Financial Data and Key Metrics Changes - The company reported revenues of $23.2 million for the quarter, representing a 6% year-over-year increase [21] - Non-GAAP net income was $800,000, compared to a loss of $900,000 in the first quarter of the previous year [23] - Positive operating cash flow of $1.7 million was reported, with cash and short-term investments totaling $60.7 million at the end of the quarter [23] 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 [21] - CCaaS's annual recurring revenue (ARR) reached $21.2 million, reflecting a 55% increase year-over-year [7][21] - Non-GAAP gross margin remained stable at 70.4%, with expectations for continued growth as CCaaS revenue increases [22] Market Data and Key Metrics Changes - Verizon became the largest contributor to CCaaS revenues in the first quarter, driven by the launch of their mobile service and existing fixed wireless access customers [11][32] - The company is experiencing strong traction in partnerships with major telecom operators, including Vodafone and Verizon, which are expected to drive future growth [11][19] Company Strategy and Development Direction - The company is focused on a "security first" strategy, aiming to enhance growth and profitability through its Security as a Service solutions [6][18] - There is a strong emphasis on expanding partnerships and converting a robust pipeline of opportunities into new agreements [9][19] - The launch of new products, such as the OfNet Secure solution, is part of the strategy to provide comprehensive cybersecurity offerings [12][18] 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 [19] - The company is confident in its ability to capitalize on the growing demand for cybersecurity solutions, particularly in the consumer and SMB segments [18] - Management acknowledged the competitive nature of the market but highlighted the company's strong position and innovative offerings [41] Other Important Information - The company has made significant progress in expanding its pipeline for both CCaaS and smart products, with several multimillion-dollar agreements signed [14][52] - The Terra III multi-service platform has generated interest among Tier 1 telecom operators, contributing to a strong pipeline of opportunities [14][52] 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, resulting in minimal contribution for Q1, with expectations for significant growth in Q2 [27][28] Question: What was the driver for the significant CCaaS ARR growth? - The growth was attributed to new agreements and service launches, particularly related to Vodafone and other previous announcements [29] Question: Is there a probability that CCaaS ARR grows less than 50%? - Management stated that while they are comfortable with the 50% estimate, there are uncertainties due to reliance on service providers' marketing efforts [30][31] Question: Is there potential for cross-selling CCaaS solutions to smart business customers? - Management confirmed that there are synergies and potential for cross-selling between smart products and CCaaS solutions [37] Question: Are there large deals in the pipeline for the smart product line? - Management confirmed the presence of several 8-figure deals in the pipeline, driven by both existing and new projects [50][52] Question: How is the partnership with Vodafone progressing? - Management noted that some revenues have already been recognized from the Vodafone agreements, with expectations for continued growth [56][57]

Financial Data and Key Metrics Changes - The company reported a revenue of $23.2 million for Q1 2025, representing a 6% year-over-year increase [22] - Non-GAAP net income was $800,000, compared to a net loss of $900,000 in Q1 2024 [24] - Positive operating cash flow of $1.7 million was reported for the quarter, with cash and short-term deposits totaling $60.7 million at the end of Q1 2025 [24] 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 [22] - CCaaS annual recurring revenue (ARR) reached $21.2 million, reflecting a 55% increase year-over-year [7][22] - Non-GAAP gross margin remained stable at 70.4%, with expectations for continued growth as CCaaS revenue increases [23] Market Data and Key Metrics Changes - Verizon became the largest contributor to CCaaS revenues in Q1 2025, driven by the launch of their mobile service and existing fixed wireless access customers [12][32] - The company is experiencing strong traction in partnerships with major telecom operators, including Vodafone and Verizon, which are expected to drive future growth [10][12] Company Strategy and Development Direction - The company is focused on a "Security First" strategy, aiming to enhance cybersecurity offerings and expand partnerships with telecom operators [6][19] - 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 [10][16] - The launch of new products, such as the OfNet Secure solution, is part of the strategy to provide comprehensive cybersecurity services [13][19] 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 grow by around 50% or more year-over-year [20] - The company is confident in its ability to capitalize on the increasing demand for cybersecurity solutions, particularly in the consumer and SMB segments [19] - Management highlighted the importance of execution in translating the growing pipeline into actual business [50] Other Important Information - The company has made significant progress in expanding its partnership with Verizon Business, which now includes a broader customer base for its cybersecurity solutions [10][12] - The Terra III multi-service platform has generated interest among Tier 1 telecom operators, contributing to a robust pipeline of opportunities [15][16] 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, resulting in minimal contribution for Q1, with expectations for significant growth in Q2 [27][28] Question: What was the driver for the significant CCaaS ARR growth? - The growth was attributed to new agreements and service launches, particularly with Vodafone and other carriers, which are starting to contribute to revenue [29] Question: Is there a possibility that CCaaS ARR growth could be less than 50%? - Management acknowledged potential variability due to reliance on service providers' marketing efforts but expressed confidence in achieving around 50% growth [30][31] 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 number one account for CCaaS revenue [32] Question: Are there opportunities to cross-sell CCaaS solutions to smart business customers? - Management confirmed that there are synergies and potential for cross-selling between smart products and CCaaS solutions [36] Question: Will Verizon's bundling of security services influence other operators? - Management believes that Verizon's success will likely prompt competitors to consider similar bundling strategies [43][44] Question: Can you provide updates on the partnership with Vodafone? - Management confirmed that revenues from Vodafone agreements are already contributing, with expectations for further growth as the agreements are fully realized [54][55]

