Based on my analysis, Allot Ltd. (NASDAQ: ALLT ) presents a unique and attractive investment opportunity for investors who are looking to gain exposure in the cybersecurity industry. Apart from the company's impressive turnaround post-2022, ALLTI am seasoned investor with more than 20 years of investment experience, specializing in identifying companies that have the potential to consistently outperform the broader market. My investment journey begin pre-2008 and I have experienced multiple market cycles, a ...

Group 1 - The bullish thesis on Allot Ltd. has strengthened following its Q2 2025 results, indicating a successful transformation to Security as a Service (SECaaS) [1] - The company's performance reflects a significant shift in its business model towards providing security solutions [1]

Financial Data and Key Metrics Changes - The company reported revenue of $24.1 million for Q2 2025, representing a 9% year-over-year increase [22] - The CCaaS (Cybersecurity as a Service) ARR (Annual Recurring Revenue) was $6.4 million, up 73% year-over-year, comprising 27% of total revenue [22] - Non-GAAP gross margin improved to 73.4% from 70.6% in the same quarter last year [23] - Non-GAAP operating income was $1.2 million compared to a loss of $1 million in Q2 2024 [24] - Positive operating cash flow of $4.4 million was reported, with cash and equivalents totaling $72 million as of June 30, 2025 [25] Business Line Data and Key Metrics Changes - The CCaaS segment is highlighted as the primary growth engine, with significant contributions from new customer acquisitions and upselling existing services [5][7] - The successful launch of Verizon's MyDisPlan contributed positively to the CCaaS growth, indicating strong market traction [6][8] Market Data and Key Metrics Changes - The company is seeing strong momentum in the cybersecurity services market, particularly among major telecom operators [7] - New contracts with telecom operators in Poland and Panama indicate expanding market presence and service adoption [9][10] Company Strategy and Development Direction - The company is focused on sustainable, profitable growth through its cybersecurity as a service strategy, aiming to increase the number of telecom partners and expand service offerings [10][12] - The launch of the SG Terra 3 platform is expected to enhance service delivery and customer engagement [16][17] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential, citing improved visibility and a strong backlog of opportunities [20] - The company anticipates a strong year-end CCaaS ARR growth of 55% to 60% for 2025 [19] Other Important Information - A follow-on equity offering raised $46 million, which was used to repay convertible notes and strengthen the balance sheet, leaving the company with no debt [24][25] - The company expects overall revenues for 2025 to be between $98 million and $102 million, positioning itself for profitable growth [19] Q&A Session Summary Question: What has been driving the strong ARR growth metrics? - The strong ARR growth is attributed to new customer acquisitions, increased adoption of existing services, and upselling new applications [29] Question: What has been driving the improved gross margin performance? - Improved gross margin is due to a favorable revenue mix, particularly from software expansion deals [31] Question: Can you provide more color on the MyBiz opportunity? - The MyBiz plan is expected to ramp up over the next two to three years, with high attach rates due to its default inclusion in the service [33][35] Question: Can you discuss the large European telecom deal? - The deal involves network intelligence and cybersecurity solutions, expected to generate revenue primarily in 2026 and 2027 [37][39] Question: Are there any macro impacts on sales cycles? - There are no significant macro impacts observed, and the demand is driven by the new Terra 3 platform [63]

Core Insights - Allot Ltd. reported a strong performance in Q2 2025, with a 73% year-over-year growth in SECaaS Annual Recurring Revenue (ARR), which now constitutes over 25% of total revenue [2][3] - The company raised its full-year revenue guidance to a range of $98-102 million, reflecting confidence in continued growth driven by SECaaS [3] - Overall revenue for Q2 2025 reached $24.1 million, marking a 9% increase from $22.2 million in Q2 2024 [4][8] Financial Performance - Gross profit on a GAAP basis for Q2 2025 was $17.3 million, with a gross margin of 72.1%, up from $15.2 million and 68.5% in Q2 2024 [4] - Non-GAAP gross profit was reported at $17.6 million, with a gross margin of 73.4%, compared to $15.7 million and 70.6% in the same quarter last year [5] - The company achieved a non-GAAP operating income of $1.2 million in Q2 2025, a significant improvement from an operating loss of $1.0 million in Q2 2024 [6] Cash Flow and Debt Management - Operating cash flow for the quarter was $4.4 million, a notable increase from $1.2 million in Q2 2024 [7][8] - As of June 30, 2025, Allot had $72 million in cash and cash equivalents, an increase of $13 million from $59 million at the end of 2024, and the company reported no debt [9] Strategic Developments - Allot secured a landmark multi-year deal valued in the tens of millions with a tier-1 telecom operator in EMEA, highlighting its competitive edge in cybersecurity and network intelligence [3] - The company’s SECaaS service is gaining traction, particularly through partnerships like the one with Verizon Business, contributing significantly to revenue growth [2][3] Revenue Breakdown - In Q2 2025, SECaaS revenue was $6.4 million, representing 27% of total revenue, compared to 18% in Q2 2024 [27] - The geographic revenue breakdown showed that EMEA accounted for 66% of total revenues, while the Americas and Asia Pacific contributed 17% each [26]

