Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Limited Results Conference Call for the Fourth Quarter and Full Year 2021. All participants are present in a listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded and will be available for replay on the company's website. On the call are Eyal Harari, RADCOM's CEO; and Hadar Rahav, RADCOM's CFO. Please note that management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through the link in the Investors section of RADCOM's website. Before we begin, I would like to review the safe harbor provision. Forward-looking statements in the conference call involve several risks and uncertainties, including, but not limited to, the company's statements about the 5G market and industry trends and expected increase in stand-alone 5G launches, the role the company is expected to play in the 5G transformation, sales opportunities, sales cycles and pipeline, the expected impact of currency rates, company market position, cash position, potential and expected growth in 2022 and thereafter, its expectations with respect to research and development and sales and marketing expenses as well as grants from the Israel Innovation Authority, the company's expectations with respect to its relationships with its partners, the potential of the RADCOM ACE product and the integration with Microsoft Azure and AWS, its expectation to continue enhancing its software solutions and demand for its solutions, deployment of its 5G solutions in multiple cloud environments and the potential benefits to its clients, its ability to capitalize on the emerging 5G opportunities and win more market share, the potential of the company's long-term vision and the use of artificial intelligence in its products, its expectation that greenfield operators will choose vendors based on innovation and its revenue guidance. The company does not undertake to update forward-looking statements. The full safe harbor provisions, including risks that could cause actual results to differ from these forward-looking statements are outlined in the presentation and the company filings. In this conference call, management will refer to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company's financial performance by excluding certain noncash stock-based compensation expenses. Non-GAAP results provide information helpful in assessing RADCOM's core operating performance and evaluating and comparing the results of operations consistently from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures included in the quarter's earnings release available on our website. Now I would like to turn the call over to Eyal. Please go ahead.

