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Allot Announces Third Quarter 2021 Financial Results

Allot Announces Third Quarter 2021 Financial Results

November 9, 2021 at 5:00 AM EST
Continued revenue growth and signing of new security deals

HOD HASHARON, Israel, Nov. 9, 2021 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide, today announced its unaudited results for the third quarter of 2021, ended September 30, 2021.

 

Allot Logo

 

Third Quarter 2021 Highlights

  • Revenue growth of 10% YoY to $38.2 million
  • Operating profit on a non-GAAP basis of $0.3 million compared to a loss of $1 million in Q3 2020
  • Net loss on a non-GAAP basis reduced by 86% YoY to $0.2 million
  • Signed Security as a Service deal with DISH in the US to deliver cybersecurity to their 5G customers

Financial Outlook

Management expects 2021 revenues to be between $145- 146 million and continues to expect to sign recurring security deals to be closed in 2021 with an MAR* of at least $180 million.

Management expectations of Security as a Service (SECaaS) revenues have been delayed due to delays in service launches.  Formerly forecasted SECaaS revenues levels are expected to be reached with a delay of approximately two quarters. Considering the above, management is providing the following updates to the SECaaS revenue guidance:

  • For 2021, SECaaS revenues are expected to be between $4.1-4.3 million.
  • SECaaS revenues in 2022 are expected to be between $10-15 million.
  • SECaaS revenues for the 12 months between July 2022 and June 2023 are expected to be between $20 - $30 million.
  • ARR* in December of 2021 is expected to be between $5–6 million and in December 2022 between $20–30 million. ARR measures the current annual run rate of the SECaaS revenues, which is calculated based on these expected revenues in the current month of December and multiplied by 12.

Management Comment

Erez Antebi, President & CEO of Allot, commented: "In the third quarter of 2021, we continued to execute on our plan and grow. This is our 15th straight quarter of year over year growth, and I am very pleased with the results we achieved. Our DPI business is showing solid results as we continue to sign up new customers and grow our market share. In our cybersecurity business, we are executing on our strategy to revolutionize consumer cybersecurity, by enabling CSPs to offer consumer cybersecurity as a network service. To date, we have signed Security as a Service (SECaaS) deals with 18 different operators globally. This is a testimony that our service is proving to be highly in demand by both mobile and fixed operators throughout the world."

Continued Mr. Antebi, "In North America we are seeing very strong traction. As announced earlier this year, DISH Network Corporation (NASDAQ: DISH) selected Allot to provide end-to-end User Plane Protection (UPP) and Deep Packet Inspection (DPI) services for the company's cloud-native 5G network, and has since expanded the partnership to include cybersecurity services for DISH customers.  This deal is in addition to previously announced Security as a Service wins with mobile and fixed line operators in EMEA and APAC."

"Looking at the Security as a Service network-based cybersecurity market, I am very encouraged by what we see: our pipeline is growing and we are seeing more operator interest than ever; adoption rates of operators that launched the service with the right go-to-market are high; and the North American market is very interested in delivering consumers network-based security.  By our count, Allot is winning most of the "network-based Security as a Service" deals.  Our high win ratio is, in our opinion, because of our high value product, commercial model, marketing support and track record.  I firmly believe our strategic and financial goals with this significant growth engine are very tangible and I am confident that despite the lengthened launch process, we will meet them."

Q3 2021 Financial Results Summary

Total revenues for the third quarter of 2021 were $38.2 million, an increase of 10% compared to $34.8 million in the third quarter of 2020.

Gross profit on a GAAP basis for the third quarter of 2021 was $26.5 million (gross margin of 69.5%), compared with $23.7 million (gross margin of 68.3%) in the third quarter of 2020.

Gross profit on a non-GAAP basis for the third quarter of 2021 was $26.8 million (gross margin of 70.4%), compared with $24 million (gross margin of 69%) in the third quarter of 2020.

Net loss on a GAAP basis for the third quarter of 2021 was $3.1 million, or $0.08 loss per basic share, compared with a net loss of $2.4 million, or $0.07 loss per basic share, in the third quarter of 2020.

