RADCOM Reports Fourth Quarter and Full Year 2018 Results

•    Cash and Cash Equivalents of $62 million and No Debt
•    8% decrease in year over year revenues due to slower than expected pace of NFV transformations
•    Continuing investment in R&D activities to maintain technological leadership in support of expected 5G rollout

 

TEL AVIV, Israel – February 12, 2019 − RADCOM Ltd. (NASDAQ: RDCM), today reported its financial results for the fourth quarter and full year ended December 31, 2018

 

“During 2018, we delivered successfully on our project commitments while at the same time generating new opportunities,” commented Mr. Yaron Ravkaie, RADCOM’s CEO. “Although our results were affected by a slower than expected pace of NFV transformations, and while market conditions continue to affect our visibility into when operators will implement their NFV and 5G plans, we remain confident in the future of NFV and 5G and in our technological leadership, our solutions and strong industry recognition.  As operators begin to roll out 5G networks, RADCOM is well positioned as a leading assurance player for NFV, which will be the foundation for 5G-ready cloud services. The Company continues to invest in R&D activities, supported by our healthy balance sheet, to push our innovative technology forward and continue meeting the needs of our leading customers. Taking into account market conditions, we are currently providing revenue guidance for 2019 of $28 - $32 million.” 

 

Fourth Quarter 2018 Financial Highlights:

• Revenues: Total revenues for the fourth quarter were $4.0 million, down 62% compared to $10.6 million in the fourth quarter of 2017

Net Income (loss): GAAP net loss for the period was $4.1 million, or $0.30 per diluted share, compared to GAAP net income of $2.3 million, or $0.17 per diluted share for the fourth quarter of 2017 

Non-GAAP Net Income (loss):  Non-GAAP net loss for the period was $3.7 million, or $0.27 per diluted share, compared to non-GAAP net income of $2.7 million, or $0.21 per diluted share for the fourth quarter of 2017

• Balance sheet: As of December 31, 2018, the Company had cash and cash equivalents of $62 million and no debt

 

Full Year 2018 Financial Highlights:

• Revenues: Total revenues for the full year 2018 were $34.1 million, down 8% compared to $37.2 million in the full year 2017


• Net Income (loss): GAAP net loss for the full year 2018 was $2.4 million, or $0.18 per diluted share, compared to GAAP net income of $2.9 million, or $0.23 per diluted share for the full year 2017


• Non-GAAP Net Income (loss):  Non-GAAP net loss for the period was $0.3 million, or $0.02 per diluted share, compared to non-GAAP net income of $5.1 million, or $0.41 per diluted share for the full year 2017

 

Earnings Conference Call
RADCOM’s management will hold an interactive conference call today at 8:00 AM Eastern Time (3:00 PM Israel Standard 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): +1-888-407-2553

From other locations: +972-3-918-0610

 

For those unable to listen to the call at the time, a replay will be available from February 13th on RADCOM's website.

 

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About RADCOM
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 continued investment in technology to meet the needs of its clients, the expected role of NFV and the Companby’s solutions in 5G networks, the Company’s technological leadership or industry recognition, the Company’s pipeline of opportunities, and its revenue guidance, 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.

 

RADCOM LTD.
Consolidated Statements of Operations
(thousands of U.S. dollars, except share and per share data)

 

 

Three months ended
 December 31,

 

Twelve months ended 
December 31,

 
 

2018

 

2017

 

2018

 

2017

 
 

(unaudited)

 

(unaudited)

 

(unaudited)

     

Revenues

$3,989

 

$10,631

 

$34,050

 

$37,233

 

Cost of revenues

1,439

 

2,660

 

8,866

 

10,488

 

Gross profit

2,550

 

7,971

 

25,184

 

26,745

 

Research and development, gross

4,074

 

3,055

 

15,503

 

10,562

 

Less - royalty-bearing participation

366

 

1,132

 

1,648

 

1,599

 

Research and development, net

3,708

 

1,923

 

13,855

 

8,963

 

Sales and marketing, net

2,701

 

2,777

 

11,426

 

10,996

 

General and administrative

744

 

1,042

 

3,391

 

4,191

 

Total operating expenses

7,153

 

5,742

 

28,672

 

24,150

 

Operating income (loss)

(4,603)

 

2,229

 

(3,488)

 

2,595

 

Financial income, net

481

 

64

 

1,136

 

389

 

Income (loss) before taxes on income

(4,122)

 

2,293

 

(2,352)

 

2,984

 

Taxes on income

(6)

 

(35)

 

(63)

 

(83)

 

Net income (loss)

$(4,128)

 

$2,258

 

$(2,415)

 

$2,901

 

 

Basic net income (loss) per ordinary share

$(0.30)

 

$0.17

 

$(0.18)

 

$0.24

 

Diluted net income (loss) per ordinary share

$(0.30)

 

$0.17

 

