Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][12] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [14][15] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [15] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024 [15][16] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025 from 58% in Q3 2024 [13] Business Line Data and Key Metrics Changes - Revenue from the CCAS (Cybersecurity as a Service) segment was $7.3 million, up 60% year-over-year, accounting for 28% of total revenue [12][5] - CCAS annual recurring revenue (ARR) as of September 2025 was $27.6 million [12] - The Smart product line also contributed to revenue growth, with a strong backlog and visibility heading into the next year [9][10] Market Data and Key Metrics Changes - Increased sales in the Americas were noted, aligning with the strategy to boost business in this region [12] - The company is seeing strong traction among major telecom operators for its cybersecurity solutions [7][8] Company Strategy and Development Direction - The company is focused on a cybersecurity-first strategy and a renewed go-to-market approach [7][10] - There is an emphasis on expanding the CCAS offering and enhancing the Smart product line to maintain technology leadership [9][10] - The company is optimistic about long-term growth, expecting CCAS ARR to surpass 60% year-over-year growth by year-end 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth trajectory, citing a robust pipeline and backlog [10][11] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [29] - Management raised full-year 2025 revenue guidance to between $100 million and $103 million [11] Other Important Information - The company completed a $46 million follow-on share offering, enhancing its financial resources [15] - Allot has no debt, positioning it well for future growth [16] Q&A Session Summary Question: Increased traction with major telecom customers - Management noted positive trends in both tax rates and new service launches contributing to significant growth in CCAS revenue and ARR [18] Question: Details on the first customer for OPNET Secure - The first customer aims for 24/7 protection for their customers, combining Allot's network security with OPNET [19][20] Question: Continued strength in the Smart pipeline - Management confirmed a strong pipeline with opportunities from both new and existing customers, particularly for the Terra 3 product [23] Question: Drivers of CCAS growth - Growth is primarily from new customer contracts and existing accounts expanding their services [27] Question: Competitive landscape for network intelligence offerings - The competitive environment is currently favorable, with unique technology providing a competitive edge [29] Question: Impact of ad campaigns on CCAS adoption - Management identified four drivers for CCAS growth, including new customer additions and upselling existing services [31][32]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][12] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [14][15] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [15] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024, with no debt [15][16] Business Line Data and Key Metrics Changes - Revenue from Cybersecurity as a Service (CCAs) was $7.3 million, up 60% year-over-year, comprising 28% of total revenue [12][5] - CCAs Annual Recurring Revenue (ARR) as of September 2025 was $27.6 million [12] - The Smart product line also contributed to growth, with a strong performance and a robust pipeline [9][10] Market Data and Key Metrics Changes - Increased sales in the Americas, particularly from a large Smart order and growing contributions from the U.S. market [12] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025 from 58% in Q3 2024 [13] Company Strategy and Development Direction - The company is executing a cybersecurity-first strategy and focusing on a renewed go-to-market approach [7][10] - The launch of OPNET Secure aims to enhance cybersecurity protection for end customers, expanding the service beyond the operator's infrastructure [8] - The company is optimistic about long-term growth, with expectations for CCAs ARR to surpass 60% year-over-year growth by year-end 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth strategy, highlighting the positive momentum in CCAs and network intelligence solutions [10][11] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [29] - Management raised full-year 2025 revenue guidance to between $100 million and $103 million [11] Other Important Information - The company completed a $46 million follow-on share offering, with $40 million received in Q2 and $6 million in Q3 [15] - The company reported positive operating cash flow of $4 million for the third consecutive