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Aug 4, 2019 2:17 AM EDT
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Allot Announces Second Quarter 2019 Financial Results

Allot Announces Second Quarter 2019 Financial Results

August 6, 2019 at 5:00 AM EDT
Quarterly Revenues Grow 15% Year over Year

HOD HASHARON, Israel, Aug. 6, 2019 /PRNewswire/ -- Allot 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 2019 financial results.

Allot Logo (PRNewsfoto/Allot Communications Ltd.)

Second Quarter 2019 – Financial Highlights

  • Revenue growth to $26.6 million, up 15% year-over-year;
  • GAAP gross profit up 12% year-over-year to $18.3 million; non-GAAP gross profit up 12% to $18.5 million;
  • GAAP operating loss of $1.5 million; non-GAAP operating loss of $2.1 million. 

Financial Outlook

  • Management continues to maintain its 2019 expectations of yearly revenues between $106-110 million, representing continued double-digit year-over-year growth;
  • Management continue to expect full year 2019 book to bill ratio at above 1.

Management Comment

Erez Antebi, President & CEO of Allot, commented: "We are pleased with our ongoing year-over-year growth in revenue and we remain on target with our strategy and longer-term goals. Our pipeline remains strong and we are actively working to close further deals in the coming months, both in the Visibility and Control, as well as in the Security areas. We look forward to continued and sustainable growth for the remainder of this year and beyond."

Second Quarter 2019 Financial Results Summary

Total revenues for the quarter were $26.6 million, an increase of 15% compared to $23.0 million in the second quarter of 2018.

Gross profit on a GAAP basis for the quarter was $18.3 million (gross margin of 68.7%), a 12% improvement compared with $16.3 million (gross margin of 70.8%) in the second quarter of 2018.

Gross profit on a non-GAAP basis for the quarter of was $18.5 million (gross margin of 69.8%), a 12% improvement compared with $16.6 million (gross margin of 72.2%) in the second quarter of 2018.

Operating loss on a GAAP basis for the quarter was $1.5 million, compared with an operating loss of $2.8 million, in the second quarter of 2018.

Non-GAAP operating loss for the quarter was $2.1 million, compared with a non-GAAP operating loss of $1.3 million in the second quarter of 2018.

Net loss on a GAAP basis for the quarter was $1.5million, or $0.04 per basic and diluted share, compared with a net loss of $2.4 million, or $0.07 per basic and diluted share, in the second quarter of 2018.

Non-GAAP net loss for the quarter was $2.1 million, or $0.06 per basic share, compared with a non-GAAP net loss of $1.2 million, or $0.04 per basic share, in the second quarter of 2018.

Cash and investments as of June 30, 2019 totaled $101.6 million, compared to $101.5 million as of March 31, 2019.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss second quarter 2019 earnings results today, August 6, 2019 at 8:30 am ET, 3:30 pmIsrael time. To access the conference call, please dial one of the following numbers:

US:  1-888-407-2553, UK: 0-800-917-5108, Israel: +972-3-918-0610

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 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 21 million subscribers in Europe. Allot. See. Control. Secure.

For more information, visit www.allot.com

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: 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



Six Months Ended


June 30,



June 30,


2019


2018



2019


2018


(Unaudited)


(Unaudited)



(Unaudited)


(Unaudited)










Revenues

$       26,554


$       23,003



$       51,896


$       44,735

Cost of revenues

8,301


6,712



15,594


13,636










Gross profit  

18,253


16,291



36,302


31,099










Operating expenses:









Research and development costs, net

7,633


6,298



14,807


12,091

Sales and marketing

11,209


10,182



22,686


20,215

General and administrative

923


2,579



3,628


5,045

Total operating expenses

19,765


19,059



41,121


37,351

Operating loss

(1,512)


(2,768)



(4,819)


(6,252)

Financial and other income, net

571


806



1,103


1,036

Loss before income tax expenses

(941)


(1,962)



(3,716)


(5,216)










Tax expenses

592


455



1,150


887

Net Loss

(1,533)


(2,417)



(4,866)


(6,103)










 Basic net loss per share

$          (0.04)


$          (0.07)



$          (0.14)


$          (0.18)










 Diluted net loss per share

$          (0.04)


$          (0.07)



$          (0.14)


$          (0.18)










