Skip to Content

Stock Quote


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

Oct 16, 2022 12:53 AM EDT
Copyright Nasdaq.
Minimum 15 minutes delayed

Allot Announces Third Quarter 2022 Financial Results

Allot Announces Third Quarter 2022 Financial Results

November 15, 2022 at 5:00 AM EST

HOD HASHARON, Israel, Nov. 15, 2022 /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 third quarter 2022 financial results.

Allot Ltd. Logo

 Third Quarter 2022 Financial Highlights

  • Third quarter revenues were $25.0 million compared with $38.2 million in the third quarter of last year;
  • Gross margin on a non-GAAP basis was 67%;
  • GAAP operating loss was $13.1 million and non-GAAP operating loss was $10.8 million;
  • GAAP net loss was $12.9 million and non-GAAP net loss was $10.6 million.

Financial Outlook

For the fourth quarter and full year of 2022, management reiterates its guidance expectations as follows:

  • Maintaining guidance for full year revenues of $125 million to $130 million, with expectations that full year revenues will trend toward the lower end of the range;
  • Additional recurring security deals to be executed, providing incremental MAR** of approximately $180 million for the full year;
  • Continues to expect additional recurring security deals to be executed, providing incremental MAR** of more than $180 million for the full year;
  • Continues to expect December 2022 total ARR* including SECaaS ARR* and Support & Maintenance ARR* to be between $50-52 million,
  • Continues to expect December 2022 SECaaS ARR* to be approximately $9 million;
  • Continues to expect recurring security revenue to be approximately $7 million for 2022.

Management Comment

Erez Antebi, President & CEO of Allot, commented, "While our third quarter ended as we had expected, we are obviously striving to achieve much more in the future.  I am very proud that Verizon selected Allot to enable network-based security services for their SMB customers.   I believe that this decision by Verizon proves that network-based security is becoming a significant part of the offering for operators."

Continued Mr. Antebi, "We remain committed to reach profitability for the full year 2024.  This will be achieved via revenue growth, mainly through the SECaaS business, but also through tight expense control. We also expect our loss in 2023 to be significantly lower than in 2022. I continue to strongly believe in the potential for our SECaaS solution for protecting consumers as well as its ability to bring Allot into a new era of growth and profitability."

Q3 2022 Financial Results Summary

Total revenues for the third quarter of 2022 were $25.0 million, a decrease of 34% compared to $38.2 million in the third quarter of 2021.

Gross profit on a GAAP basis for the third quarter of 2022 was $16.4 million (gross margin of 65.4%), a 38% decline compared with $26.5 million (gross margin of 69.5%) in the third quarter of 2021.

Gross profit on a non-GAAP basis for the third quarter of 2022 was $16.8 million (gross margin of 67.2%), a 37% decline compared with $26.8 million (gross margin of 70.4%) in the third quarter of 2021. The lower level of revenue in the third quarter was impacted the gross margin level.

Net loss on a GAAP basis for the third quarter of 2022 was $12.9 million, or $0.35 per basic share, compared with a net loss of $3.1 million, or $0.08 per basic share, in the third quarter of 2021.

Net loss on a non-GAAP for the third quarter of 2022 was $10.6 million, or $0.28 per basic share compared with a non-GAAP net loss of $0.2 million, or $0.00 per basic share, in the third quarter of 2021.

Cash, short-term bank deposits and investments as of September 30, 2022 totaled $98.1 million, compared to $85.7 million as of December 31, 2021.

Conference Call & Webcast:

The Allot management team will host a conference call to discuss its third quarter 2022 earnings results today, November 15, 2022 at 8:30 am ET, 3:30 pm Israel time. To access the conference call, please dial one of the following numbers:

US:  1-888-642-5032, UK: 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 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 1,000 enterprises. Our industry leading network-based security as a service solution is already used by over 20 million subscribers in Europe. Allot. See. Control. Secure.

