Solid start to the year with profitable growth including 54% increase in SECaaS ARR YoY
HOD HASHARON, Israel, May 12, 2025 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide, today announced its unaudited financial results for the first quarter 2025.
Financial Highlights for the First Quarter of 2025
- Revenues of $23.2, up 6% year over year;
- Security as a Service (SECaaS) revenues continued to grow strongly, increasing 49% year-over-year to $5.1 million;
- March 2025 SECaaS ARR* of $21.2 million, up 54% year-over-year;
- Non-GAAP gross margin of 70.4%, similar to the first quarter of last year;
- Non-GAAP operating profit of $0.4 million, versus an operating loss of 1.2 million in the first quarter of last year;
- Positive operating cash flow of $1.7 million in the quarter;
Management Comment
Eyal Harari, CEO of Allot, commented, "We are very happy to report solid results for the quarter with renewed year-over-year growth across all key metrics. We recently signed a number of multi-million dollar agreements with new customers for our Smart product and see strong interest in our new Tera III product from tier-1 customers which is increasing our pipeline, all of which will contribute to future growth."
Continued Mr. Harari, "We continue to drive strong results with our SECaaS offering. Recent agreements illustrate the success of our security business, and we are well positioned to continue growing our recurring revenue stream. We are pleased that Verizon Business recently launched a new mobile plan which includes our SECaaS service, demonstrating the importance that Verizon places on providing cybersecurity protection to their customers."
Concluded Mr. Harari, "Given our solid execution, we expect that for full year 2025 we will achieve profitable growth, with SECaaS revenue and ARR achieving strong year-over-year increases at around 50% or more."
First quarter 2025 Financial Results Summary
Total revenues for the first quarter of 2025 were $23.2 million, a 6% increase year-over-year compared with $21.9 million in the first quarter of 2024.
Gross profit on a GAAP basis for the first quarter of 2025 was $16.0 million (gross margin of 69.3%), a 6% increase compared with $15.1 million (gross margin of 69%) in the first quarter of 2024.
Gross profit on a non-GAAP basis for the first quarter of 2025 was $16.3 million (gross margin of 70.4%), a 6% increase compared with $15.4 million (gross margin of 70.4%) in the first quarter of 2024.
Operating loss on a GAAP basis for the first quarter of 2025 was $0.7 million, compared with an operating loss of $2.7 million in the first quarter of 2024.
Operating income on a non-GAAP basis for the first quarter of 2025 was $0.4 million, compared with an operating loss of $1.2 million in the first quarter of 2024.
Net loss on a GAAP basis for the first quarter of 2025 was $0.3 million, or $0.01 per share, an improvement compared to the net loss of $2.5 million, or $0.07 per share, in the first quarter of 2024.
Net income on a non-GAAP basis for the first quarter of 2025 was $0.8 million, or $0.02 income per diluted share, an improvement compared to the non-GAAP net loss of $0.9 million, or $0.03 loss per basic share, in the first quarter of 2024.
Operating cash flow generated in the quarter was positive $1.7 million.
Cash and cash equivalents, short-term bank deposits, short-term restricted deposits and investments as of March 31, 2025, totaled $60.7 million, an increase of $2 million versus $58.8 million as of December 31, 2024.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss its first quarter 2025 earnings results today, May 12, 2025 at 9:00 am ET, 4:00 pm Israel time. To access the conference call, please dial one of the following numbers:
US: 1-888-642-5032, UK: 0-800-917-5108, Israel: +972-3-918-0644
A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot website at: http://investors.allot.com/index.cfm
About Allot
Allot Ltd. (NASDAQ: ALLT, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers and enterprises worldwide, enhancing value to their customers. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot's multi-service platforms are deployed by over 500 mobile, fixed, and cloud service providers and over 1,000 enterprises. Our industry-leading network-based security as a service solution is already used by many millions of subscribers globally. Allot. See. Control. Secure.
For more information, visit www.allot.com
Performance Metrics
* SECaaS ARR - measures the current annual recurring SECaaS revenues, which is calculated based on estimated revenues for the month of March 2025 and multiplied by 12.
GAAP to Non-GAAP Reconciliation:
The difference between GAAP and non-GAAP revenues is related to the acquisitions made by the Company and represents revenues adjusted for the impact of the fair value adjustment to acquired deferred revenue related to purchase accounting. Non-GAAP net income is defined as GAAP net income after including deferred revenues related to the fair value adjustment resulting from purchase accounting and excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment and changes in taxes-related items.
