Allot Announces Fourth Quarter 2024 Financial Results

Strong Double-Digit SECaaS Growth and Significant Improvement in Profitability

HOD HASHARON, Israel, Feb. 25, 2025 -- 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 fourth quarter and full year of 2024.

Financial Highlights for the Fourth Quarter

• Revenues of $24.9 million increased 2% year over year and 7% sequentially, representing a return to revenue growth;
• Security as a Service (SECaaS) revenues continued to grow strongly, increasing 49% year-over-year to $4.8 million;
• December 2024 SECaaS ARR* grew to $18.2 million, an increase of 43% year-over-year;
• Non-GAAP gross margin was 69.7%, a strong improvement versus gross margin of 51.7% in the fourth quarter of last year;
• Non-GAAP operating profit was $1.8 million, GAAP operating income was $0.3 million, versus operating losses last year;
• Generated strong positive operating cash flow in the quarter of $4.1 million;

Management Comment

Eyal Harari, CEO of Allot, commented, "We are very pleased to report solid fourth-quarter and full year 2024 results, demonstrating that Allot is at a key inflection point in its turnaround process. Our results show renewed revenue growth and a return to profitability, with growing positive cash flow generation. Our SECaaS growth engine continued its strong performance in 2024, with high double-digit growth rates in both revenues and ARR."

Continued Mr. Harari, "Our security-first strategy and renewed go-to-market focus are gaining strong traction and momentum.  As we recently announced, we were very excited to sign a new major agreement with Verizon Business. We are very happy that the significant Verizon Business mobile customer base will have the opportunity to sign up for Allot's cybersecurity protection solution. This new agreement adds to the strong momentum that Allot has recently seen, including our announcements with Vodafone, O2 and MEO. These important partnerships illustrate our growing success and expand our potential for long-term recurring revenue."

Concluded Mr. Harari, "Looking ahead to 2025, we remain focused on advancing our strategy and executing on another year of double-digit SECaaS revenue and ARR growth, and improved profitability."     

Fourth Quarter 2024 Financial Results Summary

Total revenues for the fourth quarter of 2024 were $24.9 million, a 7% increase sequentially compared with $23.2 million in the prior quarter and a 2% increase year-over-year compared with $24.3 million in the fourth quarter of 2023. .

Gross profit on a GAAP basis for the fourth quarter of 2024 was $17.1 million (gross margin of 68.5%), a 49.6% increase compared with $11.4 million (gross margin of 46.8%) in the fourth quarter of 2023.   

Gross profit on a non-GAAP basis for the fourth quarter of 2024 was $17.4 million (gross margin of 69.7%), a 37.9% increase compared with $12.6 million (gross margin of 51.7%) in the fourth quarter of 2023.   

Operating income on a GAAP basis for the fourth quarter of 2024 was $0.3 million, compared with an operating loss of $18.9 million in the fourth quarter of 2023.

Operating income on a non-GAAP basis for the fourth quarter of 2024 was $1.8 million, compared with an operating loss of $17.0 million in the fourth quarter of 2023.   

Net income on a GAAP basis for the fourth quarter of 2024 was $0.2 million, or $0.01 income per diluted share, an improvement compared to the net loss of $18.3 million, or $0.48 loss per basic share, in the fourth quarter of 2023.

Net income on a non-GAAP basis for the fourth quarter of 2024 was $2.0 million, or $0.05 income per diluted share, an improvement compared to the non-GAAP net loss of $16.4 million, or $0.43 loss per basic share, in the fourth quarter of 2023.

Operating cash flow generated in the quarter was $4.1 million.    

Full Year 2024 Financial Results Summary

Total revenues for 2024 were $92.2 million, a 1% decrease compared to $93.2 million in 2023.

Gross profit on a GAAP basis for 2024 was $63.7 million (gross margin of 69.1%), a 20.9% increase compared with $52.7 million (gross margin of 56.6%) in 2023.

Gross profit on a non-GAAP basis for 2024 was $65.1 million (gross margin of 70.6%), a 17.2% year-over-year growth compared with $55.5 million (gross margin of 59.6%) in 2023.

Net loss on a GAAP basis for 2024 was $5.9 million, or $0.15 per basic share, compared with a net loss of $62.8 million, or $1.66 per basic share, in 2023.

Net income on a non-GAAP basis for 2024 was $1.6 million, or $0.04 income per diluted share, compared with a net loss of $53.3 million, or $1.41 loss per basic share, in 2023.

Operating cash flow generated in 2024 was $4.8 million.   

Cash and cash equivalents, short-term bank deposits, short-term restricted deposits, and investments as of December 31, 2024, totaled $58.8 million, versus $54.8 million as of December 31, 2023.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss its fourth quarter and full year 2024 earnings results today, February 25, 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: +972-3-918-0610

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 of SECaaS revenues, which is calculated based on estimated revenues for the month of December 2024 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.