Allot (ALLT) Q4 2024 earnings summary

Executive summary

• Achieved strong Q4 and full-year 2024 results, marking a key inflection point in the turnaround with a return to revenue growth and profitability, driven by double-digit SECaaS growth and improved cash flow.

• SECaaS (Security-as-a-Service) was a major growth driver, with revenues up 49% year-over-year in Q4 and ARR up 43%.

• Positive cash flow generated for the first time in years, with year-end cash and equivalents at $58.8 million.

• Secured significant new contracts, including Verizon, Vodafone UK, O2 Czech Republic, and MEO, expanding market reach and recurring revenue potential.

Financial highlights

• Q4 2024 revenue was $24.9 million, up 2% year-over-year and 7% sequentially; full-year 2024 revenue was $92.2 million, down 1% from 2023.

• SECaaS revenue in Q4 was $4.8 million, up 49% year-over-year, making up 19% of quarterly revenue; SECaaS ARR at year-end was $18.2 million.

• Non-GAAP gross margin for Q4 was 69.7%, up from 51.7% last year; full-year gross margin improved to 70.6% from 59.6%.

• Non-GAAP net income for 2024 was $1.6 million ($0.04/share), a turnaround from a $53.3 million loss in 2023.

• Operating cash flow was $4.8 million for the year; cash and equivalents at year-end were $58.8 million.

Outlook and guidance

• Expecting another year of strong double-digit SECaaS revenue and ARR growth in 2025, with improved profitability.

• Gross margin expected to remain around 70% in the coming year.

• Smart product line revenue expected to remain stable, with potential upside from pipeline deals.

• OpEx expected to remain flat with some increase toward year-end as investments in growth continue.