quarter [15] Q&A Session Summary Question: Increased traction with major telecom customer - Management noted positive trends in both tax rates and new services launched, contributing to significant growth in CCAs revenue and ARR [18] Question: Details on the first customer for OPNET Secure - Management indicated that the first customer values 24/7 protection and is looking to enhance their service with OPNET [19][21] Question: Continued strength in the Smart pipeline - Management confirmed a strong pipeline with opportunities from both new and existing customers, particularly for the Terra 3 product [23] Question: Drivers of CCAs growth - Growth is primarily from new contracts and the onboarding of additional customers, with a focus on strategic accounts [27] Question: Competitive landscape for network intelligence offerings - Management described the competitive landscape as easier, with unique technology providing a competitive edge [28] Question: Drivers of growth in larger CCAs contracts - Management identified new customer additions, upselling, and cross-selling as key growth drivers [32] Question: Progress with Verizon Live's penetration - Management refrained from discussing specific customers but expressed overall satisfaction with progress [39] Question: Role of Terra 3 in customer conversations - Management highlighted a good mix of new opportunities and discussions with existing customers, focusing on customer success [41]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $26.4 million, representing a 14% year-over-year increase [5][11] - Non-GAAP operating income was $3.7 million, compared to $1.1 million in Q3 2024 [12] - Non-GAAP net income was $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in the same quarter last year [13][14] - Cash and investments totaled $81 million as of September 30, 2025, up from $59 million at the end of 2024, with no debt [15] Business Line Data and Key Metrics Changes - Cybersecurity as a Service (CCAS) revenue was $7.3 million in Q3 2025, up 60% year-over-year, comprising 28% of total revenue [11][12] - CCAS Annual Recurring Revenue (ARR) as of September 2025 was $27.6 million [11] - The Smart product for network intelligence also contributed to growth, with a strong pipeline and backlog [8][9] Market Data and Key Metrics Changes - Increased sales in the Americas, particularly from a large Smart order and growing contributions from the U.S. market [11] - Recurring revenue as a percentage of total revenue increased to 63% in Q3 2025, up from 58% in Q3 2024 [12] Company Strategy and Development Direction - The company is executing a cybersecurity-first strategy and focusing on a renewed go-to-market approach [6][9] - The introduction of OPNET Secure aims to enhance cybersecurity protection for end customers, expanding the service beyond the operator's infrastructure [7][19] - The company is optimistic about long-term growth, with expectations for CCAS ARR to surpass 60% year-over-year growth by year-end 2025 [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and growth strategy, highlighting the positive momentum in CCAS and network intelligence solutions [6][9] - The competitive landscape is viewed as more favorable, with unique technology providing a competitive edge [25] - Management anticipates continued growth in both CCAS and Smart product lines, supported by a robust pipeline and backlog [9][11] Other Important Information - The company completed a $46 million follow-on share offering, enhancing its financial resources for growth initiatives [14] - The company reported positive operating cash flow for the third consecutive quarter, totaling $4 million in Q3 2025 [14] Q&A Session Summary Question: Increased traction with major telecom customers - Management noted positive trends in both tax rates and new services launched, contributing to significant growth in CCAS revenue and ARR [17] Question: Details on the first customer for OPNET Secure - The first customer aims for 24/7 protection for their customers, combining network security with OPNET services [19][20] Question: Drivers of CCAS growth - Growth is primarily from new customer contracts and the onboarding of additional customers from existing contracts [23] Question: Competitive landscape for network intelligence offerings - The competitive environment is currently more favorable, with unique technology providing a competitive edge [25] Question: Drivers of growth in larger CCAS contracts - Growth is driven by new customer additions and upselling additional services to existing customers [28] Question: Terra 3's role in customer conversations - The company is focusing on customer success and maintaining a healthy mix of new and existing customer opportunities [35]

