60% YoY SECaaS ARR growth with robust profitability; raising full year guidance
Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative Security-as-a-Service (SECaaS) and network intelligence solutions for communications service providers and enterprises, today announced its unaudited financial results for the third quarter of 2025.
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Financial Highlights for the Third Quarter of 2025
— Revenues of $26.4 million, up 14% year over year with SECaaS representing 28% of overall revenue;
— September 2025 SECaaS ARR* of $27.6 million, up 60% year-over-year;
— GAAP operating income of $2.2 million versus loss of $0.2 million in Q3 2024;
— Non-GAAP operating income of $3.7 million, compared with $1.1 million in Q3 2024;
— Strong positive operating cash flow of $4.0 million and quarter-end total cash** of $81 million;
Management Comment
Eyal Harari, CEO of Allot, commented, “We reported a return to double-digit year-over-year revenue growth of 14% and our operations generated the highest profitability in over a decade. The growth was driven by excellent performance from both our cyber security solutions and our network intelligence offerings.”
Mr. Harari continued, “We are advancing strongly on our cyber-security first strategy, and we are progressing well with our key customers. Helping our customers achieve their business goals is a key to driving our profitable growth.”
Concluded Mr. Harari, “Given the continued accelerated SECaaS growth, our solid visibility, and high level of backlog, we expect that our SECaaS ARR year-over-year growth will surpass 60%. We are raising our full year 2025 revenue guidance to between $100-103 million.”
Third Quarter 2025 Financial Results Summary
Total revenues for the third quarter of 2025 were $26.4 million, a 14% increase year-over-year compared with $23.2 million in the third quarter of 2024.
Gross profit on a GAAP basis for the third quarter of 2025 was $18.9 million (gross margin of 71.4%), a 15% increase compared with $16.4 million (gross margin of 70.4%) in the third quarter of 2024.
Gross profit on a non-GAAP basis for the third quarter of 2025 was $19.1 million (gross margin of 72.2%), a 14% increase compared with $16.7 million (gross margin of 71.7%) in the third quarter of 2024.
Operating income on a GAAP basis for the third quarter of 2025 was $2.2 million, compared with an operating loss of $0.2 million in the third quarter of 2024.
Operating income on a non-GAAP basis for the third quarter of 2025 was $3.7 million, compared with an operating income of $1.1 million in the third quarter of 2024.
Net income on a GAAP basis for the third quarter of 2025 was $2.8 million, or income of $0.07 per diluted share, an improvement compared to the net loss of $0.2 million, or loss of $0.01 per basic share, in the third quarter of 2024.
Net income on a non-GAAP basis for the third quarter of 2025 was $4.6 million, or income of $0.1 per diluted share, compared to the non-GAAP net income of $1.3 million, or income of $0.03 per diluted share, in the third quarter of 2024.
Operating cash flow generated in the quarter was $4.0 million.
Net cash and cash equivalents, bank deposits, restricted deposits and investments as of September 30, 2025, total $81 million, an increase of $22 million versus $59 million cash and cash equivalents, bank deposits, restricted deposits and investment as of December 31, 2024. As of September 30, 2025, the company has no debt.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss its third quarter 2025 earnings results today, November 20, 2025 at 9:00 am ET, 4:00 pm Israel time. To access the conference call, please dial one of the following numbers:
US: 1-888-668-9141, UK: 0-800-917-5108, Israel: +972-3-918-0644
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 leading provider of innovative converged cybersecurity solutions and network intelligence offerings for service providers and enterprises worldwide. Allot enhances value to its customers' customers through its solutions, which are deployed globally for network-native cybersecurity services, network and application analytics, traffic control and shaping, and more. Allot's multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Our industry-leading network-native security-as-a-service solution is already used by many millions of subscribers globally.
For more information, visit www.allot.com
Performance Metrics
* SECaaS ARR – measures the current annual recurring SECaaS revenues, which is calculated based on estimated revenues for the month of September 2025 and multiplied by 12.
