Allot Communications Reports Non-GAAP 25% Revenue Growth for Q3 2014
Non-GAAP Revenues reach $30.1 million, compared with $24.1 million for Q3 2013
HOD HASHARON, Israel, Nov. 4, 2014 /PRNewswire/ -- Allot Communications Ltd. (NASDAQ: ALLT), a leading supplier of service optimization and revenue generation solutions for fixed and mobile broadband operators and cloud providers worldwide, today announced its third quarter 2014 results, with non-GAAP revenues reaching $30.1 million.
Q3 2014 - Key Highlights:
- Non-GAAP Revenues grew 25% year on year and 7% sequentially
- Non-GAAP Gross Margin was 75% (73% on a GAAP basis)
- Non-GAAP Operating Margin was 10% (2% on a GAAP basis)
- Book-to-bill above one
- Generated $2.9 million of Operating Cash Flow
- Net Cash as of September 30, 2014 totaled $125.4 million
Financial results:
On a non-GAAP basis, total revenues for Q3 2014 reached $30.1 million, compared with $24.1 million of non-GAAP revenue reported for Q3 2013 and $28.2 million of non-GAAP revenue reported for Q2 2014. On a non-GAAP basis, net profit for Q3 2014 was $3.1 million, or $0.09 per basic and diluted share. This compares with non-GAAP net profit of $1.1 million, or $0.03 per basic and diluted share, in Q3 2013 and a non-GAAP net profit of $1.9 million, or $0.06 per basic and diluted share, in Q2 2014.
Total GAAP revenues for Q3 2014 reached $30.1 million compared to $24.0 million of revenue reported for Q3 2013 and $28.2 million of GAAP revenue reported for Q2 2014. On a GAAP basis, net profit for Q3 2014 was $0.8 million, or of $0.02 per basic and diluted share. This compares with a net loss of $1.9 million, or $0.06 per basic and diluted share, in Q3 2013 and a net loss of $0.6 million, or $0.02 per basic and diluted share, in Q2 2014.
Q3 2014 - Key Achievements:
- During Q3 2014, 10 large orders were received, 2 of which are new customers
- 3 of the large orders came from mobile-service providers and 4 were from fixed-line service providers
- In addition, 3 large orders were received for private and public cloud deployments
- Received an expansion order of more than $15 million from a Tier-1 operator. The order includes Allot Service Gateway Tera and Allot ServiceProtector.
- Received an expansion order of over $5 million for the Tera platform from two Tier-1 service providers.
- Secured 3 orders from major cloud service providers to ensure user experience and productivity through greater application visibility, control and security.
"We are pleased with our performance during the third quarter and the ongoing strong momentum in our booking flow. During the third quarter we continued to execute well on all fronts, increased our revenues by 25% YoY and 7% sequentially, improved our gross margin and book to bill was once again above 1," said Andrei Elefant, President & CEO of Allot Communications. "We continue to see a strong demand from service provides for revenue generating services. The advanced value added services provided on our Service Gateway Tera continue to gain tractions among Service Provides."
Conference Call & Webcast:
The Allot management team will host a conference call to discuss third quarter 2014 earnings results today at 8:30 AM ET, 3:30 p.m. Israel time. To access the conference call, please dial one of the following numbers: US: +1646 254 3361, UK: +44(0)2034271907, Israel: +97237630145, participant code 1230659.
A replay of the conference call will be available from 12:00 PM ET on November 4 2014 for 30 days. To access the replay, please dial: US: +1 347 366 9565; UK: +44(0)2034270598, access code: 1230659. A live webcast of the conference call can be accessed on the Allot Communications website at www.allot.com. The webcast also will be archived on the website following the conference call.
