Financial 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]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Mobile-Network Solutions (MNDR) is up 96% at $3.26 - PACS Group, Inc. (PACS) is up 44% at $24.37 - Cerence Inc. (CRNC) is up 28% at $10.16 - Magnera Corporation (MAGN) is up 26% at $10.07 - Oddity Tech Ltd. (ODD) is up 17% at $43.75 - Allot Ltd. (ALLT) is up 14% at $9.80 - Artiva Biotherapeutics, Inc. (ARTV) is up 14% at $3.88 - Kulicke and Soffa Industries, Inc. (KLIC) is up 13% at $40.22 - Fossil Group, Inc. (FOSL) is up 12% at $2.29 - NVIDIA Corporation (NVDA) is up 5% at $195.84 [3] Premarket Losers - Brera Holdings PLC (SLMT) is down 33% at $3.84 - Bath & Body Works, Inc. (BBWI) is down 14% at $18.04 - Cemtrex, Inc. (CETX) is down 11% at $3.20 - Atkore Inc. (ATKR) is down 9% at $60.00 - Gloo Holdings, Inc. (GLOO) is down 9% at $7.30 - SMX (Security Matters) Public Limited Company (SMX) is down 9% at $4.60 - Sonim Technologies, Inc. (SONM) is down 8% at $7.31 - Psyence Biomedical Ltd. (PBM) is down 7% at $2.56 - MMTec, Inc. (MTC) is down 6% at $2.00 - Ridgetech, Inc. (RDGT) is down 5% at $4.78 [4]

Core Insights - Allot Ltd. reported a significant year-over-year growth in SECaaS Annual Recurring Revenue (ARR) of 60% and raised its full-year revenue guidance to between $100 million and $103 million [2][3][9]. Financial Performance - Total revenues for Q3 2025 reached $26.4 million, marking a 14% increase from $23.2 million in Q3 2024 [3][9]. - GAAP gross profit was $18.9 million with a gross margin of 71.4%, up from $16.4 million and a gross margin of 70.4% in the same quarter of the previous year [3][9]. - Non-GAAP gross profit was $19.1 million with a gross margin of 72.2%, compared to $16.7 million and a gross margin of 71.7% in Q3 2024 [3][9]. - GAAP operating income was $2.2 million, a turnaround from an operating loss of $0.2 million in Q3 2024 [4][9]. - Non-GAAP operating income increased to $3.7 million from $1.1 million in Q3 2024 [4][9]. - Net income on a GAAP basis was $2.8 million, or $0.07 per diluted share, compared to a net loss of $0.2 million, or a loss of $0.01 per basic share, in Q3 2024 [4][5][9]. - Non-GAAP net income was $4.6 million, or $0.1 per diluted share, compared to $1.3 million, or $0.03 per diluted share, in Q3 2024 [5][9]. Cash Flow and Financial Position - Operating cash flow for the quarter was $4.0 million [5][9]. - As of September 30, 2025, total cash and cash equivalents amounted to $81 million, an increase of $22 million from $59 million at the end of 2024 [5][9]. - The company reported no debt as of the end of Q3 2025 [5][9]. Strategic Focus - The company is advancing its cyber-security first strategy and is seeing strong performance from its cyber security and network intelligence solutions [2][3]. - Allot's SECaaS solutions are deployed globally, serving over 500 service providers and more than 1,000 enterprises [7][9].

