Radware posts record Q3 revenue of $84.4m on cloud security growth
Radware (NASDAQ: RDWR) has reported record third-quarter 2026 revenue of $84.4 million, up 12% year-on-year from $75.3 million in the same period of 2025. The Tel Aviv-based application security and delivery vendor said growth was broad-based across all three geographic regions, with Americas, EMEA and APAC each recording 12% gains.
Cloud annual recurring revenue reached $107 million, a 21% increase year-on-year, which the company cited as a signal of accelerating adoption of its subscription-based security services. Operating cash flow from continuing operations came in at $15.5 million for the quarter, and Radware ended September with $421.5 million in cash, deposits and marketable securities.
Profitability under pressure from FX and cost growth
Despite the top-line record, GAAP net income from continuing operations fell to $4.5 million ($0.11 per diluted share), down from $8.2 million ($0.19 per share) in Q3 2025. Non-GAAP net income from continuing operations was $13.9 million ($0.32 per diluted share), compared with $14.8 million ($0.33 per share) a year earlier.
Radware attributed the gap largely to shekel appreciation against the US dollar. Excluding the $4.6 million adverse foreign-exchange impact on expenses, the company said non-GAAP net income would have been $17.8 million and non-GAAP diluted EPS $0.41, representing year-on-year growth of 20% and 24% respectively. Research and development costs also rose markedly, with GAAP R&D expenses up to $24.1 million from $18.3 million in Q3 2025, reflecting ongoing investment in AI-driven security capabilities.
President and chief executive Roy Zisapel said customer demand for application security remained "robust", pointing to cloud bookings and large deal activity. "As we continue to expand our cloud security platform with new AI security capabilities, customers are increasingly adopting Radware to protect applications, APIs, infrastructure, and AI environments through a unified platform," he said.
Radware also repurchased $13.7 million of its own shares during the quarter, part of a $61.8 million buyback programme year-to-date, which has reduced the weighted average diluted share count from approximately 45 million to 43.5 million.
Market context
The enterprise application security market is increasingly competitive, with Radware facing pressure from Cloudflare, Akamai, Imperva (now part of Thales) and a cohort of cloud-native entrants targeting API security and bot mitigation. Hyperscalers are also embedding security controls deeper into their own platforms, raising the bar for standalone vendors to justify separate spend.
Radware's positioning around AI environment protection is notable given the fast-emerging category of securing AI agents and model inference endpoints. As enterprises deploy large-language-model-based applications, attack surfaces are expanding beyond traditional web and API layers into prompt injection, model exfiltration and supply-chain threats. Vendors that can credibly address these vectors alongside conventional DDoS and application-layer defence are well placed for cross-sell into existing accounts.
The EU AI Act's obligations for AI system providers, phasing in through 2026 and 2027, add a compliance dimension that could increase demand for documented security controls around AI workloads, another area Radware is positioning to address. Radware will host a Q3 earnings call on 28 October 2026 and is expected to provide Q4 guidance at that time.