Cuộc họp công bố kết quả kinh doanh Quý 3/2026 của Radware (RDWR): Doanh thu kỷ lục, ARR mảng đám mây tăng 21%

Các điểm chính

• Radware đã báo cáo doanh thu kỷ lục trong quý 3 năm 2026 đạt 84,4 triệu USD, tăng 12% so với cùng kỳ năm ngoái, đánh dấu quý thứ tám tăng trưởng hai chữ số trong chín quý gần nhất.
• Tổng ARR tăng 11% lên khoảng 266 triệu USD. Cloud ARR tăng 21% lên khoảng 107 triệu USD và chiếm 41% tổng ARR, tăng từ mức 37% của một năm trước đó.
• EPS pha loãng phi GAAP từ các hoạt động liên tục đạt 0,32 USD, so với 0,33 USD trong quý 3 năm 2025. Nếu không tính tác động tiền tệ 4,6 triệu USD, EPS lẽ ra đã đạt 0,41 USD.
• Tăng trưởng diễn ra trên diện rộng, với doanh thu tại châu Mỹ, EMEA và APAC đều tăng 12% so với cùng kỳ năm ngoái. An ninh mạng đám mây và nhu cầu đối với DefensePro X đã hỗ trợ kết quả hoạt động của quý.
• Ban quản lý dự báo doanh thu quý 4 năm 2026 đạt từ 88 triệu đến 90 triệu USD và EPS pha loãng phi GAAP từ 0,34 đến 0,35 USD.
• Ban quản lý cho biết các trường hợp sử dụng an ninh mạng liên quan đến AI hiện tại đã và đang hỗ trợ nhu cầu về WAF, API và DDoS, trong khi việc áp dụng rộng rãi hơn các giải pháp bảo mật cho các môi trường AI mới dự kiến sẽ trở thành cơ hội ý nghĩa hơn vào năm 2027.

Dữ liệu tài chính chính

Trừ khi có tuyên bố khác, các chỉ số khả năng sinh lời đều là chỉ số phi GAAP và liên quan đến các hoạt động liên tục. SkyHawk đã được phân loại là hoạt động bị chấm dứt kể từ quý 1 năm 2026.

Radware đã mua lại khoảng 13,7 triệu USD cổ phiếu trong quý, nâng tổng số cổ phiếu mua lại từ đầu năm đến nay lên khoảng 62 triệu USD.

Kết quả kinh doanh và hoạt động

An ninh mạng đám mây tiếp tục là động lực tăng trưởng chính. Radware cho biết việc áp dụng nền tảng tích hợp của công ty trên toàn bộ WAF, bảo mật API và bảo vệ DDoS vẫn duy trì đà tăng. Công ty đã giành được một hợp đồng thay thế cạnh tranh lớn với một nhà cung cấp hạ tầng thanh toán tại châu Mỹ, hợp nhất việc bảo vệ WAF, API và DDoS trên nền tảng của mình.

Ban quản lý cũng nhấn mạnh nhu cầu gia tăng do việc phát hiện lỗ hổng và tự động hóa tấn công có sự hỗ trợ của AI gây ra. Radware đã giành được hợp đồng Xploit Shield lớn đầu tiên với một nhà cung cấp viễn thông hàng đầu châu Á. Công ty đang mở rộng danh mục giải pháp an ninh mạng cho Agentic AI thông qua MCP Server Protection và Agent Trust Management, còn được gọi là Serve AI.

Mảng kinh doanh an ninh mạng tại chỗ (on-premises) cũng hoạt động tốt. DefensePro X được hưởng lợi từ chu kỳ nâng cấp hạ tầng, với chưa đến một phần ba cơ sở đã cài đặt hết hạn bán được nâng cấp cho đến nay. Radware cũng thông báo về một thỏa thuận với một nhà cung cấp đám mây lớn toàn cầu để hiện đại hóa và mở rộng hạ tầng bảo vệ DDoS.

Tăng trưởng theo khu vực diễn ra đồng đều:

• Châu Mỹ: Doanh thu đạt 39,6 triệu USD, tăng 12%, chiếm 47% tổng doanh thu.
• EMEA: Doanh thu đạt 25,6 triệu USD, tăng 12%, chiếm 30% tổng doanh thu.
• APAC: Doanh thu đạt 19,2 triệu USD, tăng 12%, chiếm 23% tổng doanh thu.