About Allot Communications
Allot Communications Ltd. (NASDAQ, TASE: ALLT) empowers service providers to monetize and optimize their networks, enterprises to enhance productivity and consumers to enjoy an always-on digital lifestyle. Allot's advanced DPI-based broadband solutions identify and leverage network intelligence to analyze, protect, improve and enrich mobile, fixed and cloud service delivery and user experience. Allot's unique blend of innovative technology, proven know-how and collaborative approach to industry standards and partnerships enables network operators worldwide to elevate their role in the digital lifestyle ecosystem and to open the door to a wealth of new business opportunities. For more information, please visit www.allot.com.
GAAP to Non-GAAP Reconciliation:
The discrepancy 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 profit is defined as GAAP net profit 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, regulatory matters, acquisition-related expenses and compensation expenses related to the acquisitions.
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 are 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 may contain 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 expressed or implied by 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; 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 third party channel partners for a material portion of our revenues; 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:
Rami Rozen
AVP Corporate Development
International access code +972-52-569-4441
[email protected]
Public Relations Contact:
Maya Lustig
Director Corporate Communications
International access code +972-54-677-8100
[email protected]
TABLE - 1 |
||||||||
ALLOT COMMUNICATIONS 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, |
|||||||
2014 |
2013 |
2014 |
2013 |
|||||
(Unaudited) |
(Unaudited) |
|||||||
Revenues |
$ 30,101 |
$ 23,949 |
$ 86,551 |
$ 69,274 |
||||
Cost of revenues |
8,059 |
6,568 |
24,311 |
19,061 |
||||
Gross profit |
22,042 |
17,381 |
62,240 |
50,213 |
||||
Operating expenses: |
||||||||
Research and development costs, net |
7,240 |
6,599 |
21,649 |
20,399 |
||||
Sales and marketing |
11,411 |
9,982 |
32,544 |
29,704 |
||||
General and administrative |
2,798 |
2,942 |
8,616 |
8,246 |
||||
Total operating expenses |
21,449 |
19,523 |
62,809 |
58,349 |
||||
Operating profit (loss) |
593 |
(2,142) |
(569) |
(8,136) |
||||
Financial and other income, net |
224 |
229 |
460 |
584 |
||||
Profit (loss) before income tax benefit |
817 |
(1,913) |
(109) |
(7,552) |
||||
Tax expenses |
52 |
17 |
134 |
90 |
||||
Net profit (loss) |
765 |
(1,930) |
(243) |
(7,642) |
||||
Basic net profit (loss) per share |
$ 0.02 |
$ (0.06) |
$ (0.01) |
$ (0.23) |
||||
Diluted net profit (loss) per share |
$ 0.02 |
$ (0.06) |
$ (0.01) |
$ (0.23) |
||||
Weighted average number of shares |
||||||||
used in computing basic net |
||||||||
earnings per share |
33,234,558 |
32,710,885 |
33,096,065 |
32,634,926 |
||||
Weighted average number of shares |
||||||||
used in computing diluted net |
||||||||
earnings per share |
33,631,356 |
32,710,885 |
33,096,065 |
32,634,926 |
TABLE - 2 |
||||||||
ALLOT COMMUNICATIONS 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, |
|||||||
2014 |
2013 |
2014 |
2013 |
|||||
(Unaudited) |
(Unaudited) |
|||||||
GAAP net profit (loss) as reported |
$ 765 |
