Allot Ltd. Q3 FY2025 earnings call

• The company reported double-digit year-over-year revenue growth for the first time in multiple years, with revenue at $26.4 million, up 14% year over year.
• CCaaS ARR was up 60% year over year as of September 2025, and CCaaS made up 28% of the quarter's revenues.
• Saw increased traction among major telcos for cybersecurity as a service solutions, with the recent customer launches of the cybersecurity service going well, including the first customer for the newly released Ofnet Secure solution.
• Smart product network intelligence continued to perform well, with new customers driving higher revenues, stronger backlog, and a robust pipeline, and the integrated Unified Cybersecurity First platform was enabling increased demand.
• Ended the quarter with over $80 million in cash and no debt, in a very strong financial position.

In the third quarter of 2025, the CCaaS segment generated revenue of $7.3 million, which accounted for 28% of the total revenue. The Smart Product Network Intelligence also contributed to growth during the quarter. Overall, revenue for the quarter was $26.4 million, up 14% year over year.

• Expect 2025 year-end CCaaS ARR to show an exceptionally strong year-over-year growth surpassing 60%.
• Raise full-year 2025 revenue guidance to between $100 and $103 million.

• Changing market trends may impact performance.
• Delays in the launch of services by Allot's customers could affect results.
• Reduced demand in the security services industry is a risk.
• Competitive nature of the security services industry poses challenges.

Q: Can you outline whether the increased traction with major telecom customers is coming from higher attach rates or more bundles?

A: Overall, seeing good progress with new customer launches, with positive trends on both attach rates and new services launched. This quarter, there was a new launch in Panama.

Q: Can you give more detail on the customer profile of the first customer for Ofnet Secure?

A: Ofnet Secure is aimed at enhancing security protection for end customers both on and off the network. The first customer values 24/7 protection and combining network security with off-net.

Q: Is the first customer for Ofnet Secure material to Allot?

A: Appreciate the customer, but specifics are not disclosed, but there are multiple opportunities with other customers.

Q: Do you continue to see a strong smart pipeline?

A: Yes, there is a strong pipeline with opportunities from existing customers looking to expand platforms, demand for Terra three new product, and a good mix of new and existing customers.

Q: Can you unpack the drivers of CCaaS growth?

A: Drivers include new customers expanding TAM, additional services on existing accounts, marketing and consultancy support, and upselling/cross-selling new innovations.

Q: How is Verizon-like penetration trending versus expectations?

A: Cannot refer to specific customers, but overall pleased with progress and quarterly numbers.

Q: How is Terra three playing a role in customer conversations?

A: There is a good mix of new opportunities and discussions with existing customers, focusing on customer success and supporting business goals, with a healthy mix in the pipeline between smart and secure product lines.