Core Viewpoint - Allot Ltd. is experiencing strong demand for its products and an increase in Security-as-a-Service (SECaaS) revenues, which is generating optimism among investors despite high valuation concerns and potential limitations on near-term gains [3][5]. Group 1: Company Overview - Allot Ltd. provides network intelligence and security solutions globally, enhancing and protecting digital experiences for carriers, service providers, and institutions [1]. - The company operates in diverse regions, including Europe, Asia, Oceania, the Middle East, Africa, and the Americas, offering a wide range of security and management solutions [1]. Group 2: Stock Performance and Analyst Outlook - The consensus price target for Allot Ltd.'s stock has remained stable at $12.5 over the past year, indicating a steady outlook from analysts [2][5]. - Recently, Allot Ltd. saw an 8% surge in its stock price during the last trading session, driven by higher-than-average trading volume [4]. - Despite the positive stock movement, the trend in earnings estimate revisions suggests that the stock may not sustain its upward trajectory in the near term [4][5].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][12] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [14][15] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [15] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024 [15][16] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025 from 58% in Q3 2024 [13] Business Line Data and Key Metrics Changes - Revenue from the CCAS (Cybersecurity as a Service) segment was $7.3 million, up 60% year-over-year, accounting for 28% of total revenue [12][5] - CCAS annual recurring revenue (ARR) as of September 2025 was $27.6 million [12] - The Smart product line also contributed to revenue growth, with a strong backlog and visibility heading into the next year [9][10] Market Data and Key Metrics Changes - Increased sales in the Americas were noted, aligning with the strategy to boost business in this region [12] - The company is seeing strong traction among major telecom operators for its cybersecurity solutions [7][8] Company Strategy and Development Direction - The company is focused on a cybersecurity-first strategy and a renewed go-to-market approach [7][10] - There is an emphasis on expanding the CCAS offering and enhancing the Smart product line to maintain technology leadership [9][10] - The company is optimistic about long-term growth, expecting CCAS ARR to surpass 60% year-over-year growth by year-end 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth trajectory, citing a robust pipeline and backlog [10][11] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [29] - Management raised full-year 2025 revenue guidance to between $100 million and $103 million [11] Other Important Information - The company completed a $46 million follow-on share offering, enhancing its financial resources [15] - Allot has no debt, positioning it well for future growth [16] Q&A Session Summary Question: Increased traction with major telecom customers - Management noted positive trends in both tax rates and new service launches contributing to significant growth in CCAS revenue and ARR [18] Question: Details on the first customer for OPNET Secure - The first customer aims for 24/7 protection for their customers, combining Allot's network security with OPNET [19][20] Question: Continued strength in the Smart pipeline - Management confirmed a strong pipeline with opportunities from both new and existing customers, particularly for the Terra 3 product [23] Question: Drivers of CCAS growth - Growth is primarily from new customer contracts and existing accounts expanding their services [27] Question: Competitive landscape for network intelligence offerings - The competitive environment is currently favorable, with unique technology providing a competitive edge [29] Question: Impact of ad campaigns on CCAS adoption - Management identified four drivers for CCAS growth, including new customer additions and upselling existing services [31][32]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][12] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [14][15] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [15] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024, with no debt [15][16] Business Line Data and Key Metrics Changes - Revenue from Cybersecurity as a Service (CCAs) was $7.3 million, up 60% year-over-year, comprising 28% of total revenue [12][5] - CCAs Annual Recurring Revenue (ARR) as of September 2025 was $27.6 million [12] - The Smart product line also contributed to growth, with a strong performance and a robust pipeline [9][10] Market Data and Key Metrics Changes - Increased sales in the