Allot Highlights 60%+ Cybersecurity Growth Outlook and Carrier Wins at Needham Growth Conference

Core Insights - Allot is experiencing significant momentum in its cybersecurity services, driven by increasing urgency for cybersecurity solutions among consumers and small to medium-sized businesses (SMBs) [1][4] - The company projects its cybersecurity services business to grow over 60% year-over-year in 2025, following a more than 50% growth in 2024 [2][7] Business Segments - Allot operates two main business lines: a networking business contributing approximately 70% of revenue and a cybersecurity-as-a-service (SECaaS/CCaaS) business accounting for about 30% [3][4] - The cybersecurity segment has been delivering strong double-digit growth and is increasingly impacting overall company revenue [3] Financial Performance - In Q3, Allot reported a 14% year-over-year growth in total revenue, with the security services line significantly contributing to this increase [2][7] - The cybersecurity business has gross margins around 80%, while consolidated margins are approximately 70% [5][11] Growth Drivers - Allot's growth is supported by new partnerships with communications service providers (CSPs), including Verizon, and a new agreement with Compax targeting mobile virtual network operators (MVNOs) [6][9] - The company is focusing on four growth levers: new CSP signings, expansion within existing carriers, multi-year ramps, and ongoing research and development [6][8] Strategic Focus - The company aims to enhance its cybersecurity offerings while maintaining a stable networking segment, leveraging over two decades of carrier-grade network intelligence [4][15] - Allot's Tera III platform, capable of speeds up to 3 Tbps, is designed to improve operational efficiency for carriers and support upgrades within the existing customer base [14] Future Outlook - Allot has outlined a three-phase plan for growth, focusing on turnaround and break-even in the initial phase, followed by profitable growth from 2025 to 2027, and a longer-term transformation to expand its cybersecurity offerings [15]