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Allot Announces Second Quarter 2020 Financial Results
[August 04, 2020]

Allot Announces Second Quarter 2020 Financial Results


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.

Allot Ltd. Logo

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

Financial Outlook

  • 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.

Management Comment

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 pm Israel time. To access the conference call, please dial one of the following numbers:

US:  1-888-407-2553, UK: 0-800-917-5108, Israel: +972-3-918-0610

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  

Additional Resources

Allot Blog: https://www.allot.com/blog

Follow us on Twitter: @allot_ltd

Follow us on LinkedIn: https://www.linkedin.com/company/allot-communications

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 23 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, 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.

 





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,


2020


2019



2020


2019


(Unaudited)


(Unaudited)



(Unaudited)


(Unaudited)










Revenues

$       32,790


$       26,554



$        62,079


$        51,896

Cost of revenues

9,838


8,301



17,448


15,594

Gross profit 

22,952


18,253



44,631


36,302










Operating expenses:









Research and development costs, net

10,396


7,633



19,095


14,807

Sales and marketing

11,780


11,209



23,302


22,686

General and administrative

4,554


923



7,595


3,628

Total operating expenses

26,730


19,765



49,992


41,121

Operating loss

(3,778)


(1,512)



(5,361)


(4,819)

Financial and other income, net

717


571



868


1,103

Loss before income tax expenses

(3,061)


(941)



(4,493)


(3,716)










Tax expenses

553


592



781


1,150

Net Loss

(3,614)


(1,533)



(5,274)


(4,866)










 Basic net loss per share

$          (0.10)


$          (0.04)



$          (0.15)


$          (0.14)




 ?               -  















 Diluted net loss per share

$          (0.10)


$          (0.04)



$          (0.15)


$          (0.14)










Weighted average number of shares used in









computing basic net loss per share

34,917,617


34,213,724



34,771,624


34,099,428










Weighted average number of shares used in









computing diluted net loss per share

34,917,617


34,213,724



34,771,624


34,099,428










 

 


 

 

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,




2020


2019


2020


2019




(Unaudited)


(Unaudited)


GAAP cost of revenues

$        9,838


$        8,301


$     17,448


$     15,594


Share-based compensation (1) 

(86)


(61)


(153)


(121)


Amortization of intangible assets (2) 

(152)


(232)


(304)


(464)


Non-GAAP cost of revenues

$        9,600


$        8,008


$     16,991


$      15,009












 GAAP gross profit 

$      22,952


$      18,253


$     44,631


$      36,302


 Gross profit adjustments 

238


293


457


585


 Non-GAAP gross profit 

$      23,190


$      18,546


$     45,088


$       36,887












 GAAP operating expenses 

$      26,730


$      19,765


$      49,992


$     41,121


 Share-based compensation (1) 

(1,146)


(782)


(2,003)


(1,467)


 Amortization of intangible assets (2) 

-


(189)


-


(377)


 Income (Expenses) related to M&A activities (3) 

(137)


1,832


(34)


1,537


 Non-GAAP operating expenses 

$      25,447


$      20,626


$      47,955


$      40,814












 GAAP financial and other income 

$           717


$           571


$           868


$        1,103


 Exchange rate differences* 

(316)


(31)


(98)


(33)


 Non-GAAP Financial and other income 

$           401


$           540


$           770


$        1,070












 GAAP taxes on income 

$           553


$           592


$           781


$        1,150


 Tax expenses in respect of net deferred tax asset recorded 

(15)


(17)


(75)


(33)


 Non-GAAP taxes on income 

$           538


$           575


$           706


$        1,117












 GAAP Net Loss 

$      (3,614)


$      (1,533)


$      (5,274)


$      (4,866)


 Share-based compensation (1) 

1,232


843


2,156


1,588


 Amortization of intangible assets (2) 

152


421


304


841


 Income (Expenses) related to M&A activities (3) 

137


(1,832)


34


(1,537)


 Exchange rate differences 

(316)


(31)


(98)


(33)


 Tax expenses in respect of net deferred tax asset recorded 

15


17


75


33


 Non-GAAP Net Loss 

$      (2,394)


$      (2,115)


$      (2,803)


$      (3,974)












 GAAP Loss per share (diluted) 

$        (0.10)


$         (0.04)


$        (0.15)


$        (0.14)


 Share-based compensation 

0.04


0.02


0.06


0.05


 Amortization of intangible assets 

0.00


0.02


0.01


0.02


 Expenses (Income) related to M&A activities 

0.00


(0.06)


0.00


(0.05)


 Exchange rate differences 

(0.01)


(0.00)


(0.00)


(0.00)


 Non-GAAP Net loss per share (diluted) 

$        (0.07)


$        (0.06)


$        (0.08)


$        (0.12)






















Weighted average number of shares used in 









computing GAAP diluted net loss per share

34,917,617


34,213,724


34,771,624


34,099,428






















Weighted average number of shares used in 









computing non-GAAP diluted net loss per share

34,917,617


34,213,724


34,771,624


34,099,428












* 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,




2020


2019


2020


2019




(Unaudited)