Americas, particularly from a large Smart order and growing contributions from the U.S. market [12] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025 from 58% in Q3 2024 [13] Company Strategy and Development Direction - The company is executing a cybersecurity-first strategy and focusing on a renewed go-to-market approach [7][10] - The launch of OPNET Secure aims to enhance cybersecurity protection for end customers, expanding the service beyond the operator's infrastructure [8] - The company is optimistic about long-term growth, with expectations for CCAs ARR to surpass 60% year-over-year growth by year-end 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth strategy, highlighting the positive momentum in CCAs and network intelligence solutions [10][11] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [29] - Management raised full-year 2025 revenue guidance to between $100 million and $103 million [11] Other Important Information - The company completed a $46 million follow-on share offering, with $40 million received in Q2 and $6 million in Q3 [15] - The company reported positive operating cash flow of $4 million for the third consecutive quarter [15] Q&A Session Summary Question: Increased traction with major telecom customer - Management noted positive trends in both tax rates and new services launched, contributing to significant growth in CCAs revenue and ARR [18] Question: Details on the first customer for OPNET Secure - Management indicated that the first customer values 24/7 protection and is looking to enhance their service with OPNET [19][21] Question: Continued strength in the Smart pipeline - Management confirmed a strong pipeline with opportunities from both new and existing customers, particularly for the Terra 3 product [23] Question: Drivers of CCAs growth - Growth is primarily from new contracts and the onboarding of additional customers, with a focus on strategic accounts [27] Question: Competitive landscape for network intelligence offerings - Management described the competitive landscape as easier, with unique technology providing a competitive edge [28] Question: Drivers of growth in larger CCAs contracts - Management identified new customer additions, upselling, and cross-selling as key growth drivers [32] Question: Progress with Verizon Live's penetration - Management refrained from discussing specific customers but expressed overall satisfaction with progress [39] Question: Role of Terra 3 in customer conversations - Management highlighted a good mix of new opportunities and discussions with existing customers, focusing on customer success [41]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][11] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [12] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [13][14] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024, with no debt [15] Business Line Data and Key Metrics Changes - Cybersecurity as a Service (CCAS) revenue was $7.3 million in Q3 2025, up 60% year-over-year, comprising 28% of total revenue [11][12] - CCAS Annual Recurring Revenue (ARR) as of September 2025 was $27.6 million [11] - The Smart product for network intelligence also contributed to growth, with a strong pipeline and backlog [8][9] Market Data and Key Metrics Changes - Increased sales in the Americas, particularly from a large Smart order and growing contributions from the U.S. market [11] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025, up from 58% in Q3 2024 [12] Company Strategy and Development Direction - The company is executing a cybersecurity-first strategy and focusing on a renewed go-to-market approach [6][9] - The introduction of OPNET Secure aims to enhance cybersecurity protection for end customers, expanding the service beyond the operator's infrastructure [7][19] - The company is optimistic about long-term growth, with expectations for CCAS ARR to surpass 60% year-over-year growth by year-end 2025 [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth strategy, highlighting the positive momentum in CCAS and network intelligence solutions [6][9] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [25] - Management anticipates continued growth in both CCAS and Smart product lines, supported by a robust pipeline and backlog [9][11] Other Important Information - The company completed a $46 million follow-on share offering, enhancing its financial resources for growth initiatives [14] - The company reported positive operating cash flow for the third consecutive quarter, totaling $4 million in Q3 2025 [14] Q&A Session Summary Question: Increased traction with major telecom customers - Management noted positive trends in both tax rates and new services launched, contributing to significant growth