FOR IMMEDIATE RELEASE
RADCOM ANNOUNCES THIRD QUARTER 2006 RESULTS
- $6.7M Revenues and 70% Gross Margin Yields 42% YOY Increase
in Non-GAAP Net Income -
-- 12 th Straight Quarter of YOY Revenue Growth --
TEL-AVIV, Israel—October 23, 2006-- RADCOM Ltd. (RADCOM) (NASDAQ and TASE:
RDCM) today announced financial results for the third quarter and nine months ended September 30, 2006.
Financial Results for the Third Quarter
Revenues for the third quarter of 2006 were $6.7 million, an increase of 14% compared with $5.9 million
for the third quarter of 2005, and 18% compared sequentially with the $5.7 million in the second quarter of
2006. This represents the Company’s 12 th straight quarter of year-over-year revenue growth and its highest
quarterly revenues since the fourth quarter of 2000. Gross margin for the third quarter of 2006 was 70%
compared with 66% for the third quarter of 2005 and 70% for the second quarter of 2006.
On the basis of U.S. generally accepted accounted principles (GAAP), the Company recorded net
income for the third quarter of 2006 of $570,000, or $0.04 per basic share ($0.03 diluted). Net income for the
quarter included non-cash share-based compensation expense of $131,000 taken in respect of the Company’s
mandatory adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based
Payment" ("SFAS 123R"). SFAS 123R requires that companies recognize the fair value of share-based
incentives as compensation.
The Company is also presenting 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 a non-GAAP
basis, RADCOM’s net income for the third quarter of 2006 was $701,000, or $0.04 per share (basic and
diluted). This is an increase of 42% compared with $492,000, or $0.03 per ordinary share (basic and diluted),
for the third quarter of 2005, which did not include share-based compensation, and is more than double the