Allot Announces First Quarter 2024 Financial Results

HOD HASHARON, Israel, May 29, 2024 /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 first quarter 2024 financial results.

Allot Logo

Financial Highlights for the First Quarter

  • First quarter revenues were $21.9 million, up 4% year-over-year;
  • First quarter gross margins improved year over year by 8.1% to 69.0% on a GAAP basis and by 4.7% to 70.4% on a non-GAAP basis;
  • SECaaS revenues were $3.4 million for Q1 up 51% year-over-year and March 2024 SECaaS ARR* was $13.7 million;
  • Net loss improved and was reduced significantly year over year: on a GAAP basis, net loss reduced by 77.9% to $2.5 million and on a non-GAAP basis, net loss reduced by 88.8% to $0.9 million;

Financial Outlook

For the full year 2024, management reiterates that it expects:

  • Non-GAAP operating profit and net cash flow breakeven;
  • Continued yearly double-digit growth of SECaaS revenues and ARR;

Management Comment

Eyal Harari, CEO of Allot commented, “We are pleased with the strong progress we have made stabilizing the business and lowering expenses to align our operating costs to current revenue levels. Revenues improved year-over-year, and we lowered our expenses by 26% (on a Non-GAAP basis), significantly reducing our operating and net loss. We are working hard to bring the business back to profitability while maintaining our investment in our long-term growth engine, Security as a Service (SECaaS).”

“I am thrilled with the opportunity to join Allot. I believe we have a bright future, and I am looking forward to working with the Allot team to drive profitable growth,” added Mr. Harari.

Q1 2024 Financial Results Summary

Total revenues for the first quarter of 2024 were $21.9 million, an increase of 4% compared to $21.1 million in the first quarter of 2023.

Gross profit on a GAAP basis for the first quarter of 2024 was $15.1 million (gross margin of 69.0%), a 12% increase compared with $13.5 million (gross margin of 63.8%) in the first quarter of 2023.

Gross profit on a non-GAAP basis for the first quarter of 2024 was $15.4 million (gross margin of 70.4%), an 8% increase compared with $14.2 million (gross margin of 67.2%) in the first quarter of 2023.   

Net loss on a GAAP basis for the first quarter of 2024 was $2.5 million, or $0.07 per basic share, an improvement compared with a net loss of $11.4 million, or $0.30 per basic share, in the first quarter of 2023.

Net loss on a non-GAAP for the first quarter of 2024 was $0.9 million, or $0.03 per basic share an improvement compared with a non-GAAP net loss of $7.7 million, or $0.21 per basic share, in the first quarter of 2023.  

Cash, short-term bank deposits, and investments as of March 31, 2024, totaled $52.6 million, compared to $54.9 million as of December 31, 2023.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss its first quarter 2024 earnings results today, May 29, 2024, 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

* Total ARR – Support & Maintenance ARR (measures the current annual run rate of support & maintenance revenues, which is calculated based on the expected revenues for the first quarter of 2024, excluding one-time items, and multiplied by 4) and SECaaS ARR (measures the current annual run rate of SECaaS revenues, which is calculated based on estimated revenues for the month of Mar. 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.

Logo: https://mma.prnewswire.com/media/703889/Allot_Logo.jpg

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]  

 

 

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,





2024


2023





(Unaudited)











Revenues

$       21,890


$       21,126




Cost of revenues

6,792


7,651




Gross profit  

15,098


13,475











Operating expenses:







Research and development costs, net

7,149


10,494




Sales and marketing

7,790


10,887




General and administrative

2,902


3,960




Total operating expenses

17,841


25,341




Operating loss

(2,743)


(11,866)




Financial and other income, net

540


794




Loss before income tax expenses

(2,203)


(11,072)











Tax expenses

307


290




Net Loss

(2,510)


(11,362)











Basic net loss per share

$         (0.07)


$         (0.30)











Diluted net loss per share

$         (0.07)


$         (0.30)











Weighted average number of shares used in 







computing basic net loss per share

38,411,724


37,421,720











Weighted average number of shares used in 







computing diluted net loss per share

38,411,724


37,421,720


















 

