Core Viewpoint - The article emphasizes the importance of identifying sustainable trends in short-term investing to maximize profits, highlighting the challenges investors face in maintaining momentum in stock prices [1][2]. Group 1: Stock Performance - Allot Communications (ALLT) has shown a significant price increase of 58.3% over the past 12 weeks, indicating strong investor interest [4]. - In addition to the long-term trend, ALLT has maintained a price increase of 2.9% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, ALLT is trading at 90.5% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - ALLT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock also has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like ALLT that have sufficient fundamental strength to sustain their recent uptrends [3]. - The article suggests that there are multiple stocks passing through this screening process, providing additional investment opportunities for trend-focused investors [8].

Company Overview - Allot Communications (ALLT) shares increased by 8% to $9.21 in the last trading session, following a period of 4.6% loss over the past four weeks, indicating a significant recovery in investor sentiment [1] - The rise in stock price is attributed to recent analyst upgrades, promising earnings potential, an expanding customer base, and effective rollout of security solutions [1] Earnings Expectations - Allot Communications is expected to report break-even quarterly earnings per share, reflecting a year-over-year change of +100% [2] - Projected revenues for the upcoming report are $22.9 million, which is a 3.3% increase from the same quarter last year [2] Stock Performance Indicators - The consensus EPS estimate for Allot Communications has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating strong market confidence [4] Industry Context - Allot Communications operates within the Zacks Technology Services industry, where Ibotta (IBTA) is another player, having experienced a 3.3% decline in the last trading session and a -26.1% return over the past month [4] - Ibotta's consensus EPS estimate has also remained unchanged, with a projected change of +113.6% year-over-year [5]

Core Insights - Allot Ltd. has secured its largest customer win in five years, signing a multi-year agreement valued at tens of millions of dollars with a Tier-1 telecom operator in EMEA for integrated network intelligence and cybersecurity solutions [1][3]. Group 1: Agreement Details - The agreement includes Allot Smart solutions for Traffic Management, Policy & Charging Control, Network Visibility and Analytics, as well as cybersecurity services such as DDoS attack protection, anti-botnet, and reputation protection [2]. - The solution will utilize the SG Tera-III platform, which is noted as the highest capacity multiservice gateway in the telecommunications market [2]. Group 2: Strategic Importance - This partnership is pivotal for Allot as it aims to expand its security and network intelligence presence across EMEA, leveraging its technological advantages and core expertise [3]. - The integrated solutions will support both fixed fiber and mobile 5G and 4G networks, aiming to reduce access bandwidth costs, defer capacity expansion, cut operational expenses through automation, and ensure high Quality of Experience (QoE) for the telecom operator's customers [3]. Group 3: Company Overview - Allot Ltd. is recognized as a leading provider of innovative converged cybersecurity solutions and network intelligence for service providers and enterprises globally, with deployments across over 500 mobile, fixed, and cloud service providers [4]. - The company's solutions enhance value for customers through network-native cybersecurity services, network and application analytics, and traffic control [4].

Core Viewpoint - Allot Ltd. is conducting a public offering of 5,000,000 ordinary shares priced at $8.00 per share, with an additional option for underwriters to purchase up to 750,000 shares [1][2]. Group 1: Offering Details - The gross proceeds from the offering are expected to be $40.0 million, assuming no exercise of the underwriters' option [2]. - The net proceeds will be used to repay $31.41 million of principal outstanding under the Lynrock Note and the remainder for general corporate purposes [2][3]. - The offering is expected to close on June 26, 2025, subject to customary closing conditions [1]. Group 2: Lynrock Note Conversion - Lynrock has agreed to convert the remaining $8.59 million of principal under the Lynrock Note into 1,249,995 ordinary shares [3]. - Following the repayment and conversion of the Lynrock Note, the company will have no outstanding indebtedness for borrowed money [3]. Group 3: Underwriters and Registration - TD Cowen and William Blair are acting as joint book-running managers, with Needham & Company as lead manager and Northland Capital Markets as co-manager for the offering [4]. - The public offering is made pursuant to an effective shelf registration statement filed with the SEC [5].

Core Viewpoint - Allot Ltd. announced a proposed public offering of its ordinary shares, with all shares being sold by the Company [1]. Group 1: Use of Proceeds - The net proceeds from the public offering are expected to be used to repay $31.41 million of principal outstanding under the Lynrock Note, which has a face value of $40 million, and the remaining balance will be allocated for general corporate purposes [2]. - Lynrock has agreed to convert the remaining $8.59 million of principal outstanding under the Lynrock Note into ordinary shares, and will enter into a lock-up agreement for 75 days following the final prospectus supplement [3]. Group 2: Offering Details - The Company plans to grant underwriters a 30-day option to purchase up to an additional 15% of the ordinary shares sold in the public offering at the public offering price, less underwriting discounts and commissions [4]. - The public offering is being made under an effective shelf registration statement on Form F-3 filed with the SEC, declared effective on April 3, 2025 [5]. Group 3: Company Overview - Allot Ltd. is recognized as a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide [7].