Q3 2025 Performance Highlights - Sales increased by 3% year-over-year, reaching $1022 million in Q3 2025 compared to $993 million in Q3 2024[18] - Adjusted Operating Income rose by 10% year-over-year, from $239 million in Q3 2024 to $263 million in Q3 2025[18] - Adjusted EPS increased by 14% year-over-year[18] - ROS expanded by 160 bps, reaching 257% in Q3 2025 from 241% in Q3 2024[18] Segment Performance - Flow segment sales increased by 6% year-over-year, reaching $394 million in Q3 2025 compared to $372 million in Q3 2024[33] - Water Solutions segment sales decreased by 6% year-over-year, reaching $273 million in Q3 2025 compared to $290 million in Q3 2024, inclusive of portfolio exits[41, 43] - Pool segment sales increased by 7% year-over-year, reaching $354 million in Q3 2025 compared to $331 million in Q3 2024[50] Financial Position and Outlook - Increased FY'25 Sales guidance to up approximately 2%, projecting sales of $4160 million to $4170 million[20, 63] - Increased Adjusted EPS guidance to $485 to $490, up approximately 12% to 13%[20, 63] - The company acquired Hydra-Stop on September 17th for $292 million, expecting approximately $50 million of tax benefits[19]

Core Insights - Madison Investments released its second-quarter 2025 investor letter for the Madison Mid Cap Fund, which reported a return of 5.2%, underperforming the Russell Midcap Index's 8.5% increase [1] - The fund highlighted Microchip Technology Incorporated (NASDAQ:MCHP) as one of its top five contributors for the quarter, alongside Amphenol, Arista Networks, MKS, and Liberty Formula One [3] Fund Performance - The Madison Mid Cap Fund (Class Y) achieved a return of 5.2% in Q2 2025, while the Russell Midcap Index rose by 8.5% during the same period [1] - The fund's top five holdings were mentioned, indicating a focus on specific stocks that contributed positively to its performance [1] Microchip Technology Incorporated (MCHP) - Microchip Technology's stock experienced a one-month return of -4.96% and a 52-week decline of 15.46%, closing at $65.15 per share with a market capitalization of $35.16 billion as of September 19, 2025 [2] - The company benefited from improved sentiment regarding the semiconductor cycle, with its CEO suggesting that the business has bottomed out for this cycle [3] - Despite its potential, Microchip Technology is not among the 30 most popular stocks among hedge funds, with 54 hedge fund portfolios holding its shares at the end of Q2 2025, a decrease from 56 in the previous quarter [4]

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes finding undervalued stocks based on financial ratios [3] - Growth Score focuses on a company's financial health and future growth potential [4] - Momentum Score identifies stocks with favorable price trends and earnings outlooks [5] - VGM Score combines all three styles to highlight stocks with attractive value, growth forecasts, and momentum [6] Zacks Rank and Style Scores Interaction - The Zacks Rank utilizes earnings estimate revisions to assist in portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 that also have Style Scores of A or B for optimal success [9] - Stocks rated 4 (Sell) or 5 (Strong Sell) should be avoided, even if they have high Style Scores, due to declining earnings forecasts [10] Company Spotlight: Pentair plc - Pentair plc, based in Manchester, U.K., provides sustainable water solutions globally, focusing on clean water access and consumption reduction [11] - Currently rated 3 (Hold) with a VGM Score of A, Pentair has a Momentum Style Score of B and has seen a 0.7% increase in shares over the past four weeks [12] - Recent upward revisions in earnings estimates by analysts indicate a positive outlook, with the Zacks Consensus Estimate rising by $0.09 to $4.84 per share [12]

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]

Company Overview - Microchip Technology Incorporated is a leading provider of smart, connected, and secure embedded control solutions [3] - The company serves approximately 105,000 customers across various markets including industrial, automotive, consumer, aerospace and defense, communications, and computing [3] - Microchip is headquartered in Chandler, Arizona, and offers comprehensive product portfolios and development tools to reduce risk and lower total system costs [3] Upcoming Events - The company will present at the Mizuho 2025 Technology Conference on August 12, 2025, at 11:30 a.m. Mountain Time [1] - Mr. Eric Bjornholt, Senior Vice President and Chief Financial Officer, will represent the company during the presentation [1] - A live webcast of the presentation will be available on the Microchip website [1]

Core Viewpoint - Microchip Technology Incorporated has appointed Steve Sanghi as the permanent Chief Executive Officer and President, after serving in an interim capacity since November 2024 [1][2]. Group 1: Leadership Changes - Steve Sanghi has been with Microchip for over 30 years and previously served as CEO until 2021 [1][2]. - The Board of Directors expressed confidence in Sanghi's leadership, highlighting his decisive actions in implementing a recovery plan to restore the company's industry leadership [2]. Group 2: Recovery Plan - Sanghi noted that while several elements of the recovery plan have been completed or substantially implemented, achieving the long-term operating model will require ongoing efforts [2]. Group 3: Company Overview - Microchip Technology is a leading provider of smart, connected, and secure embedded control solutions, serving approximately 109,000 customers across various markets including industrial, automotive, consumer, aerospace, defense, communications, and computing [3]. - The company is headquartered in Chandler, Arizona, and offers comprehensive product portfolios and development tools to reduce risk and lower total system costs [3].

Company Overview - Microchip Technology Incorporated is a leading provider of smart, connected, and secure embedded control solutions [3] - The company serves approximately 112,000 customers across various markets including industrial, automotive, consumer, aerospace and defense, communications, and computing [3] - Microchip is headquartered in Chandler, Arizona, and offers outstanding technical support along with dependable delivery and quality [3] Upcoming Event - The company will present at the Mizuho 2025 Technology Conference on June 10, 2025, at 9:45 a.m. Eastern Time [1] - Presenters will include Mr. Richard Simoncic, Chief Operating Officer, and Mr. Sajid Daudi, Head of Investor Relations [1] - A live webcast of the presentation will be available on the Microchip website [1]