These non-GAAP measures should be considered in addition to, and not as a substitute for, comparable GAAP measures. The non-GAAP results and a full reconciliation between GAAP and non-GAAP results is provided in the accompanying Table 2. The Company provides these non-GAAP financial measures because it believes they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes they are useful to investors in enhancing an understanding of the Company's operating performance.
Safe Harbor Statement
This release contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements to differ significantly from the results, performance or achievements set forth in such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: our accounts receivables, including our ability to collect outstanding accounts and assess their collectability on a quarterly basis; our ability to meet expectations with respect to our financial guidance and outlook; our ability to compete successfully with other companies offering competing technologies; the loss of one or more significant customers; consolidation of, and strategic alliances by, our competitors; government regulation; the timing of completion of key project milestones which impact the timing of our revenue recognition; lower demand for key value-added services; our ability to keep pace with advances in technology and to add new features and value-added services; managing lengthy sales cycles; operational risks associated with large projects; our dependence on fourth party channel partners for a material portion of our revenues; and other factors discussed under the heading "Risk Factors" in the Company's annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Relations Contact: EK Global Investor Relations Ehud Helft +1 212 378 8040 [email protected] | Public Relations Contact: Seth Greenberg, Allot Ltd. +972 54 922 2294 [email protected] |
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TABLE - 1 | |||||
ALLOT LTD. | |||||
AND ITS SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(U.S. dollars in thousands, except share and per share data) | |||||
Three Months Ended | |||||
March 31, | |||||
2025 | 2024 | ||||
(Unaudited) | |||||
Revenues | $ 23,150 | $ 21,890 | |||
Cost of revenues | 7,103 | 6,792 | |||
Gross profit | 16,047 | 15,098 | |||
Operating expenses: | |||||
Research and development costs, net | 5,991 | 7,149 | |||
Sales and marketing | 7,338 | 7,790 | |||
General and administrative | 3,427 | 2,902 | |||
Total operating expenses | 16,756 | 17,841 | |||
Operating profit (loss) | (709) | (2,743) | |||
Financial and other income (loss), net | 673 | 540 | |||
Profit (Loss) before income tax benefit | (36) | (2,203) | |||
Tax expenses | 296 | 307 | |||
Net profit (Loss) | (332) | (2,510) | |||
Basic net profit (loss) per share | $ (0.01) | $ (0.07) | |||
Diluted net profit (loss) per share | $ (0.01) | $ (0.07) | |||
Weighted average number of shares used in | |||||
computing basic net loss per share | 39,620,521 | 38,411,724 | |||
Weighted average number of shares used in | |||||
computing diluted net loss per share | 39,620,521 | 38,411,724 | |||
TABLE - 2 | ||||
ALLOT LTD. | ||||
AND ITS SUBSIDIARIES | ||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(U.S. dollars in thousands, except per share data) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
(Unaudited) | ||||
GAAP cost of revenues | $ 7,103 | $ 6,792 | ||
Share-based compensation (1) | (94) | (154) | ||
Amortization of intangible assets (2) | (152) | (152) | ||
Non-GAAP cost of revenues | $ 6,857 | $ 6,486 | ||
GAAP gross profit | $ 16,047 | $ 15,098 | ||
Gross profit adjustments | 246 | 306 | ||
Non-GAAP gross profit | $ 16,293 | $ 15,404 | ||
GAAP operating expenses | $ 16,756 | $ 17,841 | ||
Share-based compensation (1) | (887) | (1,206) | ||
Non-GAAP operating expenses | $ 15,869 | $ 16,635 | ||
GAAP financial and other income | $ 673 | $ 540 | ||
