Core Insights - Palo Alto Networks (PANW) and Allot Ltd. (ALLT) are significant players in the network security sector, with PANW focusing on next-generation firewalls and cloud security, while ALLT specializes in network intelligence for service providers and enterprises [1][2] Industry Trends - The network security market is projected to grow at a CAGR of 11.47% from 2025 to 2030, driven by increasing complex cyberattacks such as credential theft and social engineering [2] Company Analysis: Palo Alto Networks (PANW) - PANW is recognized as a cybersecurity leader, providing comprehensive solutions for network and cloud security, with a strong customer base and innovative products [4][5] - In Q1 of fiscal 2026, PANW's Secure Access Service Edge (SASE) segment saw a 34% year-over-year increase in Annual Recurring Revenues (ARR), driven by demand for streamlined security tools [6] - However, PANW's revenue growth has slowed to the mid-teen percentage range, with a forecast of 14-15% growth for the full fiscal year 2026, down from mid-20s in fiscal 2023 [7] Company Analysis: Allot Ltd. (ALLT) - ALLT is experiencing robust growth in its Cybersecurity-as-a-Service (SECaaS) business, with ARR increasing approximately 60% year-over-year in Q3 2025 [8][12] - SECaaS accounted for about 28% of ALLT's total revenues in Q3, with expectations to rise to 30%, indicating a shift towards more predictable subscription-based revenues [9] - ALLT's sales and non-GAAP EPS grew 14% and 233.3% year-over-year in Q3 2025, prompting an upward revision of revenue guidance for the year [12] Comparative Valuation and Performance - Over the past six months, ALLT shares have increased by 33.8%, while PANW shares have decreased by 6.1% [18] - ALLT is trading at a forward sales multiple of 4.37X, significantly lower than PANW's 11.71X, making ALLT more attractive for value-seeking investors [19] - Analysts are increasingly bullish on ALLT, reflected in the positive earnings estimate revisions compared to PANW [13][16] Conclusion - The analysis suggests a preference for ALLT over PANW due to its strong growth in SECaaS, improving revenue quality, and more favorable valuation metrics [22][23]

Core Insights - Allot Ltd. (ALLT) shares have increased by 20.6% over the past six months, outperforming the Zacks Internet-Software industry's decline of 7.5% and surpassing peers like Cisco Systems, F5, and Palo Alto Networks [1][9] - The strong performance is attributed to the rapid growth of Allot's Cybersecurity-as-a-Service (SECaaS) business, which is becoming a significant revenue driver [5][8] Financial Performance - In Q3 2025, Allot reported net sales of $26.4 million, a 14% year-over-year increase, exceeding the Zacks Consensus Estimate of $26 million [6] - Non-GAAP earnings per share (EPS) rose to 10 cents, compared to 3 cents in the same quarter last year, beating the consensus estimate by 150% [6] Revenue Guidance - Allot has raised its 2025 revenue guidance to a range of $100-$103 million, up from the previous estimate of $98-$102 million [7] - The company also increased its SECaaS annual recurring revenue (ARR) growth forecast to over 60% year-over-year, up from the prior guidance of 55-60% [7] SECaaS Business Growth - SECaaS ARR grew approximately 60% year-over-year in Q3 2025, driven by increased adoption from telecom partners and more end users subscribing to security services [8][10] - SECaaS accounted for around 28% of Allot's total revenues in Q3, with expectations to rise to nearly 30% if current trends persist [10] Market Position and Valuation - Allot's stock trades at a lower price-to-sales (P/S) ratio of 4.54X compared to the industry average of 4.71X, making it appealing for long-term investors [9][17] - Compared to peers, Allot's P/S multiple is lower than Cisco Systems (4.74X), F5 (4.93X), and Palo Alto Networks (11.82X), enhancing its attractiveness [17] Investment Recommendation - The strong growth in SECaaS, rising recurring income, and reasonable valuation position Allot as an attractive buy for investors seeking exposure to cybersecurity growth [18]

Core Viewpoint - Allot Ltd. partners with Compax Venture to launch the first MVNO offering advanced cybersecurity services through Allot NetworkSecure and OffNetSecure, enhancing the value proposition for brand communities and their subscribers [1][3]. Group 1: Partnership and Services - Compax Venture, part of the Compax group, will implement MVNO services that include Allot's cybersecurity solutions, providing comprehensive protection for subscribers [2][3]. - The partnership aims to increase the value proposition for brand communities by integrating advanced cybersecurity services, ensuring a secure digital experience for members [3]. Group 2: Cybersecurity Solutions - Allot's NetworkSecure offers a clientless, zero-touch cybersecurity service that protects against threats such as malware, viruses, phishing, and ransomware, while also providing content filtering [3]. - OffNetSecure extends cybersecurity protection to subscribers when they are not connected to the provider's network, allowing service providers to maintain communication with subscribers in previously unmonitored areas [4]. Group 3: Market Impact - The integration of Allot's network-based security is expected to create a sustainable recurring revenue stream for Compax Venture, driving growth and enhancing customer loyalty [3]. - Allot's solutions are already deployed by over 500 service providers and 1000 enterprises globally, indicating a strong market presence and demand for their cybersecurity services [5].