$(0.18)

 

$0.23

 

 

Weighted average number of ordinary shares used in 

computing basic net income (loss) per ordinary share

13,719,649

 

13,050,849

 

13,630,793

 

12,039,176

 

 

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

13,719,649

 

13,339,174

 

13,630,793

 

12,351,566

 

 

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
December 31,

Twelve months ended

December 31,

 

2018

 

2017

 

2018

 

2017

GAAP gross profit

$2,550

 

$7,971

 

$25,184

 

$26,745

Stock-based compensation

10

 

55

 

112

 

189

Non-GAAP gross profit

$2,560

 

$8,026

 

$25,296

 

$26,934

 

GAAP research and development, net

$3,708

 

$1,923

 

$13,855

 

$8,963

Stock-based compensation

187

 

134

 

808

 

473

Non-GAAP research and development, net

$3,521

 

$1,789

 

$13,047

 

$8,490

GAAP sales and marketing, net

$2,701

 

$2,777

 

$11,426

 

$10,996

Stock-based compensation

115

 

105

 

698

 

499

Non-GAAP sales and marketing, net

$2,586

 

$2,672

 

$10,728

 

$10,497

GAAP general and administrative

$744

 

$1,042

 

$3,391

 

$4,191

Stock-based compensation

101

 

196

 

503

 

1,055

Non-GAAP general and administrative

$643

 

$846

 

$2,888

 

$3,136

GAAP total operating expenses

$7,153

 

$5,742

 

$28,672

 

$24,150

Stock-based compensation

403

 

435

 

2,009

 

2,027

Non-GAAP total operating expenses

$6,750

 

$5,307

 

$26,663

 

$22,123

GAAP operating income (loss)

$(4,603)

 

$2,229

 

$(3,488)

 

$2,595

Stock-based compensation

413

 

490

 

2,121

 

2,216

Non-GAAP operating income (loss)

$(4,190)

 

$2,719

 

$(1,367)

 

$4,811

GAAP income (loss) before taxes on income

$(4,122)

 

$2,293

 

$(2,352)

 

$2,984

Stock-based compensation

413

 

490

 

2,121

 

2,216

Non-GAAP income (loss) before taxes on income

$(3,709)

 

$2,783

 

$(231)

 

$5,200

GAAP net income (loss)

$(4,128)

 

$2,258

 

$(2,415)

 

$2,901

Stock-based compensation

413

 

490

 

2,121

 

2,216

Non-GAAP net income (loss)

$(3,715)

 

$2,748

 

$(294)

 

$5,117

GAAP net income (loss) per diluted share

$(0.30)

 

$0.17

 

$(0.18)

 

$0.23

Stock-based compensation

0.03

 

0.04

 

0.16

 

0.18

Non-GAAP net income (loss) per diluted share

$(0.27)

 

$0.21

 

$(0.02)

 

$0.41

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

13,719,649

 

13,339,174

 

13,630,793

 

12,351,566

 

 

RADCOM Ltd.
Consolidated Balance Sheets

(thousands of U.S. dollars) 

 

 

 

 

 

As of December 31,

2018

 

As of December 31,

2017

 

(unaudited)

   
       

Current Assets

     

Cash and cash equivalents

$61,988

 

$22,575

Restricted bank deposit

-

 

36

Short-term bank deposit

-

 

40,000

Trade receivables, net

20,381

 

20,266

Inventories

251

 

1,199

Other receivables

1,766

 

2,685

Total Current Assets

84,386

 

86,761

Severance pay fund

2,967

 

3,052

Other long-term receivables

346

 

172

Property and equipment, net

1,832

 

1,924

       

Total Assets

$89,531

 

$91,909

       

Liabilities and Shareholders' Equity

     
       

Current Liabilities

     

Trade payables

$1,559

 

$1,828

Deferred revenue

266

 

2,601

Employee and payroll accruals

3,420

 

4,062

Other payables and accrued expenses

2,281

 

3,428

Total Current Liabilities

7,526

 

11,919

       

Non-Current Liabilities

     

Deferred revenue

100

 

21

Accrued severance pay       

3,425

 

3,573

Total Non-Current Liabilities

3,525

 

3,594

       

Total Liabilities

$11,051

 

$15,513

       

Shareholders' Equity

     

Share capital

$643

 

$628

Additional paid-in capital

135,730

 

131,491

Accumulated other comprehensive loss

(2,612)

 

(2,520)

Accumulated deficit

(55,281)

 

(53,203)

       

Total Shareholders' Equity

78,480

 

76,396

Total Liabilities and Shareholders' Equity

$89,531

 

$91,909

 

 

 

For all investor enquiries, please contact:

Investor Relations:
Miri Segal
MS-IR LLC
917-607-8654
msegal@ms-ir.com


Company Contact:
Amir Hai 
CFO
+972-77-774-5011
amir.hai@radcom.com