in CCAS revenue and ARR [17] Question: Details on the first customer for OPNET Secure - The first customer aims for 24/7 protection for their customers, combining network security with OPNET services [19][20] Question: Drivers of CCAS growth - Growth is primarily from new customer contracts and the onboarding of additional customers from existing contracts [23] Question: Competitive landscape for network intelligence offerings - The competitive environment is currently more favorable, with unique technology providing a competitive edge [25] Question: Drivers of growth in larger CCAS contracts - Growth is driven by new customer additions and upselling additional services to existing customers [28] Question: Terra 3's role in customer conversations - The company is focusing on customer success and maintaining a healthy mix of new and existing customer opportunities [35]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Mobile-Network Solutions (MNDR) is up 96% at $3.26 - PACS Group, Inc. (PACS) is up 44% at $24.37 - Cerence Inc. (CRNC) is up 28% at $10.16 - Magnera Corporation (MAGN) is up 26% at $10.07 - Oddity Tech Ltd. (ODD) is up 17% at $43.75 - Allot Ltd. (ALLT) is up 14% at $9.80 - Artiva Biotherapeutics, Inc. (ARTV) is up 14% at $3.88 - Kulicke and Soffa Industries, Inc. (KLIC) is up 13% at $40.22 - Fossil Group, Inc. (FOSL) is up 12% at $2.29 - NVIDIA Corporation (NVDA) is up 5% at $195.84 [3] Premarket Losers - Brera Holdings PLC (SLMT) is down 33% at $3.84 - Bath & Body Works, Inc. (BBWI) is down 14% at $18.04 - Cemtrex, Inc. (CETX) is down 11% at $3.20 - Atkore Inc. (ATKR) is down 9% at $60.00 - Gloo Holdings, Inc. (GLOO) is down 9% at $7.30 - SMX (Security Matters) Public Limited Company (SMX) is down 9% at $4.60 - Sonim Technologies, Inc. (SONM) is down 8% at $7.31 - Psyence Biomedical Ltd. (PBM) is down 7% at $2.56 - MMTec, Inc. (MTC) is down 6% at $2.00 - Ridgetech, Inc. (RDGT) is down 5% at $4.78 [4]

Core Insights - Allot Ltd. reported a significant year-over-year growth in SECaaS Annual Recurring Revenue (ARR) of 60% and raised its full-year revenue guidance to between $100 million and $103 million [2][3][9]. Financial Performance - Total revenues for Q3 2025 reached $26.4 million, marking a 14% increase from $23.2 million in Q3 2024 [3][9]. - GAAP gross profit was $18.9 million with a gross margin of 71.4%, up from $16.4 million and a gross margin of 70.4% in the same quarter of the previous year [3][9]. - Non-GAAP gross profit was $19.1 million with a gross margin of 72.2%, compared to $16.7 million and a gross margin of 71.7% in Q3 2024 [3][9]. - GAAP operating income was $2.2 million, a turnaround from an operating loss of $0.2 million in Q3 2024 [4][9]. - Non-GAAP operating income increased to $3.7 million from $1.1 million in Q3 2024 [4][9]. - Net income on a GAAP basis was $2.8 million, or $0.07 per diluted share, compared to a net loss of $0.2 million, or a loss of $0.01 per basic share, in Q3 2024 [4][5][9]. - Non-GAAP net income was $4.6 million, or $0.1 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in Q3 2024 [5][9]. Cash Flow and Financial Position - Operating cash flow for the quarter was $4.0 million [5][9]. - As of September 30, 2025, total cash and cash equivalents amounted to $81 million, an increase of $22 million from $59 million at the end of 2024 [5][9]. - The company reported no debt as of the end of Q3 2025 [5][9]. Strategic Focus - The company is advancing its cyber-security first strategy and is seeing strong performance from its cyber security and network intelligence solutions [2][3]. - Allot's SECaaS solutions are deployed globally, serving over 500 service providers and more than 1,000 enterprises [7][9].

Financial Performance - Total revenues for Q3 2025 were $26.4 million, a 14% increase year-over-year from $23.2 million in Q3 2024[5] - GAAP operating income was $2.2 million, compared to a loss of $0.2 million in Q3 2024[6] - Non-GAAP operating income increased to $3.7 million from $1.1 million in Q3 2024[8] - Net income on a GAAP basis was $2.8 million, or $0.07 per diluted share, improving from a net loss of $0.2 million, or $0.01 per basic share, in Q3 2024[8] - GAAP net income for Q3 2025 was $2,824,000, compared to a loss of $244,000 in Q3 2024, representing a significant turnaround[23] - Non-GAAP net income for Q3 2025 was $4,579,000, up from $1,261,000 in Q3 2024, indicating a year-over-year increase of 264%[23] - Net income for Q3 2025 was $2.824 million, a significant improvement from a net loss of $244 million in Q3 2024[29] Revenue Breakdown - SECaaS represented 28% of overall revenue, with SECaaS ARR reaching $27.6 million, up 60% year-over-year[6] - Total revenues for Q3 2025 reached $26.4 million, with a