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Allot Announces Second Quarter 2021 Financial Results

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Continued revenue growth and signing of new security deals

HOD HASHARON, Israel, Aug. 10, 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 second quarter of 2021, ended June 30, 2021.

Allot Logo
Allot Logo

Second Quarter 2021 Highlights

  • Revenue growth of 8% YoY to $35.3 million

  • Operating loss and net loss reduced by almost 40% YoY

  • Cash and investments increased to $105.6 million

  • 5G Netprotect product gaining momentum with another win with a Tier-1 in APAC

  • Signed additional SECaas contracts with multiple operators in APAC, EMEA and Latam

  • Signed a SECaas deal with a Tier-1 Communications Group with operating units in the EU and North America

Financial Outlook

  • Management continues to expect:
    - 2021 revenues to grow to between $145-150 million;
    - Recurring security deals to be closed in 2021 with an MAR* of at least $180 million;
    - Recurring security revenues in 2021 of around $5 million and approximately $25 million in 2022;

Management Comment

Erez Antebi, President & CEO of Allot, commented: "We are very pleased with our performance in the second quarter and are confident we are on our way to achieve the goals we set for 2021. The revolution of shifting cybersecurity responsibility from the individual to the CSP is growing worldwide and gaining momentum. This is evidenced by growth in several directions: In the number of CSPs that are engaging with us; in the number of operators that contract with us; and in the number of consumers signing up for cybersecurity protection once the operator launches the service. I am very proud that Allot is the technology company leading this revolution."

Q2 2021 Financial Results Summary

Total revenues for the second quarter of 2021 were $35.3 million, an increase of 8% compared to $32.8 million in the second quarter of 2020.

Gross profit on a GAAP basis for the second quarter of 2021 was $24.5 million (gross margin of 69%), compared with $23.0 million (gross margin of 70%) in the second quarter of 2020.

Gross profit on a non-GAAP basis for the second quarter of 2021 was $24.8 million (gross margin of 70.2%), compared with $23.2 million (gross margin of 70.7%) in the second quarter of 2020.

Net loss on a GAAP basis for the second quarter of 2021 was $4.0 million, or $0.11 loss per basic share, compared with a net loss of $3.6 million, or $0.10 loss per basic share, in the second quarter of 2020.

Net loss on a non-GAAP basis for the second quarter of 2021 was $1.5 million, or $0.04 loss per basic share compared with a non-GAAP net loss of $2.4 million, or $0.07 loss per basic share, in the second quarter of 2020.

Cash and investments as of June 30, 2021 totaled $105.6 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 second quarter results today, August 10, 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.

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

+1 646 201 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



Six Months Ended



June 30,



June 30,



2021


2020



2021


2020



(Unaudited)


(Unaudited)



(Unaudited)


(Unaudited)












Revenues

$ 35,288


$ 32,790



$ 66,471


$ 62,079


Cost of revenues

10,822


9,838



20,413


17,448


Gross profit

24,466


22,952



46,058


44,631












Operating expenses:










Research and development costs, net

11,373


10,396



21,940


19,095


Sales and marketing

12,818


11,780



24,411


23,302


General and administrative

4,080


4,554



7,280


7,595


Total operating expenses

28,271


26,730



53,631


49,992


Operating loss

(3,805)


(3,778)



(7,573)


(5,361)


Financial and other income, net

194


717



309


868


Loss before income tax expenses

(3,611)


(3,061)



(7,264)


(4,493)












Tax expenses

368


553



673


781


Net Loss

(3,979)


(3,614)



(7,937)


(5,274)












Basic net loss per share

$ (0.11)


$ (0.10)



$ (0.22)


$ (0.15)






















Diluted net loss per share

$ (0.11)


$ (0.10)



$ (0.22)


$ (0.15)












Weighted average number of shares used in










computing basic net loss per share

35,941,378


34,917,617



35,739,556


34,771,624












Weighted average number of shares used in










computing diluted net loss per share

35,941,378


34,917,617



35,739,556


34,771,624


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


Six Months Ended




June 30,


June 30,




2021


2020


2021


2020




(Unaudited)


(Unaudited)


GAAP cost of revenues

$ 10,822


$ 9,838


$ 20,413


$ 17,448


Share-based compensation (1)

(164)


(86)


(283)


(153)


