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Sep 25, 2020 10:49 PM EDT
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Allot Announces First Quarter 2020 Financial Results

Allot Announces First Quarter 2020 Financial Results

May 12, 2020 at 5:00 AM EDT
Q1 2020 revenue grew by 16% year-over-year
Reconfirms 2020 revenue guidance between $135-140 million

HOD HASHARON, Israel, May 12, 2020 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for communication service providers and enterprises worldwide, today announced its unaudited first quarter 2020 financial results.

Allot logo

Highlights

  • First quarter revenues were $29.3 million, up 16% year-over-year;
  • Non-GAAP gross margin increased to 74.8% compared to 72.4% in the first quarter of 2019 and GAAP gross margin increased to 74.0% compared to 71.2% in the first quarter of 2019;
  • Non-GAAP net loss of $0.4 million and GAAP net loss $1.7 million, both significantly improved from non-GAAP net loss of $1.9 million and GAAP net loss of $3.3 million in the first quarter of 2019;
  • Cash and investments at the end of the first quarter totaled $110.7 million compared to $117.6 million at year-end 2019;
  • Two additional recurring security revenue deals signed with new operators during the first quarter

Financial Outlook

  • Management reiterates its prior issued guidance, with expectations for full year 2020 revenues to grow to between $135-140 million, representing accelerated double-digit growth. In addition, expectations are that second quarter revenue will exceed those reported for the first quarter of 2020;
  • Management continues to expect to return to profitability on a quarterly basis before year-end;
  • Management continues to expect to close additional Recurring Security Revenue deals in 2020 and reiterates that the MAR* (maximum annual revenue potential of concluded transactions) of new deals expected to be signed in 2020 should exceed $140 million

Management Comment

Erez Antebi, President & CEO of Allot, commented: "We are pleased with our first quarter results. We grew revenues by 16% year-over-year, while improving margins and continuing our advance toward profitability."

Continued Mr. Antebi, "COVID-19 is presenting Allot with both challenges and opportunities. Operators worldwide are seeing growth in demand for bandwidth of up to 40%, as well as an increase in cyber attacks on consumers and SMBs. While some operators are delaying tasks they consider less critical, we see overall demand for Allot products and services at similar levels to what we saw before COVID-19, and in some areas, we even see somewhat increased demand."

Concluded Mr. Antebi, "Despite the employees from both Allot and our customers working from home, as well as the other adaptations we have all made, we are continuing to work toward meeting our goals and are on track to achieving our original 2020 plan. I believe that long-term, the growth in bandwidth needs and increased cyber security needs will further increase demand for Allot solutions."

First Quarter 2020 Financial Results Summary

Total revenues for the first quarter of 2020 were $29.3 million, an increase of 16% compared to $25.3 million in the first quarter of 2019.

Gross profit on a GAAP basis for the first quarter of 2020 was $21.7 million (gross margin of 74.0%), a 20% improvement compared with $18.0 million (gross margin of 71.2%) in the first quarter of 2019.

Gross profit on a non-GAAP basis for the first quarter of 2020 was $21.9 million (gross margin of 74.8%), a 19% improvement compared with $18.3 million (gross margin of 72.4%) in the first quarter of 2019.

Net loss on a GAAP basis for the first quarter of 2020 improved to $1.7 million, or $0.05 per basic share, compared with a net loss of $3.3 million, or $0.10 per basic share, in the first quarter of 2019.

Non-GAAP net loss for the first quarter of 2020 improved to $0.4 million, or $0.01 per basic share, compared with a non-GAAP net loss of $1.9 million, or $0.05 per basic share, in the first quarter of 2019.

Cash and investments as of March 31, 2020 totaled $110.7 million, compared with $117.6 million, as of December 31, 2019.

Conference Call & Webcast

The Allot management team will host a conference call to discuss first quarter 2020 earnings results today, May 12, 2020 at 8:30 am ET, 3:30 pmIsrael time. To access the conference call, please dial one of the following numbers:

US:  1-888-281-1167, UK: 0-800-917-5108, Israel: +972-3-918-0664

A live webcast and, following the end of the call, an archive of the conference call, will be accessible on the Allot website at: https://investors.allot.com  

Additional Resources

Allot Blog: https://www.allot.com/blog
Follow us on Twitter: @allot_ltd
Follow us on LinkedIn: https://www.linkedin.com/company/allot-communications

About Allot

Allot Ltd. (NASDAQ: ALLT, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers and enterprises worldwide, enhancing value to their customers. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, 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-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 23 million subscribers in Europe.