 

 

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,




2024


2023




(Unaudited)


GAAP cost of revenues

$          6,792


$          7,651


 Share-based compensation (1) 

(154)


(531)


 Amortization of intangible assets (2) 

(152)


(193)


Non-GAAP cost of revenues

$          6,486


$          6,927








 GAAP gross profit 

$        15,098


$        13,475


 Gross profit adjustments 

306


724


 Non-GAAP gross profit 

$        15,404


$        14,199








 GAAP operating expenses 

$        17,841


$        25,341


 Share-based compensation (1) 

(1,206)


(2,937)


 Non-GAAP operating expenses 

$        16,635


$        22,404








 GAAP financial and other income 

$             540


$            794


 Expenses related to M&A activities (3) 


14


 Exchange rate differences* 

94


(43)


 Non-GAAP Financial and other income 

$             634


$            765








 GAAP taxes on income 

$             307


$            290


 Changes in tax related items 

(44)


(25)


 Non-GAAP taxes on income 

$             263


$            265








 GAAP Net Loss 

$         (2,510)


$      (11,362)


 Share-based compensation (1) 

1,360


3,468


 Amortization of intangible assets (2) 

152


193


 Expenses related to M&A activities (3) 


14


 Exchange rate differences* 

94


(43)


 Changes in tax related items 

44


25


 Non-GAAP Net income (loss) 

$            (860)


$        (7,705)








 GAAP Loss per share (diluted) 

$           (0.07)


$          (0.30)


 Share-based compensation 

0.04


0.09


 Amortization of intangible assets



 Expenses related to M&A activities



 Exchange rate differences*



 Changes in tax related items



 Non-GAAP Net income (loss) per share (diluted) 

$           (0.03)


$          (0.21)














Weighted average number of shares used in 





computing GAAP diluted net loss per share

38,411,724


37,421,720














Weighted average number of shares used in 





computing non-GAAP diluted net loss per share

38,411,724


37,421,720








* Financial income or expenses related to exchange rate differences in connection with revaluation of assets and


 liabilities in non-dollar denominated currencies. 





 ** While amortization of acquired intangible assets is excluded from the measures, the revenue of the acquired  


 companies is reflected in the measures and the acquired assets contribute to revenue generation. 











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,




2024


2023




(Unaudited)








(1) Share-based compensation:






Cost of revenues

$             154


$            531



Research and development costs, net

498


1,202



Sales and marketing

443


1,037



General and administrative

265


698




$          1,360


$          3,468








 (2) Amortization of intangible assets 






Cost of revenues

$             152


$            193




$             152


$            193








 (3) Expenses related to M&A activities 






Financial income

$               –


$              14




$               –


$              14














 

 

TABLE  – 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













March 31,


December 31,



2024


2023



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$                  22,718


$              14,192

Restricted deposit


1,182


1,728

Short-term bank deposits



10,000

Available-for-sale marketable securities


28,657


28,853

Trade receivables, net  (net of allowance for credit

losses of $25,363 and $25,253 on March 31, 2024 and

December 31, 2023, respectively)


15,019


14,828

Other receivables and prepaid expenses


6,996


8,437

Inventories


11,707


11,874

Total current assets


86,279


89,912






NON-CURRENT ASSETS:





Severance pay fund


389


395

Restricted deposit



158

Operating lease right-of-use assets


2,505


3,057

Other assets 


1,091


704

Property and equipment, net


10,403


11,189

Intangible assets, net


763


915

Goodwill


31,833


31,833

Total non-current assets


46,984


48,251






Total assets


$                  133,263


$              138,163






LIABILITIES AND SHAREHOLDERS’

EQUITY





CURRENT LIABILITIES:





Trade payables


$                        709


$                     969

Deferred revenues


15,168


14,892

Short-term operating lease liabilities


1,494


1,453

Other payables and accrued expenses


18,075


22,094

Total current liabilities


35,446


39,408






LONG-TERM LIABILITIES:





