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 Insights - Allot Ltd. reported a significant year-over-year growth in SECaaS Annual Recurring Revenue (ARR) of 60% and raised its full-year revenue guidance to between $100 million and $103 million [2][3][9]. Financial Performance - Total revenues for Q3 2025 reached $26.4 million, marking a 14% increase from $23.2 million in Q3 2024 [3][9]. - GAAP gross profit was $18.9 million with a gross margin of 71.4%, up from $16.4 million and a gross margin of 70.4% in the same quarter of the previous year [3][9]. - Non-GAAP gross profit was $19.1 million with a gross margin of 72.2%, compared to $16.7 million and a gross margin of 71.7% in Q3 2024 [3][9]. - GAAP operating income was $2.2 million, a turnaround from an operating loss of $0.2 million in Q3 2024 [4][9]. - Non-GAAP operating income increased to $3.7 million from $1.1 million in Q3 2024 [4][9]. - Net income on a GAAP basis was $2.8 million, or $0.07 per diluted share, compared to a net loss of $0.2 million, or a loss of $0.01 per basic share, in Q3 2024 [4][5][9]. - Non-GAAP net income was $4.6 million, or $0.1 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in Q3 2024 [5][9]. Cash Flow and Financial Position - Operating cash flow for the quarter was $4.0 million [5][9]. - As of September 30, 2025, total cash and cash equivalents amounted to $81 million, an increase of $22 million from $59 million at the end of 2024 [5][9]. - The company reported no debt as of the end of Q3 2025 [5][9]. Strategic Focus - The company is advancing its cyber-security first strategy and is seeing strong performance from its cyber security and network intelligence solutions [2][3]. - Allot's SECaaS solutions are deployed globally, serving over 500 service providers and more than 1,000 enterprises [7][9].

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]

Core Insights - Allot Ltd. reported a strong performance in Q2 2025, with a 73% year-over-year growth in SECaaS Annual Recurring Revenue (ARR), which now constitutes over 25% of total revenue [2][3] - The company raised its full-year revenue guidance to a range of $98-102 million, reflecting confidence in continued growth driven by SECaaS [3] - Overall revenue for Q2 2025 reached $24.1 million, marking a 9% increase from $22.2 million in Q2 2024 [4][8] Financial Performance - Gross profit on a GAAP basis for Q2 2025 was $17.3 million, with a gross margin of 72.1%, up from $15.2 million and 68.5% in Q2 2024 [4] - Non-GAAP gross profit was reported at $17.6 million, with a gross margin of 73.4%, compared to $15.7 million and 70.6% in the same quarter last year [5] - The company achieved a non-GAAP operating income of $1.2 million in Q2 2025, a significant improvement from an operating loss of $1.0 million in Q2 2024 [6] Cash Flow and Debt Management - Operating cash flow for the quarter was $4.4 million, a notable increase from $1.2 million in Q2 2024 [7][8] - As of June 30, 2025, Allot had $72 million in cash and cash equivalents, an increase of $13 million from $59 million at the end of 2024, and the company reported no debt [9] Strategic Developments - Allot secured a landmark multi-year deal valued in the tens of millions with a tier-1 telecom operator in EMEA, highlighting its competitive edge in cybersecurity and network intelligence [3] - The company’s SECaaS service is gaining traction, particularly through partnerships like the one with Verizon Business, contributing significantly to revenue growth [2][3] Revenue Breakdown - In Q2 2025, SECaaS revenue was $6.4 million, representing 27% of total revenue, compared to 18% in Q2 2024 [27] - The geographic revenue breakdown showed that EMEA accounted for 66% of total revenues, while the Americas and Asia Pacific contributed 17% each [26]

Core Insights - Allot Ltd. (ALLT) is set to report its Q2 2025 results on August 14, with earnings expected to be breakeven compared to a loss of 2 cents in the same quarter last year [1] - The revenue consensus estimate for the upcoming quarter is $22.9 million, reflecting a 3.3% year-over-year increase [1][2] - The company has seen strong demand for its Smart and Tera III products, driven by multi-million-dollar agreements with tier-1 customers, which is expected to boost revenue and margins [6][8] Financial Estimates - The Zacks Consensus Estimate for Q2 2025 revenues is $22.9 million, with a year-over-year growth estimate of 3.34% [2] - For the next quarter (Q3 2025), the revenue estimate is $25.9 million, indicating an 11.45% growth [2] - The current year revenue estimate stands at $98.6 million, with a year-over-year growth of 6.95%, while the next year is projected at $125.7 million, reflecting a 27.48% increase [2] Earnings Projections - The earnings consensus for Q2 2025 is expected to be flat at $0.00, compared to a loss of $0.02 in the same quarter last year [3] - For the current year, the earnings estimate is $0.10, with a significant year-over-year growth of 150% expected for the next year at $0.28 [3] Market Performance - ALLT's stock has increased by 28% year-to-date, significantly outperforming the industry growth of 19% [10] - The current valuation metrics indicate that ALLT is trading at a trailing EV-to-EBITDA of 71.63X, which is considerably higher than the industry average of 35.85X [11] Strategic Positioning - The company is benefiting from rising high-margin recurring revenues from its SECaaS offerings, which are expected to grow around 50% year-over-year [8] - Partnerships, such as Verizon's integration of SECaaS into mobile plans, are enhancing recurring revenue visibility and long-term growth potential [6][13] - The competitive landscape includes companies like Radware and Ceragon Networks, which are also focusing on subscription-based services and recurring revenue strategies [9]

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].