Radware tiếp tục bổ sung các điểm hiện diện (PoP) cho bảo vệ/giảm thiểu tấn công và an ninh ứng dụng. Ban quản lý cho biết công ty đã hoàn thành kế hoạch nhân đôi công suất giảm thiểu tấn công trong năm và đang phát triển các trung tâm giảm thiểu tấn công lớn hơn bên cạnh các PoP AppSec địa phương.

Dự báo của Ban quản lý

Đối với quý 4 năm 2026, ban quản lý đã đưa ra dự báo sau:

Ban quản lý không đưa ra dự báo chính thức cho năm 2027. Tuy nhiên, công ty cho biết cơ hội dự án (pipeline) cho các sản phẩm an ninh mạng AI đang mở rộng và kỳ vọng bảo mật cho các môi trường AI mới triển khai sẽ trở thành cơ hội lớn hơn vào năm 2027.

Rủi ro và các lĩnh vực cần theo dõi

Việc đồng shekel Israel tăng giá so với đồng USD đã làm giảm lợi nhuận từ hoạt động kinh doanh quý 3 khoảng 4,6 triệu USD. Nếu không tính tác động này, lợi nhuận từ hoạt động kinh doanh phi GAAP lẽ ra đã đạt 16,5 triệu USD, tăng 37% so với cùng kỳ năm ngoái, trong khi lợi nhuận ròng và EPS pha loãng lần lượt đạt 17,8 triệu USD và 0,41 USD.

Biên lợi nhuận gộp giảm 100 điểm cơ bản xuống 81,4%, phản ánh áp lực tỷ giá hối đoái, cơ cấu sản phẩm và chi phí chuỗi cung ứng. Lãi suất thị trường thấp hơn và số dư tiền mặt giảm sau các đợt mua lại cổ phiếu cũng gây áp lực lên doanh thu tài chính, và ban quản lý dự kiến lực cản nhỏ này sẽ kéo dài đến cuối năm.

Ban quản lý mô tả an ninh mạng cho Agentic AI là một thị trường mới nổi và còn phân mảnh với nhiều công ty khởi nghiệp và các đối thủ cạnh tranh lớn hơn. Mặc dù Radware đã có những khách hàng đầu tiên và danh sách cơ hội dự án đang tăng trưởng, ban quản lý cho biết thời điểm và quy mô áp dụng rộng rãi hơn vẫn đang trong giai đoạn phát triển.

Các điểm nổi bật trong phần Hỏi & Đáp với chuyên gia phân tích

• Thương mại hóa AI: Ban quản lý chia cơ hội thành ba lĩnh vực: bảo vệ các ứng dụng hiện có khỏi các cuộc tấn công có sự hỗ trợ của AI, bảo vệ các môi trường AI và Agentic AI mới, và tự động hóa các hoạt động an ninh mạng thông qua AI SOC Xpert. Các trường hợp sử dụng an ninh ứng dụng và SOC hiện tại đã đóng góp vào nhu cầu, trong khi việc áp dụng bảo mật các môi trường AI mới ở quy mô lớn hơn dự kiến sẽ diễn ra vào năm 2027.
• Đầu tư bán hàng: Radware cho biết các khoản đầu tư bán hàng và tiếp thị trước đây đã đem lại hiệu quả tích cực trong khi chi phí bán hàng và tiếp thị giảm tính theo tỷ lệ phần trăm trên doanh thu. Công ty có kế hoạch tiếp tục đầu tư vào Xploit Shield, an ninh mạng AI, bảo mật API, các kênh MSSP và OEM.
• Bối cảnh cạnh tranh: Xploit Shield nhìn chung được bán cho các khách hàng mua giải pháp an ninh ứng dụng hiện tại, trong khi giải pháp bảo vệ Agentic AI liên quan đến một lĩnh vực cạnh tranh mới hơn và phân mảnh hơn. AI SOC Xpert chủ yếu được định vị là sản phẩm bán thêm (upsell) cho các khách hàng hiện tại.
• Mở rộng mạng lưới và hiệu quả sử dụng vốn: Chi phí vốn quý 3 tăng lên 3,1 triệu USD từ mức 1,9 triệu USD của một năm trước đó do Radware bổ sung công suất và các PoP. Ban quản lý nhấn mạnh rằng việc sử dụng phần cứng giảm thiểu tấn công và các chip ASIC riêng giúp dòng tiền tự do xấp xỉ dòng tiền từ hoạt động kinh doanh.

Toàn văn Biên bản Cuộc họp Báo cáo Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Radware's Third Quarter 2026 Earnings Call.

