RADCOM Reports Strong Results For Q3 2014: Excellent Reception Of MaveriQ CEM Solution Grows Revenues 26% To $6M With Record Net Income, $0.11 EPS (Non-GAAP)

TEL-AVIV, Israel, Oct. 29, 2014 /PRNewswire/ -- RADCOM Ltd. (NASDAQ: RDCM), a leading provider of customer experience management (CEM) solutions, today reported its financial results for the third quarter and nine months ended September 30, 2014.

Financial Results

Third Quarter: RADCOM's revenues for the third quarter totaled $6.0 million, up 26% compared with Q3 2013 and 21% compared with Q2 2014. Gross margin for the quarter increased to 66.0% from 50.4% in Q3 2013. The significant rise in gross margin reflected the Company's continued transition to a software-driven business model together with the sales of MaveriQ, its NFV-ready software-based solution, countered partially by the lower margins of some older projects not yet completed.

Net income for the quarter totaled $776,000, or $0.10 per basic ordinary share ($0.09 per diluted ordinary share) compared with a net loss of $(1,148,000), or $(0.15) per ordinary share (basic and diluted), for the third quarter of 2013. This is more than triple the $207,000 net profit reported in Q2 2014, representing a record net margin of 12.9%.

On a non-GAAP basis, net income totaled $872,000, or $0.11 (basic) and $.010 (diluted) per ordinary share, compared with a net loss of $(1,017,000), or $(0.13) per ordinary share (basic and diluted), for the third quarter of 2013. This represented a record non-GAAP net margin of 14.5%.

Collections during the period totaled $4.8 million, raising the Company's cash balance to $4.5 million at the end of the quarter, up 17% compared with the second quarter and 280% compared with the end of 2013.

First Nine Months of 2014: For the first nine months of 2014, RADCOM's revenues increased by 11% to $16.4 million from $14.8 million in the first nine months of 2013. Gross margin for the period increased to 69.2% from 61.6% in the prior-year period, reflecting the Company's ongoing transition to a software company, as mentioned above.

Net income for the first nine months totaled $1.1 million, or $0.14 (basic) and $0.13 (diluted) per ordinary share, compared with the net loss of $(1.5) million, or $(0.22) per ordinary share (basic and diluted), recorded in the first nine months of 2013. On a non-GAAP basis, net income for the period totaled $1.5 million, or $0.18 (basic) and $0.17 (diluted) per ordinary share, compared with the non-GAAP net loss of $(1,100,000), or $(0.16) per ordinary share (basic and diluted) reported in the first nine months of 2013.

Comments of Management
"We are very pleased to report another strong quarter that is moving RADCOM to new levels of revenues, profits and margins," commented Mr. David Ripstein, RADCOM's President and CEO. "With revenues above $6 million and growing sales of software-based products, our gross margin continues to climb towards our long-term target of above 75%. This has enabled us to deliver our fourth straight profitable quarter and third straight quarter of positive cash flow, achieving an all-time record for our operating and net profit with a 14.5% net margin (non-GAAP). And we believe the best is still ahead."

Mr. Ripstein continued, "These outstanding results derive from the market's exceedingly strong reception of MaveriQ, our unique software-based CEM solution, whose superior 'anti-churn' capabilities are being recognized by Tier I & Tier II 4G/LTE/Data service providers throughout the world. This capability has given us entry into more and larger tenders than ever before, and we are enjoying a strong win rate. We feel well positioned to grow in step with the LTE build-out, a trend we believe has the power to continue driving our results throughout 2015."

Earnings Conference Call
RADCOM's management will hold an interactive conference call today at 9:00 AM Eastern Time (15:00 Israel 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): + 1-888-668-9141

From other locations: +972-3-918-0609

For those unable to listen to the call at the time, a replay will be available from October 30th on RADCOM's website.

About RADCOM
RADCOM provides innovative service assurance and customer experience management solutions for leading telecom operators and communications service providers. RADCOM specializes in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband. RADCOM's comprehensive, carrier- grade solutions are designed for big data analytics on terabit networks, and are used to prevent service provider revenue leakage and to enhance customer care management. RADCOM's products interact with policy management to provide self-optimizing network solutions. RADCOM's shares are listed on the NASDAQ Capital Market under the symbol RDCM. For more information, please visit www.radcom.com

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 our financial performance. By excluding non-cash stock-based compensation that has been expensed in accordance with ASC Topic 718, our non-GAAP results provide information to both management and investors that is useful in assessing our core operating performance and in evaluating and comparing our 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. 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 United States Securities and Exchange Commission. The Company does not undertake to revise or update any forward-looking statements for any reason.

Contact:
Uri Birenberg
CFO
(972) 77-774-5060
[email protected]  

SOURCE RADCOM Ltd.