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01/11 10:31
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue $26.4 million, up 14% year-over-year. The increase was driven by growth in both SECaaS and smart businesses.
SECaaS Revenue $7.3 million, up 60% year-over-year, comprising 28% of total revenue. Growth attributed to increased traction among major telcos and end customers.
SECaaS Annual Recurring Revenue (ARR) $27.6 million as of September 2025, up 60% year-over-year. Growth driven by strong traction and customer launches.
Recurring Revenue 63% of total revenue in Q3 2025, up from 58% in Q3 2024. Increase due to higher contributions from SECaaS and smart businesses.
Non-GAAP Gross Margin 72.2%, compared to 71.7% in Q3 2024. Improvement due to revenue growth and operational efficiency.
Non-GAAP Operating Income $3.7 million, compared to $1.1 million in Q3 2024. Growth driven by increased revenue and improved gross margin on a stable expense base.
Non-GAAP Net Income $4.6 million, or $0.10 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in Q3 2024. Increase due to higher operating income.
Operating Cash Flow $4 million positive in Q3 2025, marking the third consecutive quarter of positive cash flow. Growth attributed to improved profitability and operational performance.
Cash Balance $81 million as of September 30, 2025, up from $59 million as of December 31, 2024. Increase due to positive cash flow and share offering proceeds.
OffNetSecure solution: Launched the OffNetSecure solution, which extends network-based cybersecurity protection beyond the operator's infrastructure to subscribers using any network or Wi-Fi connection. It enhances customer loyalty, increases subscription-based revenue opportunities, and reinforces the operator's role as a trusted provider of digital security.
Increased U.S. market contribution: Recognized revenue from a large smart order and growing SECaaS contributions in the U.S., aligning with the strategy to expand business in the Americas.
Revenue growth: Achieved $26.4 million in revenue for Q3 2025, a 14% year-over-year increase, driven by growth in SECaaS and smart businesses.
Profitability improvement: Reported non-GAAP operating income of $3.7 million, up from $1.1 million in Q3 2024, and non-GAAP net income of $4.6 million, up from $1.3 million in Q3 2024.
Cash position: Ended Q3 2025 with $81 million in cash, up from $59 million at the end of 2024, with no debt.
Cybersecurity-first strategy: Continued focus on cybersecurity solutions, with SECaaS becoming a significant revenue driver, comprising 28% of Q3 2025 revenue and showing 60% year-over-year growth in ARR.
Guidance increase: Raised full-year 2025 revenue guidance to $100-$103 million and projected SECaaS ARR growth to surpass 60% year-over-year.
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 services poses a risk to revenue growth and operational stability.
Competitive Pressures: The competitive nature of the security services industry could challenge Allot's market position and profitability.
Regulatory Risks: Potential regulatory hurdles could impact operations and strategic execution.
Customer Launch Challenges: Challenges in supporting customer launches and ensuring successful rollouts of new services could affect growth momentum.
Economic Uncertainties: Broader economic uncertainties could influence customer spending and demand for Allot's services.
SECaaS Annual Recurring Revenue (ARR) Growth: The company expects 2025 year-end SECaaS ARR to show exceptionally strong year-over-year growth, surpassing 60%.
Full Year 2025 Revenue Guidance: The company has raised its full year 2025 revenue guidance to between $100 million and $103 million.
2026 Outlook: The company is well-positioned for 2026 and anticipates being at the inflection point of a longer-term trend of ongoing profitable growth.
Share Offering: During the quarter, we completed a $46 million follow-on share offering, of which $40 million in gross proceeds were received during the second quarter and the remaining $6 million in gross proceeds received this quarter. Our shares issued and outstanding as of the end of September were 48.4 million shares.
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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