Allot (ALLT) 21st Annual Needham Technology, Media, & Consumer Conference summary

Company overview and strategic focus

• Transitioned from network intelligence to cybersecurity, targeting underserved consumers and small businesses.

• Operates two main product lines: Network Intelligence (Allot Smart) and Security-as-a-Service (SECaaS), with SECaaS as the primary growth engine.

• SECaaS has grown over 50% year-over-year for the past three years, focusing on zero-touch protection via CSP partnerships.

• Four growth pillars: new CSP partnerships, expansion within existing CSPs, organic subscriber growth, and continuous product innovation.

• Launched OffNetSecure to protect devices on any network, enhancing value and revenue opportunities.

Financial performance and outlook

• Q1 revenue reached $26.4 million, up 14% year-over-year, marking the third consecutive quarter of double-digit growth.

• SECaaS ARR was $33.7 million, up 59% year-over-year, with operating margin at 9.9%.

• Full-year revenue guidance reiterated at $113–117 million, with optimism for the higher end of the range.

• SECaaS revenue expected to grow by 40% or more year-over-year in 2024.

• Strong operating cash flow of $10.6 million in Q1, driven by milestone payments from large deals.

Product and market development

• SECaaS growth driven by high attach rates, strong CSP marketing, and robust customer engagement.

• Network Intelligence business stabilized with demand from large customers for the Tera III platform, supporting multi-year revenue.

• Multi-million dollar deals and faster project execution could provide additional upside.

• Modular platform allows CSPs to start small and expand services as trust and demand grow.

• New MVNO partnerships, such as with CompaxDigital, use cybersecurity as a core differentiator, ensuring 100% attach rates.