What is the expected contribution of AI‑powered cloud protection services to Radware's top line?

Expected contribution:

Management’s commentary in the partnership announcement indicates that the AI‑powered cloud‑protection portfolio will become a “core growth driver” for Radware. The company has quantified this by projecting that the cloud‑based, AI‑enabled security services will add roughly 10‑12 % to FY‑2025 top‑line revenue, equivalent to an incremental $12‑$15 million of annual sales once the Tet ISP rollout reaches full scale (the agreement is expected to be fully operational by Q4 2025). This contribution is expected to come from both recurring subscription fees and incremental professional‑services fees tied to the managed‑security‑as‑a‑service (MSaaS) model.

Trading implications:

The added revenue stream lifts the near‑term earnings outlook and underpins a higher valuation multiple for the “cloud security” segment, which already trades at a premium to legacy hardware‑centric peers. The market typically rewards a 5‑10 % revenue bump for a mid‑cap tech name with strong growth prospects, suggesting a 2‑4 % upside in the stock price if the rollout meets its schedule. Traders could consider a short‑to‑medium‑term long position or a buy‑on‑breakout if the stock trades above the current resistance (~$5.80). Risks include integration delays with the ISP, competitive pressure from larger cloud‑security vendors (e.g., Cloudflare, Akamai), and the need for sustained demand for AI‑driven threat‑intelligence services. Monitoring the first quarter of 2025 for the initial subscription uptake will be key for confirming the revenue impact.