Exchange rate differences* | (61) | 94 | ||
Non-GAAP Financial and other income | $ 612 | $ 634 | ||
GAAP taxes on income | $ 296 | $ 307 | ||
Changes in tax related items | (45) | (44) | ||
Non-GAAP taxes on income | $ 251 | $ 263 | ||
GAAP Net profit (Loss) | $ (332) | $ (2,510) | ||
Share-based compensation (1) | 981 | 1,360 | ||
Amortization of intangible assets (2) | 152 | 152 | ||
Exchange rate differences* | (61) | 94 | ||
Changes in tax related items | 45 | 44 | ||
Non-GAAP Net income (loss) | $ 785 | $ (860) | ||
GAAP profit (Loss) per share (diluted) | $ (0.01) | $ (0.07) | ||
Share-based compensation | 0.03 | 0.04 | ||
Amortization of intangible assets | 0.00 | - | ||
Exchange rate differences* | 0.00 | 0.00 | ||
Changes in tax related items | 0.00 | 0.00 | ||
Non-GAAP Net income (loss) per share (diluted) | $ 0.02 | $ (0.03) | ||
Weighted average number of shares used in | ||||
computing GAAP diluted net income (loss) per share | 39,620,521 | 38,411,724 | ||
Weighted average number of shares used in | ||||
computing non-GAAP diluted net income (loss) per share | 42,880,655 | 38,411,724 | ||
* Financial income or expenses related to exchange rate differences in connection with revaluation of assets and | ||||
liabilities in non-dollar denominated currencies. | ||||
TABLE - 2 cont. | ||||
ALLOT LTD. | ||||
AND ITS SUBSIDIARIES | ||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(U.S. dollars in thousands, except per share data) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
(Unaudited) | ||||
(1) Share-based compensation: | ||||
Cost of revenues | $ 94 | $ 154 | ||
Research and development costs, net | 242 | 498 | ||
Sales and marketing | 305 | 443 | ||
General and administrative | 340 | 265 | ||
$ 981 | $ 1,360 | |||
(2) Amortization of intangible assets | ||||
Cost of revenues | $ 152 | $ 152 | ||
$ 152 | $ 152 | |||
TABLE - 3 | ||||
ALLOT LTD. | ||||
AND ITS SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(U.S. dollars in thousands) | ||||
March 31, | December 31, | |||
2025 | 2024 | |||
(Unaudited) | (Audited) | |||
ASSETS | ||||
CURRENT ASSETS: Cash and cash equivalents | $ 10,061 | $ 16,142 | ||
Short-term bank deposits | 16,700 | 15,250 | ||
Restricted deposits | 584 | 904 | ||
Available-for-sale marketable securities | 33,372 | 26,470 | ||
Trade receivables, net (net of allowance for credit losses of $22,324 and $25,306 on March 31, 2025 and December 31, 2024, respectively) | 19,234 | 16,482 | ||
Other receivables and prepaid expenses | 5,983 | 6,317 | ||
Inventories | 8,193 | 8,611 | ||
Total current assets | 94,127 | 90,176 | ||
LONG-TERM ASSETS: | ||||
Severance pay fund | 456 | 464 | ||
Restricted deposit | 296 | 279 | ||
Operating lease right-of-use assets | 6,366 | 6,741 | ||
Other assets | 564 | 2,151 | ||
Property and equipment, net | 6,550 | 7,692 | ||
Intangible assets, net | 153 | 305 | ||
Goodwill | 31,833 | 31,833 | ||
Total non-current assets | 46,218 | 49,465 | ||
Total assets | $ 140,345 | $ 139,641 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES: Trade payables | $ 1,021 | $ 946 | ||
Deferred revenues | 20,013 | 17,054 | ||
Short-term operating lease liabilities | 1,062 | 562 | ||
Other payables and accrued expenses | 15,781 | 17,408 | ||
Total current liabilities | 37,877 | 35,970 | ||
LONG-TERM LIABILITIES: | ||||
Deferred revenues | 6,440 | 7,136 | ||
Long-term operating lease liabilities | 5,093 | 5,807 | ||
Accrued severance pay | 934 | 946 | ||
Convertible debt | 40,000 | 39,973 | ||
Total long-term liabilities | 52,467 | 53,862 | ||
SHAREHOLDERS' EQUITY | 50,001 | 49,809 | ||
Total liabilities and shareholders' equity | $ 140,345 | $ 139,641 | ||
TABLE - 4 | ||||
ALLOT LTD. | ||||
AND ITS SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(U.S. dollars in thousands) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
(Unaudited) | ||||
Cash flows from operating activities: | ||||