[Operator Instructions]

I must advise you that this call is being recorded. I would now like to hand over the call to our first speaker, Yisca Erez, Head of Investor Relations. Yisca, please go ahead.

Yisca Erez

Good morning, everyone, and welcome to Radware's Third Quarter 2026 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 third quarter are available in the Investor Relations section 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 the 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 that 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 13, 2026. 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.

Roy Zisapel

Thank you, Yisca, and thank you all for joining us today. We delivered a strong third quarter, achieving record revenue while accelerating our year-over-year growth. Revenue reached $84.4 million, up 12%, marking our eighth quarter of double-digit growth over the last 9 quarters and reflecting solid execution across strategic priorities. Non-GAAP diluting EPS was $0.32 per share. Today, Radware is a leading cloud security platform company. Customers are increasingly looking for security solutions that can protect applications, APIs, infrastructure and emerging AI environments through a unified platform, combining advanced security capabilities with fully managed services. This is exactly what we deliver.

Cloud ARR reached $107 million, increasing 21% year-over-year, driven mainly by continued adoption of our security platform. We see rapid growth in API security. And during the quarter, we secured several meaningful API security wins, including a large deal with a leading payment infrastructure provider in the Americas. API security was an important part of this competitive replacement where we consolidated WAF, API and DDoS protection on the Radware platform, demonstrating the value of our integrated approach. The rapidly evolving threat landscape further amplifies the need for our broad application security platform approach.

According to our First Half 2026 Global Threat Analysis Report, web DDoS attacks increased 110% year-over-year, while malicious web and API activity more than doubled.

At the same time, AI is accelerating vulnerability discovery, shortening the time between exposure and exploitation, and increasing attacker automation. These trends increase the need for automated behavioral-based protection that operates in real time, which is at the core of our cloud security platform. Beyond accelerating cyber attacks, AI is also changing how organizations operate. As autonomous AI agents become more integrated into applications and business processes, they introduce new security, governance and trust challenges, creating new requirements for securing these interactions. To address these evolving requirements, we continue to expand our platform with new security modules focused specifically on securing new AI business environments.

Last quarter, we introduced Xploit Shield, which provides tailored runtime protection for new exploits discovered with traditional tools or by frontier models.

It provides immediate runtime protection to customers while they assess and remediate newly discovered vulnerabilities in their application code. Recently disclosed critical vulnerabilities such as PHP2Shell and Node2Shell bring this urgency to life, demonstrating how quickly the threat landscape can evolve and why proactive protection is critical. We are seeing strong customer interest in these capabilities and have already secured our first large Xploit Shield deal with a leading telecom provider in Asia. The carrier selected Radware as its primary cloud application security platform following a competitive evaluation with Xploit Shield serving as a key differentiator.

This win shows how our AI-driven innovation can address evolving customer requirements, strengthen our competitive position and drive broader platform adoption. We continue to expand our Agentic AI protection offering with 2 new capabilities. First, MCP Server Protection secures the emerging integration layer between AI agents and enterprise systems, and we already have production customers using this capability. And second, Agent Trust Management or Serve AI, enables organizations to safely interact with customers AI agents by assessing their identity, intent and trust and controlling the actions they can perform. Together, these capabilities extend our AI security strategy across 3 important dimensions: defending against AI-powered attacks, protecting the AI infrastructure organizations are deploying and securely enable AI agents to interact with our customers' enterprise applications and data.

We believe this greatly expands the total addressable market for our platform and further strengthen the breadth of our cloud security platform as AI becomes increasingly embedded in enterprise applications and workflows. Our technology leadership also received external validation during the quarter. IDC named Radware a leader in its 2026 Worldwide Web Application and API Protection platform assessment. We also received recognition from QKS Group, which named Radware a leader in its 2026 SPARK Matrix for DDoS mitigation and the most valuable pioneer in its AI Maturity Matrix for web application and API protection. We truly have technology leadership in the core markets we serve, WAF, API, DDoS and AI security.

While our cloud security platform remains a primary growth driver, our on-prem security business also continued to perform well. DefensePro X continued to benefit from the ongoing infrastructure refresh cycle as customers upgrade aging DDoS environments. With less than 1/3 of the end-of-sale installed base refresh to date and a strong pipeline ahead, we see meaningful opportunity from this cycle over the next several quarters. A good example of this momentum is the agreement we announced yesterday with a major global cloud provider to modernize and expand its DDoS protection infrastructure. Following a competitive evaluation, Radware was selected to significantly increase the customer protection capacity and performance while providing greater flexibility to scale.

