Financial Releases

Hod Hasharon, Israel – July 31, 2012 – Allot Communications Ltd. (NASDAQ: ALLT), a leading supplier of service optimization and revenue generation solutions for fixed and mobile data worldwide, today announced continued growth in sales during the second quarter of 2012. 

Total revenues for the second quarter of 2012 reached $26.4 million, a 43% increase from the $18.5 million of revenues reported for the second quarter of 2011, and a 9% increase from the $24.2 million of revenues reported for the first quarter of 2012.  On a GAAP basis, net profit for the second quarter of 2012 was $2.7 million, or $0.08 per basic and diluted share. This compares with net profit of $1.6 million, or $0.07 per basic share and $0.06 per diluted share, in the second quarter of 2011, and net profit of $3.2 million, or $0.10 per basic and diluted share, in the first quarter of 2012. 

On a non-GAAP basis, excluding the impact of share-based compensation, amortization of certain intangibles and certain one-time charges incurred related to M&A activities and compliance with regulatory matters, non-GAAP net profit for the second quarter of 2012 totaled $5.0 million, or $0.16 per basic share and $0.15 per diluted share, compared with non-GAAP net profit of $2.7 million, or $0.11 per basic share and $0.10 per diluted share, for the second quarter of 2011, and non-GAAP net profit $5.0 million, or $0.16 per basic share and $0.15 per diluted share, for the first quarter of 2012.  The results reflect added operating expenses from the Ortiva Wireless acquisition, which closed on May 15, 2012. 

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 Tables 2 and 3.  The Company provides these non-GAAP financial measures because it believes that 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 that they are useful to investors in enhancing an understanding of the Company’s operating performance.

“Allot continued to demonstrate sustained revenue growth during the quarter," commented Rami Hadar, Allot Communications' President and Chief Executive Officer.  “The demand for network optimization and revenue generating solutions which we offer through our Service Gateway continues to increase as data traffic continues to grow throughout the world.  With today’s announcement regarding the acquisition of Oversi, we now offer the most comprehensive video solution in the industry.”

Recently, the Company achieved the following significant goals:

• During the quarter, received large orders from 14 service providers, 6 of which represented new customers;  
• 6 of the large orders came from mobile service providers, 2 of which were new customers
• Announced closing the acquisition of Ortiva Wireless on May 15, which provides Allot with a best-of-breed video optimization solution.
• Announced the deployment of Ortiva’s video optimization solution at 3UK, a subsidiary of the Hutchison Group;
• Announced the acquisition of Oversi Networks, a leading provider of video caching solutions.

As of June 30, 2012, cash, cash equivalents, short term deposits and marketable securities totaled $159.8 million, post-closing the Ortiva acquisition, with no debt.  The preliminary allocation of the purchase price for Ortiva is based upon estimates and assumptions that are subject to change within the purchase price allocation period, which is generally one year from the acquisition date.  The primary areas of the purchase price allocation that are not yet finalized relate to the measurement of certain assets and liabilities.