For more information, visit www.allot.com

Performance Metrics

* Total ARR - Support & Maintenance ARR (measures the current annual run rate of support & maintenance revenues, which is calculated based on these expected revenues in the fourth quarter and multiplied by 4) and SECaaS ARR (measures the current annual run rate of the SECaaS revenues, which is calculated based on these expected revenues in the month of December and multiplied by 12).

** 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 applicable customer segments only subscribers, as estimated by Allot, signed up for the service.

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 and changes in taxes related items.

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:

EK Global Investor Relations

Ehud Helft

+1 212 378 8040

allot@ekgir.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,


2022


2021



2022


2021


(Unaudited)



(Unaudited)










Revenues

$       25,040


$       38,155



$       89,708


$     104,626

Cost of revenues

8,663


11,624



28,697


32,037

Gross profit  

16,377


26,531



61,011


72,589










Operating expenses:









Research and development costs, net

12,919


12,148



37,429


34,088

Sales and marketing

12,603


12,901



36,512


37,312

General and administrative

3,939


3,720



12,279


11,000

Total operating expenses

29,461


28,769



86,220


82,400

Operating loss

(13,084)


(2,238)



(25,209)


(9,811)

Financial and other income, net

471


(146)



1,338


163

Loss before income tax expenses

(12,613)


(2,384)



(23,871)


(9,648)










Tax expenses

319


689



1,421


1,362

Net Loss

(12,932)


(3,073)



(25,292)


(11,010)










 Basic net loss per share

$         (0.35)


$         (0.08)



$         (0.69)


$         (0.31)



















 Diluted net loss per share

$         (0.35)


$         (0.08)



$         (0.69)


$         (0.31)










Weighted average number of shares used in 









computing basic net loss per share

37,198,187


36,286,436



36,702,045


35,923,853










Weighted average number of shares used in 









computing diluted net loss per share

37,198,187


36,286,436



36,702,045


35,923,853

 

 

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,



2022


2021


2022


2021



(Unaudited)


(Unaudited)

GAAP cost of revenues

$          8,663


$        11,624


$       28,697


$       32,037

 Share-based compensation (1) 

(291)


(161)


(810)


(444)

 Amortization of intangible assets (2) 

(152)


(152)


(456)


(456)

Non-GAAP cost of revenues

$          8,220


$        11,311


$       27,431


$       31,137










 GAAP gross profit 

$        16,377


$        26,531


$       61,011


$       72,589

 Gross profit adjustments 

443


313


1,266


900

 Non-GAAP gross profit 

$        16,820


$        26,844


$       62,277


$       73,489










 GAAP operating expenses 

$        29,461


$        28,769


$       86,220


$       82,400

 Share-based compensation (1) 

(1,879)


(2,248)


(6,066)


(5,670)

 Non-GAAP operating expenses 

$        27,582


$        26,521


$       80,154


$       76,730










 GAAP financial and other income 

$             471


$           (146)


$         1,338


$            163

 Exchange rate differences* 

32


352


(357)


442

 Non-GAAP Financial and other income 

$             503


$            206


$            981


$            605










 GAAP taxes on income 

$             319


$            689


$         1,421


$         1,362

 Tax expenses in respect of net deferred tax asset recorded 

-


5


-


(164)

 Changes in tax related items 

(25)


-


(75)


-

 Non-GAAP taxes on income 

$             294


$            694


$         1,346


$         1,198










 GAAP Net Loss 

$       (12,932)


$        (3,073)


$      (25,292)


$      (11,010)

 Share-based compensation (1) 

2,170


2,409


6,876


6,114

 Amortization of intangible assets (2) 

152


152


456


456

 Exchange rate differences* 

32


352


(357)


442

 Tax expenses in respect of net deferred tax asset recorded 

-


(5)


-


164

 Changes in tax related items 


25


-


75


-

 Non-GAAP Net income (loss) 

$       (10,553)


$           (165)


$      (18,242)


$        (3,834)










