Chris Reimer

Chris Reimer from Barclays asked about Radware's perspective on the broader market environment, particularly concerning potential AI disruption in cloud services, and how security, especially Radware's offerings, is positioned as a defensive sector. He also inquired about the Q1 revenue guidance, noting it appears higher than typical seasonal patterns.

Answer

President and CEO Roy Zisapel explained that security is becoming more critical as attackers leverage AI, necessitating AI-based defense, which plays to Radware's strengths. He identified a new, significant TAM in protecting Agentic AI, viewing it as a major growth driver with three distinct opportunities. Roy Zisapel also confirmed that the Q1 revenue guidance reflects strong Q4 demand and a solid backlog, deviating from usual seasonality.

Chris Reimer from Barclays asked about the broader market environment, specifically how security is positioned amidst potential AI disruption in cloud services, and if it's considered a more defensive sector. He also questioned if the Q1 2026 revenue guidance was higher than typical seasonality and what factors were influencing it.

Answer

President and CEO Roy Zisapel explained that security is critical due to AI-driven attacks and the need for AI-based defense, positioning Radware well. He also identified Agentic AI protection as a new, significant TAM expansion with three major AI-related opportunities. Regarding Q1 guidance, Mr. Zisapel confirmed it was higher than usual seasonality due to strong Q4 demand and a solid backlog.

Chris Reimer from Barclays Capital asked for commentary on the business dynamics within the carrier segment and for an assessment of customer spending behavior in the U.S. market compared to the previous year.

Answer

CEO Roy Zisapel explained that while he doesn't see carriers significantly increasing overall investment, there is a growing opportunity to partner with them on their MSSP businesses using Radware's cloud solutions. For the U.S. enterprise market, he noted that budget concerns and long sales cycles persist, but Radware is overcoming these challenges through increased pipeline generation and the critical nature of its security offerings.

Chris Reimer from Barclays Capital asked for commentary on the business dynamics within the carrier segment and for an update on customer behavior and the general spending environment in the U.S. compared to the previous year.

Answer

Roy Zisapel, Co-Founder, CEO, President & Director, explained that while carriers are not significantly increasing overall investment, there are growing opportunities to partner on their MSSP businesses using Radware's cloud solutions. Regarding the U.S. enterprise market, he characterized it as stable, with ongoing budget scrutiny and long sales cycles, but noted that Radware is successfully navigating this by increasing its pipeline and focusing on critical AI and cloud security needs.

Chris Reimer inquired about the business environment across different regions, particularly the drivers behind the strong growth in the Americas, and asked for an outlook on customer behavior. He also asked if planned investments in R&D and new cloud centers would be funded by new spending or offset by other operational savings.

Answer

President and CEO Roy Zisapel explained that while large enterprises remain cautious, the rising sophistication of cyber attacks is compelling them to invest in protecting mission-critical applications. He noted strong potential in North America and plans to leverage OEM partners for international growth. Zisapel confirmed that cloud-specific investments in R&D and infrastructure would be incremental, while other new initiatives would be funded through internal resource reallocation.

Chris Reimer of Barclays asked for clarification on whether the 47% subscription revenue figure was for the quarter or year-to-date, and also inquired about the key drivers behind the strong performance in the EMEA region.

Answer

CFO Guy Avidan and CEO Roy Zisapel clarified that subscription revenue was 47% for the quarter and 46% year-to-date. Zisapel attributed the strong EMEA results to a healthy, diversified business mix, including strong cloud deals, excellent execution with OEM partners like Cisco and Check Point, and significant on-premise deals with carriers and governments.

Chris Reimer inquired about Ituran Mob's U.S. launch, including its target market, estimated size, and expected timeline for generating significant results. He also asked about the drivers behind the increase in operating expenses this quarter and the outlook for margin expansion, as well as the company's subscriber momentum against guidance and key traction areas.

Answer

CEO Eyal Sheratzky detailed Ituran Mob's U.S. strategy, targeting tens of thousands of small to medium rental companies with hundreds of thousands of cars, highlighting cost savings and efficiency benefits, and mentioned ongoing pilots in Orlando and New York. CFO Eli Kamer attributed the OPEX increase primarily to FX effects and linked future margin expansion to continued subscriber base growth. Mr. Sheratzky confirmed the company is on track to meet its 2025 subscriber guidance of 220,000-240,000 net new subscribers, driven by OEM partnerships, aftermarket sales in Brazil, insurance companies, financial solutions, and strong demand in Israel due to high car theft rates and UBI expansion.

