Skip to Content

Stock Quote


30-day Stock Price
1 month stock price graph
Price
Change

Nov 15, 2018 3:38 PM EST
Copyright Nasdaq.
Minimum 15 minutes delayed

Allot Announces Second Quarter 2018 Financial Results

Allot Announces Second Quarter 2018 Financial Results

August 7, 2018 at 5:50 AM EDT
Revenues increased 18% Year over Year with Continued Improvement in Margins

HOD HASHARON, Israel, Aug. 7, 2018 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT) (TASE: ALLT), a global provider of leading innovative network intelligence and security solutions for service providers worldwide, today announced its second quarter 2018 financial results.

Allot Logo

 Q2 2018 – Financial Highlights

  • Revenues were $23.0 million, up 18% year-over-year;
  • GAAP gross margin improved to 70.8% up from 65.8% in Q2 2017;
  • Non-GAAP gross margin was 72.2% up from 67.6%in Q2 2017;
  • GAAP operating loss narrowed to $2.8 million compared to $3.8 million in Q2 2017;
  • Non-GAAP operating loss narrowed to $1.3 million compared to $2.4 million in Q2 2017;
  • Book-to-bill was above one for the sixth consecutive quarter;
  • Cash and cash equivalents increased to $105.9 million;

Financial Outlook

  • Management continues to expect 2018 revenues to grow to between $91 - 95 million, with revenues trending toward the upper half of the range;
  • 2018 Book to Bill is expected at above 1;

Management Comment

Erez Antebi, President & CEO of Allot, commented:

"I am very pleased with our progress as demonstrated through our second quarter results, which represent another quarter of growth and improvement in margins. We are investing additional resources in pursuing and capturing the increasing growth opportunities we see in our end markets. We expect these investments to continue to bring us growth.

"Much of our growth in the first half of the year came from actionable intelligence use cases and we are pleased with our improvements in this market segment. Furthermore, we are very encouraged by the market traction we are seeing for our security solutions.  We expect to announce soon a new unified security deal for Telefonica Spain. We look forward to close additional security deals over the quarters and years ahead."   

Q2 2018 Financial Results Summary

Total revenues for the second quarter of 2018 were $23.0 million, up 18% compared to $19.5 million in the second quarter of 2017.

Gross profit on a GAAP basis for the second quarter of 2018 was $16.3 million (gross margin of 70.8%), a 27% improvement compared with $12.8 million (gross margin of 65.8%) in the second quarter of 2017.

Gross profit on a non-GAAP basis for the second quarter of 2018 was $16.6 million (gross margin of 72.2%), a 26% improvement compared with $13.2 million (gross margin of 67.6%) in the second quarter of 2017. The higher level of gross margin represents a favorable sales mix in the quarter.

Net loss on a GAAP basis for the second quarter of 2018 was $2.4 million, or $0.07 per basic share, an improvement compared with a net loss of $4.0 million, or $0.12 per basic share, in the second quarter of 2017.

Non-GAAP net loss for the second quarter of 2018 was $1.2 million, or $0.04 per basic share, an improvement compared with a non-GAAP net loss of $2.3 million, or $0.07 per basic share, in the second quarter of 2017.

Cash and investments as of June 30, 2018 totaled $105.9 million, compared to $104.7 million in March 31, 2018.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss second quarter 2018 earnings results today, August 7, 2018 at 8:30 am ET, 3:30 pmIsrael time. To access the conference call, please dial one of the following numbers:

US: +1-888-668-9141, UK: +44(0) 800-917-5108, Israel: +972-3-918-0609.

