GuruFocus - Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allot Ltd (NASDAQ:ALLT) achieved its first non-GAAP operating net profit in three years, indicating a return to financial stability.
- The company reported a positive operating cash flow and an increase in net cash levels for two consecutive quarters.
- Security as a Service revenues increased by 69% year over year, driven by top-tier customers and expanded security solutions.
- Allot Ltd (NASDAQ:ALLT) is focusing on a unified business unit strategy to leverage core strengths in security and network intelligence.
- The company is reorganizing to be more customer-centric, aiming to open new opportunities for expansion and gain new customers.
- Allot Ltd (NASDAQ:ALLT) still relies heavily on CapEx deals and non-recurring revenue, which are harder to predict.
- The company's guidance for the next quarter remains conservative due to the unpredictability of non-recurring revenue.
- There is a potential for flat or declining operating profit on a quarter-to-quarter basis due to non-recurring revenue.
- The company is undergoing a strategic reorganization, which may involve reducing headcount in specific areas.
- Allot Ltd (NASDAQ:ALLT) faces challenges in achieving growth in non-security-related revenues due to competitive pressures.
A: Yes, we expect ARR to grow next quarter. The higher revenue this quarter was due to some catch-up revenue from a customer, which is not recurring. We anticipate further ARR growth as existing customers increase usage and new customers are added. - Eyal Harari, CEO
Q: Why do you expect flat or declining operating profit on a quarter-to-quarter basis?
A: This is related to the non-recurring revenue recognized this quarter. We are focused on transitioning to a more recurring revenue model, which will provide more stability and predictability. However, we remain conservative with our guidance due to the timing of certain deals. - Eyal Harari, CEO
Q: What drove the record increase in CCAS ARR this quarter?
A: The increase is due to a mix of new service launches by existing customers, increased penetration, and new customer acquisitions. We are pleased with the progress and plan to continue investing to maintain high growth rates. - Eyal Harari, CEO
Q: Is the CCAS agreement with Vodafone (LON:VOD) limited to the UK, or will it expand to other regions?
A: We are working with our customers to deploy in all possible countries, but we cannot provide more specific details at this time. - Eyal Harari, CEO
Q: What contributed to the improved gross margin outside of the non-recurring CCAS revenue?
A: We focus on engaging with customers in a model that makes sense for Allot, and the increased mix of higher-margin CCAS revenue contributes to the overall improvement. - Liat Nachum, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.