Welcome to the Radware Conference Call discussing First Quarter 2025 Results. Thank you all for holding. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded on May 7th, 2025. I would now like to turn the call over Yisca Erez, Director, Investor Relations at Radware. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Radware's first quarter 2025 earnings conference call. Joining me today are Roy Zisapel, President and Chief Executive Officer; and Guy Avidan, Chief Financial Officer. A copy of today’s press release and financial statements as well as the investor kit for the fourth quarter are available in the Investor Relations sector of our website. During today’s call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. These forward-looking statements are subject to various risks and uncertainties, and actual results could differ materially from Radware’s current forecast and estimates. Factors that could cause or contribute to such differences include, but are not limited to, impact from changing or severe global economic conditions, general business conditions and our ability to address changes in our industry, changes in demand for products, the timing and the amount of orders and other risks detailed from time to time in Radware’s filings. We refer you to the documents the company files and furnishes from time to time with the SEC, specifically the company’s last Annual Report on Form 20-F as filed on March 28, 2025. We undertake no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date of such statement is made. I will now turn the call to Roy Zisapel.

Thank you, Yisca, and thank you all for joining us today. I'm pleased to report a strong start to 2025 exceeding our guidance. Our first quarter revenue increased 11% year-over-over to $72 million. This is the third quarter in a row of double-digit revenue growth. Our non-GAAP earning per share of 69% to $0.27 demonstrating the high leverage in our business model. And finally, cashflow from operations was $22 million. A major driver of our success is attributed to our cloud security business, which continues to grow in scale and potential. Cloud security ARR increased by 19% year-over-year to $80 million. We also achieved double digit growth in our total number of cloud customers, driven primarily by a rapid increase in new cloud application security bookings. Even these strong metrics, we continue to believe that focus on an investment in this business will position us to exceed a 20% ARR growth rate and achieve close to $100 million in cloud security ARR by end of this year. Our results also highlight the solid progress we've made against our strategy to lead us the best of [breed] providers in application and data center security. Our growth strategy continues to be centered around three pillars. Win significant market share in cloud security, leads to AI innovation and automation, and enhance our go-to-market footprint. As we highlighted last quarter, we are expanding our cloud security infrastructure in order to further scale our business. Recently, we opened new cloud service centers in Peru, India, and Kenya and have plans to expand in other regions in the near future. Today, we support a network of over 50 cloud security service centers worldwide with a mitigation capacity of up to 15 terabyte. This network enables customers to keep applications and data within their borders to meet…

Thank you, Roy, and good day, everyone. I'll provide an overview of our financial results and business performance for the first quarter, as well as our outlook for the second quarter of 2025. Before beginning the financial overview, I would like to remind you that unless otherwise indicated all financial results are non-GAAP. A full reconciliation of our results on the GAAP to non-GAAP basis is available in the earning press release issued earlier today, and in the investor section of our website. Revenue for the first quarter of 2025 grew 11% year-over-year to $72 million. Driven mainly by another solid performance of our cloud security business and good contribution from our OEM partnerships. Total ARR increased 9% year-over-year to $230 million with cloud ARR growing 19% to $80 million. Furthermore, recurring revenues grew by -- grew to 82% of total revenue in the first quarter of 2025 compared to 79% and 78% in Q1 2024 and Q4 2024 respectively. In the first quarter of 2025, our regional performance showed growth across all regions. The America's increased by 1% year-over-year to $27.4 million accounting for 38% of total revenue. For the 12 trailing month, America's revenue grew 14% year-over-year. EMEA revenue in Q1 2025 increased 25% year-over-year to $28.4 million and accounted for 39% of total revenue. For the 12 trailing months, EMEA revenue grew 11% year-over-year. And APAC Q1 revenue increased 7% year-over-year to $16.3 million, contributing 23% of total revenue, and for the 12 trailing month, APAC revenue was flat year-over-year. I'll now discuss profits and expenses. Gross margin in Q1 2025 was 82.1%, a slight increase from 82% gross margin that was recorded in Q1 2024. Operating income doubled in the first quarter of 2025 to $8.6 million compared to $4.3 million in the same period of…

[Operator Instructions] The first question is from Joseph Gallo from Jefferies.

Nice job on the quarter. I appreciate the tariff color. Just regarding macro, did you see any changes in buying behavior from your customers? How was April and what's embedded in your 2Q guidance?

Okay. Hi. We didn't see a noticeable change in the last several other months, and also starting Q2 things are relatively the same, meaning not accelerating, not decelerating, and we didn't see anything specific to tariffs. In the beginning, we saw many questions, some distributors were asking actually to accelerate shipments, but this has calmed down after a week or so when the tariffs or the majority of them were put on hold, so we didn't see anything specific. And as Guy mentioned, as we focus more and more on the cloud business in North America that is a bit isolated from the old hardware portion of our business.

And then just as a follow up, can you double click on some of those U.S. market changes? A lot of new senior leadership, which is great, but that can also result in a couple quarters of disruption. So is there any major change in process needed in the U.S. market and is that accounted for in the 2Q guide? Thank you.

Yes, so, so great question. Actually, our announcement is after all those -- all these infrastructure is already in place. So Randy, the Head Lead I think is now going into his third quarter, like nine months into the company. A lot of the individual sales heads were joining us between three to six months ago. So we're actually now expecting more and more productivity ramp-up from them. And I think the newest edition, Connie, our Chief Growth Officer, she's like a month now into the company. So a lot of the major changes were already done. Actually, last quarter I think, and a quarter before we already started to see the fruits of that and we are very strong believers that the future is brighter and we can grow forward from here and add, and that's what we announced, that we are going to add even more resources as we go forward. So we think we have a strong leadership team in place that's already executed several quarters and gets more and more productive as time passes now. We don't see any disruption we are after that so to speak.

There are no further questions at this time. I would like to turn the floor back over to Roy Zisapel for closing comments.

Okay, thank you very much and have a great day.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.