Deferred revenues


8,531


7,437

Long-term operating lease liabilities


202


702

Accrued severance pay


1,016


1,080

Convertible debt


39,823


39,773

Total long-term liabilities


49,572


48,992






SHAREHOLDERS’ EQUITY


48,245


49,763






Total liabilities and shareholders’ equity


$                  133,263


$              138,163

 

 

TABLE  – 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)







Three Months Ended



March 31,



2024


2023



(Unaudited)







Cash flows from operating activities:





Net Loss

$        (2,510)


$    (11,362)


Adjustments to reconcile net income to net cash used in operating activities:





Depreciation

1,215


1,320


Stock-based compensation

1,360


3,468


Amortization of intangible assets

152


276


Increase (Decrease) in accrued severance pay, net

(58)


60


Decrease in other assets, other receivables and prepaid expenses

717


499


Decrease (Increase) in accrued interest and  amortization of premium/discount on marketable securities 

(372)


19


Decrease in operating leases liability

(459)


(1,105)


Decrease in operating lease right-of-use asset

552


722


Decrease (Increase) in trade receivables

(191)


4,486


Decrease (Increase) in inventories

167


(3,453)


Increase (Decrease) in trade payables

(262)


739


Decrease in employees and payroll accruals

(3,486)


(1,452)


Increase (Decrease) in deferred revenues

1,370


(2,169)


Decrease in other payables, accrued expenses and other long term liabilities

(554)


(901)


Amortization of issuance costs of Convertible debt

50


49


Net cash used in operating activities

(2,309)


(8,804)







Cash flows from investing activities:





Decrease in restricted deposit

704



Investment in short-term bank deposits


(15,900)


Withdrawal of short-term bank deposits

10,000


32,900


Purchase of property and equipment

(429)


(270)


Investment in marketable securities

(24,275)


(8,983)


Proceeds from redemption or sale of marketable securities

24,835


3,370


Net cash provided by investing activities

10,835


11,117







Cash flows from financing activities:





Proceeds from exercise of stock options



Issuance of convertible debt



Net cash provided by financing activities








Increase in cash and cash equivalents

8,526


2,313


Cash and cash equivalents at the beginning of the period

14,192


12,295


Cash and cash equivalents at the end of the period

$        22,718


$     14,608


 

 

 













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
















Q1-2024


FY 2023


FY 2022




Revenues geographic breakdown










Americas


4.3

20 %

16.6

18 %

21.8

18 %




EMEA


12.5

57 %

56.1

60 %

71.2

58 %




Asia Pacific


5.1

23 %

20.5

22 %

29.7

24 %






21.9

100 %

93.2

100 %

122.7

100 %














Revenue breakdown by type










Products


7.4

34 %

37.6

40 %

61.1

50 %




Professional Services

3.0

14 %

6.1

7 %

11.6

9 %




SECaaS (Security as a Service)

3.4

16 %

10.6

11 %

7.2

6 %




Support & Maintenance

8.1

36 %

38.9

42 %

42.8

35 %






21.9

100 %

93.2

100 %

122.7

100 %














Revenues per customer type










CSP


17.3

79 %

75.1

81 %

98.3

80 %




Enterprise


4.6

21 %

18.1

19 %

24.4

20 %






21.9

100 %

93.2

100 %

122.7

100 %














Top 10 customers as a % of revenues

47 %


47 %


44 %















Total number of full time employees 

505


559


749




(end of period)










Non-GAAP Weighted average number of basic shares  (in

 millions)

38.4


37.9


37.0























Non-GAAP weighted average number of fully diluted

shares  (in millions)

42.1


40.3


39.5






























SECaaS (Security as a Service) revenues– U.S. dollars in millions (Unaudited)


















Q1-2024:

3.4










Q4-2023:

3.2










Q3-2023:

2.8










Q2-2023:

2.4










Q1-2023:

2.3





















SECaaS ARR* (annualized recurring revenues)- U.S. dollars in millions (Unaudited)

















Mar. 2024:

13.7










Dec. 2023:

12.7










Dec. 2022:

9.2










Dec. 2021:

5.2





















*ARR: annualized recurring SECaaS revenues, calculated based on the monthly revenues multiplied by 12




 

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SOURCE Allot Ltd.

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