Core Insights - Allot Ltd. (ALLT) is experiencing significant growth in its Cybersecurity-as-a-Service (SECaaS) business, which is becoming the primary growth driver for the company, with an annual recurring revenue (ARR) increase of approximately 60% year over year in Q3 2025 [1][10] Group 1: SECaaS Growth and Revenue - SECaaS accounted for around 28% of Allot's total revenues in Q3 2025, with expectations to rise to 30% if current trends persist, indicating a positive outlook for the company's future [2] - Recurring revenues represented 63% of total revenues in Q3 2025, up from 58% a year ago, reflecting an improvement in revenue quality [2] - Key drivers of SECaaS growth include the addition of new subscribers from large Tier-1 telecom customers and upselling additional services to existing customers, supported by new offerings like OffNetSecure [3][10] Group 2: Future Projections - If telecom partners continue to scale SECaaS services and user adoption remains stable, the momentum could sustain Allot's ARR growth in the upcoming quarters, with revenue growth estimates of approximately 10.3% for 2025 and 13.3% for 2026 [4] - The Zacks Consensus Estimate for Allot's full-year 2026 earnings suggests a year-over-year increase of 15.9%, with recent upward revisions in estimates [15] Group 3: Competitive Landscape - Allot faces competition from Cisco Systems and F5 in network traffic management and security, with Cisco leveraging its extensive networking and security portfolio [5] - Cisco's recent collaboration with NVIDIA aims to develop an AI-native wireless network stack for future 6G networks, enhancing telecom operators' capabilities [6] - F5 competes through its application delivery and security solutions, offering products designed for efficient network traffic management [7] Group 4: Valuation and Price Performance - Allot's shares have declined by 4.2% over the past three months, contrasting with an 11.3% decline in the Zacks Internet - Software industry [8] - The company trades at a forward price-to-sales ratio of 4.05, which is lower than the industry's average of 4.7 [12]

Summary of Allot Ltd. Conference Call (October 21, 2025) Company Overview - **Company Name**: Allot Ltd. - **Industry**: Network Intelligence and Cybersecurity - **Established**: Over two decades ago - **Focus**: Managing Internet traffic and providing network intelligence solutions [1] Core Business and Strategy - **Current Business Model**: Transitioning from a cost center to a profit center by leveraging relationships with communication service providers (CSPs) [4] - **Main Product Lines**: - **Network Intelligence**: 75% of business, includes cybersecurity engines and network management solutions [6] - **Cybersecurity-as-a-Service (SECaaS)**: 25% of business, targeting lower market segments and small businesses [6][5] - **Growth Engine**: SECaaS reported 73% year-over-year growth in Q2, aiming for $30 million Annual Recurring Revenue (ARR) from this line [5] Market Dynamics - **Target Market**: Focus on small businesses and consumers who lack adequate cybersecurity solutions [3] - **Competitive Landscape**: Major competitors include Palo Alto, Wiz, Fortinet, and Check Point, primarily targeting large enterprises [2] - **Market Opportunity**: Identified a significant untapped market in lower segments, with potential for high attach rates (15% to 50%) among carrier customers [16] Financial Performance - **Revenue Guidance**: Expected to reach $100 million this year, with an 8% growth forecast [6][11] - **Recurring Revenue**: Approximately 60% of business is recurring, contributing to stable cash flow [7] - **Profitability**: Achieved break-even last year, now generating positive cash flow and non-GAAP operating profit [8] Recent Developments - **New Partnerships**: Engaging with around two dozen carriers globally, expanding market reach [18] - **Recent Wins**: Secured multimillion-dollar contracts, including a significant networking deal announced in July [22] - **Innovative Solutions**: Launched new cybersecurity engine, OffNetSecure, to enhance service offerings [20] Future Outlook - **Growth Projections**: Anticipating 60% growth in SECaaS, contributing to overall revenue increase [17] - **Sales Cycle**: Typically 36 to 48 months to achieve significant penetration in new carrier partnerships [18] - **Investment in Innovation**: Continual development of new products and capabilities to stay ahead in the market [20] Additional Insights - **Consumer Market Strategy**: Currently leveraging CSPs for market access rather than direct-to-consumer sales, with potential exploration in the future [27] - **Bundling Opportunities**: CSPs can bundle Allot's services with their offerings, enhancing sales potential [29] Conclusion Allot Ltd. is strategically positioned to capitalize on the growing demand for cybersecurity solutions in the lower market segments, leveraging its unique relationships with CSPs and innovative technology to drive significant growth and profitability in the coming years [4][5][11]