company is not providing guidance for 2027, though he pointed to the company’s double-digit ARR growth and opportunities in API and AI-related security offerings. Zisapel said Radware plans to continue investing in sales, marketing and product capabilities related to Xploit Shield, AI Protect and API security, as well as managed security service provider and OEM channels.
About Radware (NASDAQ:RDWR)
Radware Ltd. NASDAQ: RDWR is a global provider of cybersecurity and application delivery solutions. The company helps organizations protect digital applications, networks and cloud environments from cyberattacks while maintaining the availability and performance of online services.
Its portfolio includes distributed denial-of-service (DDoS) protection, web application and API security, bot management, cloud security services, and network behavior analysis. Radware also offers application delivery controllers, load balancing and related traffic-management technologies designed to improve the reliability, scalability and performance of business-critical applications.
Founded in 1996, Radware serves enterprises, telecommunications providers, cloud service providers and other organizations worldwide through a combination of on-premises, cloud-based and hybrid solutions.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Radware, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Radware wasn't on the list.
While Radware currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Tesla, Nvidia, and Google helped shape the last era of market growth, but the next wave could come from a new group of companies. Inside this report, you’ll find 7 stocks that could play a major role in the next tech-driven market boom.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