Core Viewpoint - Allot Ltd. reported solid financial results for Q1 2025, highlighting a 54% year-over-year increase in SECaaS Annual Recurring Revenue (ARR) and a positive outlook for continued growth in the cybersecurity sector [1][3]. Financial Highlights - Total revenues for Q1 2025 were $23.2 million, a 6% increase from $21.9 million in Q1 2024 [4][8]. - Gross profit on a GAAP basis was $16.0 million, with a gross margin of 69.3%, up from $15.1 million and a gross margin of 69% in the same quarter last year [4]. - Non-GAAP gross profit was $16.3 million, maintaining a gross margin of 70.4%, compared to $15.4 million in Q1 2024 [5]. - The operating loss on a GAAP basis was reduced to $0.7 million from $2.7 million in Q1 2024 [5][6]. - Net loss on a GAAP basis was $0.3 million, or $0.01 per share, an improvement from a net loss of $2.5 million, or $0.07 per share, in Q1 2024 [6]. SECaaS Performance - SECaaS revenues grew by 49% year-over-year to $5.1 million [8]. - The SECaaS ARR as of March 2025 reached $21.2 million, reflecting a 54% increase year-over-year [8][25]. - The company anticipates SECaaS revenue and ARR to achieve strong year-over-year increases of around 50% or more for the full year 2025 [3]. Cash Flow and Financial Position - Operating cash flow for the quarter was positive at $1.7 million [7]. - Cash and cash equivalents, along with short-term deposits, totaled $60.7 million as of March 31, 2025, an increase of $2 million from $58.8 million at the end of 2024 [9]. Customer and Market Insights - The company signed several multi-million dollar agreements with new customers for its Smart product and noted strong interest in its Tera III product from tier-1 customers [3]. - Verizon Business launched a new mobile plan that includes Allot's SECaaS service, indicating the growing importance of cybersecurity solutions in the telecommunications sector [3].

Core Viewpoint - Allot Ltd. is expected to report its first-quarter 2025 results on May 12, but faces potential challenges that may impact revenue and earnings due to timing issues related to deal closures and revenue recognition [1][2]. Group 1: Q1 Expectations - Allot's product revenues experienced a significant 55% year-over-year decline in Q4 2024, primarily due to delays in deal closures [2]. - The Zacks Consensus Estimate for Allot's Q1 2025 revenues is $20.2 million, indicating a 7.7% year-over-year decline, with a projected loss per share of 5 cents compared to a loss of 3 cents per share in the previous year [3]. Group 2: Earnings Prediction Model - The current model does not predict an earnings beat for Allot, as it has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold), which does not favor an earnings surprise [4]. Group 3: Recent Earnings of Competitors - Equifax Inc. reported adjusted earnings of $1.53 per share, exceeding estimates by 9.3% and showing a 2% increase year-over-year, with total revenues of $1.4 billion, surpassing estimates by 1.9% [5]. - Fiserv, Inc. reported mixed results with adjusted earnings per share of $2.14, beating estimates by 2.9% and increasing 13.8% year-over-year, while adjusted revenues of $4.8 billion missed estimates by 1.6% but grew 5.5% year-over-year [6].

Core Viewpoint - Allot Ltd. will host a conference call to discuss its first quarter 2025 results on May 12, 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 converged cybersecurity solutions and network intelligence, enhancing value for customers through its multi-service platforms [3]. - Allot's solutions are deployed 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 utilized by millions of subscribers worldwide [3].