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

About Allot Communications

Allot Communications Ltd. (NASDAQ, TASE: ALLT) is a provider of leading innovative network intelligence and security solutions for service providers 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 20 million subscribers in Europe. Allot. See. Control. Secure. For more information, visit www.allot.com  

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, restructuring expenses, changes in taxes related items 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: 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 third 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 COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

                 
 

Three Months Ended

   

Six Months Ended

 

June 30,

   

June 30,

 

2018

 

2017

   

2018

 

2017

 

(Unaudited)

   

(Unaudited)

                 

Revenues

$       23,003

 

$       19,502

   

$       44,735

 

$       37,937

Cost of revenues

6,712

 

6,662

   

13,636

 

12,980

Gross profit  

16,291

 

12,840

   

31,099

 

24,957

                 

Operating expenses:

               

Research and development costs, net

6,298

 

5,364

   

12,091

 

10,897

Sales and marketing

10,182

 

8,747

   

20,215

 

17,727

General and administrative

2,579

 

2,519

   

5,045

 

5,060

Total operating expenses

19,059

 

16,630

   

37,351

 

33,684

Operating loss

(2,768)

 

(3,790)

   

(6,252)

 

(8,727)

Financial and other income, net

806

 

112

   

1,036

 

474

Loss before income tax expenses

(1,962)

 

(3,678)

   

(5,216)

 

(8,253)

                 

Tax expenses

455

 

352

   

887

 

854

Net Loss

(2,417)

 

(4,030)

   

(6,103)

 

(9,107)

                 

 Basic net loss per share

$          (0.07)

 

$          (0.12)

   

$          (0.18)

 

$          (0.27)

                 
                 

 Diluted net loss per share

$          (0.07)

 

$          (0.12)

   

$          (0.18)

 

$          (0.27)

                 

Weighted average number of shares used in 

               

computing basic net loss per share

33,655,940

 

33,200,982

   

33,606,236

 

33,146,715

                 

Weighted average number of shares used in 

               

computing diluted net loss per share

33,655,940

 

33,200,982

   

33,606,236

 

33,146,715

                 

 

 

 

TABLE - 2

ALLOT COMMUNICATIONS 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

 

Six Months Ended

   

June 30,

 

June 30,

   

2018

 

2017

 

2018

 

2017

   

(Unaudited)

 

(Unaudited)

                 

 GAAP Revenues 

$     23,003

 

$     19,502

 

$     44,735

 

$    37,937

 Fair value adjustment for acquired deferred revenues write down 

-

 

13

 

-

 

37

 Non-GAAP Revenues 

$     23,003

 

$     19,515

 

$     44,735

 

$    37,974

                 

GAAP cost of revenues

$        6,712

 

$        6,662

 

$     13,636

 

$    12,980

 Share-based compensation (1) 

(90)

 

(96)

 

(170)

 

(192)

 Amortization of intangible assets (2) 

(232)

 

(242)

 

(465)

 

(474)

Non-GAAP cost of revenues

$        6,390

 

$        6,324

 

$     13,001

 

$    12,314

                 

 GAAP gross profit 

$     16,291

 

$     12,840

 

$     31,099

 

$    24,957

 Gross profit adjustments 

$           322

 

351

 

635

 

703

 Non-GAAP gross profit 

$     16,613

 

$     13,191

 

$     31,734

 

$    25,660

                 

 GAAP operating expenses 

$     19,059

 

$     16,630

 

$     37,351

 

$    33,684

 Share-based compensation (1) 

(630)

 

(870)

 

(1,254)

 

(1,618)

 Amortization of intangible assets (2) 

(175)

 

(135)

 

(350)

 

(269)

 Expenses related to M&A activities (3) 

(151)

 

-

 

(189)

 

(89)

Changes in tax related items (4)

(170)

 

-

 

(170)

 

-

 Non-GAAP operating expenses 

$     17,933

 

$     15,625

 

$     35,388

 

$    31,708

                 

 GAAP financial and other income 

$           806

 

$           112

 

$        1,036

 

$         474

 Expenses related to M&A activities (3) 

(292)

 

306

 

(142)

 

379

 Non-GAAP Financial and other income 

$           514

 

$           418

 

$           894

 

$         853

                 

 GAAP taxes on income 

$           455

 

$           352

 

$           887

 

$         854

 Tax expenses (in respect of net deferred tax asset recorded) 

(19)

 

(64)

 

(38)

 

(130)

 Non-GAAP taxes on income 

$           436

 

$           288

 

$           849

 

$         724

                 

 GAAP Net Loss 

$      (2,417)

 

$      (4,030)

 

$      (6,103)

 

$    (9,107)

 Share-based compensation (1) 

720

 

966

 

1,424

 

1,810

 Amortization of intangible assets (2) 

407

 

377

 

815

 