Core Insights - Allot Ltd. (ALLT) is set to report its Q2 2025 results on August 14, with earnings expected to be breakeven compared to a loss of 2 cents in the same quarter last year [1] - The revenue consensus estimate for the upcoming quarter is $22.9 million, reflecting a 3.3% year-over-year increase [1][2] - The company has seen strong demand for its Smart and Tera III products, driven by multi-million-dollar agreements with tier-1 customers, which is expected to boost revenue and margins [6][8] Financial Estimates - The Zacks Consensus Estimate for Q2 2025 revenues is $22.9 million, with a year-over-year growth estimate of 3.34% [2] - For the next quarter (Q3 2025), the revenue estimate is $25.9 million, indicating an 11.45% growth [2] - The current year revenue estimate stands at $98.6 million, with a year-over-year growth of 6.95%, while the next year is projected at $125.7 million, reflecting a 27.48% increase [2] Earnings Projections - The earnings consensus for Q2 2025 is expected to be flat at $0.00, compared to a loss of $0.02 in the same quarter last year [3] - For the current year, the earnings estimate is $0.10, with a significant year-over-year growth of 150% expected for the next year at $0.28 [3] Market Performance - ALLT's stock has increased by 28% year-to-date, significantly outperforming the industry growth of 19% [10] - The current valuation metrics indicate that ALLT is trading at a trailing EV-to-EBITDA of 71.63X, which is considerably higher than the industry average of 35.85X [11] Strategic Positioning - The company is benefiting from rising high-margin recurring revenues from its SECaaS offerings, which are expected to grow around 50% year-over-year [8] - Partnerships, such as Verizon's integration of SECaaS into mobile plans, are enhancing recurring revenue visibility and long-term growth potential [6][13] - The competitive landscape includes companies like Radware and Ceragon Networks, which are also focusing on subscription-based services and recurring revenue strategies [9]

Core Insights - Más Móvil is the first network operator in Panama to implement network-native, zero-touch cybersecurity for its subscribers [1][2] - Allot NetworkSecure provides protection against various cyber threats, including malware and phishing attacks, without requiring application installation [2][3] - The service includes parental control features to enhance online safety for families [2][3] Company Overview - Allot Ltd. is a global provider of innovative Security-as-a-Service (SECaaS) and network intelligence solutions, serving over 500 service providers and 1000 enterprises worldwide [5] - The company's solutions are designed to enhance customer value through network-native cybersecurity services and analytics [5] Service Details - The initial phase of Más Móvil's cybersecurity offering will focus on residential postpaid customers, with plans to expand to prepaid mobile and fixed-line segments [1] - The Defender+ service reflects Más Móvil's commitment to digital security, providing effective protection without the need for application installation [3][4]

Core Viewpoint - Allot Ltd. will host a conference call to discuss its second quarter 2025 results on August 14, 2025, at 9:00 AM ET, with unaudited financial results to be published prior to the call [1][2]. Company Overview - Allot Ltd. is a leading global provider of innovative security-as-a-service (SECaaS) and network intelligence solutions for communication service providers (CSPs) and enterprises [1][3]. - The company offers solutions for network and application analytics, traffic control and shaping, and network-based security services, enhancing value for customers [3]. - Allot's multi-service platforms are utilized by over 500 mobile, fixed, and cloud service providers, as well as over 1000 enterprises globally [3]. - The company's network-based security as a service solution is used by millions of subscribers worldwide [3].