Net profit (Loss) | $ (332) | $ (2,510) | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 1,167 | 1,215 | ||
Stock-based compensation | 981 | 1,360 | ||
Amortization of intangible assets | 152 | 152 | ||
Capital loss (gain) | 255 | - | ||
Decrease in accrued severance pay, net | (4) | (58) | ||
Decrease in other assets, other receivables and prepaid expenses | 1,424 | 717 | ||
Increase in accrued interest and amortization of premium/discount on marketable securities | (341) | (372) | ||
Decrease in operating leases liability | (143) | (459) | ||
Decrease in operating lease right-of-use asset | 304 | 552 | ||
Increase in trade receivables | (2,752) | (191) | ||
Decrease in inventories | 418 | 167 | ||
Increase (Decrease) in trade payables | 75 | (262) | ||
Decrease in employees and payroll accruals | (2,212) | (3,486) | ||
Increase in deferred revenues | 2,263 | 1,370 | ||
Increase (Decrease) in other payables, accrued expenses and other long term liabilities | 403 | (554) | ||
Amortization of issuance costs of Convertible debt | 27 | 50 | ||
Net cash provided by (used in) operating activities | 1,685 | (2,309) | ||
Cash flows from investing activities: | ||||
Decrease in restricted deposit | 303 | 704 | ||
Investment in short-term bank deposits | (8,700) | - | ||
Withdrawal of short-term bank deposits | 7,250 | 10,000 | ||
Purchase of property and equipment | (281) | (429) | ||
Investment in marketable securities | (28,976) | (24,275) | ||
Proceeds from redemption or sale of marketable securities | 22,400 | 24,835 | ||
Net cash provided by (used in) investing activities | (8,004) | 10,835 | ||
- | ||||
Cash flows from financing activities: | ||||
Proceeds from exercise of stock options | 238 | - | ||
Net cash provided by financing activities | 238 | - | ||
Increase (Decrease) in cash and cash equivalents | (6,081) | 8,526 | ||
Cash and cash equivalents at the beginning of the period | 16,142 | 14,192 | ||
Cash and cash equivalents at the end of the period | $ 10,061 | $ 22,718 | ||
Non-cash activity: | ||||
ROU asset and lease liability decrease, due to lease termination | $ (71) | $ - | ||
Other financial metrics (Unaudited) | ||||||||
U.S. dollars in millions, except number of full time employees, top 10 customers as a % of revenues and number of shares | ||||||||
Q1-2025 | FY 2024 | FY 2023 | ||||||
Revenues geographic breakdown | ||||||||
Americas | 2.7 | 12 % | 14.2 | 15 % | 16.6 | 18 % | ||
EMEA | 16.8 | 72 % | 54.0 | 59 % | 56.1 | 60 % | ||
Asia Pacific | 3.7 | 16 % | 24.0 | 26 % | 20.5 | 22 % | ||
23.2 | 100 % | 92.2 | 100 % | 93.2 | 100 % | |||
Revenues breakdown by type | ||||||||
Products | 6.5 | 28 % | 30.1 | 33 % | 37.6 | 40 % | ||
Professional Services | 2.6 | 11 % | 8.3 | 9 % | 6.1 | 7 % | ||
SECaaS (Security as a Service) | 5.1 | 22 % | 16.5 | 18 % | 10.6 | 11 % | ||
Support & Maintenance | 9 | 39 % | 37.3 | 40 % | 38.9 | 42 % | ||
23.2 | 100 % | 92.2 | 100 % | 93.2 | 100 % | |||
Revenues per customer type | ||||||||
CSP | 19.5 | 84 % | 75.4 | 82 % | 75.1 | 81 % | ||
Enterprise | 3.7 | 16 % | 16.8 | 18 % | 18.1 | 19 % | ||
23.2 | 100 % | 92.2 | 100 % | 93.2 | 100 % | |||
Top 10 customers as a % of revenues | 53 % | 43 % | 47 % | |||||
Non-GAAP Weighted average number of basic shares (in millions) | 39.6 | 38.9 | 37.9 | |||||
Non-GAAP weighted average number of fully diluted shares (in millions) | 42.9 | 42.3 | 40.3 | |||||
SECaaS (Security as a Service) revenues- U.S. dollars in millions (Unaudited) | |||||||||
Q1-2025: | 5.1 | ||||||||
Q4-2024: | 4.8 | ||||||||
Q3-2024: | 4.7 | ||||||||
Q2-2024: | 3.7 | ||||||||
Q1-2024: | 3.4 | ||||||||
SECaaS ARR* - U.S. dollars in millions (Unaudited) | |||||||||
Mar. 2025: | 21.2 | ||||||||
Dec. 2024: | 18.2 | ||||||||
Dec. 2023: | 12.7 | ||||||||
Dec. 2022: | 9.2 | ||||||||
Dec. 2021: | 5.2 | ||||||||
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SOURCE Allot Ltd.
