The following is a summary of the Allot Ltd. (ALLT) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Allot reported Q3 revenue of $23.2 million, a year-over-year increase of 3% and up 5% versus the prior quarter.

• Revenue from SECaaS (Security as a Service) was $4.7 million for the quarter, up 69% year-over-year, representing 20.1% of total revenue.

• Non-GAAP gross margin was 71.7%, an increase from last year's 47.9% and the previous quarter's 70.6%.

• Non-GAAP operating income reported at $1.1 million, significantly improved from an operating loss of $11.1 million in Q3 last year.

• Positive operating cash flow of $1.9 million, with cash reserves increasing to $54.5 million.

Business Progress:

• Introduced SECaaS solutions, notably with Vodafone UK and MEO in Portugal, enhancing both mobile and broadband network security.

• Consolidating focus as a security-first company, aiming at long-term sustainable growth by leveraging core strengths in security and network intelligence.

• Ongoing strategic reorganization to align business units around customer success, potentially reducing headcount in specific areas while improving organizational efficiency.

Opportunities:

• Continued expansion in SECaaS offers substantial recurring revenue opportunities, particularly as partnerships with major telecom providers like Vodafone and MEO expand.

• Potential growth in cloud and 5G markets, targeting enterprise customers with traffic management and cybersecurity solutions implemented in the cloud.

Risks:

• Dependence on non-recurring revenue and CapEx deals which add unpredictability to financial outcomes.

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