Thanks, operator. Good morning, everyone, and thank you for joining us for our fourth quarter and full year 2021 earnings call. Q4 represented a strong finish to a good fiscal year. We achieved our highest ever quarterly and full year revenue results, ending the year at the higher end of our projected annual guidance. Total revenue for the fourth quarter was $11.2 million, which represents a tenth consecutive quarter of year-over-year revenue growth. Full year 2021 revenues grew to $14.3 million, representing a 7% year-over-year growth and a new all-time full year record for the company. In fiscal 2021, 70% of our revenue was recurring, reflecting our strategy to secure multiyear contracts, providing us good visibility into 2022. Our consistent results throughout the year came from the solid execution of these contracts, our team's ability to remain agile in an ever-changing environment and the value we bring to our customers. I am proud of our achievements in fiscal 2021. Much credit belongs to our global teams and our experienced leadership. Despite the global pandemic, our teams executed exceptionally well to meet the needs of our customers and to execute our growth strategy. While we delivered our highest ever quarterly and full year revenue results, I believe that we can deliver an even stronger growth year in 2022. Let me start by reviewing some of our 2021 achievements. In 2021, we continued to strategically invest in research and development to extend our technological leadership within the 5G assurance space, which we believe to be a key enabler for our future business. We announced the release of a new AI solution as part of the RADCOM ACE portfolio. We believe that the AI-driven analytics will offer considerable benefits to operators for future network automation and will be critical as part of an automated assurance solution as 5G evolves. I will expand on this later in my remarks. I wish to take this opportunity to thank all of RADCOM employees as they helped us to meet our business commitments and support our customers during 2021. Working in hybrid mode requires a new operating model that spans people, places, and processes. We quickly adjusted our mode of operations to the new way of remote working, empowering teams with the ability to work effectively to support our customers and to collaborate utilizing cloud-based applications and virtual conferencing. Turning to the business, AT&T remains a key strategic customer for us. In 2021, we continued our solid business relationship. We received orders for additional analytics and network integrations, and we also have a significant backlog that provides good visibility into 2022. We continue to innovate and deliver our best-in-class software to AT&T. Our cutting-edge cloud technology is embedded into AT&T's network and monitors the service quality, allowing them to optimize performance and troubleshoot network degradations. In 2022, we expect to continue providing AT&T with advanced software enhancements and providing premium customer support. We are working closely with our partners and other strategic customers to support their 4G network rollout in Japan, which in February reached 96% population coverage. We announced during the year that we started monitoring Rakuten's stand-alone 5G services in preparation for the launch of the 5G network. Having secured one of the industry's first 5G stand-alone assurance contracts, we believe that this work will help our products mature and provide valuable experience for us when we assist more operators in implementing standalone 5G looking to our assurance expertise. Additionally, as RADCOM is Rakuten's service assurance vendor of choice, we are integrated into Rakuten Symphony, a business dedicated to selling the Rakuten communication platform and managed services to telecom operators worldwide. We believe this platform integration will open significant opportunities for us in the future. While our focus remains on the 5G market, we continued in 2021 to see demand for our 4G and VoLTE assurance solutions, winning additional orders from our installed base for RADCOM ACE, including the previously announced expansion with a top-tier LATAM operator and other key accounts. In 2021, we also announced the integration of RADCOM ACE with two hyperscalers, Microsoft Azure, and Amazon Web Services. We expect 5G to be deployed in multi-cloud environments, and with these ecosystem partners, operators can seamlessly rollout by utilizing the public cloud along with RADCOM ACE to smartly manage and optimize 5G network services more automatically. As 5G gains traction, we expect this solutions integration to help us serve a wider range of customers for the rollout of more advanced 5G services. Turning to the telecom industry and the state of 5G, our estimates last year that the 5G market momentum will continue were largely laid out, and the market has continued to scale and expand globally. The GSA identifies 20 operators that are launching 5G stand-alone networks, with most being limited in scope. While the transformational aspect is still in the early stage of 5G, many networks will be launched over the next few years. Assurance vendor selection is expected to occur at the later stages of the rollout, indicating the market is gaining momentum. We are only on the cusp of this transition. As 5G advances, we see new greenfield 5G networks being built in the telecom space. These networks can be created by established telecom operators investing in 5G or newcomers to the telecom market building a network from scratch and deploying the most advanced technology. They are, in essence, pure 5G and cloud-native from the start. For these operators like Rakuten, automated assurance solutions are vital to monitor the network lifecycle and ensure ongoing service quality from land to full commercial launch. With our R&D investments and focus on automated assurance for 5G and cloud-native networks, we believe we have a competitive advantage in this emerging green market and the demand for our best-in-class solutions will grow. As I mentioned earlier, Rakuten is one of the operators already testing and planning their stand-alone network, and we are already monitoring these services, providing us with invaluable experience. This positions us as one of the only service assurance providers conducting real-life 5G monitoring, and we expect this will be a favorable factor when more operators choose their assurance solutions in 2022 and beyond. The current 5G momentum is reflected in our pipeline, which has increased by double digits from the beginning of '21 as more operators plan and transition to 5G. Our pipeline consists of a good mix of opportunities from our current installed base as well as new logos. These opportunities include several engagements with potential multiyear contracts. Our long-term vision is based on helping telecom operators become more autonomous. Telecom operators need to modernize, reduce OpEx, and deploy new services to generate new revenue streams. To achieve these goals, networks need to be software-based, smarter, and more automated. This means operators must make data-driven decisions in real-time. Operators need to collect and analyze network data, and instead of reactive analysis, use AI to gain insight into the network and pinpoint issues automatically. We believe that we will be a key player in this industry transition and have already started this journey with some customers where we are regarded as the operators' trusted assurance advisor. 5G and the cloud are expected to be business enablers leveraged to realize this transformation in the industry transition. Our advanced solution integrates seamlessly into the operator's cloud, monitors 5G services, and new smart algorithms as well as AI that function as the operator's eyes into the network and help make networks smarter and more automated. We expect to continue enhancing our software solutions in future years with extended automation and intelligence that will assist operators in this transformation. As part of this strategy, we are engaged in several high-focused programs within the framework of the Israel Innovation Authority and collaborating in several workgroups with academic institutions and industry experts to push forward AI technology. The release of our new AI-based RADCOM ACE solution was an important part of our forward-looking strategy and has received very positive feedback from our customers. To summarize, we achieved our highest ever quarterly and full year revenue results. I'm very pleased with our performance for the fiscal year 2021, and things are looking favorable for us in 2022. We continue to receive industry-wide recognition as a cloud-based assurance provider and see interest in our innovative solutions. Our cloud expertise gained through our customers' implementations is invaluable and will become a key differentiator as the 5G market gains momentum. We believe the 5G ramp-up will continue in the coming years, and we expect the demand for 5G assurance solutions to increase. As a result, we remain confident in our business strategy, the future of 5G, our innovative cloud-native offering, and the role we expect to play in the 5G transformation. Based on our current visibility, our fiscal 2022 revenue guidance is $42 million to $45 million, and we believe we will deliver a third consecutive growth year. With that, I would like to turn the call over to Hadar Rahav, our CFO, who will discuss the financial results in detail.