Weighted average number of shares used in 









computing basic net loss per share

34,213,724


33,655,940



34,099,428


33,606,236










Weighted average number of shares used in 









computing diluted net loss per share

34,213,724


33,655,940



34,099,428


33,606,236

 

 

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


Six Months Ended



June 30,


June 30,



2019


2018


2019


2018



(Unaudited)


(Unaudited)










GAAP cost of revenues

$         8,301


$          6,712


$        15,594


$        13,636

 Share-based compensation (1) 

(61)


(90)


(121)


(170)

 Amortization of intangible assets (2) 

(232)


(232)


(464)


(465)

Non-GAAP cost of revenues

$         8,008


$          6,390


$        15,009


$        13,001










 GAAP gross profit 

$       18,253


$        16,291


$        36,302


$        31,099

 Gross profit adjustments 

293


322


585


635

 Non-GAAP gross profit 

$       18,546


$        16,613


$        36,887


$        31,734










 GAAP operating expenses 

$       19,765


$        19,059


$        41,121


$        37,351

 Share-based compensation (1) 

(782)


(630)


(1,467)


(1,254)

 Amortization of intangible assets (2) 

(189)


(175)


(377)


(350)

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

1,832


(151)


1,537


(189)

 Changes in tax related items (4)

-


(170)


-


(170)

 Non-GAAP operating expenses 

$       20,626


$        17,933


$        40,814


$        35,388










 GAAP financial and other income 

$             571


$             806


$          1,103


$          1,036

 Exchange rate differences* 

(31)


(292)


(33)


(142)

 Non-GAAP Financial and other income 

$             540


$             514


$          1,070


$             894










 GAAP taxes on income 

$             592


$             455


$          1,150


$             887

 Tax expenses in respect of net deferred tax asset recorded 

(17)


(19)


(33)


(38)

 Non-GAAP taxes on income 

$             575


$             436


$          1,117


$             849










 GAAP Net Loss 

$       (1,533)


$        (2,417)


$        (4,866)


$        (6,103)

 Share-based compensation (1) 

843


720


1,588


1,424

 Amortization of intangible assets (2) 

421


407


841


815

 Expenses related to M&A activities (3) 

(1,832)


(141)


(1,537)


47

 Changes in tax related items (4)

-


170


-


170

 Exchange rate differences 

(31)


-


(33)


-

 Tax expenses in respect of net deferred tax asset recorded 

17


19


33


38

 Non-GAAP Net Loss 

$       (2,115)


$        (1,242)


$        (3,974)


$        (3,609)










 GAAP Loss per share (diluted) 

$          (0.04)


$          (0.07)


$          (0.14)


$          (0.18)

 Share-based compensation 

0.02


0.02


0.05


0.04

 Amortization of intangible assets 

0.02


0.01


0.02


0.02

 Expenses related to M&A activities 

(0.06)


(0.01)


(0.05)


0.00

 Changes in taxes and headcount related items

-


0.01


-


0.01

 Exchange rate differences 

(0.00)


-


(0.00)


-

 Tax expense in respect of net deferred tax asset recorded 

0.00


0.00


0.00


-

 Non-GAAP Net loss per share (diluted) 

$          (0.06)


$          (0.04)


$          (0.12)


$          (0.11)










Weighted average number of shares used in 








computing GAAP diluted net loss per share

34,213,724


33,655,940


34,099,428


33,606,236










Weighted average number of shares used in 








computing non-GAAP diluted net loss per share

34,213,724


33,655,940


34,099,428


33,606,236










* 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 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,



2019


2018


2019


2018



(Unaudited)


(Unaudited)










(1) Share-based compensation:









     Cost of revenues

$               61


$                90


$             121


$             170


     Research and development costs, net

214


171


383


326


     Sales and marketing

327


215


610


437


     General and administrative

241


244


474


491



$             843


$             720


$          1,588


$          1,424










 (2) Amortization of intangible assets 









     Cost of revenues

$             232


$             232


$             464


$             465


     Sales and marketing

189


175


377


350



$             421


$             407


$             841


$             815










 (3) Expenses related to M&A activities 









     General and administrative 

$       (1,947)


$                 -


$        (1,947)


$                38


     Research and development costs, net

115


151


410


151


     Financial income

-


(292)


-


(142)



$       (1,832)


$           (141)


$        (1,537)