Financial Performance - Total revenues for Q3 2025 were $26.4 million, a 14% increase year-over-year from $23.2 million in Q3 2024[5] - GAAP operating income was $2.2 million, compared to a loss of $0.2 million in Q3 2024[6] - Non-GAAP operating income increased to $3.7 million from $1.1 million in Q3 2024[8] - Net income on a GAAP basis was $2.8 million, or $0.07 per diluted share, improving from a net loss of $0.2 million, or $0.01 per basic share, in Q3 2024[8] - GAAP net income for Q3 2025 was $2,824,000, compared to a loss of $244,000 in Q3 2024, representing a significant turnaround[23] - Non-GAAP net income for Q3 2025 was $4,579,000, up from $1,261,000 in Q3 2024, indicating a year-over-year increase of 264%[23] - Net income for Q3 2025 was $2.824 million, a significant improvement from a net loss of $244 million in Q3 2024[29] Revenue Breakdown - SECaaS represented 28% of overall revenue, with SECaaS ARR reaching $27.6 million, up 60% year-over-year[6] - Total revenues for Q3 2025 reached $26.4 million, with a geographic breakdown showing 31% from the Americas, 49% from EMEA, and 20% from Asia Pacific[31] - SECaaS (Security as a Service) revenues in Q3 2025 were $7.3 million, up from $6.4 million in Q2 2025[31] - The top 10 customers accounted for 60% of total revenues in Q3 2025, compared to 47% in FY 2023[31] Guidance and Future Outlook - The company raised its full year 2025 revenue guidance to between $100 million and $103 million[4] Profitability and Margins - Gross profit on a GAAP basis was $18.9 million, with a gross margin of 71.4%, up from $16.4 million and 70.4% in Q3 2024[5] - GAAP gross profit for Q3 2025 was $18,866,000, a 15% increase from $16,364,000 in Q3 2024[23] - Non-GAAP gross profit for the nine months ended September 30, 2025, was $53,014,000, compared to $47,724,000 in the same period of 2024, showing an increase of 11%[23] Cash Flow and Liquidity - Operating cash flow for the quarter was $4.0 million, with total cash at $81 million, an increase of $22 million from $59 million at the end of 2024[10] - Cash flows from operating activities provided $4.041 million in Q3 2025, compared to $1.883 million in Q3 2024[29] - Cash and cash equivalents rose to $24,232,000 in Q3 2025, up from $16,142,000 in Q4 2024, marking a 50% increase[27] - Cash and cash equivalents at the end of Q3 2025 were $24.232 million, down from $28.226 million at the end of Q3 2024[29] Assets and Liabilities - Total current assets increased to $127,516,000 as of September 30, 2025, compared to $90,176,000 at the end of 2024, reflecting a growth of 41%[27] - Total liabilities decreased to $62,195,000 as of September 30, 2025, down from $89,832,000 at the end of 2024, a reduction of 31%[27] - The company has no debt as of September 30, 2025[10] Expenses and Investments - Research and development costs, net, for Q3 2025 were $400,000, slightly down from $402,000 in Q3 2024, indicating stable investment in innovation[25] - The company reported a GAAP operating expense of $16,716,000 for Q3 2025, which is relatively stable compared to $16,581,000 in Q3 2024[23] - The company experienced a net cash used in investing activities of $11.369 million in Q3 2025, compared to a net cash provided of $10.462 million in Q3 2024[29] Shareholder Information - The weighted average number of shares used in computing GAAP diluted net income per share increased to 41,487,057 in Q3 2025 from 39,202,550 in Q3 2024[23] - Non-GAAP weighted average number of fully diluted shares increased to 44.6 million in Q3 2025 from 40.3 million in FY 2023[31]

Core Insights - Allot Ltd. is gaining attention as a small-cap tech stock, with recent coverage initiated by TD Cowen & Co. and Needham, both giving it a Buy rating due to its growth potential in the cybersecurity market and focus on small businesses [1][2]. Company Overview - Allot Ltd. is based in Hod HaSharon, Israel, and specializes in network intelligence and cybersecurity solutions for telecom service providers and enterprises globally [3]. - The company's product offerings include Allot Smart and Allot Secure, which utilize deep packet inspection for traffic management, application visibility, and network-based security services [3]. Market Positioning - TD Cowen estimates that Allot is positioned to achieve double-digit profitable growth, driven by a total addressable market of approximately $10 billion in the small-business segment [1]. - Needham highlights Allot's momentum in the carrier cybersecurity-as-a-service (CCaaS) model, which adds recurring subscription revenue on top of telecom distribution [2].

Core Insights - Allot Ltd. is participating in the 6th Annual Needham Tech Week from November 20-24, 2025, with CEO Eyal Harari and CFO Liat Nahum attending [1] - The company will host virtual investor meetings on November 24, 2025, for interested parties to schedule meetings through Needham representatives or the investor relations team [2] Company Overview - Allot Ltd. is a leading provider of Security-as-a-Service (SECaaS) and network intelligence solutions for communications service providers and enterprises globally [2] - The company offers a range of services including network-native cybersecurity, application analytics, and traffic control, with over 500 service providers and 1000 enterprises utilizing its solutions [2] - Allot's security-as-a-service solution is currently used by millions of subscribers worldwide [2]

Core Viewpoint - Allot Ltd. will host a conference call to discuss its third quarter 2025 results on November 20, 2025, at 9:00 AM ET, with unaudited financial results to be published prior to the call [1][2]. Company Overview - Allot Ltd. is a leading provider of innovative Security-as-a-Service (SECaaS) and network intelligence solutions for communications service providers and enterprises [1][3]. - The company offers solutions for network and application analytics, traffic control and shaping, and network-based security services, enhancing value for customers [3]. - Allot's multi-service platforms are utilized by over 500 mobile, fixed, and cloud service providers, as well as over 1000 enterprises globally [3]. - The company's network-based security as a service solution is used by millions of subscribers worldwide [3].