Net loss on a non-GAAP basis for the third quarter of 2021 was $0.2 million, or $0.00 loss per basic share compared with a non-GAAP net loss of $1.2 million, or $0.03 loss per basic share, in the third quarter of 2020.

Cash and investments as of September 30, 2021 totaled $99.2 million, compared with $99.4 million, as of December 31, 2020.

Conference Call & Webcast

The Allot management team will host a conference call to discuss the third quarter results today, November 9, 2021 at 8:30 am ET, 3:30 pm Israel time.

To access the conference call, please dial one of the following numbers:

US:  1-888-668-5032, Israel: +972-3-918-0609, UK: 0 800 917 5108

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 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 20 million subscribers globally.

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.

*ARR: annual recurring SECaaS revenues, calculated based on revenues expected in the current month and multiplied by 12;

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.

Investor Relations Contact:

GK Investor Relations

Ehud Helft

+1 212 378 8040

allot@gkir.com

Public Relations Contact:

Seth Greenberg, Allot Ltd.
+972 54 922 2294
sgreenberg@allot.com

 


 

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



Nine Months Ended


September 30,



September 30,


2021


2020



2021


2020


(Unaudited)


(Unaudited)



(Unaudited)


(Unaudited)










Revenues

$       38,155


$       34,752



$     104,626


$       96,831

Cost of revenues

11,624


11,007



32,037


28,455

Gross profit 

26,531


23,745



72,589


68,376










Operating expenses:









Research and development costs, net

12,148


11,741



34,088


30,836

Sales and marketing

12,901


11,439



37,312


34,741

General and administrative

3,720


3,076



11,000


10,671

Total operating expenses

28,769


26,256



82,400


76,248

Operating loss

(2,238)


(2,511)



(9,811)


(7,872)

Financial and other income, net

(146)


646



163


1,514

Loss before income tax expenses

(2,384)


(1,865)



(9,648)


(6,358)










Tax expenses

689


528



1,362


1,309

Net Loss

(3,073)


(2,393)



(11,010)


(7,667)










 Basic net loss per share

$          (0.08)


$          (0.07)



$          (0.31)


$          (0.22)



















 Diluted net loss per share

$          (0.08)


$          (0.07)



$          (0.31)


$          (0.22)










Weighted average number of shares used in









computing basic net loss per share

36,286,436


35,163,221



35,923,853


34,903,109

Weighted average number of shares used in

computing diluted net loss per share

36,286,436


35,163,221



35,923,853


34,903,109

 

 

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


Nine Months Ended


September 30,


September 30,


2021


2020


2021


2020


(Unaudited)


(Unaudited)

GAAP cost of revenues

$        11,624


$        11,007


$         32,037


$        28,455

 Share-based compensation (1)

(161)


(89)


(444)


(242)

 Amortization of intangible assets (2)

(152)


(152)


(456)


(456)

Non-GAAP cost of revenues

$        11,311


$        10,766


$         31,137


$        27,757









 GAAP gross profit

$        26,531


$        23,745


$         72,589


$        68,376

 Gross profit adjustments

313


241


900


698

 Non-GAAP gross profit

$        26,844


$        23,986


$         73,489


$        69,074









 GAAP operating expenses

$        28,769


$        26,256


$         82,400


$        76,248

 Share-based compensation (1)

(2,248)


(1,177)


(5,670)


(3,180)

 Income related to M&A activities (3)

-


(48)


-


(82)

 Non-GAAP operating expenses

$        26,521


$        25,031


$         76,730


$        72,986









 GAAP financial and other income

$            (146)


$             646


$               163


$           1,514

 Exchange rate differences*

352


(370)


442


(468)

 Non-GAAP Financial and other income

$              206


$             276


$               605


$           1,046









 GAAP taxes on income

$              689


$             528


$            1,362


$           1,309

 Tax expenses in respect of net deferred tax asset recorded

5


(112)


(164)


(187)