Allot. See. Control. Secure.

For more information, visit www.allot.com

*MAR (maximum annual revenue potential of concluded transactions) was estimated by Allot upon transaction signature and constitutes an approximation of the theoretical annual revenues Allot would receive if 100% of the customer's subscribers, as estimated by Allot, signed up for the service.

GAAP to Non-GAAP Reconciliation

Non-GAAP net income is defined as GAAP net income after excluding stock-based compensation expenses, amortization of acquisition-related intangible assets, deferred tax asset adjustment, exchange rate differences related to revaluation of assets and liabilities denominated in non-dollar currencies and other acquisition-related expenses.

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: those related to the COVID-19 pandemic, 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; court approval of the Company's proposed share buy-back program; 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.

 

TABLE - 1

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)



Three Months Ended


March 31,


2020


2019


(Unaudited)


(Unaudited)





Revenues

$       29,289


$       25,342

Cost of revenues

7,610


7,293

Gross profit  

21,679


18,049





Operating expenses:




Research and development costs, net

8,699


7,174

Sales and marketing

11,522


11,477

General and administrative

3,041


2,705

Total operating expenses

23,262


21,356

Operating loss

(1,583)


(3,307)

Financial and other income, net

151


532

Loss before income tax expenses

(1,432)


(2,775)





Tax expenses

228


558

Net Loss

(1,660)


(3,333)





 Basic net loss per share

$          (0.05)


$          (0.10)





 Diluted net loss per share

$          (0.05)


$          (0.10)





Weighted average number of shares used in 




computing basic net loss per share

34,625,632


33,983,863





Weighted average number of shares used in 




computing diluted net loss per share

34,625,632


33,983,863

 

 

TABLE  - 2

ALLOT LTD.

AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)









Three Months Ended




March 31,




2020


2019




(Unaudited)


GAAP cost of revenues

$          7,610


$        7,293


 Share-based compensation (1) 

(67)


(60)


 Amortization of intangible assets (2) 

(152)


(232)


Non-GAAP cost of revenues

$          7,391


$        7,001








 GAAP gross profit 

$        21,679


$      18,049


 Gross profit adjustments 

219


292


 Non-GAAP gross profit 

$        21,898


$      18,341








 GAAP operating expenses 

$        23,262


$      21,356


 Share-based compensation (1) 

(857)


(685)


 Amortization of intangible assets (2) 

-


(188)


 Income (Expenses) related to M&A activities (3) 

103


(295)


 Non-GAAP operating expenses 

$        22,508


$      20,188








 GAAP financial and other income 

$             151


$           532


 Exchange rate differences* 

218


(2)


 Non-GAAP Financial and other income 

$             369


$           530








 GAAP taxes on income 

$             228


$           558


 Tax expenses in respect of net deferred tax asset recorded 

(60)


(16)


 Non-GAAP taxes on income 

$             168


$           542








 GAAP Net Loss 

$        (1,660)


$       (3,333)


 Share-based compensation (1) 

924


745


 Amortization of intangible assets (2) 

152


420


 Income (Expenses) related to M&A activities (3) 

(103)


295


 Exchange rate differences 

218


(2)


 Tax expenses in respect of net deferred tax asset recorded 

60


16


 Non-GAAP Net Loss 

$           (409)


$      (1,859)








 GAAP Loss per share (diluted) 

$          (0.05)


$        (0.10)


 Share-based compensation 

0.03


0.02


 Amortization of intangible assets 

0.00


0.02


 Expenses (Income) related to M&A activities 

(0.00)


0.01


 Exchange rate differences 

0.01


(0.00)


 Non-GAAP Net loss per share (diluted) 

$          (0.01)


$        (0.05)














Weighted average number of shares used in 





computing GAAP diluted net loss per share

34,625,632


33,983,863














Weighted average number of shares used in 





computing non-GAAP diluted net loss per share

34,625,632


33,983,863








* Financial income or expenses related to exchange rate differences in connection with revaluation of assets


  and liabilities in non-dollar denominated currencies. 





















TABLE  - 2 cont.

ALLOT LTD.

AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP  CONSOLIDATED  STATEMENTS  OF  OPERATIONS

(U.S. dollars in thousands, except per share data)









Three Months Ended




March 31,




2020


2019




(Unaudited)








(1) Share-based compensation:






Cost of revenues

$             67


$             60



Research and development costs, net

242


169



Sales and marketing

378


283



General and administrative

237


233




$           924


$           745








 (2) Amortization of intangible assets 






Cost of revenues

$           152


$           232



Sales and marketing

-


188




$           152


$           420








 (3) Expenses (Income) related to M&A activities 






Research and development costs, net

$         (103)


$           295




$         (103)


$           295


 

 

TABLE  - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)








March 31,


December 31,



2020


2019



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            29,494


$            16,930

Short-term bank deposits


800


5,557

Restricted deposit


32,156


23,183

Available-for-sale marketable securities


47,841


61,012

Trade receivables, net


23,140


29,008

Other receivables and prepaid expenses


7,589


6,528

Inventories


15,153


10,668

Total current assets


156,173


152,886






LONG-TERM ASSETS:





Restricted deposit


440


10,913

Severance pay fund


341


387

Operating lease right-of-use assets


5,797


6,368

Deferred taxes


432


517

Other assets 


766


926

Total long-term assets


7,776


19,111






PROPERTY AND EQUIPMENT, NET


8,700


8,135

GOODWILL AND INTANGIBLE ASSETS, NET


34,884


35,037






Total assets


$          207,533


$          215,169






LIABILITIES AND SHAREHOLDERS'
EQUITY





CURRENT LIABILITIES:





Trade payables


$            13,944


$            11,676

Deferred revenues


29,921


36,360

Short-term operating lease liabilities


2,951


3,151

Other payables and accrued expenses


19,885


22,255

Total current liabilities


66,701


73,442






LONG-TERM LIABILITIES:





Deferred revenues


6,075


5,262

Long-term operating lease liabilities


2,738


3,820

Accrued severance pay


749


794

Total long-term liabilities


9,562


9,876






SHAREHOLDERS' EQUITY


131,270


131,851

Total liabilities and shareholders' equity


$          207,533


$          215,169

 

 

TABLE  - 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)







Three Months Ended



March 31,



2020


2019



(Unaudited)


(Unaudited)







Cash flows from operating activities:





Net Loss

$        (1,660)


$     (3,333)


Adjustments to reconcile net income  to net cash used in operating activities:





Depreciation

788


616


Stock-based compensation related to options granted to employees

924


745


Amortization of intangible assets

152


420


Increase (Decrease) in accrued severance pay, net

1


(65)


Decrease in other assets

160


67


Decrease in accrued interest and  amortization of premium on marketable securities 

171


77


Changes in operating leases, net

(711)


(206)


Decrease (Increase) in trade receivables

5,868


(2,593)


Increase in other receivables and prepaid expenses

(401)


(1,147)


Increase in inventories

(4,485)


(1,910)


Decrease (Increase) in long-term deferred taxes, net

84


(33)


Increase in trade payables

2,268


2,557


Increase (Decrease) in employees and payroll accruals

(1,325)


1,023


Decrease in deferred revenues

(5,626)


(592)


Increase (Decrease) in other payables, accrued expenses and other long term liabilities

(1,718)


1,893


Net cash used in operating activities

(5,510)


(2,481)







Cash flows from investing activities:





Decrease (Increase) in restricted deposit

1,500


(83)


Redemption of short-term deposits 

4,757


3,986


Purchase of property and equipment

(1,351)


(729)


Investment in available-for sale marketable securities

(375)


(11,584)


Proceeds from redemption or sale of available-for sale marketable securities

12,923


11,379


Net cash provided by investing activities

17,454


2,969







Cash flows from financing activities:





Exercise of employee stock options 

620


606


Net cash provided by financing activities

620


606







Increase in cash and cash equivalents

12,564


1,094


Cash and cash equivalents at the beginning of the period

16,930


16,336


Cash and cash equivalents at the end of the period

$        29,494


$     17,430


 

Logo - https://mma.prnewswire.com/media/703889/Allot_Logo.jpg

 

Investor Relations Contact                          

GK Investor Relations

Ehud Helft

+1 646 201 9246

allot@gkir.com

Public Relations Contact

Seth Greenberg, Allot Ltd.

+972 54 922 2294

sgreenberg@allot.com

 

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SOURCE Allot Ltd.