$ (1,930) |
$ (243) |
$ (7,642) |
||||
Non-GAAP adjustments |
||||||||
Expenses recorded for stock-based compensation |
||||||||
Cost of revenues |
90 |
88 |
268 |
289 |
||||
Research and development costs, net |
476 |
428 |
1,432 |
1,251 |
||||
Sales and marketing |
830 |
796 |
2,462 |
2,415 |
||||
General and administrative |
498 |
705 |
1,710 |
1,940 |
||||
Expenses related to M&A activities and compliance with regulatory matters (*) |
||||||||
General and administrative |
- |
3 |
33 |
36 |
||||
Research and development costs, net |
- |
- |
- |
28 |
||||
Sales and marketing |
- |
- |
- |
12 |
||||
Intangible assets amortization |
||||||||
Cost of revenues |
400 |
587 |
1,199 |
1,593 |
||||
Sales and marketing |
57 |
58 |
188 |
173 |
||||
Fair value adjustment for acquired deferred revenues write down |
11 |
147 |
34 |
460 |
||||
Expense related to settlement of OCS grants (Cost of revenues) |
- |
250 |
- |
250 |
||||
Total adjustments |
2,362 |
3,062 |
7,326 |
8,447 |
||||
Non-GAAP net profit |
$ 3,127 |
$ 1,132 |
$ 7,083 |
$ 805 |
||||
Non- GAAP basic net profit per share |
$ 0.09 |
$ 0.03 |
$ 0.21 |
$ 0.02 |
||||
Non- GAAP diluted net profit per share |
$ 0.09 |
$ 0.03 |
$ 0.21 |
$ 0.02 |
||||
Weighted average number of shares |
||||||||
used in computing basic net |
||||||||
earnings per share |
33,234,558 |
32,710,885 |
33,096,065 |
32,634,926 |
||||
Weighted average number of shares |
||||||||
used in computing diluted net |
||||||||
earnings per share |
33,943,166 |
33,579,948 |
33,949,132 |
33,453,921 |
||||
(*) Mostly legal, finance and compensation expenses related to the acquisition |
TABLE - 3 |
|||||||
ALLOT COMMUNICATIONS LTD. |
|||||||
AND ITS SUBSIDIARIES |
|||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED REVENUES |
|||||||
(U.S. dollars in thousands, except share and per share data) |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
September 30, |
September 30, |
||||||
2014 |
2013 |
2014 |
2013 |
||||
(Unaudited) |
(Unaudited) |
||||||
GAAP Revenues |
$ 30,101 |
$ 23,949 |
$ 86,551 |
$ 69,274 |
|||
Fair value adjustment for acquired deferred revenues write down |
11 |
147 |
$ 34 |
$ 460 |
|||
Non-GAAP Revenues |
$ 30,112 |
$ 24,096 |
$ 86,585 |
$ 69,734 |
|||
TABLE - 4 |
||||
ALLOT COMMUNICATIONS LTD. |
||||
AND ITS SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
(U.S. dollars in thousands) |
||||
September 30, |
December 31, |
|||
2014 |
2013 |
|||
(Unaudited) |
(Audited) |
|||
ASSETS |
||||
CURRENT ASSETS: |
||||
Cash and cash equivalents |
$ 31,631 |
$ 42,813 |
||
Short term deposits |
38,500 |
38,000 |
||
Marketable securities and restricted cash |
55,276 |
40,798 |
||
Trade receivables, net |
25,325 |
16,908 |
||
Other receivables and prepaid expenses |
9,962 |
8,218 |
||
Inventories |
13,042 |
13,798 |
||
Total current assets |
173,736 |
160,535 |
||
LONG-TERM ASSETS: |
||||
Severance pay fund |
268 |
254 |
||
Deferred taxes |
1,436 |
1,602 |
||
Other assets |
2,256 |
771 |
||
Total long-term assets |
3,960 |
2,627 |
||
PROPERTY AND EQUIPMENT, NET |
6,061 |
5,874 |
||
GOODWILL AND INTANGIBLE ASSETS, NET |
28,834 |
30,221 |
||
Total assets |
$ 212,591 |
$ 199,257 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
CURRENT LIABILITIES: |
||||
Trade payables |
$ 5,372 |
$ 3,191 |
||
Deferred revenues |
12,156 |
12,504 |
||
Other payables and accrued expenses |
14,954 |
10,906 |
||
