Allot Announces First Quarter 2021 Financial Results

HOD HASHARON, Israel, May 11, 2021 /PRNewswire/ — Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative…

HOD HASHARON, Israel, May 11, 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 first quarter 2021 financial results.

Allot Ltd. Logo

 First Quarter 2021 Highlights

  • Continued growth: revenues of $31.2 million, up 6% year-over-year;
  • End of quarter cash and investments of $103 million;
  • Allot’s first major penetration into US market: DISH Network Selected Allot to Protect the United States’ First Cloud-native, OpenRAN-based 5G Network and its Customers from Cybersecurity Threats.

Financial Outlook

  • Management continues to expect 2021 revenues to grow to between $145-150 million;
  • Management continues to expect to close recurring security deals in 2021 with an MAR* expected to exceed $180 million;
  • Management continues to expect recurring security revenues in 2021 to be at least $6 million, and around $25 million in 2022.

Management Comment

Erez Antebi, President & CEO of Allot, commented: «We are pleased with our start to 2021 with continued year-over-year revenue growth. From the strategic perspective, we are very happy with our first major penetration into the US market and are thrilled that DISH chose to partner with us to help secure their innovative 5G network, which will be one of the most advanced in the US market.  This deal, together with Dish’s stated intent to sign an additional deal with Allot to launch network based security services to their customers, is a major indication on the importance of security to 5G networks and customers worldwide.»

Continued Mr. Antebi, «We see 2021 as a transformation year for Allot. We expect that as our SECaaS partners begin to launch their services over the coming months, we will see the initial ramp of these recurring revenues. We are very encouraged by the traction we have been gaining and look forward to continue signing additional recurring security revenue deals, ensuring further long-term sustainable growth.»

Q1 2021 Financial Results Summary

Total revenues for the first quarter of 2021 were $31.2 million, an increase of 6% compared to $29.3 million in the first quarter of 2020.

Gross profit on a GAAP basis for the first quarter of 2021 was $21.6 million (gross margin of 69.2%), with no material change when compared with $21.7 million (gross margin of 74%) in the first quarter of 2020.

Gross profit on a non-GAAP basis for the first quarter of 2021 was $21.9 million (gross margin of 70.1%), similar when compared with $21.9 million (gross margin of 74.8%) in the first quarter of 2020.

Net loss on a GAAP basis for the first quarter of 2021 was $4 million, or $0.11 loss per basic share, compared with a net loss of $1.7 million, or $0.05 loss per basic share, in the first quarter of 2020.

Net loss on a non-GAAP basis for the first quarter of 2021 was $2.2 million, or $0.06 loss per basic share compared with a non-GAAP net loss of $0.4 million, or $0.01 loss per basic share, in the first quarter of 2020.

Cash and investments as of March 31, 2021 totaled $103.2 million, compared with $99.4 million, as of December 31, 2020.

Analyst & Investor Event

Allot will host a virtual Analyst & Investor event later today, May 11, 2021 at 9am ET. The event will provide more color on the growth potential of the Company and on the Revolution of Consumer Cybersecurity. It will feature presentations delivered by various members of the Allot management team as well as talks by some of the Company’s cybersecurity customers.

The Analyst & Investor event will be hosted via a Zoom Webinar. To register for the event, please use the following link: https://www.allot.com/210511-investor-day-lp/

A recording of the event, including the presentations, will be archived and available for viewing on the Allot website a few days following the event.

For further details about the agenda and participating in the virtual Investor Day event and the earnings results call, please refer to the Allot investor relations website at https://investors.allot.com.

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 has achieved over 50% penetration with some service providers and is already used by over 20 million subscribers in Europe. 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.

