Allot(US:ALLT)2025-08-14 14:00Financial Data and Key Metrics Changes - The company reported revenue of $24.1 million for Q2 2025, representing a 9% year-over-year increase [22] - The CCaaS (Cybersecurity as a Service) ARR (Annual Recurring Revenue) was $6.4 million, up 73% year-over-year, comprising 27% of total revenue [22] - Non-GAAP gross margin improved to 73.4% from 70.6% in the same quarter last year [23] - Non-GAAP operating income was $1.2 million compared to a loss of $1 million in Q2 2024 [24] - Positive operating cash flow of $4.4 million was reported, with cash and equivalents totaling $72 million as of June 30, 2025 [25] Business Line Data and Key Metrics Changes - The CCaaS segment is highlighted as the primary growth engine, with significant contributions from new customer acquisitions and upselling existing services [5][7] - The successful launch of Verizon's MyDisPlan contributed positively to the CCaaS growth, indicating strong market traction [6][8] Market Data and Key Metrics Changes - The company is seeing strong momentum in the cybersecurity services market, particularly among major telecom operators [7] - New contracts with telecom operators in Poland and Panama indicate expanding market presence and service adoption [9][10] Company Strategy and Development Direction - The company is focused on sustainable, profitable growth through its cybersecurity as a service strategy, aiming to increase the number of telecom partners and expand service offerings [10][12] - The launch of the SG Terra 3 platform is expected to enhance service delivery and customer engagement [16][17] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential, citing improved visibility and a strong backlog of opportunities [20] - The company anticipates a strong year-end CCaaS ARR growth of 55% to 60% for 2025 [19] Other Important Information - A follow-on equity offering raised $46 million, which was used to repay convertible notes and strengthen the balance sheet, leaving the company with no debt [24][25] - The company expects overall revenues for 2025 to be between $98 million and $102 million, positioning itself for profitable growth [19] Q&A Session Summary Question: What has been driving the strong ARR growth metrics? - The strong ARR growth is attributed to new customer acquisitions, increased adoption of existing services, and upselling new applications [29] Question: What has been driving the improved gross margin performance? - Improved gross margin is due to a favorable revenue mix, particularly from software expansion deals [31] Question: Can you provide more color on the MyBiz opportunity? - The MyBiz plan is expected to ramp up over the next two to three years, with high attach rates due to its default inclusion in the service [33][35] Question: Can you discuss the large European telecom deal? - The deal involves network intelligence and cybersecurity solutions, expected to generate revenue primarily in 2026 and 2027 [37][39] Question: Are there any macro impacts on sales cycles? - There are no significant macro impacts observed, and the demand is driven by the new Terra 3 platform [63]