In summary, the third quarter was another strong quarter of execution. We accelerated growth, increased ARR and continue to broaden our customer reach. At the same time, we accelerated the pace of innovation, expanding our cloud security platform into new AI security domains with new capabilities such as Xploit Shield, MCP Protection and Agent Trust Management. Looking ahead, AI is rapidly reshaping the security landscape, creating new challenges for our customers and significant new opportunities for us. We believe our broader platform, strong innovation engine and consistent execution position us well to capture this opportunity and deliver sustainable long-term growth. With that, I'll turn the call over to Guy.

Guy Avidan

Thank you, Roy, and good day, everyone. I'll review our third quarter financial performance, discuss the main trends reflected in the results and conclude with our outlook for the fourth quarter of 2026. As a reminder, unless stated otherwise, the financial metrics discussed today are presented on a non-GAAP basis. Reconciliation between GAAP and non-GAAP results are included in the press release we issued earlier today and are also available in the Investors section of our website. As discussed previously, SkyHawk is presented as a discontinued operation beginning the first quarter of 2026. Accordingly, the results I'll review today relate to continuing operations.

Third quarter revenue reached a record $84.4 million, increasing 12% year-over-year. This marks a further acceleration in our growth rate and reflects solid execution across the business. The quarter benefited from continued momentum in cloud security and demand for our DefensePro X in subscription and on-prem business models. Total ARR reached approximately $266 million, up 11% year-over-year, reflecting the continued expansion of our recurring revenue base. Cloud ARR ended the quarter at approximately $107 million, up 21% from a year ago. Cloud continues to be a large portion of our recurring business, representing 41% of total ARR compared with 37% in the third quarter of 2025. This shift in mix reflects the continued adoption of our cloud security platform that supports greater visibility into our revenue base.

Looking at regional performance. We delivered a strong performance across all geographies in the third quarter, with each region achieving double-digit year-over-year growth. Importantly, the growth was broad-based and reflects healthy demand across diverse verticals. In the Americas, revenue was $39.6 million, up 12% year-over-year, representing 47% of total revenue. On a trailing 12-month basis, revenue in the Americas grew 17% year-over-year.

EMEA revenue was $25.6 million, up 12% year-over-year and represented 30% of total revenue. On a trailing 12-month basis, revenue in EMEA grew 8% year-over-year. APAC revenue was $19.2 million, up 12% year-over-year, representing 23% of total revenue. On a trailing 12-month basis, revenue in APAC grew 5% year-over-year.

Moving now to profitability. Gross profit in the third quarter was $68.7 million, increasing 11% year-over-year. Gross margin was 81.4% compared with 82.4% in the third quarter of 2025. Gross margin was mainly impacted by the foreign exchange headwind, product mix and supply chain cost pressure we discussed in previous quarters. Operating income was $11.9 million compared to $12 million in the same period last year. The year-over-year comparison was primarily affected by the appreciation of the Israeli shekel against the U.S. dollar. Excluding this currency impact, operating income would have been $16.5 million, representing 37% growth compared with the third quarter of 2025. At the same time, we continue to invest in technology and innovation to capture the opportunity emerging from the rapidly evolving AI market and support our future growth.

Financial income was $4.5 million in the quarter compared to $5.2 million in the same period last year, reflecting lower market interest rate and reduced cash balance following share repurchases executed over recent quarters. We expect these factors to remain a modest headwind to finance income throughout the end of the year. Our effective tax rate was 15% compared to 13.5% in the same period last year. We expect the effective tax rate to be between 14% to 15% in the coming quarter. Net income from continuing operations was $13.9 million, down 6% year-over-year and diluted earnings per share from continuing operations were $0.32 compared to $0.33 in Q3 2025.

Excluding the $4.6 million unfavorable impact of the appreciation of the Israeli shekel against the U.S. dollar in the third quarter of 2026, non-GAAP net income from continued operations and non-GAAP income diluted EPS from continuing operations would have been $17.8 million and $0.41, respectively. This compares with the reported $14.8 million and $0.33 per diluted share in the third quarter of 2025, representing year-over-year growth of 20% in non-GAAP net income and 24% in non-GAAP diluted EPS.

