0001365767 2024-01-01 2024-06-30 0001365767 2024-04-01 2024-06-30 0001365767 2023-04-01 2023-06-30 0001365767 2023-01-01 2023-06-30 0001365767 2024-03-31 0001365767 2023-03-31 0001365767 2023-12-31 0001365767 2022-12-31 0001365767 2024-06-30 0001365767 2023-06-30 xbrli:shares iso4217:USD iso4217:USDxbrli:shares
Exhibit 99.1
 
image0.jpg
 
Allot Announces Second Quarter 2024 Financial Results
 
Hod Hasharon, Israel – August 27, 2024 - 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 second quarter of 2024.
 
Financial Highlights for the Second Quarter
 
 •
Revenues were $22.2 million, stable compared with that of the prior quarter;
 
 •
Non-GAAP gross margin was 70.6%;
 
 •
Security as a Service (SECaaS) revenues continued to grow, increasing 54% year-over-year to $3.7 million;
 
 •
June 2024 SECaaS ARR* was $14.6 million;
 
 •
Operating loss improved significantly year over year: declining 84% to $3.4 million on a GAAP basis and 95% to $1 million on a non-GAAP basis;
 
 •
Operating cash flow was positive for the first time in three years, coming in at $1.2 million;
 
 •
Net cash** increased by $0.6 million during the quarter;
 
Financial Outlook
 
For the second half of 2024, management expects non-GAAP operating profit at around breakeven and the net cash position to not decrease.
 
Full year SECaaS revenue and SECaaS ARR* are expected to continue experiencing accelerated growth at around 50% year-over-year.
 
Management Comment
 
Eyal Harari, CEO of Allot commented, “We have made significant progress improving our operational efficiency and stabilizing the business, and we are very pleased to have returned to positive operating cash flow for the first time in three years. At the same time, we continue investing in our long-term growth engine, SECaaS.
 
“During the quarter, we demonstrated solid execution. We won new customers in both Allot Smart and Allot Secure, and we closed expansion contracts with existing customers. We have a strong and broad pipeline of opportunities, and we are making progress in converting that pipeline into orders.
 
“In my first few months at Allot, I have been meeting our customers and employees, looking for ways to leverage our strong assets and deep technological capabilities to better serve all our stakeholders. We are formulating a strategic plan to drive long-term profitable growth, and I look forward to realizing Allot’s strong potential.”
 
Q2 2024 Financial Results Summary
 
Total revenues for the second quarter of 2024 were $22.2 million, a 12% decrease compared to $25 million in the second quarter of 2023.
 
Gross profit on a GAAP basis for the second quarter of 2024 was $15.2 million (gross margin of 68.5%), a 12% decline compared with $17.3 million (gross margin of 69.2%) in the second quarter of 2023.
 
Gross profit on a non-GAAP basis for the second quarter of 2024 was $15.7 million (gross margin of 70.6%), a 12% decline compared with $17.9 million (gross margin of 71.4%) in the second quarter of 2023.
 
Operating loss on a GAAP basis for the second quarter of 2024 was $3.4 million, an 84% improvement compared with an operating loss of $21.5 million in the second quarter of 2023.
 
Operating loss on a non-GAAP basis for the second quarter of 2024 was $1 million, a 95% improvement compared with an $18.9 million loss in the second quarter of 2023.
 
Net loss on a GAAP basis for the second quarter of 2024 was $3.4 million, or $0.09 per basic share, an improvement compared to the net loss of $20.7 million, or $0.55 per basic share, in the second quarter of 2023.
 
Net loss on a non-GAAP basis for the second quarter of 2024 was $0.8 million, or $0.02 per basic share, an improvement compared to the non-GAAP net loss of $18.3 million, or $0.49 per basic share, in the second quarter of 2023.
 
Operating cash flow in the quarter was $1.2 million.
 
Cash and cash equivalents, short-term bank deposits, and investments as of June 30, 2024, totaled $53.2 million, an increase of $0.6 million versus $52.6 million at the end of the prior quarter and $54.8 million as of December 31, 2023.
 
# # #
 
Conference Call & Webcast:
 
The Allot management team will host a conference call to discuss its Second quarter 2024 earnings results today, August 27, 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
 
* SECaaS ARR – measures the current annual recurring of SECaaS revenues, which is calculated based on estimated revenues for the month of June 2024 and multiplied by 12.
 
