Allot (ALLT) Q3 2024 earnings summary

Executive summary

• Achieved first non-GAAP operating net profit in three years, with positive operating cash flow and increased net cash for two consecutive quarters.

• Security business (SECaaS) continues to drive growth, with significant expansion among top-tier telecom customers and new launches at Vodafone and MEO.

• Strategic reorganization to a security-first, unified business unit to enhance customer focus and operational efficiency.

• Entering a new chapter with a focus on sustainable, profitable growth and improved financial stability.

Financial highlights

• Q3 2024 revenue was $23.2 million, up 3% year-over-year and 5% sequentially.

• SECaaS revenue reached $4.7 million, up 69% year-over-year, now 20.1% of total revenue.

• Non-GAAP gross margin was 71.7%, up from 47.9% a year ago and 70.6% last quarter; GAAP gross margin was 70.4%.

• Non-GAAP operating income was $1.1 million, a turnaround from a $11.1 million loss last year and $1 million loss last quarter.

• Non-GAAP net profit was $1.3 million ($0.033 per diluted share), compared to a $10.8 million loss last year.

• Operating cash flow was $1.9 million; cash and investments totaled $54.5 million at quarter end.

Outlook and guidance

• Q4 2024 expected to be around break-even on a non-GAAP operating profit basis, with positive operating cash flow.

• Management reiterates double-digit year-over-year growth for full-year SECaaS revenue and ARR.

• SECaaS ARR expected to continue growing, driven by increased usage and new customer launches.