Turning to cash flow and the balance sheet. Operating cash flow provided by continuing operations in Q3 2026 was $15.5 million compared to a negative $2.1 million in the same quarter last year. During the quarter, we continued to execute our capital allocation strategy and repurchased shares in approximately $13.7 million. This brings total share repurchases from the beginning of the year to approximately $62 million. We ended the quarter with $421.5 million in cash, cash equivalents, bank deposits and marketable securities, maintaining a strong balance sheet and financial flexibility to continue to support our strategic priorities.

And now to our guidance. For the fourth quarter of 2026, we expect total revenue to be in the range of $88 million to $90 million. We expect fourth quarter 2026 non-GAAP operating expenses to be between $57 million to $58 million. We expect fourth quarter 2026 non-GAAP diluted earnings per share to be between $0.34 and $0.35. With that, I'll turn the call back to the operator, and we will be happy to take your questions.

Operator

[Operator Instructions]

Our first question comes from Joe Gallo from Jefferies.

Phần hỏi đáp

Joseph Gallo

Roy, I just want to start high level. Where are customers in this AI journey? And where are you seeing the benefit the most pronounced today? It seems like it's in WAF and API. And then just in terms of your recent AI security products you launched earlier this year, when should we expect that to start benefiting growth? Is that a 4Q phenomenon or more of a next year?

Roy Zisapel

Okay. Thanks, Joe. So I would say on AI, there are many, many different dimensions. So first, we are seeing more and more use of AI, red teaming, AI frontier models to discover vulnerabilities in existing applications, meaning this has nothing to do with AI agents or AI infrastructure. This is about each and every application and the PHP example is a great example from last week. In that regard, customers are under extreme stress to accelerate their ability to move from discovered vulnerability or exploit to protection mode. And here, we see a lot of customers high interest in working adding web application firewalls, API security in front of their apps and in the new Xploit Shield that really creates a tailored shield for you, for your apps given those scanning attempts.

So this is one strong, I would say, driver for our cloud security platform driven primarily with the significant increase in vulnerability discovery and attack tools powered by AI. So this is the first pillar. Second pillar is customers are looking today to understand or to see the AI applications running within their enterprise, which users are running which application. They want to make sure that there's no shadow AI. They want to make sure that proprietary information of the enterprise is not linked. This is the center together with protecting Agentic AI of our AI protect products that we have announced beginning of the year, and we see a continuous rise and more and more pipeline creation. I do think it's a 2027 opportunity, but we're definitely seeing the life there.

The third area of AI is using AI to actually automate the security operations. And here, we're seeing very good take-up of our Agentic SOC, which we call AI SOC Xpert across our DDoS, WAF, BOT and soon also API. So AI is today embedded in multiple dimensions of our offering, some as they relate to the existing infrastructure like protecting applications or automating the SOC. We are already seeing a strong uptick and that drives more use, more revenue for us in WAF, API and DDoS and some as it relates to the newly AI environments, we are seeing a build-out of the pipeline and initial customers. We already have, of course, customers and every quarter more and more, but I do think the real scale is next year.

Joseph Gallo

That's really helpful. Maybe as a follow-up for Guy. Guy, you've done a great job accelerating the top line. Comps will now start to get a little bit more difficult, but Roy sounds super excited. And when you look at cloud or short-term billings, the growth profile there is approximately 20%. Is it fair to expect that growth can continue to inflect next year? Or is there anything that we should be aware of regarding the growth profile on-premise in our models?

Guy Avidan

So again, we're not guiding for next year, only for the coming quarter. We gave several data points, including our ARR, which is currently double digit. We have high hopes. We discussed it, and we think that they will yield revenues and ARR coming from all the waves of the API and AI for next year.

Roy started the call by saying 8 out of the last 9 quarters, we were at double digit, and there is no reason it will not continue to accelerate.

Operator

Our next question will come from George Notter from Wolfe Research.

George Notter

I wanted to ask about the investments in the sales and marketing organization. Obviously, that was a number of quarters ago. I'm just curious on your perspective. Are you seeing the returns on those investments? What does that look like? Are you doing anything new in terms of the shape and organization of the selling and marketing organization going forward? Just bigger picture, how are you driving that organization?

Roy Zisapel

George, so first, I think we've seen very good return on the investments we've done. We were able to increase spend, but also to reduce given the leverage in the model and the growth that we've seen actually as a percentage of revenues, our sales and marketing expenses have declined. So we like the efficiency. We like the growth. We are now ready to continue to deploy additional capabilities across the world. As I've mentioned, we are very optimistic on the future of the cloud security platform with all the additional modules. So we do believe that more investment towards Xploit Shield, AI security, API security in the field will provide us with great results. In addition to that, I do want to mention that we're seeing good traction, both on the MSSP side of our business and the OEM side of the business, so there's definitely room for further investments to continue to grow our business, and we are doing it now continuously across the year.

