Allot(US:ALLT)2026-02-25 15:00Financial Data and Key Metrics Changes - The company reported a strong fourth quarter with revenue of $28.4 million, up 14% year-over-year, and total revenue for 2025 reached $102 million, an 11% increase from $92.2 million in 2024 [17][4] - Cybersecurity-as-a-Service (CCaaS) revenue was $8.1 million in the fourth quarter, up 70% year-over-year, and comprised 28% of total revenue for the quarter [17][4] - Annual recurring revenue (ARR) for CCaaS was $30.8 million as of December 2025, reflecting a 69% year-over-year increase [17][4] - Non-GAAP operating income for Q4 was $3.6 million, a 101% increase compared to $1.8 million in Q4 2024, and for the full year, it was $8.9 million compared to $0.6 million in 2024 [19][20] - The company ended 2025 with over $88 million in cash and no debt, providing strategic flexibility for growth initiatives [5][20] Business Line Data and Key Metrics Changes - Recurring revenue increased to 28% of total revenue in Q4 and represented 62% of total revenue for the full year, enhancing revenue visibility [5][17] - The CCaaS offering is the primary growth driver, with significant traction and a strong pipeline of new business opportunities [6][15] Market Data and Key Metrics Changes - The company is focused on expanding its partnerships with Communication Service Providers (CSPs) and telcos to enhance its market reach [6][7] - The partnership with Compax Venture allows for the introduction of cybersecurity services to MVNO customers, expanding the addressable market [6][7] Company Strategy and Development Direction - The company aims to be a cybersecurity-first organization, integrating cybersecurity and network intelligence to enhance its service offerings [5][6] - The strategy includes expanding the CCaaS model and introducing new products like Off-Net solutions to increase average revenue per user (ARPU) [8][11] - The company plans to evolve its offerings to provide comprehensive protection for consumers and SMBs, addressing underserved markets [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting continued double-digit revenue growth in 2026, with total revenue projected between $113 million and $117 million [15][23] - The company anticipates strong demand for its cybersecurity services, driven by increasing awareness of cybersecurity threats [48][72] - Management acknowledged potential cost pressures from supply chain constraints but remains confident in maintaining a gross margin around 70% [21][23] Other Important Information - The company is actively investing in marketing and sales to strengthen its go-to-market capabilities and support new product launches [14][23] - Participation in major industry events like Mobile World Congress and RSA Conference is planned to showcase new products and drive customer engagement [14][15] Q&A Session Summary Question: What drove the strength in the CCaaS business this quarter? - Management noted strong adoption rates for security services launched with customers, contributing to increased ARR and revenue [26] Question: Can you elaborate on the MVNO opportunity? - Management highlighted that targeting MVNOs with cybersecurity offerings could differentiate their services and potentially unlock significant new revenue streams [30][32] Question: Is the wording around CCaaS ARR expectations more positive than a year ago? - Management confirmed strong demand for solutions and visibility into growth, indicating robust expectations for CCaaS ARR [36][38] Question: What is the book-to-bill ratio in the Smart business? - Management reported a book-to-bill ratio over one, indicating strong demand and a healthy backlog for 2026 [78][79] Question: How is the company addressing AI-driven fraud attempts? - Management emphasized leveraging network visibility to identify and protect against sophisticated fraud attempts, enhancing customer security [68][69]