** Net Cash – Cash and cash equivalents, short-term bank deposits, and investments net of convertible debt.
 
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
allot@ekgir.com
Public Relations Contact:
Seth Greenberg, Allot Ltd.
+972 54 922 2294
sgreenberg@allot.com
  
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
    
Six Months Ended
  
   
Jun 30,
    
Jun 30,
  
   
2024
    
2023
    
2024
    
2023
  
   
(Unaudited)
    
(Unaudited)
  
                         
Revenues
  
$
22,164
    
$
25,047
    
$
44,054
    
$
46,173
  
Cost of revenues
    
6,989
      
7,707
      
13,781
      
15,358
  
Gross profit
    
15,175
      
17,340
      
30,273
      
30,815
  
                                 
Operating expenses:
                                
Research and development costs, net
    
7,326
      
10,752
      
14,475
      
21,246
  
Sales and marketing
    
7,911
      
10,522
      
15,701
      
21,409
  
General and administrative
    
3,304
      
17,558
      
6,206
      
21,518
  
Total operating expenses
    
18,541
      
38,832
      
36,382
      
64,173
  
Operating loss
    
(3,366
)
    
(21,492
)
    
(6,109
)
    
(33,358
)
Financial and other income, net
    
489
      
985
      
1,029
      
1,779
  
Loss before income tax expenses
    
(2,877
)
    
(20,507
)
    
(5,080
)
    
(31,579
)
                                 
Tax expenses
    
479
      
225
      
786
      
515
  
Net Loss
    
(3,356
)
    
(20,732
)
    
(5,866
)
    
(32,094
)
                                 
Basic net loss per share
  
$
(0.09
)
  
$
(0.55
)
  
$
(0.16
)
  
$
(0.85
)
                                 
Diluted net loss per share
  
$
(0.09
)
  
$
(0.55
)
  
$
(0.16
)
  
$
(0.85
)
                                 
Weighted average number of shares used in
                                
computing basic net loss per share
    
38,712,407
      
37,743,328
      
38,562,065
      
37,583,412
  
                                 
Weighted average number of shares used in
                                
computing diluted net loss per share
    
38,712,407
      
37,743,328
      
38,562,065
      
37,583,412
  
 
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
  
Six Months Ended
 
  
June 30,
  
June 30,
 
  
2024
  
2023
  
2024
  
2023
 
  
(Unaudited)
  
(Unaudited)
 
GAAP cost of revenues
 
$
6,989
  
$
7,707
  
$
13,781
  
$
15,358
 
 Share-based compensation (1)
  
(324
)
  
(348
)
  
(478
)
  
(879
)
 Amortization of intangible assets (2)
  
(152
)
  
(194
)
  
(304
)
  
(387
)
Non-GAAP cost of revenues
 
$
6,513
  
$
7,165
  
$
12,999
  
$
14,092
 
                 
 GAAP gross profit
 
$
15,175
  
$
17,340
  
$
30,273
  
$
30,815
 
 Gross profit adjustments
  
476
   
542
   
782
   
1,266
 
 Non-GAAP gross profit
 
$
15,651
  
$
17,882
  
$
31,055
  
$
32,081
 
                 
 GAAP operating expenses
 
$
18,541
  
$
38,832
  
$
36,382
  
$
64,173
 
 Share-based compensation (1)
  
(1,863
)
  
(2,077
)
  
(3,069
)
  
(5,014
)
 Non-GAAP operating expenses
 
$
16,678
  
$
36,755
  
$
33,313
  
$
59,159
 
                 
 GAAP financial and other income
 
$
489
  
$
985
  
$
1,029
  
$
1,779
 
 Exchange rate differences*
  
110
   
(238
)
  
204
   
(281
)
 Expenses related to M&A activities (3)
  
-
   
14
   
-
   
28
 
 Non-GAAP Financial and other income
 
$
599
  
$
761
  
$
1,233
  
$
1,526
 
                 
 GAAP taxes on income
 
$
479
  
$
225
  
$
786
  
$
515
 
 Changes in tax related items
  
(133
)
  
(25
)
  
(177
)
  
(50
)
 Non-GAAP taxes on income
 
$
346
  
$
200
  
$
609
  
$
465
 
                 
 GAAP Net Loss
 
$
(3,356
)
 
$
(20,732
)
 
$
(5,866
)
 
$
(32,094
)
 Share-based compensation (1)
  
2,187
   
2,425
   
3,547
   
5,893
 
 Amortization of intangible assets (2)
  
152
   
194
   
304
   
387
 
 Expenses related to M&A activities (3)
  
-
   
14
   
-
   
28
 
 Exchange rate differences*
  
110
   
(238
)
  
204
   
(281
)
 Changes in tax related items
  
133
   
25
   
177
   
50
 
 Non-GAAP Net loss
 
$
(774
)
 
$
(18,312
)
 
$
(1,634
)
 
$
(26,017
)
                 
 GAAP Loss per share (diluted)
 
$
(0.09
)
 
$
(0.55
)
 
$
(0.16
)
 
$
(0.85
)
 Share-based compensation
  
0.06
   
0.06
   
0.10
   
0.16
 
 Amortization of intangible assets
  
0.01
   
0.01
   
0.01
   
0.01
 
 Expenses related to M&A activities
  
-
   
0.00
   
-
   
0.00
 
 Exchange rate differences*
  
0.00
   
(0.01
)
  