George Notter

Got it. And then how about investments in scrubbing centers? Just curious where you are in terms of total mitigation capacity, AppSec PoPs, that sort of thing. Any update there would be great.

Roy Zisapel

So like we say in the company, we no longer open physical offices with people. We open more PoPs now than offices. I think we just announced Bangkok a couple of weeks ago, and we continue to build every quarter more centers. There's, I think the next one is coming up in Indonesia, for example. Capacity-wise, we shared a plan of doubling the mitigation capacity this year, which we executed, and we continue to build now, extreme mega PoPs, extremely large PoPs or even bigger capacity together with more and more AppSec local PoPs to serve sovereign, PII, localized businesses across the world. So this is now ongoing in a continuous fashion.

And you see it also in our numbers. I think one thing to highlight is it's very capital efficient, what we're doing. So our, the fact that we're utilizing our own mitigators with the hardware and the ASICs allows us to, especially in these days to purchase significantly lower amount of servers in order to do large-scale mitigation. And as a result, our CapEx that is needed, which is for the most part in DDoS is our own devices is very, very efficient and effective. So we believe that's also from a business model, a competitive advantage.

Guy Avidan

Just to put it in numbers, so if you take cash from operation and free cash flow, so this quarter, free cash flow was $12.4 million. If you look at year-over-year, we did show some increase in CapEx from $1.9 million to $3.1 million year-over-year based on what Roy said, increased capacity, adding PoPs. But if you compare it to, let's say, other companies that build global networks, our free cash flow is very close to operating cash flow, and that's a big advantage.

Operator

Our next question comes from Jeffrey Hopson from Needham.

John Jeffrey Hopson

On the AI side, is this kind of a different sale for the sales force? Or is it just an additional conversation? And is it similar sets of competitors that you're seeing out there? Or are there a bunch of new AI entrants that you're competing against?

Roy Zisapel

So very good question. So I think it depends on the AI use case that I've mentioned. So if I'm talking about shortening the time between vulnerability discovery to protection, so over there, I think it's very similar conversation to the conversation we already have with our AppSec customers around WAF and API and BOT. And it's a very advanced innovative solution, but I do believe it goes within the same persona in the customer. If we're talking on some of the Agentic AI protection, and I've mentioned, for example, MCP protection or AI agent protection, this is a new field today in security. There's plenty of start-ups, I think, over 20 and of course, some of the large players.

So there's still a lot of noise. I think the fact that it's fully integrated into our platform and really working hand-in-hand with some of the other modules and our expertise in data center and application protection is helping us a lot there. But definitely many more, the field is very fragmented. As I've mentioned, many players out there. If I'm looking on the last piece of AI, the ability to automate and accelerate SOC work, this is really for our customers on top of a platform. So it's really an upsell. It's to the same personas we are already selling, and it provides them with much faster investigation, forensics, mean time to restore service.

So this has a very high value, but it's clearly upsell to our incumbent customers. So different use cases, the different answers there. But if you're looking on the Agentic AI security itself, it's yet to be seen.

John Jeffrey Hopson

Got it. That's helpful. And maybe just AI and agentic threats. There's been a lot of headlines and risks out there. I guess is that, is the environment today just maybe AI is ahead of some of the sensors? Or is it more like customers out there aren't fully utilizing the existing tools that they already have?

Roy Zisapel

No, with AI, you can, for example, the PHP vulnerability was suspected, but there was no exploit. But with AI, such exploit was possible to achieve, for example, in a very fast way. So AI is really on existing applications, existing codes, finding more vulnerabilities and actually make them actionable. Being able to develop exploit code to match them, it's a game changer for sure. And as a result, the risk for the enterprise customers is much higher, and they do need to shore up defenses. And those defenses must be also algorithmic, dynamic, run time, basically also using AI for the defense.

So I do think that this AI in the service of the attacker will cause all the enterprise customers to double down on their application security to do things differently. It's technology, it's also process, but a lot should go to automation, prevention, so to save the whole event from the get-go.

Operator

There are no further questions. I would now like to hand the call back to Roy for closing statement.

Roy Zisapel

Okay. Thanks a lot, everyone, and have a great day.