(Unaudited)












(1) Share-based compensation:










Cost of revenues

$             86


$             61


$           153


$           121



Research and development costs, net

361


214


603


383



Sales and marketing

533


327


911


610



General and administrative

252


241


489


474




$        1,232


$           843


$        2,156


$        1,588












 (2) Amortization of intangible assets 










Cost of revenues

$           152


$           232


$           304


$           464



Sales and marketing

-


189


-


377




$           152


$           421


$           304


$           841












 (3) Expenses (Income) related to M&A activities 










General and administrative 

$              -


$      (1,947)


$              -


$      (1,947)



Research and development costs, net

$           137


$           115


34


410




$           137


$      (1,832)


$             34


$      (1,537)









































 

 

TABLE - 3

ALLOT LTD.

AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)













June 30,


December 31,



2020


2019



(Unaudited)


(Audited)




ASSETS





CURRENT ASSETS:





Cash and cash equivalents


$            30,542


$            16,930

Short-term bank deposits


15,000


5,557

Restricted deposit


23,154


23,183

Available-for-sale marketable securities


40,038


61,012

Trade receivables, net


21,524


29,008

Other receivables and prepaid expenses


8,128


6,528

Inventories


17,266


10,668

Total current assets


155,652


152,886






LONG-TERM ASSETS:





Restricted deposit


440


10,913

Severance pay fund


390


387

Operating lease right-of-use assets


5,740


6,368

Deferred taxes


413


517

Other assets 


767


926

Total long-term assets


7,750


19,111






PROPERTY AND EQUIPMENT, NET


10,146


8,135

GOODWILL AND INTANGIBLE ASSETS, NET


34,732


35,037






Total assets


$          208,280


$          215,169






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





Trade payables


$               7,476


$            11,676

Deferred revenues


31,387


36,360

Short-term operating lease liabilities


3,111


3,151

Other payables and accrued expenses


22,605


22,255

Total current liabilities


64,579


73,442






LONG-TERM LIABILITIES:





Deferred revenues


8,778


5,262

Long-term operating lease liabilities


3,065


3,820

Accrued severance pay


797


794

Total long-term liabilities


12,640


9,876






SHAREHOLDERS' EQUITY


131,061


131,851






Total liabilities and shareholders' equity


$          208,280


$          215,169











 

 

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,


2020


2019


2020


2019


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)









Cash flows from operating activities:
















Net Loss

$        (3,614)


$     (1,533)


$      (5,274)


$     (4,866)

Adjustments to reconcile net income  to net cash used in operating activities:








Depreciation

897


617


1,685


1,233

Stock-based compensation related to options granted to employees

1,232


843


2,156


1,588

Amortization of intangible assets

152


421


304


841

Increase (Decrease) in accrued severance pay, net

(1)


15


-


(50)

Decrease (Increase) in other assets

(1)


(344)


159


(277)

Decrease in accrued interest and  amortization of premium on marketable securities 

57


164


228


241

Changes in operating leases, net

544


588


(167)


382

Decrease in trade receivables

1,616


6,823


7,484


4,230

Decrease (Increase) in other receivables and prepaid expenses

(518)


773


(919)


(374)

Decrease (Increase) in inventories

(2,113)


1,676


(6,598)


(234)

Decrease (Increase) in long-term deferred taxes, net

20


(149)


104


(182)

Decrease in trade payables

(6,468)


(3,769)


(4,200)


(1,212)

Increase (Decrease) in employees and payroll accruals

1,024


517


(301)


1,540

Increase (Decrease) in deferred revenues

4,169


1,915


(1,457)


1,323

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

2,235


(7,923)


517


(6,030)




-


-


-

Net cash provided by (used in) operating activities

(769)


634


(6,279)


(1,847)









Cash flows from investing activities:








Decrease (Increase) in restricted deposit

9,002


42


10,502


(41)

Redemption of (Investment in) short-term deposits 

(14,200)


933


(9,443)


4,919

Purchase of property and equipment

(2,345)


(748)


(3,696)


(1,477)

Investment in available-for sale marketable securities

-


(13,020)


(375)


(24,604)

Proceeds from redemption or sale of available-for sale marketable securities

8,523


12,190


21,446


23,569

Net cash provided by (used in) investing activities

980


(603)


18,434


2,366









Cash flows from financing activities:
















Exercise of employee stock options 

837


56


1,457


662

Net cash provided by financing activities

837


56


1,457


662

















Increase in cash and cash equivalents

1,048


87


13,612


1,181

Cash and cash equivalents at the beginning of the period

29,494


17,430


16,930


16,336









Cash and cash equivalents at the end of the period

$        30,542


$     17,517


$     30,542


$     17,517

















 

Cision View original content:http://www.prnewswire.com/news-releases/allot-announces-second-quarter-2020-financial-results-301105399.html

SOURCE Allot Ltd.


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