-
   
(0.01
)
 Changes in tax related items
  
-
   
-
   
-
   
-
 
 Non-GAAP Net loss per share (diluted)
 
$
(0.02
)
 
$
(0.49
)
 
$
(0.05
)
 
$
(0.69
)
                 
Weighted average number of shares used in
                
computing GAAP diluted net loss per share
  
38,712,407
   
37,743,328
   
38,562,065
   
37,583,412
 
                 
Weighted average number of shares used in
                
computing non-GAAP diluted net loss per share
  
38,712,407
   
37,743,328
   
38,562,065
   
37,583,412
 
 
* 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
  
Six Months Ended
 
  
June 30,
  
June 30,
 
  
2024
  
2023
  
2024
  
2023
 
  
(Unaudited)
  
(Unaudited)
 
             
(1) Share-based compensation:
            
Cost of revenues
 
$
324
  
$
348
  
$
478
  
$
879
 
Research and development costs, net
  
787
   
754
   
1,285
   
1,956
 
Sales and marketing
  
792
   
733
   
1,235
   
1,770
 
General and administrative
  
284
   
590
   
549
   
1,288
 
  
$
2,187
  
$
2,425
  
$
3,547
  
$
5,893
 
                 
(2) Amortization of intangible assets
                
Cost of revenues
 
$
152
  
$
194
  
$
304
  
$
387
 
  
$
152
  
$
194
  
$
304
  
$
387
 
                 
(3) Expenses related to M&A activities
                
Financial income
 
$
-
  
$
14
  
$
-
  
$
28
 
  
$
-
  
$
14
  
$
-
  
$
28
 
 
TABLE - 3
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 
   
June 30,
    
December 31,
  
   
2024
    
2023
  
   
(Unaudited)
    
(Audited)
  
             
ASSETS
            
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
15,883
    
$
14,192
  
Short-term bank deposits
    
3,800
      
10,000
  
Restricted deposits
    
1,183
      
1,728
  
Available-for-sale marketable securities
    
32,313
      
28,853
  
Trade receivables, net (net of allowance for credit losses of $25,341 and $25,253 on June 30, 2024 and December 31, 2023, respectively)
    
17,808
      
14,828
  
Other receivables and prepaid expenses
    
5,933
      
8,437
  
Inventories
    
9,606
      
11,874
  
Total current assets
    
86,526
      
89,912
  
                 
LONG-TERM ASSETS:
                
Severance pay fund
    
409
      
395
  
Restricted deposit
    
-
      
158
  
Operating lease right-of-use assets
    
1,883
      
3,057
  
Other assets
    
1,025
      
704
  
Property and equipment, net
    
10,203
      
11,189
  
Intangible assets, net
    
610
      
915
  
Goodwill
    
31,833
      
31,833
  
Total non-current assets
    
45,963
      
48,251
  
                 
Total assets
  
$
132,489
    
$
138,163
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Trade payables
  
$
985
    
$
969
  
Deferred revenues
    
15,565
      
14,892
  
Short-term operating lease liabilities
    
1,405
      
1,453
  
Other payables and accrued expenses
    
18,128
      
22,094
  
Total current liabilities
    
36,083
      
39,408
  
                 
LONG-TERM LIABILITIES:
                
Deferred revenues
    
8,729
      
7,437
  
Long-term operating lease liabilities
    
132
      
702
  
Accrued severance pay
    
929
      
1,080
  
Convertible debt
    
39,873
      
39,773
  
Total long-term liabilities
    
49,663
      
48,992
  
                 
SHAREHOLDERS' EQUITY
    
46,743
      
49,763
  
                 
Total liabilities and shareholders' equity
  
$
132,489
    
$
138,163
  
 
TABLE - 4
ALLOT LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
 
   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
   
(Unaudited)
    
(Unaudited)
  
                         
Cash flows from operating activities:
                        
                         
Net Loss
  
$
(3,356
)
  
$
(20,732
)
  
$
(5,866
)
  
$
(32,094
)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
                                
Depreciation
    
1,156
      
1,327
      
2,371
      
2,647
  
Stock-based compensation
    
2,187
      
2,425
      
3,547
      
5,893
  
Amortization of intangible assets
    
153
      
277
      
305
      
553
  
Increase (Decrease) in accrued severance pay, net
    
(107
)
    
13
      
(165
)
    
73
  
Decrease in other assets, other receivables and prepaid expenses
    
955
      
468
      
1,672
      
967
  
Increase in accrued interest and amortization of premium/discount on marketable securities
    
(405
)
    
(166
)
    
(777
)
    
(147
)
Decrease in operating leases liability
    
(159
)
    
(438
)
    
(618
)
    