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, tax related items, 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

+1 646 201 9246

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



March 31,



2021


2020



(Unaudited)


(Unaudited)







Revenues

$       31,183


$       29,289


Cost of revenues

9,591


7,610


Gross profit  

21,592


21,679







Operating expenses:





Research and development costs, net

10,567


8,699


Sales and marketing

11,593


11,522


General and administrative

3,200


3,041


Total operating expenses

25,360


23,262


Operating loss

(3,768)


(1,583)


Financial and other income, net

115


151


Loss before income tax expenses

(3,653)


(1,432)







Tax expenses

305


228


Net Loss

(3,958)


(1,660)







 Basic net loss per share

$          (0.11)


$          (0.05)












 Diluted net loss per share

$          (0.11)


$          (0.05)







Weighted average number of shares used in 





computing basic net loss per share

35,535,493


34,625,632







Weighted average number of shares used in 





computing diluted net loss per share

35,535,493


34,625,632












 

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




March 31,




2021


2020




(Unaudited)


GAAP cost of revenues

$               9,591


$                      7,610


 Share-based compensation (1) 

(119)


(67)


 Amortization of intangible assets (2) 

(152)


(152)


Non-GAAP cost of revenues

$               9,320


$                      7,391








 GAAP gross profit 

$             21,592


$                    21,679


 Gross profit adjustments 

271


219


 Non-GAAP gross profit 

$             21,863


$                    21,898








 GAAP operating expenses 

$             25,360


$                    23,262


 Share-based compensation (1) 

(1,325)


(857)


 Income related to M&A activities (3) 


103


 Non-GAAP operating expenses 

$             24,035


$                    22,508








 GAAP financial and other income 

$                  115


$                         151


 Exchange rate differences* 

76


218


 Non-GAAP Financial and other income 

$                  191


$                         369








 GAAP taxes on income 

$                  305


$                         228


 Tax expenses in respect of net deferred tax asset recorded 

(67)


(60)


 Non-GAAP taxes on income 

$                  238


$                         168








 GAAP Net Loss 

$             (3,958)


$                    (1,660)


 Share-based compensation (1) 

1,444


924


 Amortization of intangible assets (2) 

152


152


 Income related to M&A activities (3) 


(103)


 Exchange rate differences* 

76


218


 Tax expenses in respect of net deferred tax asset recorded 

67


60


 Non-GAAP Net loss 

$             (2,219)


$                       (409)








 GAAP Loss per share (diluted) 

$               (0.11)


$                      (0.05)


 Share-based compensation 

0.04


0.03


 Amortization of intangible assets 

0.01


0.00


 Income related to M&A activities 

0.00


(0.00)


 Exchange rate differences* 

0.00


0.01


 Tax expense in respect of net deferred tax asset recorded 

0.00


0.00


 Non-GAAP Net loss per share (diluted) 

$               (0.06)


$                      (0.01)














Weighted average number of shares used in 





computing GAAP diluted net loss per share

35,535,493


34,625,632














Weighted average number of shares used in 





computing non-GAAP diluted net loss per share

35,535,493


34,625,632








* 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




March 31,




2021


2020




(Unaudited)








(1) Share-based compensation:






Cost of revenues

$                  119


$                            67



Research and development costs, net

395


242



Sales and marketing

582


378



General and administrative

348


237




$               1,444


$                         924








 (2) Amortization of intangible assets 






Cost of revenues

$                  152


$                         152




$                  152


$                         152








 (3) Income related to M&A activities 






Research and development costs, net

$                     –


$                       (103)




$                     –


$                       (103)














 

 

TABLE  – 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED  BALANCE  SHEETS

(U.S. dollars in thousands)













March 31,


December 31,



2021


2020



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$               7,148


$            23,599

Short-term bank deposits


71,525


47,225

Restricted deposits


1,634


1,200

Available-for-sale marketable securities


22,643


27,178

Trade receivables, net


27,828


20,685

Other receivables and prepaid expenses


11,455


14,205

Inventories


13,543


12,586

Total current assets


155,776


146,678






LONG-TERM ASSETS:





