Allot(US:ALLT)2025-11-20 15:00Financial 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]