 GAAP Loss per share (diluted) 

$           (0.35)


$          (0.08)


$         (0.69)


$         (0.31)

 Share-based compensation 

0.06


0.07


0.19


0.17

 Amortization of intangible assets 

0.01


0.00


0.01


0.02

 Exchange rate differences* 

(0.0)


0.01


(0.00)


0.01

 Tax expense in respect of net deferred tax asset recorded 

-


(0.00)


-


-

 Non-GAAP Net income (loss) per share (diluted) 

$           (0.28)


$          (0.00)


$         (0.49)


$         (0.11)



















Weighted average number of shares used in 








computing GAAP diluted net loss per share

37,198,187


36,286,436


36,702,045


35,923,853



















Weighted average number of shares used in 








computing non-GAAP diluted net loss per share

37,198,187


36,286,436


36,702,045


35,923,853










* 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,



2022


2021


2022


2021



(Unaudited)


(Unaudited)










(1) Share-based compensation:









Cost of revenues

$             291


$            161


$            810


$            444


Research and development costs, net

704


759


2,393


1,853


Sales and marketing

727


960


2,259


2,472


General and administrative

448


529


1,414


1,345



$          2,170


$          2,409


$         6,876


$         6,114










 (2) Amortization of intangible assets 









Cost of revenues

$             152


$            152


$            456


$            456



$             152


$            152


$            456


$            456




























 

 

TABLE  - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













September 30,


December 31,



2022


2021



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$                     8,587


$                11,717

Short-term bank deposits


84,115


60,720

Restricted deposits


1,100


1,480

Available-for-sale marketable securities


4,261


11,531

Trade receivables, net


34,688


30,829

Other receivables and prepaid expenses


7,592


8,490

Inventories


12,676


11,092

Total current assets


153,019


135,859






LONG-TERM ASSETS:





Long-term bank deposits


-


215

Severance pay fund


359


407

Operating lease right-of-use assets


6,368


8,513

Trade receivables, net


7,224


6,643

Other assets 


1,060


1,639

Total long-term assets


15,011


17,417






PROPERTY AND EQUIPMENT, NET


15,016


15,000

GOODWILL AND INTANGIBLE ASSETS, NET


34,433


35,138






Total assets


$                 217,479


$              203,414






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Trade payables


$                     6,053


$                  3,940

Deferred revenues


25,551


22,138

Short-term operating lease liabilities


2,502


2,785

Other payables and accrued expenses


26,503


26,250

Total current liabilities


60,609


55,113






LONG-TERM LIABILITIES:





Deferred revenues


9,374


15,942

Long-term operating lease liabilities


2,621


5,467

Accrued severance pay


871


884

Convertible debt


39,525


-

Total long-term liabilities


52,391


22,293






SHAREHOLDERS' EQUITY


104,479


126,008






Total liabilities and shareholders' equity


$                 217,479


$              203,414











 

 

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,


2022


2021


2022


2021


(Unaudited)


(Unaudited)









Cash flows from operating activities:
















Net Loss

$      (12,932)


$      (3,073)


$      (25,292)


$        (11,010)

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








Depreciation

1,373


1,151


4,119


3,380

Stock-based compensation

2,171


2,409


6,877


6,114

Amortization of intangible assets

235


235


705


706

Increase (Decrease) in accrued severance pay, net

15


16


35


(44)

Decrease in other assets

143


103


579


1,144

Decrease in accrued interest and  amortization of premium on marketable securities 

36


58


84


165

Changes in operating leases, net

(421)


344


(984)


(367)

Decrease (Increase) in trade receivables

367


(281)


(4,440)


(10,537)

Decrease in other receivables and prepaid expenses

1,176


183


283


3,705

Decrease (Increase) in inventories

(420)


399


(1,584)


3,688

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

-


(10)


-


165

Increase (Decrease) in trade payables

3,050


(168)


2,113


(704)

Decrease in employees and payroll accruals

(295)


(1,450)