Thank you, Eyal, and good morning, everyone. Now please turn to Slide 8 for our financial highlights. To help you understand the results, I will primarily refer to non-GAAP numbers, which exclude share-based compensation. We ended the fourth quarter of 2021 with $11.2 million in revenue, representing a 9% year-over-year growth in this new record quarter. It is also a tenth consecutive quarter of year-over-year revenue growth, increasing from $10.2 million in the fourth quarter of 2020. Our gross margin in the fourth quarter of 2021 on a non-GAAP basis was 70%. Please note that our gross margin can fluctuate depending on the revenue mix. Our gross R&D expenses for the fourth quarter of 2021 on a non-GAAP basis were $4.7 million, a slight increase of $110,000 compared to the fourth quarter of 2020. We received a grant of $194,000 from the Israel Innovation Authority during the quarter compared to a grant of $308,000 in the fourth quarter of the prior year. As a result, our net R&D expenses for the fourth quarter of 2021 on a non-GAAP basis were $4.6 million compared to $4.3 million in the fourth quarter of 2020. Sales and marketing expenses for the fourth quarter of 2021 were $2.6 million on a non-GAAP basis, a slight increase of $256,000 compared to the fourth quarter of 2020. G&A expenses for the fourth quarter of 2021 on a non-GAAP basis were $837,000, a slight increase of $89,000 compared to the fourth quarter of 2020. Operating income on a non-GAAP basis for the fourth quarter of 2021 was $158,000 compared to an operating loss of $231,000 for the fourth quarter of 2020. Net loss for the fourth quarter of 2021 on a non-GAAP basis was $237,000 or a net loss of $0.02 per diluted share compared to a net income of $85,000 or net income of $0.01 per diluted share for the fourth quarter of 2020. On a GAAP basis, our net loss for the fourth quarter of 2021 was $1.4 million or a net loss of $0.10 per diluted share compared to a net loss of $0.5 million or a net loss of $0.03 per diluted share for the fourth quarter of 2020. At the end of the fourth quarter of 2021, our headcount was 278. Now let's turn to the full year results. We ended 2021 with revenues of $40.3 million, an increase of 7% from $37.6 million in the fiscal year 2020. On both a GAAP and non-GAAP basis, our gross margin was 72% in the fiscal year 2021 compared to a gross margin of 71% in 2020. Our gross R&D expenses for the full year of 2021 on a non-GAAP basis were $19 million, an increase of $659,000 compared to the full year of 2020. We plan to continue investing in R&D during 2022 at approximately the same level as in 2021. We received a cumulative grant from the Israel Innovation Authority for $537,000 during the year. In 2022, we expect grants from the Israel Innovation Authority to be higher than in 2021, but not as high as in 2020, approximately $900,000. Sales and marketing expenses for the full year of 2021 were $9.5 million on a non-GAAP basis compared to $9.2 million in 2020. In 2022, we expect a gradual increase in sales and marketing to support an increasing pipeline of opportunities. G&A expenses for the full year of 2021 on a non-GAAP basis were $3.3 million, a slight increase of $77,000 compared to the full year of 2020. Operating loss on a non-GAAP basis for the full year of 2021 was $2.1 million compared to an operating loss of $2.4 million for the full year of 2020. Net loss for the full year of 2021 on a non-GAAP basis was $1.9 million or a net loss of $0.13 per diluted share compared to a net loss of $1.8 million or a net loss of $0.13 per diluted share for the full year of 2020. Non-GAAP net losses were negatively impacted by the strengthening of the new Israeli Shekel during 2021. On a GAAP basis, our net loss for the full year of 2021 was $5.3 million or a net loss of $0.37 per diluted share compared to a net loss of $4 million or a net loss of $0.29 per diluted share for the full year of 2020. GAAP net loss was negatively impacted by the strengthening of the new Israeli Shekel during 2021 and an increase in share-based compensation expenses in 2021 compared to 2020. In 2022, we believe that the dollar-share ratio will stabilize at the current levels and will not require hedging. Turning to the balance sheet, our cash, cash equivalents, and short-term bank deposits as of December 31, 2021, was $70.6 million. That concludes our prepared remarks. I will now turn the call back over to the operator for your questions.