Long-term bank deposits


215


215

Severance pay fund


438


434

Operating lease right-of-use assets


3,679


4,458

Deferred taxes


349


420

Other assets 


1,475


2,975

Total long-term assets


6,156


8,502






PROPERTY AND EQUIPMENT, NET


12,600


11,993

GOODWILL AND INTANGIBLE ASSETS, NET


35,842


34,427






Total assets


$          210,374


$          201,600






LIABILITIES AND SHAREHOLDERS’ EQUITY





CURRENT LIABILITIES:





Trade payables


$               1,222


$               2,092

Deferred revenues


30,194


26,658

Short-term operating lease liabilities


2,602


2,813

Other payables and accrued expenses


25,199


27,299

Total current liabilities


59,217


58,862






LONG-TERM LIABILITIES:





Deferred revenues


21,218


9,782

Long-term operating lease liabilities


1,035


1,835

Accrued severance pay


901


969

Total long-term liabilities


23,154


12,586






SHAREHOLDERS’ EQUITY


128,003


130,152






Total liabilities and shareholders’ equity


$          210,374


$          201,600
















 

 

 

TABLE  – 4

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(U.S. dollars in thousands)







Three Months Ended



March 31,



2021


2020



(Unaudited)


(Unaudited)







Cash flows from operating activities:










Net Loss

$        (3,958)


$     (1,660)


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




Depreciation

1,088


788


Stock-based compensation

1,444


924


Amortization of intangible assets

237


152


Increase (Decrease) in accrued severance pay, net

(72)


1


Decrease in other assets

1,499


160


Decrease in accrued interest and  amortization of premium on marketable securities 

75


171


Changes in operating leases, net

(232)


(711)


Decrease (Increase) in trade receivables

(7,143)


5,868


Decrease (Increase) in other receivables and prepaid expenses

2,080


(401)


Increase in inventories

(957)


(4,485)


Decrease in long-term deferred taxes, net

72


84


Increase (Decrease) in trade payables

(870)


2,268


Decrease in employees and payroll accruals

(1,909)


(1,325)


Increase (Decrease) in deferred revenues

14,972


(5,626)


Decrease in other payables, accrued expenses and other long term liabilities

(603)


(1,718)


Net cash provided by (used in) operating activities

5,723


(5,510)







Cash flows from investing activities:





Decrease (Increase) in restricted deposit

(434)


1,500


Redemption of (Investment in) short-term deposits 

(24,300)


4,757


Purchase of property and equipment

(1,695)


(1,351)


Purchase of intangible assets

(1,652)



Investment in available-for sale marketable securities


(375)


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

4,348


12,923


Net cash provided by (used in) investing activities

(23,733)


17,454







Cash flows from financing activities:










Proceeds from exercise of stock options

1,559


620


Net cash provided by financing activities

1,559


620












Increase (Decrease) in cash and cash equivalents

(16,451)


12,564


Cash and cash equivalents at the beginning of the period

23,599


16,930







Cash and cash equivalents at the end of the period

$          7,148


$     29,494












 

Other financial metrics






U.S dollars in millions, except number of full time employees, % of top-

10 end-customers out of revenues and number of shares









Revenues geographic breakdown

Q1-2021



FY 2020



Americas


5.1

16%


8.1

6%


EMEA


20.2

65%


104.3

77%


Asia Pacific

5.9

19%


23.5

17%




31.2

100%


135.9

100%









Breakdown between products & services

revenues

Q1-2021



FY 2020



Products


17.8

57%


92.5

68%


Professional Services

4.1

13%


13.3

10%


Support & Maintenance

9.3

30%


30.1

22%




31.2

100%


135.9

100%









Revenues per customer type

Q1-2021



FY 2020



CSP


22.8

73%


114.8

84%


Enterprise

8.4

27%


21.1

16%




31.2

100%


135.9

100%












Q1-2021



FY 2020


% of top-10 end-customers out of revenues

60%



71%










Total number of full time employees 

671



676










Number of basic shares (in millions)

35.5



35.0










Non-GAAP weighted average number of fully

diluted shares  (in millions)

37.8



37.2


 

 

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SOURCE Allot Ltd.