Core Insights - Allot Ltd. (ALLT) reported better-than-expected fourth-quarter 2025 results, with both revenue and earnings exceeding the Zacks Consensus Estimate [1][7] Financial Performance - Allot's fourth-quarter non-GAAP earnings were 8 cents per share, surpassing the Zacks Consensus Estimate by 14.3%, compared to 5 cents per share in the same period last year [1][7] - The company's fourth-quarter revenues reached $28.4 million, exceeding the Zacks Consensus Estimate by 1.7% and reflecting a 14% increase from $24.9 million in the year-ago quarter [2][7] Segment Performance - Revenues from Security as a Service (SECaaS) were $8.1 million, contributing 28% to total revenues, marking a significant increase of 68.8% year-over-year [3] - Product sales amounted to $8.4 million, representing 30% of total revenues, up 71.4% from the prior-year quarter [3] - Professional Services generated $2.9 million, contributing 10% to total revenues, with a year-over-year increase of 3.6% [3] - Support & Maintenance sales were $9 million, accounting for 32% of total revenues, but decreased by 28% from the prior-year quarter [4] Profitability Metrics - Non-GAAP gross profit increased by 18% year-over-year to $20.4 million, with gross margin expanding by 220 basis points to 71.9% [4] - Non-GAAP operating income rose to $3.6 million from $1.8 million in the year-ago quarter, with operating margin expanding by 550 basis points to 12.7% [4] Balance Sheet and Cash Flow - As of December 31, 2025, Allot had cash and cash equivalents of $88 million, up from $81 million as of September 30, 2025 [5] - The company generated $8.1 million in operating cash flow during the fourth quarter of 2025, totaling $17.8 million for the year [5] Future Guidance - For 2026, Allot expects revenues to be in the range of $113-$117 million, with the Zacks Consensus Estimate at $115.21 million, indicating a year-over-year growth of 13.3% [6] - The consensus estimate for earnings per share in 2026 is 28 cents, revised upward by 3 cents over the past 60 days, suggesting a year-over-year increase of 24.3% [6]

Core Viewpoint - Cantor Fitzgerald initiated coverage of Allot Ltd. (ALLT) with an Overweight rating and a price target of $15, highlighting the company's transition to a security-first consumer company with Security as a Service (SECaaS) as the main growth driver [1] Group 1: Company Transition and Growth - Allot is moving from being a mature network intelligence vendor to focusing on security services, indicating a strategic shift in its business model [1] - The primary growth driver for Allot is identified as SECaaS, which is expected to enhance the company's fundamentals and recurring revenue [1] Group 2: Market Position and Valuation - Despite the strong momentum and carrier-led wins, Allot's shares are trading at a significant discount compared to its peers, suggesting potential for growth and a re-rating of its market multiple [1] - The analyst notes that the combination of improving fundamentals and rising recurring revenue positions Allot for renewed growth [1]

Group 1 - The bullish thesis on Allot Ltd. has strengthened following its Q2 2025 results, indicating a successful transformation to Security as a Service (SECaaS) [1] - The company's performance reflects a significant shift in its business model towards providing security solutions [1]