Core Viewpoint - Allot Ltd. is launching its new OffNetSecure solution, designed to protect telecom customers from cyber threats when they are not connected to their provider's network, and will showcase it at the RSA Conference in San Francisco [1][5]. Group 1: Product Overview - The OffNetSecure solution extends the Allot Secure cybersecurity platform, providing seamless protection for consumer and SMB telecom subscribers when connected to external networks, such as guest Wi-Fi [2]. - This solution addresses a previously identified 'blind spot' for service providers, allowing them to maintain communication with subscribers even when they are not on the provider's network [2]. - OffNetSecure enhances the existing Allot Secure suite by offering protection against malware, phishing, and ransomware attacks, contributing to a comprehensive cybersecurity solution [2][3]. Group 2: Implementation and Benefits - The OffNetSecure solution is implemented directly on end customers' devices, including Android smartphones, tablets, iPhones, and iPads, and requires no downloading or installation by the user [4]. - This product can help telecom providers increase revenue by enabling the creation of premium plans and offering unified provisioning, policies, configurations, and reporting alongside other Allot Secure products [4]. - The solution is expected to provide telecom providers with a new revenue stream due to its high adoption rates among users [3]. Group 3: Market Context - The current mobile internet landscape is fraught with cyber threats, making solutions like OffNetSecure increasingly relevant for telecom providers [3]. - Allot's offerings are deployed globally, with over 500 service providers and more than 1000 enterprises utilizing their cybersecurity solutions, indicating a strong market presence [6].

Core Viewpoint - Companies with favorable efficiency levels are more likely to attract investors due to their expected impressive returns, which are believed to be positively correlated with price performance [1] Efficiency Ratios - The efficiency ratio is a key indicator of a company's financial health, analyzing how effectively a company utilizes its assets and liabilities [1] - Popular efficiency ratios to consider when selecting stocks include Receivables Turnover, Asset Utilization, Inventory Turnover, and Operating Margin [2][3][4][5] Receivables Turnover - This ratio measures a company's ability to extend credit and collect debts, with a high ratio indicating effective collection of accounts receivable [2] Asset Utilization - This ratio indicates how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] Inventory Turnover - This ratio assesses a company's ability to manage inventory relative to its cost of goods sold, with high values indicating efficient inventory management [4] Operating Margin - This measure reflects a company's ability to control operating expenses, with higher values indicating better expense management compared to peers [5] Screening Criteria - A favorable Zacks Rank (Zacks Rank 1) is included in the screening process to enhance profitability [6] - The screening criteria narrowed down over 7,906 stocks to eight, focusing on companies with efficiency ratios above industry averages [7] Selected Stocks - The top five stocks identified through the screening process include: - **Allot (ALLT)**: Provider of network intelligence and security solutions, with an average four-quarter positive earnings surprise of 106.7% [8] - **Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS)**: Provides public water and sewage services, with an average four-quarter positive earnings surprise of 30.8% [10] - **Lindsay (LNN)**: Offers water management and road infrastructure products, with an average four-quarter positive earnings surprise of 17.9% [11] - **Equity Bancshares (EQBK)**: A bank holding company providing financial services, with an average four-quarter positive earnings surprise of 17.3% [12] - **Griffon (GFF)**: Engaged in manufacturing consumer and professional products, with an average four-quarter positive earnings surprise of 14.7% [13]

Core Viewpoint - Allot Communications (ALLT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Allot Communications is projected to earn $0.06 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 50% [8]. - Over the past three months, the Zacks Consensus Estimate for Allot Communications has risen by 57.1% [8]. Investment Implications - The upgrade to Zacks Rank 1 suggests that Allot Communications is positioned in the top 5% of Zacks-covered stocks, indicating strong potential for price appreciation in the near term [10]. - Rising earnings estimates and the corresponding rating upgrade imply an improvement in the company's underlying business, which could lead to increased investor interest and stock price growth [5][10].

Company Overview - Allot Ltd. is a leading global provider of innovative security-as-a-service (SECaaS) and network intelligence solutions for communication service providers and enterprises [1][3] - The company offers converged cybersecurity solutions, network and application analytics, and traffic control services, deployed by over 500 service providers and more than 1000 enterprises globally [3] Upcoming Event - Allot will participate in the 15th Annual LD Micro Invitational investor conference in New York on April 9th and 10th, 2025 [1] - CEO Eyal Harari will present to investors on April 10 from 12:00 to 12:25 PM in Track 1, with opportunities for one-on-one meetings available throughout the day [2] Investor Engagement - Interested parties can register to watch the presentation virtually through a link on Allot's website [2] - Management is available for one-on-one meetings, and requests can be made via LD Micro representatives or the investor relations team [2]

Group 1 - Allot Ltd. has filed its annual report on Form 20-F for the fiscal year ended December 31, 2024 with the U.S. Securities and Exchange Commission [1] - The annual report includes audited financial statements and is accessible on the SEC's website and the company's investor relations website [2] - The company offers to deliver a hard copy of its annual report, including complete audited financial statements, free of charge to shareholders upon request [2] Group 2 - Allot Ltd. is a provider of innovative converged cybersecurity solutions and network intelligence for service providers and enterprises globally [3] - The company's solutions are deployed by over 500 mobile, fixed, and cloud service providers and over 1,000 enterprises [3] - Allot's network-native security-as-a-service solution is utilized by many millions of subscribers worldwide [3]