(1,543
)
Decrease in operating lease right-of-use asset
    
622
      
728
      
1,174
      
1,450
  
Decrease (Increase) in trade receivables
    
(2,789
)
    
10,403
      
(2,980
)
    
14,889
  
Decrease (Increase) in inventories
    
2,101
      
(1,645
)
    
2,268
      
(5,098
)
Increase (Decrease) in trade payables
    
278
      
(2,941
)
    
16
      
(2,202
)
Decrease in employees and payroll accruals
    
(649
)
    
(1,042
)
    
(4,135
)
    
(2,494
)
Increase (Decrease) in deferred revenues
    
595
      
870
      
1,965
      
(1,299
)
Increase (Decrease) in other payables, accrued expenses and other long term liabilities
    
542
      
(923
)
    
(12
)
    
(1,824
)
Amortization of issuance costs of Convertible debt
    
50
      
49
      
100
      
98
  
Net cash provided by (used in) operating activities
    
1,174
      
(11,327
)
    
(1,135
)
    
(20,131
)
                                 
Cash flows from investing activities:
                                
                                 
Decrease (Increase) in restricted deposit
    
(1
)
    
(224
)
    
703
      
(224
)
Investment in short-term bank deposits
    
(3,800
)
    
-
      
(3,800
)
    
(15,900
)
Withdrawal of short-term bank deposits
    
-
      
21,700
      
10,000
      
54,600
  
Purchase of property and equipment
    
(957
)
    
(290
)
    
(1,386
)
    
(560
)
Investment in marketable securities
    
(10,477
)
    
(9,584
)
    
(34,752
)
    
(18,567
)
Proceeds from redemption or sale of marketable securities
    
7,225
      
590
      
32,060
      
3,960
  
Net cash provided by (used in) investing activities
    
(8,010
)
    
12,192
      
2,825
      
23,309
  
                                 
Cash flows from financing activities:
                                
                                 
Proceeds from exercise of stock options
    
1
      
-
      
1
      
-
  
Net cash provided by financing activities
    
1
      
-
      
1
      
-
  
                                 
Increase (Decrease) in cash and cash equivalents
    
(6,835
)
    
865
      
1,691
      
3,178
  
Cash and cash equivalents at the beginning of the period
    
22,718
      
14,608
      
14,192
      
12,295
  
                                 
Cash and cash equivalents at the end of the period
  
$
15,883
    
$
15,473
    
$
15,883
    
$
15,473
  
 
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
 
  
Q2-2024
  
YTD 2024
  
FY 2023
 
Revenues geographic breakdown
                   
Americas
  
2.1
   
10
%
  
6.4
   
15
%
  
16.6
   
18
%
EMEA
  
11.1
   
50
%
  
23.6
   
53
%
  
56.1
   
60
%
Asia Pacific
  
9.0
   
40
%
  
14.1
   
32
%
  
20.5
   
22
%
   
22.2
   
100
%
  
44.1
   
100
%
  
93.2
   
100
%
                         
Revenues breakdown by type
                        
Products
  
9.4
   
42
%
  
16.8
   
38
%
  
37.6
   
40
%
Professional Services
  
1.2
   
5
%
  
4.2
   
10
%
  
6.1
   
7
%
SECaaS (Security as a Service)
  
3.7
   
17
%
  
7.1
   
16
%
  
10.6
   
11
%
Support & Maintenance
  
7.9
   
36
%
  
16.0
   
36
%
  
38.9
   
42
%
   
22.2
   
100
%
  
44.1
   
100
%
  
93.2
   
100
%
                         
Revenues per customer type
                        
CSP
  
18.7
   
84
%
  
36.0
   
82
%
  
75.1
   
81
%
Enterprise
  
3.5
   
16
%
  
8.1
   
18
%
  
18.1
   
19
%
   
22.2
   
100
%
  
44.1
   
100
%
  
93.2
   
100
%
                         
Top 10 customers as a % of revenues
  
50
%
      
45
%
      
47
%
    
                         
Total number of full time employees
  
500
       
500
       
559
     
(end of period)
                        
                         
Non-GAAP Weighted average number of basic shares (in millions)
  
38.7
       
38.6
       
37.9
     
                         
Non-GAAP weighted average number of fully diluted shares (in millions)
  
42.3
       
41.7
       
40.3
     
 
 SECaaS (Security as a Service) revenues- U.S. dollars in millions (Unaudited)
 
Q2-2024:
3.7
       
Q1-2024:
3.4
       
Q4-2023:
3.2
       
Q3-2023:
2.8
       
Q2-2023:
2.4
       
 
SECaaS ARR* - U.S. dollars in millions (Unaudited)
 
Jun. 2024:
14.6
       
Dec. 2023:
12.7
       
Dec. 2022:
9.2
       
Dec. 2021:
5.2