[ALLOT LTD. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=1&type=section&id=ALLOT%20LTD.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Allot Ltd.'s total assets marginally increased to **$140.3 million** by March 31, 2025, with liabilities decreasing and equity rising Consolidated Balance Sheet Summary (in thousands USD) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $94,127 | $90,176 | +$3,951 | | Cash and cash equivalents | $10,061 | $16,142 | -$6,081 | | Available-for-sale marketable securities | $33,372 | $26,470 | +$6,902 | | Trade receivables, net | $19,234 | $16,482 | +$2,752 | | **Total Non-Current Assets** | $46,218 | $49,465 | -$3,247 | | **Total Assets** | **$140,345** | **$139,641** | **+$704** | | **Total Current Liabilities** | $37,877 | $35,970 | +$1,907 | | Deferred revenues (Current) | $20,013 | $17,054 | +$2,959 | | **Total Long-Term Liabilities** | $52,467 | $53,862 | -$1,395 | | Convertible debt | $40,000 | $39,973 | +$27 | | **Total Liabilities** | **$90,344** | **$89,832** | **+$512** | | **Total Shareholders' Equity** | **$50,001** | **$49,809** | **+$192** | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Allot Ltd. significantly improved Q1 2025 financial performance, with revenues up **5.8%** and net loss narrowing to **$0.33 million** Statement of Comprehensive Loss (in thousands USD, except per share data) | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$23,150** | **$21,890** | **+5.8%** | | - Products | $6,465 | $7,400 | -12.6% | | - Services | $16,685 | $14,490 | +15.1% | | **Gross Profit** | **$16,047** | **$15,098** | **+6.3%** | | **Total Operating Expenses** | **$16,756** | **$17,841** | **-6.1%** | | - Research and development | $5,991 | $7,149 | -16.2% | | - Sales and marketing | $7,338 | $7,790 | -5.8% | | **Operating Loss** | **($709)** | **($2,743)** | **+74.2%** | | **Net Loss** | **($332)** | **($2,510)** | **+86.8%** | | **Net Loss Per Share (Basic & Diluted)** | **($0.01)** | **($0.07)** | **+85.7%** | | **Total Comprehensive Loss** | **($1,027)** | **($2,879)** | **+64.3%** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased by **$0.2 million** in Q1 2025 to **$50.0 million**, primarily due to share-based compensation and option exercises Reconciliation of Shareholders' Equity for Q1 2025 (in thousands USD) | Description | Amount | | :--- | :--- | | **Balance as of January 1, 2025** | **$49,809** | | Exercise of share options and RSUs | $238 | | Share-based compensation | $981 | | Other comprehensive loss | ($695) | | Net loss | ($332) | | **Balance as of March 31, 2025** | **$50,001** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Allot generated **$1.7 million** in operating cash flow in Q1 2025, a significant turnaround, resulting in a **$6.1 million** decrease in cash and equivalents Cash Flow Summary (in thousands USD) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,685 | ($2,309) | | Net cash provided by (used in) investing activities | ($8,004) | $10,835 | | Net cash provided by financing activities | $238 | $0 | | **Increase (decrease) in cash and cash equivalents** | **($6,081)** | **$8,526** | | **Cash and cash equivalents at end of period** | **$10,061** | **$22,718** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain Allot's accounting policies, financial instruments, and key financial figures, including a **$40 million** convertible note [Note 1: Organization and Business Description](index=9&type=section&id=NOTE%201%3A%20-%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) Allot Ltd. specializes in developing and marketing network intelligence and security solutions for service providers and enterprises globally - The company's core business is providing innovative **network intelligence and security solutions** for mobile/fixed service providers and enterprises[15](index=15&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%202%3A%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company recognized **$7.125 million** in deferred revenue in Q1 2025 and has **$64.84 million** in remaining performance obligations - In Q1 2025, the company recognized **$7.125 million** in revenue that was included in the deferred revenue balance