The first question is from Bhavan Suri of William Blair.

It's Kate Bruner on for Bhavan. First off, congrats on the quarter and a great year. I wanted to start out with some housekeeping items about the ongoing projects, specifically the project in Latin America. Can you guys touch on just how this is progressing and the planned progression into '22?

Overall, we are very pleased with our progress. We got this project awarded somewhere in the middle of 2021, and we continue with execution. This project in LATAM is very important to us, as you recall, the start of a multistage RFP that we got the initial stage while we are still looking forward to further expand this. Our relationship with the customers is very strong. Implementation is going very well and we look positive on this activity.

Okay. Awesome. With that, I also wanted to talk about the Rakuten partnership. I know you mentioned the possibility of international expansion with them. I was just curious if there's anything in the direct pipeline on this, any new contracts expanded to different markets with them currently?

So I mentioned previously, Rakuten's strategy is to go beyond Japan into international markets, and they are currently being very aggressive and active with Rakuten Symphony. As you've seen in the news, they announced the Rakuten app store for telecom applications. RADCOM is fully integrated into the Rakuten stack. We are a strategic partner and their vendor of choice. Any success from Rakuten and any pipeline we build positions us well for additional projects. This is, of course, not guaranteed and relates to end customer requirements. But definitely, there are opportunities, and some of our pipeline includes opportunities with Rakuten to expand into additional carriers globally.

Okay. Last one, just as you look forward to the next 2 to 3 years, what do you see being the main growth drivers of your operations? Is it focused on 5G expansion? Is it working through the early stages or more product expansion? Can you just add some color on that?

Yes. We are very focused on our strategy to look at partner operators as they transition to 5G and innovate their networks. Today, most networks are built on physical client-based implementations. As operators move to 5G, they will not only revise their networks but also transition to cloud-native. This is exactly where RADCOM excels, putting us in a very good position with our technology. We invested significantly over the last 5 years in R&D to virtualize and refine our software solutions. As operators adopt 5G, we expect to see demands for reassessment of vendor selections. While some may remain with existing vendors, many will certainly be open to alternatives we provide, and this is a significant opportunity for us. Our technology is well-prepared for the market advances, and we are ahead of the curve. Many operators, as I mentioned in my previous remarks, are still in early vendor selection stages. It will take time, but it's exciting to see our strategy succeeding. We are demonstrating consecutive growth while in the early market stages, which suggests that we can achieve much higher success.

The next question is from Alex Henderson of Needham & Company.

So a couple of questions. First one, I wanted to talk a little bit about the penetration of the AI analytics today in terms of existing customers and, more importantly, what's in your pipeline, to what extent is AI included in the pipeline of opportunities for '22? Any calibration around that would be helpful.

Our AI capabilities truly serve as our secret sauce while many competitors are still busy figuring out how to build virtualized cloud-native solutions and transition to 5G. We have invested heavily in this area and possess advanced capabilities. This enables us to dedicate substantial R&D resources to the next stage of AI development. Our long-term vision is for AI to play a crucial role in our offerings, and we engage with both new and existing customers for AI. We provide it in two flavors: some AI capabilities are part of our standardized solution to deliver immediate benefits, while some advanced features can provide further upsell opportunities to both existing and new accounts. There remains much to be done with AI, as we are collecting vast amounts of data through real-time monitoring of transactions. We believe the potential is immense. AI is advancing across many sectors, and particularly in telecom, where efficient operations are critical.