743

 Expenses related to M&A activities (3) 

(141)

 

306

 

47

 

468

Changes in tax related items (4)

170

 

-

 

170

 

-

 Fair value adjustment for acquired deferred revenues write down 

-

 

13

 

-

 

37

 Tax expenses in respect of net deferred tax asset recorded 

19

 

64

 

38

 

130

 Non-GAAP Net income (Loss) 

$      (1,242)

 

$      (2,304)

 

$      (3,609)

 

$    (5,919)

                 

 GAAP Loss per share (diluted) 

$        (0.07)

 

$        (0.12)

 

$        (0.18)

 

$      (0.27)

 Share-based compensation 

0.02

 

0.03

 

0.04

 

0.05

 Amortization of intangible assets 

0.01

 

0.01

 

0.02

 

0.02

 Expenses related to M&A activities 

(0.01)

 

0.01

 

0.00

 

0.01

 Fair value adjustment for acquired deferred revenues write down 

-

 

0.00

 

-

 

0.00

 Changes in taxes and headcount related items 

0.01

 

0.00

 

0.01

 

0.00

 Tax benefit (in respect of net deferred tax asset recorded) 

0.00

 

0.00

 

-

 

0.01

 Non-GAAP Net loss per share (diluted) 

(0.04)

 

$        (0.07)

 

$        (0.11)

 

$      (0.18)

                 
                 

Weighted average number of shares used in 

             

computing GAAP diluted net loss per share

33,655,940

 

33,200,982

 

33,606,236

 

33,146,715

                 
                 

Weighted average number of shares used in 

             

computing non-GAAP diluted net loss per share

33,655,940

 

33,200,982

 

33,606,236

 

33,146,715

                 
 

 

 

 

TABLE  - 2 cont.

ALLOT COMMUNICATIONS 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

 

Six Months Ended

   

March 31,

 

June 30,

   

2018

 

2017

 

2018

 

2017

   

(Unaudited)

 

(Unaudited)

                 

(1) Share-based compensation:

             
 

Cost of revenues

$             90

 

$             96

 

$           170

 

$         192

 

Research and development costs, net

171

 

217

 

326

 

446

 

Sales and marketing

215

 

246

 

437

 

487

 

General and administrative

244

 

407

 

491

 

685

   

$           720

 

$           966

 

$        1,424

 

$      1,810

                 

 (2) Amortization of intangible assets 

             
 

Cost of revenues

$           232

 

$           242

 

$           465

 

$         474

 

Sales and marketing

175

 

135

 

350

 

269

   

$           407

 

$           377

 

$           815

 

$         743

                 

 (3) Expenses related to M&A activities 

             
 

General and administrative 

$              -

 

$              -

 

$             38

 

$           89

 

Research and development costs, net

151

 

-

 

151

 

-

 

Financial expenses (income)

(292)

 

306

 

(142)

 

379

   

$         (141)

 

$           306

 

$             47

 

$         468

                 

 (4) Changes in tax related items 

             
 

Sales and marketing

$           100

 

$              -

 

$           100

 

$            -

 

General and administrative

70

 

-

 

70

 

-

   

$           170

 

$              -

 

$           170

 

$            -

                 
 

 

 

 

TABLE  - 3

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)

         
         
   

June 30,

 

December 31,

   

2018

 

2017

   

(Unaudited)

 

(Audited)

     

ASSETS

       

CURRENT ASSETS:

       

Cash and cash equivalents

 

$            20,371

 

$            15,342

Short term deposits

 

20,943

 

31,043

Restricted deposit

 

580

 

428

Marketable securities 

 

64,037

 

63,194

Trade receivables, net

 

24,626

 

22,737

Other receivables and prepaid expenses

 

2,772

 

2,649

Inventories

 

8,010

 

7,897

Total current assets

 

141,339

 

143,290

         

LONG-TERM ASSETS:

       

Severance pay fund

 

298

 

302

Deferred taxes

 

263

 

301

Other assets 

 

742

 

1,135

Total long-term assets

 

1,303

 

1,738

         

PROPERTY AND EQUIPMENT, NET

 

5,482

 

5,002

GOODWILL AND INTANGIBLE ASSETS, NET

 

