HOD HASHARON, Israel, Aug. 4, 2020 /PRNewswire/ -- Allot Ltd. (NASDAQ: ALLT) (TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for communication service providers and enterprises worldwide, today announced its unaudited second quarter 2020 financial results.
Highlights of the Second Quarter
Second quarter revenues were $32.8 million, up 23% year-over-year;
Non-GAAP gross margin increased to 70.7%, up from 69.8% in the second quarter of 2019;
GAAP gross margin increased to 70.0%, up from 68.7% in the second quarter of 2019;
Non-GAAP net loss of $2.4 million and GAAP net loss $3.6 million; Net loss includes a $1.5 million doubtful debt expense from a system integrator in Latin America experiencing financial difficulties;
Since the May 2020 first quarter earnings call, two recurring security revenue expansion deals were signed with existing customers
Management reiterates its prior-issued guidance, with expectations for full year 2020 revenues to be between $135 - $140 million, representing accelerated double-digit growth over those of 2019. In addition, management expects that third quarter revenue will exceed those reported for the second quarter of 2020;
Management continues to expect to be profitable in the fourth quarter this year;
Management continues to expect to close additional Recurring Security Revenue deals in 2020 and reiterates that the MAR* (maximum annual revenue potential of concluded transactions) of new deals expected to be signed in 2020 should exceed $140 million.
Erez Antebi, President & CEO of Allot, commented: "We are very pleased with our performance in the second quarter. We grew revenues 23% year-over-year, while improving gross margins and continuing our advance to profitability."
Continued Mr. Antebi, "COVID-19 continues to present Allot with both challenges and opportunities. While it is taking longer to close deals and the absence of travel is challenging business development activities, we are continuing to work towards meeting our goals and are on track to achieving our original 2020 plan. I believe that in the long-term, the growing need for successful connectivity and the increased amount of threats consumers face on the internet, will further increase demand for Allot's solutions."
Second Quarter 2020 Financial Results Summary
Total revenues for the second quarter of 2020 were $32.8 million, an increase of 23% compared to $26.6 million in the second quarter of 2019.
Gross profit on a GAAP basis for the second quarter of 2020 was $23.0 million (gross margin of 70.0%), compared with $18.3 million (gross margin of 68.7%) in the second quarter of 2019, representing a 26% improvement.
Gross profit on a non-GAAP basis for the second quarter of 2020 was $23.2 million (gross margin of 70.7%), a 25% improvement compared with $18.5 million (gross margin of 69.8%) in the second quarter of 2019.
Net loss on a GAAP basis for the second quarter of 2020 was $3.6 million, or $0.10 per basic share, compared with a net loss of $1.5 million, or $0.04 per basic share, in the second quarter of 2019.
Non-GAAP net loss for the second quarter of 2020 was $2.4 million, or $0.07 per basic share, compared with a non-GAAP net loss of $2.1 million, or $0.06 per basic share, in the second quarter of 2019.
It is noted that the operating expenses for the second quarter of 2020 include a doubtful debt expense of $1.5 million.
Cash and investments as of June 30, 2020 totaled $109.2 million, compared with $110.7 million, as of March 31, 2020.
Conference Call & Webcast
The Allot management team will host a conference call to discuss second quarter 2020 earnings results today, August 4, 2020 at 8:30 am ET, 3:30 pmIsrael time. To access the conference call, please dial one of the following numbers:
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 23 million subscribers in Europe.
*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: those related to the COVID-19 pandemic, 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.