at the beginning of the period[20](index=20&type=chunk) - As of March 31, 2025, the company has **$64.84 million** in remaining performance obligations, with approximately **$48.56 million** expected to be recognized as revenue within the next 12 months[21](index=21&type=chunk) - The company is currently evaluating the impact of new accounting standards **ASU 2024-03 (Expense Disaggregation)** and **ASU 2023-09 (Income Tax Disclosures)**[22](index=22&type=chunk)[23](index=23&type=chunk) [Note 5: Derivative Instruments](index=12&type=section&id=NOTE%205%3A%20-%20DERIVATIVE%20INSTRUMENTS) Allot uses derivative instruments, primarily forward contracts and options, to hedge foreign currency risks for up to two years - The company hedges future foreign currency exposures (primarily salaries and related expenses) for up to **two years** using forward contracts and options[30](index=30&type=chunk)[31](index=31&type=chunk) - As of March 31, 2025, the company had outstanding hedge transactions with a net notional amount of **$28.5 million**[33](index=33&type=chunk) - The company also uses non-designated forward contracts to mitigate currency variability on monetary assets and liabilities, with **$11.4 million** in outstanding transactions as of March 31, 2025[38](index=38&type=chunk)[39](index=39&type=chunk) [Note 9: Commitments and Contingent Liabilities](index=17&type=section&id=NOTE%209%3A%20-%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) Allot has provided **$880,000** in bank guarantees and is involved in an ongoing legal proceeding with former Netonomy Ltd. employees - The company has provided bank guarantees of approximately **$463,000** for customer performance obligations and **$417,000** for lease agreements[44](index=44&type=chunk) - A civil claim from former employees of Netonomy Ltd. is ongoing, and the potential outcome cannot be estimated[44](index=44&type=chunk)[45](index=45&type=chunk) [Note 10: Shareholders' Equity](index=17&type=section&id=NOTE%2010%3A%20-%20SHAREHOLDERS'%20EQUITY) Shareholders' equity details include RSU and option plans, with **$10.05 million** in unrecognized RSU compensation cost RSU Activity for Q1 2025 | RSU Activity | Number of Shares | | :--- | :--- | | Outstanding at beginning of year | 3,047,441 | | Granted | 922,688 | | Vested | (173,398) | | Forfeited | (92,670) | | **Unvested at end of year** | **3,704,061** | - As of March 31, 2025, unrecognized compensation cost related to RSUs is **$10.05 million**, to be recognized over a weighted average of **2.09 years**[52](index=52&type=chunk) - In Q1 2025, **40,000** share options were exercised, reducing the outstanding options to **20,000**[48](index=48&type=chunk) [Note 12: Geographic and Segment Information](index=19&type=section&id=NOTE%2012%3A%20-%20GEOGRAPHIC%20AND%20SEGMENT%20INFORMATION) Allot operates as a single segment, with Europe as its largest market (**52.7%** of Q1 2025 revenues), and two customers contributing **25%** of total revenues Revenues by Geographic Region (in thousands USD) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Europe | $12,213 | $10,206 | | Asia and Oceania | $3,740 | $5,128 | | Americas | $2,639 | $4,286 | | Middle East and Africa | $4,558 | $2,270 | | **Total** | **$23,150** | **$21,890** | - In Q1 2025, two customers accounted for **14%** and **11%** of total revenues, respectively[58](index=58&type=chunk) - For Q1 2025, revenues were split between **network intelligence solutions (60%)** and **security solutions (40%)**[58](index=58&type=chunk) [Note 14: Convertible Notes](index=21&type=section&id=NOTE%2014%3A%20-%20CONVERTIBLE%20NOTES) The company has a **$40 million** senior unsecured convertible note with Lynrock Lake Master Fund LP, extended to February 2026 - On February 14, 2022, the company issued a **$40,000 thousand** convertible note to Lynrock Lake Master Fund LP[62](index=62&type=chunk) - The note has an initial conversion price of **$10.30 per share**, and its maturity was extended to **February 14, 2026**[62](index=62&type=chunk) - Amortization expenses related to the note's issuance costs were **$27 thousand** for Q1 2025, compared to **$50 thousand** for Q1 2024[65](index=65&type=chunk)