$                47










 (4) Changes in tax related items 









     Sales and marketing

-


100


-


100


     General and administrative

-


70


-


70



$                -


$             170


$                 -


$             170

 

 

TABLE  - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)








June 30,


December 31,



2019


2018



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            17,517


$            16,336

Short term deposits


17,624


22,543

Restricted deposit


506


465

Marketable securities 


65,681


64,290

Trade receivables, net


21,863


26,093

Other receivables and prepaid expenses


4,552


3,647

Inventories


10,687


11,345

Total current assets


138,430


144,719






LONG-TERM ASSETS:





Restricted deposit


257


257

Severance pay fund


357


345

Operating lease right-of-use assets


6,129


-

Deferred taxes


463


281

Other assets 


877


600

Total long-term assets


8,083


1,483






PROPERTY AND EQUIPMENT, NET


7,385


6,249

GOODWILL AND INTANGIBLE ASSETS, NET


35,802


37,393






Total assets


$          189,700


$          189,844






LIABILITIES AND SHAREHOLDERS'
EQUITY





CURRENT LIABILITIES:





Trade payables


$               6,601


$               7,813

Deferred revenues


15,271


13,855

Short-term operating lease liabilities


2,480


-

Other payables and accrued expenses


21,473


21,052

Total current liabilities


45,825


42,720






LONG-TERM LIABILITIES:





Deferred revenues


4,154


4,247

Long-term operating lease liabilities


4,031


-

Accrued severance pay


768


806

Other long term liabilities


590


6,168

Total long-term liabilities


9,543


11,221






SHAREHOLDERS' EQUITY


134,332


135,903






Total liabilities and shareholders' equity


$          189,700


$          189,844

 

 

TABLE  - 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2018


2019


2018


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)









Cash flows from operating activities:
















Net Loss

$        (1,533)


$     (2,417)


$      (4,866)


$     (6,103)

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








Depreciation

617


555


1,233


1,053

Stock-based compensation related to options granted to employees

843


720


1,588


1,424

Amortization of intangible assets

421


407


841


815

Capital loss 

-


36


-


39

Decrease (Increase) in accrued severance pay, net

15


(7)


(50)


26

Decrease (Increase) in other assets

(344)


(395)


(277)


393

Decrease in accrued interest and  amortization of premium on marketable securities 

164


169


241


415

Changes in operating leases, net

588


-


382


-

Decrease (Increase) in trade receivables

6,823


(2,635)


4,230


(1,889)

Decrease (Increase) in other receivables and prepaid expenses

773


1,597


(374)


(282)

Decrease (Increase) in inventories

1,676


164


(234)


(113)

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

(149)


19


(182)


38

Increase (Decrease) in trade payables

(3,769)


(113)


(1,212)


489

Increase (Decrease) in employees and payroll accruals

517


214


1,540


(285)

Increase in deferred revenues

1,915


943


1,323


1,674

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

(7,923)


2,920


(6,030)


3,405

Net cash provided by (used in) operating activities

634


2,177


(1,847)


1,099









Cash flows from investing activities:








Decrease (Increase) in restricted deposit

42


(352)


(41)


(152)

Redemption of (investment in) short-term deposits 

933


(4,000)


4,919


10,100

Purchase of property and equipment

(748)


(874)


(1,477)


(1,568)

Investment in marketable securities

(13,020)


(10,896)


(24,604)


(17,957)

Proceeds from redemption or sale of marketable securities

12,190


11,422


23,569


16,413

Acquisitions

-


-


-


(3,048)

Net cash provided by (used in) investing activities

(603)


(4,700)


2,366


3,788









Cash flows from financing activities:








Exercise of employee stock options 

56


59


662


142

Net cash provided by financing activities

56


59


662


142









Increase (Decrease) in cash and cash equivalents

87


(2,464)


1,181


5,029

Cash and cash equivalents at the beginning of the period

17,430


22,835


16,336


15,342

Cash and cash equivalents at the end of the period

$        17,517


$     20,371


$     17,517


$     20,371

 

 

Investor Relations Contact:

GK Investor Relations

Ehud Helft/Gavriel Frohwein

+1 646 688 3559

allot@gkir.com

Public Relations Contact:

Seth Greenberg

Director of Corporate Communications
sgreenberg@allot.com

 

 

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SOURCE Allot Ltd.