The question really is, obviously, the piece that's embedded in your existing core technology is going to be part of every transaction you do. But the upsell piece is an add-on sale. Is the add-on sales in the existing pipeline? Do you believe that pipeline will drive that upsell, resulting in higher revenue per service provider? Or is that something that will happen post-deployment as an upsell to the existing installed base?

It's mostly the latter. When looking at the pipeline for new accounts, they are generally focused on the foundational aspects, which are included in our standardized solution. The real opportunity for upselling lies further along, as we continuously develop and add use cases to our AI capabilities.

The second question is on the cloud-based operating structure. Clearly, it’s a cutting-edge capability. It's impressive that you're able to deliver on a micro service cloud node architecture. However, it's not clear how many service providers are as cutting-edge as this technology would imply. I was wondering if you could talk about your pipeline and existing customers, particularly in terms of how critical the cloud-native capability is for them or if it's something beyond their current ambition?

It depends on the customer type. When we engage with customers advancing towards 5G using stand-alone technology, it is vital for them to have cloud-native applications. I mentioned previously that transitioning to public cloud is a prolonged process and many legacy providers still depend on physical solutions. Nevertheless, we are dedicated to partnering with cutting-edge implementations and those operators progressing to 5G. I expect that as they mature, the importance of cloud-native capabilities will grow.

So just to clarify, this is a necessity in the roadmap, but not necessarily something that will immediately appear in initial orders for the next couple of years?

For the advanced operators, it's a mandatory requirement. For others not as far along, they may not integrate it right away but could include it in the shorter roadmap. It ultimately depends on the operator's stage of maturity in adopting these technologies. For instance, Rakuten is a clear example where cloud-native integration is essential. Conversely, operators still in the early phases of 5G might not prioritize this right now.

So regarding the competitive landscape, have you observed any changes throughout 2021? Have competitors realized that traditional methods are not sufficient and are they scrambling to catch up with your advancements?

I focus primarily on our progress and the feedback we receive from customers. Overall, we hear excitement about our technology. Competitors may not be as advanced, and when they delve into specifics, they appreciate our technological investments. We are consistently innovating and confident in our technology compared to others in the market. The shift to 5G is clear to all competitors, and they recognize the need to transition to cloud-native solutions. However, how quickly they can adapt and implement is uncertain. Our ongoing investments provide us an advantage that's difficult for them to overcome.

Have you experienced any competitive bids where others showed interest? Or are you still perceived as the leading option in most of the opportunities you're exploring?

Again, the feedback indicates we are the most advanced, particularly regarding our roadmap and future commitments. However, while we have strong reference customers with cloud-native solutions, we remain vigilant in monitoring the landscape.

Shifting to the income statement and cash position, given increasing wage inflation and a relatively static headcount, do you anticipate improvement in your operating margins, potentially reaching breakeven by year-end, or should we expect slight losses to persist?

As you can see, this quarter reflects several inflationary impacts along with the Shekel to dollar ratio. We are approximately at breakeven with $11 million in quarterly revenue. If we achieve the higher end of our guidance, we are looking to stay near breakeven. So yes, this is a realistic target. Overall, we intend to maintain our R&D at similar levels while gradually increasing sales and marketing. If we can execute our growth plans, we will aim to further reduce losses and move toward profitability.

With just a few additions in headcount last year, are you expecting a larger headcount growth in 2022?

No, we are content with our current headcount. We may see slight increases, particularly in sales and marketing, as we aim to expand into more territories and address the evolving 5G landscape.

On the cash flow side, there seems to be potential for strong cash generation in '22. Is that accurate?

While we generated cash in 2021, I believe we may have a similar outlook. However, fluctuations may occur due to project-specific milestones and payment schedules, which could see amounts shift between years. Overall, our current cash levels are among the highest in the last three years, and we are not burning cash. As our results improve and revenue increases, this will only become more favorable.

This concludes the RADCOM Ltd. fourth quarter and full year 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.