Revenues up 57% year over year for Q2, 47% for the first half

July 21, 2008

3 Min Read

TEL AVIV -- RADCOM Ltd. (RADCOM) (NASDAQ and TASE:RDCM) today announced its unaudited financial results for the second quarter and six months ended June 30, 2008.

Financial Results for the Second Quarter

Revenues for the second quarter of 2008 were $3.7 million, a 57% increase compared with $2.4 million for the second quarter of 2007. On the basis of U.S. generally accepted accounting principles (GAAP), the period's net loss was $(1.8) million, or $(0.37) per ordinary share (basic and diluted), including non-cash share-based compensation expense of $145,000 taken in respect of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). This compares to a net loss for the second quarter of 2007 of $(3.5) million, or $(0.85) per ordinary share (basic and diluted), which included non-cash share-based compensation expense of $138,000.

The Company is also presenting its results on a non-GAAP basis excluding share-based compensation in order to provide investors with insight into its underlying operating results. On a non-GAAP basis, RADCOM's net loss for the second quarter of 2008 was $(1.7) million, or $(0.34) per ordinary share (basic and diluted). This compares to a net loss of $(3.3) million, or $(0.81) per ordinary share (basic and diluted), for the second quarter of 2007.

During the quarter, the Company secured a $2.5 million venture loan. This sum is reflected in the Company's Balance Sheet as of June 30, 2008 in Venture Loan and Shareholders' Equity.

Financial Results for the First Half

Revenues for the first six months of 2008 were $8.2 million, an increase of 47% compared to $5.6 million recorded in the first half of 2007. On the basis of U.S. generally accepted accounted principles (GAAP), the Company's net loss for the period was $(2.7) million, or $(0.55) per ordinary share (basic and diluted), including non-cash share-based payment of $302,000. This compares with a net loss of $ (6.3) million, or $(1.54) per ordinary share (basic and diluted), for the first half of 2007, which included non-cash share-based compensation expense of $264,000.

The Company has also presented its results on a non-GAAP basis excluding share-based compensation to provide investors and management with insight into RADCOM's underlying operating results. On such non-GAAP basis, RADCOM's net loss for the first six months of 2008 was $(2.4) million, or $(0.49) per ordinary share (basic and diluted), compared with $(6.0) million, or $(1.47) per ordinary share (basic and diluted), for the first six months of 2007. Comments of Management

Commenting on the results, Mr. David Ripstein, RADCOM's President and CEO, said, "We are pleased to have delivered significant year-over-year revenue growth again this quarter, giving us a 47% increase for the first half of the year compared with the first half of 2007. However, these revenues were below our expectations due to sales cycle delays that have accompanied the slowdown of European and North American communications markets. Nonetheless, we have experienced a surge in interest and sales in our target emerging markets - particularly in Latin America and the Far East - that has boosted our sales pipeline significantly, both in the number and size of new opportunities. Further, we believe that our target IMS markets will continue to grow, acting as an engine that will drive our business to the next stage over the next few years."

Radcom Ltd.

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