Chris Reimer asked for more details on IturanMob's U.S. launch, including the target market size and expected timeline for results. He also inquired about the drivers behind the increase in operating expenses and the outlook for margin expansion, as well as the company's subscriber momentum against guidance and areas of strongest traction.

Answer

Eyal Sheratzky (CEO) explained that IturanMob targets tens of thousands of small to medium U.S. car rental companies, representing hundreds of thousands of cars, aiming to reduce their operational costs through remote access and efficient management. He noted successful pilots in Orlando and New York, viewing it as a huge long-term niche. Eli Kamer (CFO) attributed the OpEx increase mainly to FX effects and projected margin expansion with continued subscriber growth. Eyal Sheratzky (CEO) confirmed Ituran is on track to meet its 2025 subscriber guidance of 220,000-240,000 net additions, driven by OEM, aftermarket in Brazil, insurance, financial solutions, and strong growth in Israel due to high car theft rates and new UBI partnerships.

Chris Reimer from Barclays Capital inquired about Ituran's growth outlook for the second half of 2025, the post-conflict business recovery in Israel, the potential scope of the new BMW motorcycle partnership in Brazil, and the expected trajectory of financial expenses.

Answer

Co-CEO Eyal Sheratzky affirmed the company remains on track to achieve its full-year guidance of 220,000 to 240,000 net new subscribers. Regarding the BMW partnership, he projected it could add tens of thousands of subscribers annually in the coming years. EVP of Finance & CFO Eli Kamer clarified that recent financial expenses were a non-cash item driven by foreign exchange fluctuations, specifically the strengthening of the Israeli shekel against the US dollar, making future expenses difficult to forecast.

Chris Reimer of Barclays Capital inquired about the dynamics of lower ARPU and customer attrition for large OEM deals like the one with Stellantis, and also asked for an outlook on the product revenue pipeline for the remainder of the year.

Answer

Co-CEO Eyal Sheratzky clarified that with the Stellantis deal, Stellantis is the direct customer, and end-users receive a free trial, which results in lower churn. He explained the ARPU is lower because it's a service-only contract without hardware, but this structure yields higher margins. Sheratzky also noted the opportunity to renew these subscribers at higher, direct-to-consumer rates post-trial. Executive VP & CFO Eli Kamer added that product revenue gross margins are expected to be around 20-25% going forward, though this can be volatile depending on the product mix.

Chris Reimer of Barclays asked for clarification on the contribution mix between OEM and retail subscribers and requested a sense of the revenue contribution from new products versus traditional ones.

Answer

Executive Eyal Sheratzky explained that providing a precise OEM versus retail subscriber breakdown is difficult due to service overlaps, but confirmed that retail still constitutes the major portion of growth, with OEM business being additive. He noted that OEM contracts have lower margins. Regarding new products, Sheratzky stated that while initiatives like UBI and motorcycle solutions are gaining traction, their individual revenue contributions are not yet significant compared to the large, traditional Stolen Vehicle Recovery (SVR) business.

Chris Reimer from Barclays questioned if there is any seasonality in Ituran's revenue streams and asked for an update on the market trends and customer reaction to the company's motorcycle insurance products.

Answer

Executive Eyal Sheratzky confirmed that there is no material seasonality for the company as a whole, thanks to its diversification across geographies and business segments. He explained that the motorcycle insurance product is gaining traction by addressing a high-risk segment. In Israel, it helps owners reduce theft risk, while in Brazil, it enables insurance companies to manage risk better, leading to a growing customer base.

Chris Reimer of Barclays Capital inquired about customer behavior and IT spending recovery in the U.S., the primary drivers affecting margins, and the progress of customer transitions to cloud solutions.

Answer

CFO Asaf Berenstin noted that U.S. demand is recuperating after nearly a year of stagnation. He explained that margins were impacted by the timing of software license renewals, which are now concentrated in Q4, and a revenue mix shift toward lower-margin professional services. He expects margins to improve in the second half and level out around 29% annually. CTO Yuval Lavi added that cloud adoption is accelerating, with new customers going directly to the cloud and legacy customers increasingly migrating.

Chris Reimer of Barclays Capital inquired about customer behavior and IT spending recovery in the U.S., the primary drivers affecting margins, and the progress of customer migration to cloud solutions.