(2,258)


(2,073)

Decrease in deferred revenues

(4,284)


(5,288)


(3,155)


11,324

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

1,441


(133)


(82)


(3,497)

Amortization of issuance costs of Convertible debt

50


-


121


-

Net cash provided by (used in) operating activities

(8,295)


(5,505)


(22,879)


2,159









Cash flows from investing activities:








Decrease (Increase) in restricted deposit

-


2,474


380


(400)

Redemption of (Investment in) short-term deposits

2,000


(3,500)


(23,180)


(27,700)

Purchase of property and equipment

(1,579)


(962)


(4,135)


(4,591)

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

1,000


2,353


7,030


9,932

Net cash provided by (used in) investing activities

1,421


365


(19,905)


(22,759)









Cash flows from financing activities:








Proceeds from exercise of stock options

-


193


250


2,660

Issuance of convertible debt

-


-


39,404


-

Net cash provided by financing activities

-


193


39,654


2,660

















Decrease in cash and cash equivalents

(6,874)


(4,947)


(3,130)


(17,940)

Cash and cash equivalents at the beginning of the period

15,461


10,606


11,717


23,599









Cash and cash equivalents at the end of the period

$          8,587


$       5,659


$          8,587


$            5,659

















 

 













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
















Q3-2022


YTD 2022


FY 2021




Revenues geographic breakdown










Americas


3.1

12 %

16.2

18 %

19.4

14 %




EMEA


15.3

61 %

50.0

56 %

82.0

56 %




Asia Pacific


6.6

27 %

23.5

26 %

44.2

30 %






25.0

100 %

89.7

100 %

145.6

100 %














Revenue breakdown by type










Products


10.1

40 %

44.0

49 %

88.1

60 %




Professional Services

2.6

10 %

8.6

10 %

15.2

11 %




SECaaS (Security as a Service)

1.7

7 %

4.9

5 %

4.1

3 %




Support & Maintenance

10.6

43 %

32.2

36 %

38.2

26 %






25.0

100 %

89.7

100 %

145.6

100 %














Revenues per customer type










CSP


19.4

78 %

71.3

80 %

116.9

80 %




Enterprise


5.6

22 %

18.4

20 %

28.7

20 %






25.0

100 %

89.7

100 %

145.6

100 %














% of top-10 end-customers out of revenues

41 %


47 %


51 %















Total number of full time employees 

770


770


741




(end of period)





















Non-GAAP Weighted average number of basic shares  (in millions)

37.2


36.7


36.1












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

39.3


39.1


38.4














 

 














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




















Q3-2022:

1.7











Q2-2022:

1.7











Q1-2022:

1.5











Q4-2021:

1.3























SECaaS ARR* (annualized recurring revenues)- U.S. dollars in millions (Unaudited)



















Sep. 2022:

6.9











Dec. 2021:

5.2











Dec. 2020:

2.7











Dec. 2019:

0.5























*ARR: annualized recurring SECaaS revenues, calculated based on the monthly revenues multiplied by 12

















 

 






























ARR - U.S. dollars in millions (Unaudited)














Dec. 2020


Dec. 2021 


Dec. 2022 target


2021 vs. 2020


2022 (target) vs. 2021 



Support & maintenance ARR *

31.2


42.0


41-43


35 %


(2%) -2%

















SECaaS ARR **


2.7


5.2


9


93 %


73 %

















Total ARR


33.9


47.2


 50-52


39 %


 6%-10%

















* Support & Maintenance ARR measures the current annual run rate of the support & maintenance revenues, which is calculated based on these expected revenues in the fourth quarter and multiplied by 4.





** SECaaS ARR measures the current annual run rate of the SECaaS revenues, which is calculated based on these expected revenues in the  month of December and multiplied by 12.
















 

Cision View original content:https://www.prnewswire.com/news-releases/allot-announces-third-quarter-2022-financial-results-301678178.html

SOURCE Allot Ltd.