Total current liabilities |
32,482 |
26,601 |
||
LONG-TERM LIABILITIES: |
||||
Deferred revenues |
4,472 |
2,447 |
||
Accrued severance pay |
289 |
282 |
||
Total long-term liabilities |
4,761 |
2,729 |
||
SHAREHOLDERS' EQUITY |
175,348 |
169,927 |
||
Total liabilities and shareholders' equity |
$ 212,591 |
$ 199,257 |
||
TABLE - 5 |
|||||
ALLOT COMMUNICATIONS LTD. |
|||||
AND ITS SUBSIDIARIES |
|||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
(U.S. dollars in thousands) |
|||||
Three Months Ended |
Nine Months Ended |
||||
September 30, |
September 30, |
||||
2014 |
2013 |
2014 |
2013 |
||
(Unaudited) |
(Unaudited) |
||||
Cash flows from operating activities: |
|||||
Net income (Loss) |
$ 765 |
$ (1,930) |
$ (243) |
$ (7,642) |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||
Depreciation |
764 |
837 |
2,326 |
2,584 |
|
Stock-based compensation related to options granted to employees |
1,894 |
2,017 |
5,873 |
5,896 |
|
Amortization of intangible assets |
457 |
645 |
1,387 |
1,767 |
|
Capital loss |
- |
4 |
- |
18 |
|
Decrease (Increase) in accrued severance pay, net |
(4) |
(2) |
(7) |
(4) |
|
Decrease (Increase) in other assets |
131 |
27 |
60 |
14 |
|
Decrease (Increase) in accrued interest and amortization of premium on marketable securities |
275 |
151 |
520 |
208 |
|
Increase (Decrease) in trade receivables |
(1,539) |
(761) |
(8,417) |
(3,244) |
|
Decrease (Increase) in other receivables and prepaid expenses |
(1,468) |
(971) |
(1,269) |
(2,640) |
|
Decrease (Increase) in inventories |
835 |
(1,325) |
756 |
(2,106) |
|
Increase in long-term deferred taxes, net |
- |
- |
56 |
- |
|
Increase (Decrease) in trade payables |
(2,121) |
(263) |
2,181 |
(42) |
|
Increase (Decrease) in employees and payroll accruals |
(598) |
(144) |
407 |
(1,404) |
|
Increase (Decrease) in deferred revenues |
1,313 |
(590) |
1,677 |
(4,648) |
|
Increase (Decrease) in other payables and accrued expenses |
2,212 |
(1,135) |
2,459 |
1,001 |
|
Increase in Liability related to settlement of OCS grants |
- |
(16,024) |
- |
(16,024) |
|
Net cash provided by (used in) operating activities |
2,916 |
(19,464) |
7,766 |
(26,266) |
|
Cash flows from investing activities: |
|||||
Increase in restricted deposit |
- |
145 |
- |
146 |
|
Redemption of short-term deposits |
- |
- |
29,500 |
76,042 |
|
Investment in short-term deposit |
(30,000) |
(21,600) |
(30,000) |
(21,600) |
|
Purchase of property and equipment |
(900) |
(552) |
(2,513) |
(1,980) |
|
Investment in marketable securities |
(885) |
(525) |
(19,866) |
(29,891) |
|
Proceeds from redemption or sale of marketable securities |
500 |
1,100 |
4,764 |
4,811 |
|
Loan provided to third party |
- |
- |
(2,735) |
- |
|
Proceeds from loan provided to third party |
157 |
- |
500 |
- |
|
Net cash provided by (used in) investing activities |
(31,128) |
(21,432) |
(20,350) |
27,528 |
|
Cash flows from financing activities: |
|||||
Exercise of employee stock options |
14 |
304 |
1,402 |
573 |
|
Net cash provided by financing activities |
14 |
304 |
1,402 |
573 |
|
Increase in cash and cash equivalents |
(28,198) |
(40,592) |
(11,182) |
1,835 |
|
Cash and cash equivalents at the beginning of the period |
59,829 |
92,453 |
42,813 |
50,026 |
|
Cash and cash equivalents at the end of the period |
$ 31,631 |
$ 51,861 |
$ 31,631 |
$ 51,861 |
|
SOURCE Allot Communications Ltd.
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