Abstract
Radware will report second-quarter 2026 results on July 29, 2026 Pre-MKt, with consensus pointing to higher revenue and improved year-over-year EPS; this preview outlines expectations, the most closely watched operating drivers, and the balance of analyst opinions into the print.Market Forecast
Consensus for the second quarter of 2026 points to revenue of 81.49 million US dollars, up 10.87% year over year, and adjusted EPS of 0.28, up 7.22% year over year; EBIT is projected at 10.43 million US dollars, up 19.16% year over year. The company has not issued explicit margin guidance for the quarter; it exited the first quarter of 2026 with an 81.07% gross margin and a 4.44% net profit margin, which the market expects to remain broadly resilient given product mix and recurring revenue exposure.The main business mix remains anchored by two categories that shape profitability and cash flow cadence, with product deliveries and recurring services both supporting top-line visibility and margin stability. The most promising engine within this mix is the services-led subscription and cloud security portfolio; services revenue stands at 112.27 million US dollars on a trailing basis, with the ongoing shift toward subscriptions expected to underpin sustained double-digit revenue growth for the group this quarter, though a formal segment-level year-over-year figure was not disclosed.
Last Quarter Review
In the first quarter of 2026, Radware reported revenue of 79.81 million US dollars, a gross margin of 81.07%, GAAP net profit attributable to the company of 3.54 million US dollars, a net profit margin of 4.44%, and adjusted EPS of 0.25, down 7.41% year over year; total revenue rose 10.73% year over year, while net profit declined 41.33% quarter over quarter. A notable financial highlight was EBIT of 11.05 million US dollars, which increased 28.28% year over year, even as adjusted EPS missed consensus by 0.03. From a business standpoint, overall revenue growth was solidly double-digit year over year, while the mix of products and services continued to support high gross margins, with product revenue at 189.58 million US dollars and services revenue at 112.27 million US dollars on a trailing basis.Current Quarter Outlook
Main business performance
The core drivers for the second quarter are expected to be steady execution in application security and delivery technologies and continued demand for high-performance protection capabilities that can be deployed across multi-cloud environments. Consensus implies revenue of 81.49 million US dollars and adjusted EPS of 0.28, both pointing to year-over-year growth, with the magnitude of upside or downside most sensitive to the mix between hardware/software product shipments and recurring services. The absence of explicit company guidance on gross margin means investors will map outcomes back to the first quarter’s 81.07% starting point; mix remaining favorable toward high-value software and services would typically support gross margin holding near that level. Operating leverage is also in focus: after EBIT expanded 28.28% year over year in the first quarter, the second quarter’s EBIT growth expectation of 19.16% implies the market is looking for disciplined operating expense control against a higher revenue base, with any surprise likely to translate directly into EPS sensitivity.Order timing and deal linearity across the quarter will be important to watch, especially for larger projects that can swing recognized revenue. A balanced billings profile, coupled with recurring-service momentum, should help mitigate end-of-quarter lumpiness, but even small shifts in the delivery calendar can influence reported growth given the company’s scale. Currency effects and any regional demand variances will be examined in the context of reported margins; while the company’s pricing discipline has historically underpinned strong gross margins, resourcing for innovation and go-to-market can modestly dampen near-term operating margin if initiatives are pulled forward.
Most promising business: subscription and cloud-delivered security
The services business—comprising subscription and cloud-delivered security capabilities—remains the clearest pathway to durable growth and margin resilience. On a trailing basis, services revenue is 112.27 million US dollars, providing a substantial recurring foundation to revenue visibility, cash conversion, and a smoother earnings profile over time. Product innovation in the quarter has been oriented around faster protection cycles and broader coverage for modern application architectures, including the launch of an AI-driven rapid shield for web applications and APIs against emerging exploit vectors, and a cloud-augmented protection layer debuting with advanced web DDoS defense—both designed to tighten detection and accelerate mitigation while keeping sensitive mitigation steps on premises where needed.The commercialization logic behind these updates aligns closely with enterprise buying patterns, where customers prioritize rapid time-to-protect, compliance-aligned controls, and simplified operations across multi-cloud. An expanded set of controls for AI agent security and enhanced compliance reporting widens the addressable footprint in enterprises currently formalizing AI governance frameworks, creating prospects for cross-sell and up-sell within existing accounts. While the quarter’s reported revenue will still reflect a mix between products and services, the cadence of new service introductions, coupled with integrations that extend security visibility into AI and API workflows, should continue to help tilt the revenue mix toward high-value, recurring services—an outcome that, if realized, would be supportive of both gross margin durability and improving operating leverage.
Key stock price drivers this quarter
Relative to consensus, the primary debate centers on whether revenue can modestly exceed the 81.49 million US dollars benchmark without pressure on gross margin, and whether EBIT can track at or above the 10.43 million US dollars expectation as operating expenses absorb recent innovation and go-to-market initiatives. Given the first quarter’s adjusted EPS miss versus expectations, the market will place heightened emphasis on second-quarter execution against cost efficiency targets, where even a small operating margin beat can meaningfully influence EPS. Billings growth and the quality of bookings—particularly multi-year services contracts—will be scrutinized for their implications on second-half momentum and the shape of revenue in the back half of 2026.Large-deal timing remains a tactical swing factor. The mix of deferred revenue additions versus in-quarter revenue recognition can create short-term noise, but the direction of recurring revenue ratios and renewal performance are more likely to inform the valuation narrative beyond a single quarter. Another factor is the translation of recent product announcements into pipeline and near-term bookings; early signs of customer adoption for the new AI-driven shields and cloud-augmented defenses would strengthen the case for sustained double-digit growth. Finally, any commentary on pricing dynamics and competitive win rates will help calibrate margin expectations; stable pricing amid rising service attach rates would reinforce both the revenue and profit trajectories implied by consensus.
Analyst Opinions
Across previews and commentaries published from January 1, 2026 through July 22, 2026, the balance of opinions is bullish at 100% versus bearish at 0%. The dominant view expects second-quarter revenue of 81.49 million US dollars, adjusted EPS of 0.28, and EBIT of 10.43 million US dollars, each higher year over year by 10.87%, 7.22%, and 19.16%, respectively, aligning with the theme of steady revenue expansion and measured operating leverage. Supportive arguments emphasize three points. First, the services-led shift—anchored in subscription and cloud security—continues to add resilience to both top line and gross margin, an important consideration given the company’s 81.07% gross margin level in the first quarter of 2026. Second, the quarter’s product and platform updates, including rapid-protection AI offerings and cloud-augmented defenses, are seen as near-term catalysts for expanding deal sizes and improving attach of advanced protections, which would be constructive for mix and recurring revenue. Third, expectations for EBIT growth of 19.16% year over year suggest confidence that expense discipline can absorb innovation investments without diluting operating margin, with upside if revenue surprises to the high end.The minority cautionary perspective—while limited in volume—focuses on execution proof points after the first quarter’s adjusted EPS of 0.25 missed estimates by 0.03. Within the bullish consensus, this risk is framed as a timing issue rather than a structural change to the earnings path, given that first-quarter EBIT still expanded 28.28% year over year and that revenue grew 10.73% year over year. As a result, the prevailing expectation into July 29, 2026 is for Radware to deliver year-over-year growth in revenue, adjusted EPS, and EBIT in line with the consensus markers, with the stock reaction most sensitive to the mix of recurring services, gross margin resilience near the roughly 81% level, and any qualitative signals on the conversion of recent product launches into bookings momentum for the second half of 2026.
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