Release Date: August 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allot Ltd (ALLT, Financial) generated positive operating cash flow and increased its net cash position for the first time in three years.
- Operating expenses were significantly reduced by approximately 25% compared to the previous year.
- SECaaS revenue increased by 54% year-over-year, indicating strong growth in this segment.
- The company signed an expansion agreement with a Tier-1 European CSP customer, expected to contribute to revenue by the end of the year.
- Allot Ltd (ALLT) has a strong relationship with Verizon, with potential expansion opportunities within Verizon's different customer segments.
Negative Points
- Overall revenue declined by 12% year-over-year, despite a slight increase from the previous quarter.
- The gross margin slightly decreased from 71.4% last year to 70.6% this quarter.
- The company reported a non-GAAP net loss of $0.8 million for the quarter.
- There is a risk of project delays in the SECaaS segment, which could impact revenue timing.
- The DPI market demand is lower than in previous years, posing challenges for growth in this segment.
Q & A Highlights
Q: Can you clarify the SECaaS ARR guidance, which suggests a 50% year-over-year growth? Does this translate to an ARR of around $19 million?
A: Yes, that's correct. We anticipate continued demand for our SECaaS service, with a reported 54% growth this quarter. We expect this trend to persist in the upcoming quarters. - Eyal Harari, CEO
Q: How do you build up the SECaaS ARR guidance? Is it based on incremental subscriptions or sustained year-over-year growth?
A: The SECaaS growth is driven by winning new accounts, expanding services within existing customers, and the natural uptake of services post-launch. We foresee growth from these dimensions, contributing to the 50% growth target. - Eyal Harari, CEO
Q: Regarding the incremental SECaaS ARR for the rest of the year, will most of it occur in the fourth quarter?
A: The growth will be gradual, with some increase in Q3 and a higher growth expected in Q4. - Eyal Harari, CEO
Q: What is the driver for SECaaS ARR at the end of calendar '24?
A: We have an agreement with an existing customer to expand our SECaaS services, which will be implemented over the next couple of quarters. This expansion is expected to contribute to our revenue growth in 2025. - Eyal Harari, CEO
Q: Can you discuss the attach rate for new subscribers with Verizon's fixed wireless customers? Has it remained steady?
A: Yes, the attach rate has stayed relatively steady. We see potential for growth both from new subscribers and within the existing customer base. - Eyal Harari, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