 Non-GAAP taxes on income

$              694


$             416


$            1,198


$           1,122









 GAAP Net Loss

$         (3,073)


$        (2,393)


$        (11,010)


$         (7,667)

 Share-based compensation (1)

2,409


1,266


6,114


3,422

 Amortization of intangible assets (2)

152


152


456


456

 Income related to M&A activities (3)

-


48


-


82

 Exchange rate differences*

352


(370)


442


(468)

 Tax expenses in respect of net deferred tax asset recorded

(5)


112


164


187

 Non-GAAP Net loss

$            (165)


$        (1,185)


$          (3,834)


$         (3,988)









 GAAP Loss per share (diluted)

$           (0.08)


$          (0.07)


$            (0.31)


$           (0.22)

 Share-based compensation

0.07


0.04


0.17


0.10

 Amortization of intangible assets

0.00


0.00


0.02


0.01

 Income related to M&A activities

-


0.01


-


0.01

 Exchange rate differences*

0.01


(0.01)


0.01


(0.01)

 Tax expense in respect of net deferred tax asset recorded

(0.00)


-


-


-

 Non-GAAP Net loss per share (diluted)

$           (0.00)


$          (0.03)


$            (0.11)


$           (0.11)

















Weighted average number of shares used in








computing GAAP diluted net loss per share

36,286,436


35,163,221


35,923,853


34,903,109

















Weighted average number of shares used in








computing non-GAAP diluted net loss per share

36,286,436


35,163,221


35,923,853


34,903,109









* 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


Nine Months Ended



September 30,


September 30,



2021


2020


2021


2020



(Unaudited)


(Unaudited)










(1) Share-based compensation:









Cost of revenues

$              161


$               89


$               444


$              242


Research and development costs, net

759


353


1,853


956


Sales and marketing

960


551


2,472


1,462


General and administrative

529


273


1,345


762



$           2,409


$          1,266


$            6,114


$           3,422










 (2) Amortization of intangible assets









Cost of revenues

$              152


$             152


$               456


$              456



$              152


$             152


$               456


$              456










 (3) Income related to M&A activities









Research and development costs, net

$                 -


$               48


-


82



$                 -


$               48


$                  -


$                82

 

 

TABLE  - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)




September 30,


December 31,



2021


2020



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$               5,659


$            23,599

Short-term bank deposits


74,925


47,225

Restricted deposits


1,600


1,200

Available-for-sale marketable securities


16,813


27,178

Trade receivables, net


31,222


20,685

Other receivables and prepaid expenses


8,743


14,205

Inventories


8,898


12,586

Total current assets


147,860


146,678






LONG-TERM ASSETS:





Long-term bank deposits


215


215

Severance pay fund


474


434

Operating lease right-of-use assets


2,699


4,458

Deferred taxes


255


420

Other assets


1,501


2,975

Total long-term assets


5,144


8,502






PROPERTY AND EQUIPMENT, NET


13,205


11,993

GOODWILL AND INTANGIBLE ASSETS, NET


35,373


34,427






Total assets


$          201,582


$          201,600






LIABILITIES AND SHAREHOLDERS'
EQUITY





CURRENT LIABILITIES:





Trade payables


$               1,388


$               2,092

Deferred revenues


28,907


26,658

Short-term operating lease liabilities


1,663


2,813

Other payables and accrued expenses


21,889


27,299

Total current liabilities


53,847


58,862






LONG-TERM LIABILITIES:





Deferred revenues


18,857


9,782

Long-term operating lease liabilities


859


1,835

Accrued severance pay


965


969

Total long-term liabilities


20,681


12,586






SHAREHOLDERS' EQUITY


127,054


130,152






Total liabilities and shareholders' equity


$          201,582


$          201,600

 

 

TABLE  - 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)










Three Months Ended


Nine Months Ended


September 30,


September 30,


2021


2020


2021


2020


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)









Cash flows from operating activities:
















Net Loss

$        (3,073)


$     (2,393)


$   (11,010)


$     (7,667)

Adjustments to reconcile net income to net cash provided by (used in) operating activities:







Depreciation

1,151


978


3,380


2,663

Stock-based compensation

2,409


1,266


6,114


3,422

Amortization of intangible assets

235


152


706


456

Increase (Decrease) in accrued severance pay, net

16


36


(44)


36

Decrease in other assets

103


108


1,144


267

Decrease in accrued interest and  amortization of premium on marketable securities

58


118


165


346

Changes in operating leases, net

344


(444)


(367)


(611)

Decrease (Increase) in trade receivables

(281)


2,579


(10,537)


10,063

Decrease (Increase) in other receivables and prepaid expenses

183


(227)


3,705


(1,146)

Decrease (Increase)  in inventories

399


1,730


3,688


(4,868)

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

(10)


68


165


172

Increase (Decrease) in trade payables

(168)


3,423


(704)


(777)

Decrease in employees and payroll accruals

(1,450)


(47)


(2,073)


(348)

Increase (Decrease) in deferred revenues

(5,288)


(7,940)


11,324


(9,397)

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

(133)


453


(3,497)


970

Net cash provided by (used in) operating activities

(5,505)


(140)


2,159


(6,419)









Cash flows from investing activities:








Decrease (Increase) in restricted deposit

2,474


21,875


(400)


32,377

Investment in short-term deposits

(3,500)


(40,376)


(27,700)


(49,819)

Purchase of property and equipment

(962)


(1,851)


(4,591)


(5,547)

Investment in available-for sale marketable securities

-


-


-


(375)

Proceeds from sales and maturity of available-for sale marketable securities

2,353


7,918


9,932


29,364

Net cash provided by (used in) investing activities

365


(12,434)


(22,759)


6,000









Cash flows from financing activities:
















Proceeds from exercise of stock options

193


223


2,660


1,680

Net cash provided by financing activities

193


223


2,660


1,680

















Increase (Decrease) in cash and cash equivalents

(4,947)


(12,351)


(17,940)


1,261

Cash and cash equivalents at the beginning of the period

10,606


30,542


23,599


16,930

Cash and cash equivalents at the end of the period

$          5,659


$     18,191


$        5,659


$     18,191

 

 

Other financial metrics (Unaudited)







U.S. dollars in millions, except number of full time employees, % of top-10 end-
customers out of revenues and number of shares








Q3-2021


YTD 2021


FY 2020


Revenues geographic breakdown








Americas


1.9

5%

9.6

9%

8.1

6%


EMEA


23.7

62%

65.6

63%

104.3

77%


Asia Pacific


12.6

33%

29.4

28%

23.5

17%




38.2

100%

104.6

100%

135.9

100%










Breakdown between products & services revenues








Products


24.1

63%

64.9

62%

92.5

68%


Professional Services

4.5

12%

12.0

12%

13.3

10%


Support & Maintenance

9.6

25%

27.7

26%

30.1

22%




38.2

100%

104.6

100%

135.9

100%










Revenues per customer type








CSP


31.6

83%

82.5

79%

114.8

84%


Enterprise


6.6

17%

22.1

21%

21.1

16%




38.2

100%

104.6

100%

135.9

100%



















% of top-10 end-customers out of revenues

60%


49%


71%











Total number of full time employees

735


735


676


(end of period)

















Weighted average number of basic shares  (in millions)

36.3


35.9


35.0









Non-GAAP weighted average number of fully diluted
shares  (in millions)

38.6


38.3


37.2


 

SECaaS (Security as a Service) revenues- U.S. dollars in millions
















Q3-2021:     1.2









Q2-2021:     0.9









Q1-2021:     0.8









Q4-2020:     0.7



















ARR * (annual recurring revenues)- U.S. dollars in millions

















Sep. 2021:     4.6









Dec. 2020:     2.7









Dec. 2019:     0.5



















*ARR: annual recurring SECaas revenues, calculated based on the monthly revenues multiplied by 12




Cision View original content:https://www.prnewswire.com/news-releases/allot-announces-third-quarter-2021-financial-results-301419426.html

SOURCE Allot Ltd.