** Total cash – net cash and cash equivalents, bank deposits, restricted deposits and investments.
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: Public Relations Contact:EK Global Investor Relations Seth Greenberg, Allot Ltd.Ehud Helft +972 54 922 2294+1 212 378 8040 sgreenberg@allot.comallot@ekgir.com
TABLE – 1ALLOT LTD.AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(U.S. dollars in thousands, except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (Unaudited) (Unaudited)Revenues $ 26,405 $ 23,235 $ 73,606 $ 67,289Cost of revenues 7,539 6,871 21,362 $ 20,652Gross profit 18,866 16,364 52,244 $ 46,637Operating expenses:Research and development costs, net 5,489 5,922 18,741 20,397Sales and marketing 8,148 7,699 22,747 23,400General and administrative 3,079 2,960 9,722 9,166Total operating expenses 16,716 16,581 51,210 52,963Operating income (loss) 2,150 (217) 1,034 (6,326)Loss from extinguishment – – (1,410) -Other income – – 100 -Gain on sales of securities 193 – 193 -Financial income, net 676 513 1,709 1,542Income (loss) before income tax benefit 3,019 296 1,626 (4,784)Income tax expenses 195 540 823 1,326Net income (loss) $ 2,824 $ (244) $ 803 $ (6,110)Basic net income (loss) per share $ 0.07 $ (0.01) $ 0.02 $ (0.17)Diluted net income (loss) per share $ 0.07 $ (0.01) $ 0.02 $ (0.17)Weighted average number of shares used incomputing basic net income (loss) per share 41,487,057 39,202,550 42,580,555 38,777,119Weighted average number of shares used incomputing diluted net income (loss) per share 43,253,509 39,202,550 44,909,810 38,777,119
TABLE – 2ALLOT LTD.AND ITS SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS(U.S. dollars in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (Unaudited) (Unaudited)GAAP cost of revenues $ 7,539 $ 6,871 $ 21,362 $ 20,652Share-based compensation (1) (211) (153) (465) (631)Amortization of intangible assets (2) – (152) (305) (456)Non-GAAP cost of revenues $ 7,328 $ 6,566 $ 20,592 $ 19,565GAAP gross profit $ 18,866 $ 16,364 $ 52,244 $ 46,637Gross profit adjustments 211 305 770 1,087Non-GAAP gross profit $ 19,077 $ 16,669 $ 53,014 $ 47,724GAAP operating expenses $ 16,716 $ 16,581 $ 51,210 $ 52,963Share-based compensation (1) (1,348) (1,016) (3,524) (4,085)Non-GAAP operating expenses $ 15,368 $ 15,565 $ 47,686 $ 48,878GAAP Loss from extinguishment $ – $ – $ (1,410) $ -Loss from extinguishment – – 1,410 -Non-GAAP Loss from extinguishment $ – $ – $ – $ -GAAP financial income $ 676 $ 513 $ 1,709 $ 1,542Exchange rate differences* 116 139 159 343Non-GAAP Financial income $ 792 $ 652 $ 1,868 $ 1,885GAAP taxes on income $ 195 $ 540 $ 823 $ 1,326Changes in tax related items (80) (45) (150) (222)Non-GAAP taxes on income $ 115 $ 495 $ 673 $ 1,104GAAP Net income (Loss) $ 2,824 $ (244) $ 803 $ (6,110)Share-based compensation (1) 1,559 1,169 3,989 4,716Amortization of intangible assets (2) – 152 305 456Loss from extinguishment – – 1,410 -Exchange rate differences* 116 139 159 343Changes in tax related items 80 45 150 222Non-GAAP Net income (loss) $ 4,579 $ 1,261 $ 6,816 $ (373)GAAP Net income (loss) per share (diluted) $ 0.07 $ (0.01) $ 0.02 $ (0.17)Share-based compensation 0.03 0.03 0.09 0.13Amortization of intangible assets – 0.01 0.01 0.02Loss from extinguishment – – 0.03 -Non-GAAP Net income (Loss) per share (diluted) $ 0.10 $ 0.03 $ 0.15 $ (0.02) – – – – -Weighted average number of shares used in 41,487,057 39,202,550 42,580,555 38,777,119computing GAAP diluted net income (loss) per shareWeighted average number of shares used in 44,592,351 42,421,818 46,409,437 38,777,119computing non-GAAP diluted net income (loss) per share* Financial income or expenses related to exchange rate differences in connection with revaluation of assets andliabilities in non-dollar denominated currencies.