Answer

CFO Asaf Berenstin noted an expected recuperation in U.S. demand after a stagnant period. He attributed margin pressure to the timing of software license renewals, which are concentrated in Q4 2025, and a revenue mix shift towards lower-margin professional services. He anticipates margins will improve and level out around 29% annually. CTO Yuval Lavi added that cloud adoption is increasing among both new and legacy customers.

Chris Reimer of Barclays Capital inquired about the recovery of IT spending and customer behavior in the U.S., the primary drivers affecting profit margins for the remainder of the year, and the pace of customer migration to cloud solutions.

Answer

CFO Asaf Berenstin noted an increase in demand from major U.S. clients and expects a recovery in IT services demand. He attributed current margin pressure to the timing of software license renewals, which are back-loaded to Q4, and a revenue mix shift towards professional services. Berenstin anticipates margins will improve in the second half to an annual rate of around 29%. CTO Yuval Lavi added that cloud adoption is accelerating among both new and legacy customers.

Chris Reimer of Barclays Capital inquired about customer behavior and the recovery of IT spending in the U.S., the primary factors impacting profit margins and their expected evolution through year-end, and the progress of customer migration to cloud solutions.

Answer

CFO Asaf Berenstin stated that Magic Software is observing increased demand from major U.S. clients and anticipates a continued recovery in IT services demand. He explained that current margins are affected by the timing of software license renewals, which are concentrated in Q4 this year, and a revenue mix shift towards professional services. Berenstin expects margins to improve in the second half, leveling out around 29% annually. CTO Yuval Lavi added that cloud adoption is accelerating among both new and legacy customers.

Chris Reimer asked for more details on the changing momentum in the U.S. market and questioned the cause of the slightly lower operating margin in the quarter.

Answer

Asaf Berenstin (executive) clarified that the positive U.S. momentum is from existing customers, with an increase in deal flow after several stagnant quarters signaling a positive trend for the second half of the year. Regarding margins, Berenstin explained the dip was due to the timing of high-margin software license renewals, which are heavily weighted towards Q3 and Q4 in 2025, unlike in 2024. He anticipates gross margins will improve to over 29% as the year progresses.

Chris Reimer inquired about the primary drivers supporting the 2025 revenue guidance and asked for expectations on expenses in the anticipated higher growth environment.

Answer

Asaf Berenstin, an executive at Magic Software, attributed the confident guidance to a strong Q4 finish, a growing backlog, robust performance in cloud services and the defense sector, and expected revenue from new AI consulting deals. Regarding expenses, Berenstin noted that payroll costs have been stable but may face upward pressure as the Israeli market recovers, expressing confidence in the company's ability to maintain operational margins.

Chris Reimer of Barclays Capital asked for an update on CEVA's product pipeline, referencing new products mentioned in the previous quarter. He also requested more detail on shipment trends in market segments beyond smartphones.

Answer

CFO Yaniv Arieli described the recent record NPU licensing as a pivotal moment for the business, adding to a strong portfolio that includes growing royalties from Cellular IoT and Wi-Fi 6. CEO Amir Panush provided shipment color, stating that he expects strong sequential growth in the second half for both the smartphone segment (driven by market share gains) and the industrial segment. He also noted that consumer IoT continues to perform very well, with strong ramps in Wi-Fi 6 and Cellular IoT expected to continue.

Chris Reimer from Barclays inquired about the gross margin impact from the strategic design customer, asking for the magnitude and duration of the cost allocation. He also asked if the reduced full-year outlook was due to concerns beyond smartphones or was primarily proactive conservatism.

Answer

CFO Yaniv Arieli explained the lower gross margin is due to temporarily allocating R&D costs to cost of revenue for a strategic 5G advanced customer, a project lasting from a few quarters to a year. CEO Amir Panush added this customization work builds valuable IP. Regarding the outlook, both executives clarified that the guidance reduction reflects proactive conservatism due to the Q1 revenue miss and macro uncertainty, rather than specific weakness in other business areas.

Chris Reimer from Barclays inquired if any new licensing deals involved the kind of customization that had previously pressured gross margins. He also sought clarification on the two AI-related deals signed during the quarter.

