Allot Ltd. Q2 FY2025 earnings call

• Exceptional second quarter 2025 results from financial and strategic perspectives, with SECaaS ARR up 73% year-over-year and contributing over a quarter of revenues for the first time. • Successful launch of Verizon Business's My Biz Plan, which includes Allot's cybersecurity protection and contributes to revenue. • Landmark deal with a Tier 1 telco in EMEA for tens of millions of dollars involving network intelligence product line. • Completed a $46 million follow-on share offering to strengthen balance sheet, repay convertible debt, and support corporate purposes. • Strong pipeline of opportunities for SECaaS with existing and new customers, and expansion of services to new end user segments.

Revenue for the quarter was $24.1 million, up 9% year-over-year. SECaaS revenue was $6.4 million in the quarter, up 73% year-over-year, comprising 27% of total revenue. SECaaS annual recurring revenue (ARR) ended the quarter at $25.2 million.

• Full-year 2025 revenue expected to be between $98 million to $102 million. • Increased SECaaS ARR growth expectation for 2025 to a range of 55% to 60%.

• Changing market trends. • Delays in the launch of services by Allot customers. • Reduced demand. • Competitive nature of the security services industry.

Q: From a go-to-market perspective, can you provide color on how you're working with providers?

A: Work with existing customers to share best practices, have dedicated sales teams for new customers, and focus on targeted go-to-market approaches.

Q: Any macro impact on sales cycles for multimillion dollar deals?

A: Sales cycles for telco deals are long (12-24 months or more), but demand driven by new platform Tera III, and pipeline remains strong with many opportunities.