TABLE – 2 cont.ALLOT LTD.AND ITS SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS(U.S. dollars in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (Unaudited) (Unaudited)(1) Share-based compensation: Cost of revenues $ 211 $ 153 $ 465 $ 631 Research and development costs, net 400 402 1,022 1,687 Sales and marketing 466 310 1,237 1,545 General and administrative 482 304 1,265 853 $ 1,559 $ 1,169 $ 3,989 $ 4,716(2) Amortization of intangible assets Cost of revenues $ – $ 152 $ 305 $ 456 Sales and marketing $ – $ 152 $ 305 $ 456
TABLE – 3ALLOT LTD.AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(U.S. dollars in thousands) September 30, December 31, 2025 2024 (Unaudited) (Audited)ASSETSCURRENT ASSETS:Cash and cash equivalents $ 24,232 $ 16,142Restricted deposit 501 904Short-term bank deposits 16,800 15,250Available-for-sale marketable securities 38,827 26,470Trade receivables, net (net of allowance for credit losses of $15,215 and $25,306 20,814 16,482on September 30, 2025 and December 31, 2024 , respectively)Other receivables and prepaid expenses 12,134 6,317Inventories 14,208 8,611Total current assets 127,516 90,176NON-CURRENT ASSETS:Severance pay fund $ 248 $ 464Restricted deposit 329 279Operating lease right-of-use assets 5,787 6,741Other assets 701 2,151Property and equipment, net 5,304 7,692Intangible assets, net – 305Goodwill 31,833 31,833Total non-current assets 44,202 49,465Total assets $ 171,718 $ 139,641LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Trade payables $ 7,198 $ 946Employees and payroll accruals 9,625 8,208Deferred revenues 21,736 17,054Short-term operating lease liabilities 1,081 562Other payables and accrued expenses 11,106 9,200Total current liabilities 50,746 35,970LONG-TERM LIABILITIES:Deferred revenues 5,410 7,136Long-term operating lease liabilities 5,192 5,807Accrued severance pay 847 946Convertible debt – 39,973Total long-term liabilities 11,449 53,862SHAREHOLDERS' EQUITY 109,523 49,809Total liabilities and shareholders' equity $ 171,718 $ 139,641
TABLE – 4ALLOT LTD.AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(U.S. dollars in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (Unaudited) (Unaudited)Cash flows from operating activities:Net income (loss) $ 2,824 $ (244) $ 803 $ (6,110)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization 835 1,299 3,254 4,075Share-based compensation 1,559 1,169 3,989 4,716Capital loss – – 255 -Loss from extinguishment – – 1,410 -Other income – – (100) -Gain on sales of securities (193) – (193) -Changes in operating assets and liabilities:Decrease (Increase) in accrued severance pay, net 28 10 117 (155)Decrease (Increase) in other assets, other receivables and prepaid expenses (3,817) (696) (2,198) 976Decrease in accrued interest and amortization of premium on available-for sale marketable securities (44) (392) (906) (1,169)Increase (Decrease) in operating leases liability 190 (481) (13) (1,099)Decrease in operating lease right-of-use asset 292 675 871 1,849Decrease (Increase) in trade receivables (679) 438 (4,332) (2,542)Decrease (Increase) in inventories (5,703) (443) (5,597) 1,825Increase in trade payables 6,274 2,139 6,252 2,155Increase (Decrease) in employees and payroll accruals 844 1,575 1,417 (2,560)Increase (Decrease) in deferred revenues 420 (3,369) 2,956 (1,404)Increase in other payables and accrued expenses 1,211 203 2,126 191Net cash provided by operating activities 4,041 1,883 10,111 748Cash flows from investing activities:Decrease in restricted deposit – – 353 703Investment in short-term bank deposits (16,800) (5,500) (32,550) (9,300)Withdrawal of short-term bank deposits 11,050 3,800 31,000 13,800Purchase of property and equipment (100) (286) (789) (1,672)Investment in marketable securities (44,213) (9,532) (99,647) (44,284)Proceeds from redemption or sale of marketable securities 38,694 21,980 88,377 54,040Proceeds from sale of patent – – 100 -Net cash provided by (used in) investing activities (11,369) 10,462 (13,156) 13,287Cash flows from financing activities:Issuance of share capital 4,617 – 42,308 -Proceeds from exercise of stock options – -2 238 -1Redemption of convertible debt – – (31,410) -Net cash provided by (used in) financing activities 4,617 (2) 11,136 (1)Increase (Decrease) in cash and cash equivalents (2,711) 12,343 8,090 14,034Cash, cash equivalents at the beginning of the period 26,943 15,883 16,142 14,192Cash, cash equivalents at the end of the period $ 24,232 $ 28,226 $ 24,232 $ 28,226Non-cash activities:ROU asset and lease liability decrease, due to lease termination (12) – (83) -Redemption of convertible debt – – (10,000) -Right-of-use assets obtained in the exchange for operating lease liabilities – 5,795 – 5,795
Other financial metrics (Unaudited)U.S. dollars in millions, except top 10 customers as a % of revenues and number of shares Q3-25 FY 2024 FY 2023Revenues geographic breakdown Americas 8.1 31% 14.2 15% 16.6 18% EMEA 12.9 49% 54.0 59% 56.1 60% Asia Pacific 5.4 20% 24.0 26% 20.5 22% 26.4 100% 92.2 100% 93.2 100%Revenues breakdown by type Products 8.6 33% 30.1 33% 37.6 40% Professional Services 1.1 4% 8.3 9% 6.1 7% SECaaS (Security as a Service) 7.3 28% 16.5 18% 10.6 11% Support & Maintenance 9.4 35% 37.3 40% 38.9 42% 26.4 100% 92.2 100% 93.2 100%Top 10 customers as a % of revenues 60% 43% 47%Non-GAAP Weighted average number of basic shares (in millions) 41.5 38.9 37.9Non-GAAP weighted average number of fully diluted shares (in millions) 44.6 42.3 40.3SECaaS (Security as a Service) revenues- U.S. dollars in millions (Unaudited)Q3-2025: 7.3Q2-2025: 6.4Q1-2025: 5.1Q4-2024: 4.8Q3-2024: 4.7SECaaS ARR* – U.S. dollars in millions (Unaudited)Sep. 2025: 27.6Dec. 2024: 18.2Dec. 2023: 12.7Dec. 2022: 9.2
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