Responding to questions about deal traction—including Verizon as a new security services customer—Harari said Allot’s momentum is being driven by increasing cybersecurity urgency and a gap in protection for consumers and SMBs. He argued that many traditional cybersecurity solutions are too complex or expensive for these segments and that CSPs are well positioned to offer cybersecurity as an add-on alongside connectivity.Management said Allot guided that in 2025 its cybersecurity services business should gro ...

Summary of Allot's Growth Conference Call Company Overview - **Company**: Allot - **Industry**: Cybersecurity and Networking Solutions - **Focus**: Cybersecurity services for consumers and small businesses, leveraging partnerships with communication service providers (CSPs) to enhance customer protection and network security [3][4] Core Business Segments - **Networking Solutions**: Represents approximately 70% of Allot's business, expected to show stable growth with slight increases [4][5] - **Cybersecurity as a Service (SECaaS)**: Accounts for about 30% of the business, projected to grow over 60% year-over-year, with a previous growth rate of over 50% [4][5] Growth Strategy - **Investment in Cybersecurity**: Significant growth driven by investments in cybersecurity, which is becoming a critical need for consumers and small businesses [6][7] - **Partnerships with CSPs**: Expansion of sales teams to establish new partnerships with CSPs, allowing access to millions of subscribers [8][12] - **Service Expansion**: Initial projects with CSPs often lead to further expansion into other network segments, enhancing revenue potential [9][10] - **Innovation in Cybersecurity**: Continuous R&D investment to enhance cybersecurity offerings, including new products like OffNet and firewall solutions [11][26] Recent Developments - **New Partnerships**: Notable partnership with Comcast Ventures, focusing on a telco-as-a-service model that emphasizes security as a key differentiator [16][17] - **Market Dynamics**: Increased awareness of cybersecurity needs among consumers and small businesses, driven by rising threats such as AI-based fraud [32][34] Financial Performance - **Revenue Growth**: Q3 reported a 14% growth rate in top-line revenue, with a strong contribution from cybersecurity services [5][29] - **Recurring Revenue**: Approximately 70% of Allot's revenue is recurring, providing good visibility for future growth [29] Competitive Landscape - **Sales Cycle**: The sales cycle for CSPs is typically long (12-24 months), with a focus on larger carriers that can monetize cybersecurity services effectively [12][13] - **Market Positioning**: Allot's established relationships and reputation in the networking space facilitate entry into cybersecurity offerings [13][44] Challenges and Barriers - **Implementation Barriers**: Initial setup and integration of Allot's technology into CSP networks can be resource-intensive, posing a barrier to quick adoption [38][39] - **Competitive Pressures**: CSPs face competition from lower-tier cybersecurity solutions, necessitating differentiation through comprehensive offerings [40][41] Future Outlook - **Long-term Goals**: Allot aims to grow its ARR to $100 million and beyond, focusing on enhancing cybersecurity offerings and expanding market reach through additional channels [48][49] - **AI and Cybersecurity**: Emphasis on leveraging AI for real-time threat detection and response, addressing the evolving landscape of cyber threats [51][53] Key Performance Indicators - **ARR Growth**: Security ARR is the main KPI for measuring progress, with consistent growth expected as new services and partnerships develop [14][31] This summary encapsulates the key points discussed during the conference call, highlighting Allot's strategic focus on cybersecurity, growth initiatives, and market dynamics.