Answer

CFO Yaniv Arieli clarified that the Q4 deals were for off-the-shelf technologies and did not include customization. He explained that the slight gross margin pressure guided for Q1 2025 is a residual effect from a large mobile deal signed in Q3 2024, compounded by seasonal royalty weakness. CEO Amir Panush specified that the two AI-related deals consisted of one for the NeuPro NPU and another for a DSP targeted at AI applications.

Chris Reimer from Barclays questioned if the 10 licensing deals signed in the quarter, a number lower than the recent run rate, indicated any deal slippage and asked for more detail on the improved backlog.

Answer

CEO Amir Panush clarified that deal counts can fluctuate quarterly and CEVA prioritizes the quality and strategic value of deals over sheer quantity, noting the annual pace remains on track. He stated that the licensing pipeline is the strongest he has seen since early 2023 and that the robust backlog was a key factor in the decision to raise full-year guidance, reflecting strong business momentum.

Chris Reimer from Barclays asked about additional opportunities the company is pursuing to enhance profitability while waiting for a broader revenue acceleration.

Answer

CFO Lauri Hanover stated that the company remains vigilant in seeking operational efficiencies across all processes and expenses. CEO Ronen Samuel added that the most important driver for profitability is impression growth. He highlighted initiatives like the "Connections" event, designed to connect demand generators with Kornit's fulfillment network, citing the new Gooten partnership as a direct result of these efforts.

Chris Reimer of Barclays asked for more details on the market traction for the Atlas MAX under the AIC model, including capacity and revenue expectations, and questioned if the current 50% gross margin level is sustainable going forward.

Answer

CEO Ronen Samuel clarified that the Atlas MAX on AIC is designed for customers with lower volumes than Apollo, targeting an annual revenue of around $300,000 per machine. He confirmed strong momentum and a healthy funnel for the offering. Regarding gross margin, he stated that the long-term target is 55%, driven by a richer mix of high-margin consumables, improved service margins, and increased system sales volume over time.

Chris Reimer asked for details on the expected revenue progression for the remainder of 2025 and inquired about the primary drivers behind the updated financial outlook.

Answer

CEO Roni Al-Dor projected a gradual revenue increase in Q2, followed by a significant jump in Q3 and Q4, with Q4 expected to be slightly higher than Q3, contingent on the closing of the recent acquisitions. He identified the key drivers for the outlook as continued organic growth, favorable currency tailwinds, and the impact of the new M&A deals.

Chris Reimer asked for clarification on how Sapiens expects revenues to progress throughout the remainder of 2025 and requested details on the primary drivers contributing to the updated financial outlook.

Answer

CEO Roni Al-Dor explained that revenue is expected to see a gradual increase in Q2, followed by a more significant jump in Q3 and Q4, with Q4 being slightly higher than Q3. This progression is dependent on the closing dates of the AdvantageGo and Candela acquisitions. He identified the main drivers for the outlook as continued organic growth, a currency tailwind, and the impact of the recent M&A activities.

Chris Reimer asked about Sapiens' current strategy and pipeline for Mergers & Acquisitions (M&A), noting the lack of recent activity.

Answer

CFO Roni Giladi confirmed that M&A remains a key part of Sapiens' growth strategy. He explained that high valuations were a past obstacle but the market is now more reasonable. Mr. Giladi highlighted that the company was a final bidder in a recent European deal but withdrew due to price, demonstrating their active engagement. He stated a goal to complete at least one acquisition by the end of 2025, leveraging their available cash.

Chris Reimer questioned how insurance carriers are currently prioritizing large core system modernizations, the key decision drivers, and whether sales cycle timelines have changed with the shift to a platform model.

Answer

Chief Strategy Officer Alex Zuckerman confirmed continued high interest in core replacement, driven by carriers' need for operational efficiency, which is now enhanced by AI, data, and cloud capabilities. He noted that while the sales cycle for large transformations remains in the 12-24 month range, customer due diligence can sometimes take longer as they evaluate Sapiens' more comprehensive turnkey platform offering, which includes core, digital, data, and AI components.

Chris Reimer from Barclays inquired about the launch timeline and capital expenditure projections for Partner's new TV service, as well as any future plans for infrastructure investments.

Answer

CEO Isaac Benbenisti confirmed the new TV service will launch by the end of H1 on the Android TV platform. CFO Ziv Leitman added that most backend CapEx was included in 2016 results, while set-top box costs will be variable based on subscriber numbers. Benbenisti also affirmed continued investment in the cellular network infrastructure.