Radware (RDWR) Q3 EPS Jump Challenges Longstanding Earnings Bear Case

Radware (RDWR) just posted its FY 2025 third quarter numbers, reporting revenue of US$75.3 million and basic EPS of US$0.13, while net income excluding extra items was US$5.7 million. The company’s quarterly revenue increased from US$69.5 million in Q3 2024 to US$75.3 million in Q3 2025, with basic EPS moving from US$0.07 to US$0.13 over the same period. Trailing 12 month EPS stands at US$0.39 on net income of US$16.7 million. For investors, a key consideration is how durable these margins appear as the recent return to profitability is viewed alongside a longer history of earnings pressure.

See our full analysis for Radware.

With the latest earnings reported, the next step is to see how these results compare with the dominant narratives around Radware, and where the numbers may begin to challenge those storylines.

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Five-year EPS slide contrasts with recent US$16.7m profit

• Over the last five years, earnings declined at an annualized rate of 17.1%, while the trailing 12 months show net income excluding extra items of US$16.7 million and EPS of US$0.39.
• Bears often focus on that 17.1% annual earnings decline, and this recent profitability creates a mixed picture where:
  • The shift from a loss of US$2.3 million in the trailing period ending Q3 2024 to a profit of US$16.7 million by Q3 2025 challenges the idea that the business cannot produce positive earnings.
  • At the same time, the five-year decline keeps the cautious view in play, because a single 12 month stretch of profit does not erase the longer trend that pulled EPS down over several years.

One-off US$5.8m gain inflates recent profitability

• The last 12 months include a non recurring gain of US$5.8 million, which is a meaningful portion of the US$16.7 million net income excluding extra items reported over that period.
• Critics highlight this one off item as a key bearish point, and the numbers give them support because:
  • Removing a US$5.8 million gain from a US$16.7 million profit would leave a much smaller underlying figure, so reported EPS of US$0.39 is helped by that single event.
  • When you compare quarterly net income excluding extra items, such as US$5.7 million in Q3 2025 versus US$3.1 million in Q3 2024, it becomes important to separate recurring performance from accounting items that are unlikely to repeat.

P/E of 72.2x and DCF fair value gap

• Radware trades on a trailing P/E of 72.2x versus a peer average of 27x and a US Software industry average of 28.7x, while the current share price of US$27.71 sits above a DCF fair value estimate of US$17.93 per share.
• What stands out for cautious investors is how these valuation markers line up with the earnings record because:
  • A P/E of 72.2x on trailing EPS of US$0.39 is far higher than both the peer and industry averages, even though earnings have declined 17.1% per year over five years.
  • The gap between the US$27.71 market price and the US$17.93 DCF fair value in the data set signals that, on this measure, the stock is pricing in more than the cash flow estimate implies based on the trailing period.

Curious how numbers become stories that shape markets? Curious how numbers become stories that shape markets? Explore Community Narratives

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Radware's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Radware’s high 72.2x P/E, five year 17.1% annual earnings decline and reliance on a US$5.8 million one off gain raise valuation concerns.

If that mix of rich pricing and patchy earnings history makes you uneasy, check out our 52 high quality undervalued stocks to quickly focus on companies where current prices look more grounded in their fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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