38,208

 

34,495

         

Total assets

 

$          186,332

 

$          184,525

         

LIABILITIES AND SHAREHOLDERS' EQUITY

       

CURRENT LIABILITIES:

       

Trade payables

 

$               6,357

 

$               5,857

Deferred revenues

 

11,828

 

11,370

Other payables and accrued expenses

 

19,479

 

14,277

Total current liabilities

 

37,664

 

31,504

         

LONG-TERM LIABILITIES:

       

Deferred revenues

 

4,382

 

3,878

Accrued severance pay

 

769

 

747

Other long term liabilities

 

5,236

 

5,267

Total long-term liabilities

 

10,387

 

9,892

         

SHAREHOLDERS' EQUITY

 

138,281

 

143,129

         

Total liabilities and shareholders' equity

 

$          186,332

 

$          184,525

         
   

-

 

-

         

 

 

 

TABLE  - 4

ALLOT COMMUNICATIONS LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)

               
 

Three Months Ended

 

Six Months Ended

 

June 30,

June 30,

 

2018

 

2017

 

2018

 

2017

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

               

Cash flows from operating activities:

             
               

Net Loss

$        (2,417)

 

$     (4,030)

 

$      (6,103)

 

$     (9,107)

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

             

Depreciation

555

 

535

 

1,053

 

1,065

Stock-based compensation related to options granted to employees

720

 

966

 

1,424

 

1,809

Amortization of intangible assets

407

 

376

 

815

 

743

Capital loss 

36

 

3

 

39

 

7

Decrease (Increase) in accrued severance pay, net

(7)

 

56

 

26

 

84

Decrease (Increase) in other assets

(395)

 

258

 

393

 

566

Decrease in accrued interest and  amortization of premium on marketable securities 

169

 

376

 

415

 

502

Decrease in trade receivables

(2,635)

 

(1,469)

 

(1,889)

 

(209)

Decrease (Increase) in other receivables and prepaid expenses

1,597

 

1,028

 

(282)

 

406

Decrease (Increase) in inventories

164

 

(2,087)

 

(113)

 

(2,849)

Decrease in long-term deferred taxes, net

19

 

67

 

38

 

134

Increase (Decrease) in trade payables

(113)

 

4,287

 

489

 

6,136

Increase (Decrease) in employees and payroll accruals

214

 

340

 

(285)

 

616

Increase (Decrease) in deferred revenues

943

 

(108)

 

1,674

 

(961)

Increase in other payables and accrued expenses

2,920

 

269

 

3,405

 

760

               

Net cash provided by (used in) operating activities

2,177

 

867

 

1,099

 

(298)

               

Cash flows from investing activities:

             

Increase in restricted deposit

(352)

 

-

 

(152)

 

-

Redemption of (Investment in) short-term deposits 

(4,000)

 

4,805

 

10,100

 

5,278

Purchase of property and equipment

(874)

 

(949)

 

(1,568)

 

(1,760)

Investment in marketable securities

(10,896)

 

(8,950)

 

(17,957)

 

(15,538)

Proceeds from redemption or sale of marketable securities

11,422

 

7,662

 

16,413

 

12,411

Acquisitions

-

 

-

 

(3,048)

 

-

Net cash provided by (used in) investing activities

(4,700)

 

2,568

 

3,788

 

391

               

Cash flows from financing activities:

             
               

Exercise of employee stock options 

59

 

17

 

142

 

41

               

Net cash provided by financing activities

59

 

17

 

142

 

41

               
               

Increase (Decrease) in cash and cash equivalents

(2,464)

 

3,452

 

5,029

 

134

Cash and cash equivalents at the beginning of the period

22,835

 

20,008

 

15,342

 

23,326

               

Cash and cash equivalents at the end of the period

$        20,371

 

$     23,460

 

$     20,371

 

$     23,460

               

 

 

 

Investor Relations Contact:

Public Relations Contact:

GK Investor Relations

Vered Zur

Ehud Helft/Gavriel Frohwein

VP Marketing

+1-646-688-3559

vzur@allot.com

allot@gkir.com

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/allot-announces-second-quarter-2018-financial-results-300693035.html

SOURCE Allot Communications Ltd.