Core Viewpoint - The article emphasizes the importance of timing and sustainability in short-term investing, highlighting that a solid trend can lead to successful investments if supported by strong fundamentals and positive earnings revisions [1][2]. Group 1: Stock Performance - Allot Communications (ALLT) has shown a significant price increase of 54% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also maintained a price increase of 2.6% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, ALLT is trading at 90% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - ALLT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with strong fundamentals that can maintain their upward momentum [3]. - The article suggests that investors should consider other stocks that pass through this screening process for potential investment opportunities [8].

Core Viewpoint - The article emphasizes the importance of timing and sustainability in stock trends for successful short-term investing, highlighting the need for strong fundamentals to maintain momentum [1][2]. Group 1: Stock Performance - Allot Communications (ALLT) has shown a solid price increase of 34.5% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - The stock has also increased by 32.5% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, ALLT is trading at 80.1% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - ALLT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for investors to identify stocks like ALLT that are on an uptrend supported by strong fundamentals [3]. - The article suggests that there are several other stocks passing through this screen, providing additional investment opportunities [8].

Group 1: Company Overview - Allot Communications (ALLT) currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a historical outperformance in the market [4] Group 2: Price Performance - Over the past week, ALLT shares have increased by 30.28%, significantly outperforming the Zacks Technology Services industry, which rose by 2.61% [6] - In a longer time frame, ALLT shares have risen by 20.41% over the past quarter and an impressive 247.49% over the last year, while the S&P 500 has moved -2.56% and 11.12% respectively [7] Group 3: Trading Volume - The average 20-day trading volume for ALLT is 414,815 shares, which serves as a bullish indicator when combined with rising stock prices [8] Group 4: Earnings Outlook - In the past two months, one earnings estimate for ALLT has increased, raising the consensus estimate from $0.06 to $0.11 for the full year, with no downward revisions [10] - For the next fiscal year, one estimate has also moved upwards, indicating positive sentiment regarding future earnings [10] Group 5: Conclusion - Considering the strong price performance, positive earnings outlook, and high momentum score, ALLT is positioned as a promising investment opportunity [12]

Financial Data and Key Metrics Changes - The company reported revenues of $23.2 million for the quarter, representing a 6% year-over-year increase [19] - Non-GAAP net income was $800,000, compared to a net loss of $900,000 in the same quarter last year [21] - Positive operating cash flow of $1.7 million was achieved, with cash and short-term investments totaling $60.7 million at the end of the quarter [21] Business Line Data and Key Metrics Changes - Revenue from the CCaaS segment was $5.1 million, up 49% year-over-year, comprising 22% of total revenue [19] - CCaaS's annual recurring revenue (ARR) reached $21.2 million, reflecting a 55% increase year-over-year [6][19] - Non-GAAP gross margin remained stable at 70.4%, with expectations for continued growth as CCaaS revenue increases [20] Market Data and Key Metrics Changes - Verizon became the largest contributor to CCaaS revenues in Q1, with significant growth expected from their new mobile service [30] - The company is experiencing strong traction in partnerships with major telecom operators like Vodafone and Verizon, which are expected to drive future growth [11][52] Company Strategy and Development Direction - The company is focused on a "Security First" strategy, aiming to enhance cybersecurity offerings and expand partnerships with telecom providers [5][8] - There is a strong emphasis on converting a growing pipeline of opportunities into new partnerships and agreements, particularly in the CCaaS and smart product segments [9][15] - The launch of new products, such as the OfNet Secure solution, is part of the strategy to provide comprehensive cybersecurity services [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving profitable growth in 2025, with expectations for CCaaS revenue and ARR to increase by around 50% or more year-over-year [18] - The rise of AI and increasing demand for cybersecurity solutions are seen as key drivers for future growth [17] - Management acknowledged the competitive nature of the market but remains confident in the company's ability to capitalize on emerging opportunities [41] Other Important Information - The company has made significant progress in expanding its partnership with Verizon Business, which now includes a broader customer base [9][10] - The Terra III multi-service platform has generated interest among Tier 1 telecom operators, contributing to a robust pipeline of opportunities [14][15] Q&A Session Summary Question: Did Verizon Business Mobile Internet Security contribute to Q1 CCaaS ARR results? - Management indicated that the official launch occurred in mid-April, so minimal contribution was expected in Q1, with significant growth anticipated in Q2 [25][26] Question: What was the big driver for CCaaS ARR growth? - The growth was attributed to new agreements and service launches, particularly with Vodafone and other carriers [27][28] Question: Is there a probability that CCaaS ARR grows less than 50%? - Management stated that while they are comfortable with the 50% estimate, various factors could influence the final outcome [29] Question: Did Verizon become the largest contributor to CCaaS revenue? - Yes, Verizon's initial launch of mobile services and traction from fixed wireless access made it the top contributor [30] Question: Are there opportunities to cross-sell CCaaS solutions to smart business customers? - Management confirmed that synergies exist between the two business units, allowing for potential cross-selling opportunities [34] Question: Are there large deals in the pipeline? - Management noted several 8-figure deals in the pipeline, driven by both existing and new projects [45][48] Question: How is the partnership with Vodafone progressing? - Some revenues have already been recognized, with expectations for continued growth from the partnership [52][53]