Group 1: Allot Ltd. (ALLT) - Allot has seen a significant rise of over 26% since the beginning of 2025, but shares have recently dropped by about 16% in the last month [2][3] - The latest earnings report showed an earnings per share (EPS) of 2 cents, beating predictions of a loss, and revenue of $24.9 million, exceeding the expected $24.4 million [3] - A strategic shift away from core products towards services has led to year-over-year revenue decline in the products segment, but may allow for better adaptability to customer demands [3][4] Group 2: Ardent Health Services (ARDT) - Ardent has recently reached its lowest share price since going public, with a decline of over 15% in the last month amid challenges in the healthcare sector [6][7] - The company reported an EPS of 29 cents, exceeding predictions by 8 cents, and has shown consistent revenue growth [7][8] - Analysts anticipate a nearly 60% increase in earnings over the next year, and the stock is attractively priced with a P/E ratio of 6.8 compared to the sector average of 28.1 [8][9] Group 3: Group 1 Automotive (GPI) - Group 1's shares are down only 1% year-to-date, despite an 8% drop in the last month due to inflation concerns [11] - The company exceeded analyst expectations for first-quarter EPS by 49 cents, with quarterly revenue growth of over 23% year-over-year [12] - Upcoming Q2 2025 earnings report on July 24 could act as a catalyst for a rebound, with analysts predicting roughly 14% upside in GPI shares [13]

Core Insights - Allot Ltd. has expanded its cybersecurity partnership with Play, a leading operator in Poland, to include DNS Secure for fixed broadband customers, enhancing existing services for mobile customers [1][3] - The agreement, signed in April 2025, aims to provide comprehensive cybersecurity protection against various threats such as malware and phishing, utilizing a network-based approach [1][2] Company Overview - Allot Ltd. is a global provider of innovative security-as-a-service (SECaaS) and network intelligence solutions, serving communication service providers and enterprises [1][4] - The company has a significant presence, with over 500 service providers and more than 1000 enterprises utilizing its solutions globally [4] Product Details - DNS Secure is designed for communication service providers (CSPs) to protect fixed broadband subscribers, offering features like content filtering and protection against cyber threats [2] - The solution can be deployed as a standalone service or integrated with other Allot solutions, such as NetworkSecure, to provide a unified user experience [2][3] Customer Satisfaction - Play's Director of Home Services expressed satisfaction with Allot's existing NetworkSecure solution for mobile customers, leading to the decision to extend these services to fixed broadband customers [3] - The partnership emphasizes a commitment to customer satisfaction and success, aiming to deliver a seamless cybersecurity experience across different service platforms [3]

Market Overview - Wall Street reached record-high levels despite a turbulent first half of 2025, with the second quarter being the best for U.S. stocks in the past year due to expectations of key trade deals and reduced recession fears [1] - The Federal Reserve indicated two more cuts in the benchmark lending rate for the second half of the year, contributing to a continued bull run in July, with the S&P 500 and Nasdaq Composite hitting all-time highs [2] Stock Performance - A selection of stocks has shown significant price strength, particularly those on a recent bull run, indicating potential for continued momentum [3] - Notable stocks include RF Industries Ltd. (RFIL), Legacy Education Inc. (LGCY), Primoris Services Corp. (PRIM), Allot Ltd. (ALLT), and Euroseas Ltd. (ESEA) [3] Stock Screening Criteria - Stocks must show a percentage change in price greater than zero over the last four weeks and greater than 10% over the last 12 weeks to indicate sustained momentum [5] - Stocks should have a Zacks Rank of 1 (Strong Buy) and an average broker rating of 1, indicating strong future performance expectations [6] - Stocks must be trading at a minimum price of $5 and be within 85% of their 52-week high to ensure they are strong performers [7] Individual Stock Highlights - **RF Industries Ltd. (RFIL)**: Stock surged 74% in four weeks, with expected earnings growth over 100% for the current fiscal year [8][10] - **Legacy Education Inc. (LGCY)**: Stock price increased by 29.6% in four weeks, with an expected earnings growth rate of 0.8% [12] - **Primoris Services Corp. (PRIM)**: Stock climbed 23.4% in four weeks, with an expected earnings growth rate of 15.8% [14] - **Allot Ltd. (ALLT)**: Stock surged 19.8% in four weeks, with expected earnings growth over 100% [17] - **Euroseas Ltd. (ESEA)**: Stock advanced 12.6% in four weeks, with an expected earnings growth rate of 1.2% [19]