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01/11 10:32
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance, with a 9% revenue increase and a 73% SECaaS revenue growth. Improved margins and positive operating cash flow further support the positive sentiment. The Q&A section reveals high attach rates for Verizon's My Biz plan and a strong pipeline, despite some lack of clarity in management responses. The overall sentiment is positive, driven by strong financial metrics, optimistic guidance, and strategic partnerships.
SECaaS ARR $25.2 million, up 73% year-over-year. The growth was driven by the strong performance of the SECaaS growth engine and contributions from Verizon Business's new mobile offering, My Biz Plan.
Overall Revenue $24.1 million, up 9% year-over-year. The increase was attributed to improved margins, profitability, and the successful launch of Verizon Business's My Biz Plan.
SECaaS Revenue $6.4 million, up 73% year-over-year, comprising 27% of the total revenue. This growth was in line with expectations and driven by the increasing traction of the SECaaS solution among major telcos.
Non-GAAP Gross Margin 73.4%, compared to 70.6% in the second quarter of last year. The improvement reflects better operational efficiency and cost management.
Non-GAAP Operating Expenses $16.4 million, down 2% from $16.7 million in the second quarter of last year. The reduction was due to cost optimization efforts.
Non-GAAP Operating Income $1.2 million, compared to a non-GAAP operating loss of $1 million in the second quarter of last year. This improvement was driven by revenue growth and cost management.
Non-GAAP Net Profit $1.5 million, or $0.03 per diluted share, compared to a non-GAAP net loss of $0.8 million, or $0.02 per share, in the second quarter of last year. The improvement was due to increased revenue and reduced operating expenses.
Operating Cash Flow $4.4 million, positive in the second quarter. This was attributed to strong operational performance and cash management.
Cash, Bank Deposits, and Investments $72 million as of June 30, 2025, compared to $59 million as of December 31, 2024. The increase was due to a $46 million follow-on share offering and positive operating cash flow.
SECaaS ARR: Increased by 73% year-over-year, reaching $25.2 million. SECaaS contributed over 25% of revenues for the first time.
My Biz Plan: Launched by Verizon Business, includes Allot's cybersecurity protection. Customers are automatically opted in, and Allot is paid per connected account.
OffNet solution: A new product ensuring end-user connectivity and protection even when not under a network.
SG-Tera III platform: A recently launched service gateway offering unparalleled visibility into network traffic for top-tier telco operators.
Verizon Business partnership: Significant growth opportunity with Verizon's My Biz Plan targeting over 30 million subscribers.
Play (Poland): Selected Allot's DNS Secure solution for fixed broadband customers, expanding from mobile customers.
Más Móvil (Panama): Chose Allot NetworkSecure for mobile and fixed customer cybersecurity protection.
Tier 1 Telco in EMEA: Signed a deal worth tens of millions of dollars, marking the largest in 5 years. Includes long-term recurring revenue and expands Allot's footprint in 4G, 5G, and fixed fiber networks.
Revenue growth: Overall revenue grew 9% year-over-year to $24.1 million.
Gross margin: Improved to 73.4% from 70.6% year-over-year.
Operating income: Reported $1.2 million in non-GAAP operating income compared to a $1 million loss last year.
Cash flow: Positive operating cash flow of $4.4 million. Ended the quarter with $72 million in cash and no debt.
SECaaS growth strategy: Focused on increasing CSP partnerships, expanding services to new user segments, and upselling new applications like OffNet.
Equity offering: Raised $46 million, used to repay convertible debt and strengthen the balance sheet.
SG-Tera III adoption: Gaining interest from both existing and new customers, contributing to a strong pipeline.
Market Trends and Delays: Changing market trends and delays in the launch of services by Allot customers could adversely impact the company's performance.
Demand Reduction: Reduced demand for security services could negatively affect revenue and growth.
Competitive Pressures: The competitive nature of the security services industry poses challenges to Allot's market position and profitability.
Regulatory Risks: Potential regulatory hurdles could impact operations and strategic execution.
Customer Penetration: Challenges in increasing penetration of cybersecurity protection services among end users could limit growth.
Execution Risks: Risks associated with executing large-scale projects, such as the Tier 1 telco deal, could impact timelines and profitability.
Economic Uncertainties: Broader economic uncertainties could affect customer spending and Allot's financial performance.
Supply Chain Disruptions: Potential supply chain disruptions could impact the delivery of products and services.
SECaaS ARR Growth: The company increased its 2025 SECaaS ARR growth expectations to between 55% and 60%, reflecting strong momentum and traction among major telcos.
Revenue Guidance: Allot introduced revenue guidance for 2025, expecting overall revenues of between $98 million to $102 million, positioning the company for a year of profitable growth.
Major Telco Contract: A new contract with a Tier 1 telco operator in EMEA, valued in the range of tens of millions of dollars, will be executed over 2026 and 2027. This includes a long-term recurring revenue tail of maintenance and support revenues.
Pipeline and Backlog: The company reported a strong backlog and broad pipeline, with improved visibility into the second half of 2025.
SG-Tera III Platform: The company sees further interest in its SG-Tera III platform from both existing and new customers, contributing to a strong pipeline.
Share Offering: Towards the end of June, Allot successfully completed a follow-on equity offering, receiving strong support from the capital markets and its largest shareholder, Lynrock Lake. The proceeds were used to pay down convertible debt as well as for general corporate purposes and to strengthen the balance sheet. The offering added multiple new supportive and long-term focused institutional investors to Allot's shareholder base.
The earnings call indicates strong financial performance with 14% revenue growth, significant SECaaS revenue increase, and positive cash flow. New contracts and strategic partnerships, including a major telco deal, bolster future prospects. However, management's vague responses on certain topics in the Q&A could raise some concerns. Overall, the positive financial metrics and strategic developments suggest a likely positive stock price movement, despite some uncertainties.
The earnings call highlights strong financial performance, with a 9% revenue increase and a 73% SECaaS revenue growth. Improved margins and positive operating cash flow further support the positive sentiment. The Q&A section reveals high attach rates for Verizon's My Biz plan and a strong pipeline, despite some lack of clarity in management responses. The overall sentiment is positive, driven by strong financial metrics, optimistic guidance, and strategic partnerships.
The earnings call shows strong financial performance with a 6% revenue increase and significant growth in SECaaS revenue and ARR. The partnership expansion with Verizon and new product launches are positive indicators, along with a robust pipeline of agreements. Despite some uncertainties in guidance, the overall outlook is optimistic. The lack of a shareholder return plan is a minor negative, but the positive cash flow and improved margins are encouraging. The Q&A highlights potential future growth, especially with Verizon as a key partner. Overall, the sentiment is positive, expecting a 2-8% stock price increase.
The earnings call reflects strong financial performance with a 6% revenue increase, a significant rise in SECaaS revenue, and a transition to profitability. Operating cash flow is positive, and the cash position has improved. Despite no share repurchase, the company's strategic initiatives, including Verizon's contribution and new agreements, indicate growth potential. While competitive pressures and economic factors pose risks, the overall sentiment remains positive due to strong financial metrics and optimistic guidance, particularly in the SECaaS segment.
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