Amortization of intangible assets (2)

(152)


(152)


(304)


(304)


Non-GAAP cost of revenues

$ 10,506


$ 9,600


$ 19,826


$ 16,991












GAAP gross profit

$ 24,466


$ 22,952


$ 46,058


$ 44,631


Gross profit adjustments

316


238


587


457


Non-GAAP gross profit

$ 24,782


$ 23,190


$ 46,645


$ 45,088












GAAP operating expenses

$ 28,271


$ 26,730


$ 53,631


$ 49,992


Share-based compensation (1)

(2,097)


(1,146)


(3,422)


(2,003)


Income related to M&A activities (3)

-


(137)


-


(34)


Non-GAAP operating expenses

$ 26,174


$ 25,447


$ 50,209


$ 47,955












GAAP financial and other income

$ 194


$ 717


$ 309


$ 868


Exchange rate differences*

14


(316)


90


(98)


Non-GAAP Financial and other income

$ 208


$ 401


$ 399


$ 770












GAAP taxes on income

$ 368


$ 553


$ 673


$ 781


Tax expenses in respect of net deferred tax asset recorded

(102)


(15)


(169)


(75)


Non-GAAP taxes on income

$ 266


$ 538


$ 504


$ 706












GAAP Net Loss

$ (3,979)


$ (3,614)


$ (7,937)


$ (5,274)


Share-based compensation (1)

2,261


1,232


3,705


2,156


Amortization of intangible assets (2)

152


152


304


304


Income related to M&A activities (3)

-


137


-


34


Exchange rate differences*

14


(316)


90


(98)


Tax expenses in respect of net deferred tax asset recorded

102


15


169


75


Non-GAAP Net loss

$ (1,450)


$ (2,394)


$ (3,669)


$ (2,803)












GAAP Loss per share (diluted)

$ (0.11)


$ (0.10)


$ (0.22)


$ (0.15)


Share-based compensation

0.06


0.04


0.10


0.06


Amortization of intangible assets

0.01


0.00


0.02


0.01


Income related to M&A activities

0.00


(0.00)


-


-


Exchange rate differences*

0.00


(0.01)


-


0.00


Tax expense in respect of net deferred tax asset recorded

0.00


0.00


-


0.00


Non-GAAP Net loss per share (diluted)

$ (0.04)


$ (0.07)


$ (0.10)


$ (0.08)






















Weighted average number of shares used in









computing GAAP diluted net loss per share

35,941,378


34,917,617


35,739,556


34,771,624






















Weighted average number of shares used in









computing non-GAAP diluted net loss per share

35,941,378


34,917,617


35,739,556


34,771,624












* 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


Six Months Ended




June 30,


June 30,




2021


2020


2021


2020




(Unaudited)


(Unaudited)












(1) Share-based compensation:










Cost of revenues

$ 164


$ 86


$ 283


$ 153



Research and development costs, net

699


361


1,094


603



Sales and marketing

930


533


1,512


911



General and administrative

468


252


816


489




$ 2,261


$ 1,232


$ 3,705


$ 2,156












(2) Amortization of intangible assets










Cost of revenues

$ 152


$ 152


$ 304


$ 304




$ 152


$ 152


$ 304


$ 304












(3) Income related to M&A activities










Research and development costs, net

$ -


$ 137


-


34




$ -


$ 137


$ -


$ 34


TABLE - 3


ALLOT LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


(U.S. dollars in thousands)
















June 30,


December 31,




2021


2020




(Unaudited)


(Audited)






ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$ 10,606


$ 23,599


Short-term bank deposits


71,425


47,225


Restricted deposits


4,074


1,200


Available-for-sale marketable securities


19,308


27,178


Trade receivables, net


30,941


20,685


Other receivables and prepaid expenses


8,862


14,205


Inventories


9,297


12,586


Total current assets


154,513


146,678








LONG-TERM ASSETS:






Long-term bank deposits


215


215


Severance pay fund


469


434


Operating lease right-of-use assets


2,974


4,458


Deferred taxes


246


420


Other assets


1,603


2,975


Total long-term assets


5,507


8,502








PROPERTY AND EQUIPMENT, NET


13,394


11,993


GOODWILL AND INTANGIBLE ASSETS, NET


35,608


34,427








Total assets


$ 209,022


$ 201,600








LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:






Trade payables


$ 1,556


$ 2,092


Deferred revenues


32,852


26,658


Short-term operating lease liabilities


1,573


2,813


Other payables and accrued expenses


23,569


27,299


Total current liabilities


59,550


58,862








LONG-TERM LIABILITIES:






Deferred revenues


20,200


9,782


Long-term operating lease liabilities


880


1,835


Accrued severance pay


944


969


Total long-term liabilities


22,024


12,586








SHAREHOLDERS' EQUITY


127,448


130,152








Total liabilities and shareholders' equity


$ 209,022


$ 201,600














TABLE - 4


ALLOT LTD.


AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(U.S. dollars in thousands)




Three Months Ended


Six Months Ended



June 30,


June 30,



2021


2020


2021


2020



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)











Cash flows from operating activities:


















Net Loss

$ (3,979)


$ (3,614)


$ (7,937)


$ (5,274)


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








Depreciation

1,141


897


2,229


1,685


Stock-based compensation

2,261


1,232


3,705


2,156


Amortization of intangible assets

234


152


471


304


Increase (Decrease) in accrued severance pay, net

12


(1)


(60)


-


Decrease (Increase) in other assets

(458)


(1)


1,041


159


Decrease in accrued interest and amortization of premium on marketable securities

32


57


107


228


Changes in operating leases, net

(479)


544


(711)


(167)


Decrease (Increase) in trade receivables

(3,113)


1,616


(10,256)


7,484


Decrease (Increase) in other receivables and prepaid expenses

3,094


(518)


3,522


(919)


Decrease (Increase) in inventories

4,246


(2,113)


3,289


(6,598)


Decrease in long-term deferred taxes, net

103


20


175


104


Increase (Decrease) in trade payables

334


(6,468)


(536)


(4,200)


Increase (Decrease) in employees and payroll accruals

1,286


1,024


(623)


(301)


Increase (Decrease) in deferred revenues

1,640


4,169


16,612


(1,457)


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

(2,761)


2,235


(3,364)


517


Net cash provided by (used in) operating activities

3,593


(769)


7,664


(6,279)











Cash flows from investing activities:









Decrease (Increase) in restricted deposit

(2,440)


9,002


(2,874)


10,502


Redemption of (Investment in) short-term deposits

100


(14,200)


(24,200)


(9,443)


Purchase of property and equipment

(1,934)


(2,345)


(3,629)


(3,696)


Investment in available-for sale marketable securities

-


-


-


(375)


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

3,231


8,523


7,579


21,446


Net cash provided by (used in) investing activities

(1,043)


980


(23,124)


18,434











Cash flows from financing activities:


















Proceeds from exercise of stock options

908


837


2,467


1,457


Net cash provided by financing activities

908


837


2,467


1,457




















Increase (Decrease) in cash and cash equivalents

3,458


1,048


(12,993)


13,612


Cash and cash equivalents at the beginning of the period

7,148


29,494


23,599


16,930











Cash and cash equivalents at the end of the period

$ 10,606


$ 30,542


$ 10,606


$ 30,542






























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






Q2-2021


YTD 2021


FY 2020



Revenues geographic breakdown









Americas


2.5

7%

7.7

12%

8.1

6%



EMEA


21.8

62%

41.9

63%

104.3

77%



Asia Pacific

11.0

31%

16.9

25%

23.5

17%





35.3

100%

66.5

100%

135.9

100%












Breakdown between products & services revenues









Products


23.0

65%

40.8

62%

92.5

68%



Professional Services

3.4

10%

7.5

11%

13.3

10%



Support & Maintenance

8.9

25%

18.2

27%

30.1

22%





35.3

100%

66.5

100%

135.9

100%












Revenues per customer type









CSP


28.1

80%

50.9

76%

114.8

84%



Enterprise

7.2

20%

15.6

24%

21.1

16%





35.3

100%

66.5

100%

135.9

100%






















% of top-10 end-customers out of revenues

64%


60%


71%













Total number of full time employees

695


695


676



(end of period)



















Number of basic shares (in millions)

35.9


35.7


35.0













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

38.3


38.1


37.2



Cision
Cision

View original content:https://www.prnewswire.com/news-releases/allot-announces-second-quarter-2021-financial-results-301351799.html

SOURCE Allot Ltd.