geographic breakdown showing 31% from the Americas, 49% from EMEA, and 20% from Asia Pacific[31] - SECaaS (Security as a Service) revenues in Q3 2025 were $7.3 million, up from $6.4 million in Q2 2025[31] - The top 10 customers accounted for 60% of total revenues in Q3 2025, compared to 47% in FY 2023[31] Guidance and Future Outlook - The company raised its full year 2025 revenue guidance to between $100 million and $103 million[4] Profitability and Margins - Gross profit on a GAAP basis was $18.9 million, with a gross margin of 71.4%, up from $16.4 million and 70.4% in Q3 2024[5] - GAAP gross profit for Q3 2025 was $18,866,000, a 15% increase from $16,364,000 in Q3 2024[23] - Non-GAAP gross profit for the nine months ended September 30, 2025, was $53,014,000, compared to $47,724,000 in the same period of 2024, showing an increase of 11%[23] Cash Flow and Liquidity - Operating cash flow for the quarter was $4.0 million, with total cash at $81 million, an increase of $22 million from $59 million at the end of 2024[10] - Cash flows from operating activities provided $4.041 million in Q3 2025, compared to $1.883 million in Q3 2024[29] - Cash and cash equivalents rose to $24,232,000 in Q3 2025, up from $16,142,000 in Q4 2024, marking a 50% increase[27] - Cash and cash equivalents at the end of Q3 2025 were $24.232 million, down from $28.226 million at the end of Q3 2024[29] Assets and Liabilities - Total current assets increased to $127,516,000 as of September 30, 2025, compared to $90,176,000 at the end of 2024, reflecting a growth of 41%[27] - Total liabilities decreased to $62,195,000 as of September 30, 2025, down from $89,832,000 at the end of 2024, a reduction of 31%[27] - The company has no debt as of September 30, 2025[10] Expenses and Investments - Research and development costs, net, for Q3 2025 were $400,000, slightly down from $402,000 in Q3 2024, indicating stable investment in innovation[25] - The company reported a GAAP operating expense of $16,716,000 for Q3 2025, which is relatively stable compared to $16,581,000 in Q3 2024[23] - The company experienced a net cash used in investing activities of $11.369 million in Q3 2025, compared to a net cash provided of $10.462 million in Q3 2024[29] Shareholder Information - The weighted average number of shares used in computing GAAP diluted net income per share increased to 41,487,057 in Q3 2025 from 39,202,550 in Q3 2024[23] - Non-GAAP weighted average number of fully diluted shares increased to 44.6 million in Q3 2025 from 40.3 million in FY 2023[31]

Core Insights - Allot Ltd. is gaining attention as a small-cap tech stock, with recent coverage initiated by TD Cowen & Co. and Needham, both giving it a Buy rating due to its growth potential in the cybersecurity market and focus on small businesses [1][2]. Company Overview - Allot Ltd. is based in Hod HaSharon, Israel, and specializes in network intelligence and cybersecurity solutions for telecom service providers and enterprises globally [3]. - The company's product offerings include Allot Smart and Allot Secure, which utilize deep packet inspection for traffic management, application visibility, and network-based security services [3]. Market Positioning - TD Cowen estimates that Allot is positioned to achieve double-digit profitable growth, driven by a total addressable market of approximately $10 billion in the small-business segment [1]. - Needham highlights Allot's momentum in the carrier cybersecurity-as-a-service (CCaaS) model, which adds recurring subscription revenue on top of telecom distribution [2].

Core Insights - Allot Ltd. is participating in the 6th Annual Needham Tech Week from November 20-24, 2025, with CEO Eyal Harari and CFO Liat Nahum attending [1] - The company will host virtual investor meetings on November 24, 2025, for interested parties to schedule meetings through Needham representatives or the investor relations team [2] Company Overview - Allot Ltd. is a leading provider of Security-as-a-Service (SECaaS) and network intelligence solutions for communications service providers and enterprises globally [2] - The company offers a range of services including network-native cybersecurity, application analytics, and traffic control, with over 500 service providers and 1000 enterprises utilizing its solutions [2] - Allot's security-as-a-service solution is currently used by millions of subscribers worldwide [2]

Core Viewpoint - Allot Ltd. will host a conference call to discuss its third quarter 2025 results on November 20, 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 provider of innovative Security-as-a-Service (SECaaS) and network intelligence solutions for communications service providers 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].