Radware reported earnings of $0.08 per share for the September quarter on revenue of $84.36 million. By the Earnings Whispers measure, earnings fell 50.0% year over year while revenue grew 12.0%. That split is the central tension of the quarter. Revenue growth has now improved in four straight quarters, from 10% in Q4'25 to 11%, 11%, and 12%, and management guided Q4 well above prior run rates. Very little of that top-line momentum, however, is reaching the bottom line. The company's own figures tell different stories depending on the measure. GAAP diluted EPS from continuing operations was $0.11, down from $0.19. Total GAAP diluted EPS, including discontinued operations, was $0.06. Non-GAAP EPS from continuing operations was $0.32, slightly below last year's $0.33 but above the company's $0.28-$0.29 guidance. Investors should note that the normalized $0.08 figure does not match any of these company-reported measures.

The quality of the quarter deserves scrutiny below the operating line. Gross profit rose 11% to $67.8 million, but GAAP operating expenses jumped 19% to $65.6 million. That cut GAAP operating income to $2.2 million from $5.8 million. Stock-based compensation was a major driver, rising to $8.9 million from $5.3 million, and general and administrative stock compensation alone tripled to $4.0 million. Non-GAAP operating income was essentially flat at $11.9 million. Management attributes the stagnation largely to the Israeli shekel, which added roughly $4.6 million of expense. Excluding that hit, non-GAAP EPS would have been $0.41, up 24%. That adjustment is real but recurring, and the currency exposure is not going away. Financial income also slipped to $4.5 million on a non-GAAP basis from $5.2 million, reflecting lower rates and a smaller cash pile after $62 million of buybacks year to date. Those repurchases helped trim the diluted share count to 43.5 million from 45.0 million.

The operating story from the call is better than the earnings line suggests.

• **ARR:** Total ARR reaccelerated to 11% growth, reaching $266 million, up from 9% growth in Q1.
• **Cloud ARR:** Cloud ARR reached $107 million and now makes up 41% of total ARR.
• **Regional breadth:** Every region grew 12%. That is a notable recovery for EMEA, which declined 11% in Q1 and 2% in Q2.
• **Cash flow and deferred revenue:** Operating cash flow from continuing operations was $15.5 million, compared with a $2.1 million outflow a year ago. Total deferred revenue has climbed to about $207 million from $178 million at year-end.

There are cracks, however.

• **Gross margin** has slipped every quarter, from 82.2% to 81.8% to 81.4%. Management cited currency, product mix, and memory and supply-chain costs.
• **Cloud ARR growth** has eased from 23% to 22% to 21%, still short of the 25% target management cited last quarter.
• **Americas growth** normalized to 12% from 40% in Q1 and 24% in Q2.

Guidance was the clearest positive. Management guided Q4 revenue to $88-$90 million and non-GAAP EPS to $0.34-$0.35. That is a meaningful step up from the $82.5-$83.5 million revenue guidance given for Q3 and the $0.28-$0.29 EPS guidance given on each of the prior calls. Opex guidance was held at $57-$58 million, which implies operating leverage if revenue lands as projected. The tone was more confident: management said there is "no reason it will not continue to accelerate." One caveat: the Q4 range implies roughly 10% to 12.5% year-over-year growth, so the low end would represent a slight deceleration. An analyst also flagged tougher comparisons ahead.

The catalyst list is longer than it was a quarter ago.

• **Exploit Shield:** The product, introduced last quarter, won its first large deal with an Asian telecom after a competitive evaluation.
• **Agentic AI security:** MCP server protection already has production customers, and agent trust management was added to the portfolio.
• **Competitive displacements:** Radware replaced a rival's API security offering at a major Americas payment provider, consolidating WAF, API, and DDoS protection.
• **DefenseProX:** A global cloud provider agreed to modernize its DDoS infrastructure on the platform. Management describes the DefenseProX refresh as less than one-third complete, framing it as a multi-quarter runway.

Bears still have legitimate ammunition. Management placed meaningful agentic-AI revenue in 2027, in a market crowded with more than 20 startups alongside large incumbents. Capex is also rising, to $3.1 million from $1.9 million, to fund the expansion of points of presence.

Market data for this report is sparse. Current sentiment readings and post-report price action were not available. Shares opened at $26.80 after the July report, slightly below the stock's current 200-day moving average of $27.52. That suggests the market had treated the name with limited enthusiasm heading into a print that improved the growth narrative.

The bottom line is that Radware delivered a genuine top-line beat-and-raise, with accelerating revenue, broader regional growth, stronger cash flow, and early commercial traction for its AI security products. Earnings on every measure, including the normalized figure, show the cost of that growth: eroding gross margins, a persistent shekel headwind, and sharply higher stock compensation. The Q4 outlook implies margin recovery. Whether that materializes, and whether cloud ARR growth can turn back toward the 25% target, will determine if the revenue story finally translates into earnings growth.