Group 1 - Allot Ltd. is gaining attention from hedge funds, particularly in Q2, indicating a positive sentiment towards the stock [1] - Needham & Company initiated coverage of Allot with a Buy rating and a price target of $12.50, emphasizing its strategic positioning in network intelligence and security [1][2] - The company's multi-service platform is utilized by mobile, fixed, and cloud service providers, which supports its growth potential [1] Group 2 - The recent initiation of coverage by TD Cowen reflects a shift in analyst sentiment towards Allot's turnaround narrative [2] - Allot is based in Hod HaSharon, Israel, and specializes in network intelligence and cybersecurity solutions, enabling telecom operators and enterprises to enhance security and traffic control [2]

Group 1 - Allot Ltd. is recognized as a promising tech stock by Wall Street analysts, with TD Cowen initiating coverage with a Buy rating and a price target of $13, citing strong growth potential in the cybersecurity market [1][2] - The company is strategically focused on the small business sector, which presents a significant total addressable market (TAM) opportunity of $10 billion [2] - Allot Ltd. develops, sells, and markets network intelligence and security solutions across various regions including Israel, Europe, Asia, Oceania, the Americas, the Middle East, and Africa [3]

Summary of Allot Ltd. Conference Call (October 21, 2025) Company Overview - **Company Name**: Allot Ltd. - **Industry**: Network Intelligence and Cybersecurity - **Established**: Over two decades ago - **Focus**: Managing Internet traffic and providing network intelligence solutions [1] Core Business and Strategy - **Current Business Model**: Transitioning from a cost center to a profit center by leveraging relationships with communication service providers (CSPs) [4] - **Main Product Lines**: - **Network Intelligence**: 75% of business, includes cybersecurity engines and network management solutions [6] - **Cybersecurity-as-a-Service (SECaaS)**: 25% of business, targeting lower market segments and small businesses [6][5] - **Growth Engine**: SECaaS reported 73% year-over-year growth in Q2, aiming for $30 million Annual Recurring Revenue (ARR) from this line [5] Market Dynamics - **Target Market**: Focus on small businesses and consumers who lack adequate cybersecurity solutions [3] - **Competitive Landscape**: Major competitors include Palo Alto, Wiz, Fortinet, and Check Point, primarily targeting large enterprises [2] - **Market Opportunity**: Identified a significant untapped market in lower segments, with potential for high attach rates (15% to 50%) among carrier customers [16] Financial Performance - **Revenue Guidance**: Expected to reach $100 million this year, with an 8% growth forecast [6][11] - **Recurring Revenue**: Approximately 60% of business is recurring, contributing to stable cash flow [7] - **Profitability**: Achieved break-even last year, now generating positive cash flow and non-GAAP operating profit [8] Recent Developments - **New Partnerships**: Engaging with around two dozen carriers globally, expanding market reach [18] - **Recent Wins**: Secured multimillion-dollar contracts, including a significant networking deal announced in July [22] - **Innovative Solutions**: Launched new cybersecurity engine, OffNetSecure, to enhance service offerings [20] Future Outlook - **Growth Projections**: Anticipating 60% growth in SECaaS, contributing to overall revenue increase [17] - **Sales Cycle**: Typically 36 to 48 months to achieve significant penetration in new carrier partnerships [18] - **Investment in Innovation**: Continual development of new products and capabilities to stay ahead in the market [20] Additional Insights - **Consumer Market Strategy**: Currently leveraging CSPs for market access rather than direct-to-consumer sales, with potential exploration in the future [27] - **Bundling Opportunities**: CSPs can bundle Allot's services with their offerings, enhancing sales potential [29] Conclusion Allot Ltd. is strategically positioned to capitalize on the growing demand for cybersecurity solutions in the lower market segments, leveraging its unique relationships with CSPs and innovative technology to drive significant growth and profitability in the coming years [4][5][11]