Allot Announces Fourth Quarter 2019 Financial Results
2019 revenue grew by 15% over 2018 | Backlog grew 100% year over year to $138 million | Cash balance grew to $118 million | 2020 revenues expected to be $135-140 million
Hod Hasharon, Israel – February 4, 2020 – (NASDAQ: ALLT, TASE: ALLT), a leading global provider of innovative network intelligence and security solutions for service providers and enterprises worldwide, today announced its unaudited fourth quarter and full year 2019 financial results.
Third Quarter 2019 – Financial Highlights
- Fourth quarter revenues were $30.6 million, up 14% year-over-year;
- Full year revenues were $110.1 million, up 15% year-over-year;
- Backlog increased by $69 million to $138 million at year-end 2019 compared with $69 million at year-end 2018;
- Year-end cash and investments totaled $117.6 million compared to $103.9 million at year-end 2018;
- Allot signed in 2019 recurring security revenue agreements with a total MAR* of $85 million.
- Management expects 2020 revenues to grow to between $135-140 million, representing accelerated double digit growth;
- Management expects to close additional recurring security revenue deals in 2020. The MAR* of new deals to be signed in 2020 is expected to exceed $140 million;
Erez Antebi, President & CEO of Allot, commented: “We are very pleased with our performance in 2019. Our Visibility & Control business continued to perform well due to ongoing solid execution. We are also happy with our performance in the security space and we had a successful year bringing on several new operators to our security offerings, some of them in a revenue share arrangement. We believe that the recurring revenue and growth we gain from these deals will have a significantly positive long-term impact on our future. We expect to win further such deals in the coming year.”
Continued Mr. Antebi, “Looking out to 2020, we expect accelerated top-line growth. While we continue to invest in our offerings and in sales and marketing, our expenses should grow at a slower rate than our revenue and subsequently we expect to reach profitability in the last quarter of 2020 . We look forward to continued growth as we successfully execute on our strategy.”
Fourth Quarter 2019 Financial Results Summary
Total revenues for the fourth quarter of 2019 were $30.6 million, an increase of 14% compared to $26.9 million in the fourth quarter of 2018.
Gross profit on a GAAP basis for the fourth quarter of 2019 was $20.8 million (gross margin of 68.0%), a 12% improvement compared with $18.6 million (gross margin of 69.1%) in the fourth quarter of 2018.
Gross profit on a non-GAAP basis for the fourth quarter of 2019 was $21.0 million (gross margin of 68.7%), a 11% improvement compared with $18.9 million (gross margin of 70.3%) in the fourth quarter of 2018.
Net loss on a GAAP basis for the fourth quarter of 2019 was $1.7 million, or $0.05 per basic share, compared with a net loss of $1.8 million, or $0.05 per basic share, in the fourth quarter of 2018.
Non-GAAP net loss for the fourth quarter of 2019 was $1.7 million, or $0.05 per basic share, compared with a non-GAAP net loss of $0.5 million, or $0.01 per basic share, in the fourth quarter of 2018.
2019 Financial Results Summary
Total revenues for 2019 were $110.1 million, an increase of 15% compared to $95.8 million in 2018.
Gross profit on a GAAP basis for 2019 was $76.3 million (gross margin of 69.3%), a 15% improvement compared with $66.5 million (gross margin of 69.4%) in 2018.
Gross profit on a non-GAAP basis for 2019 was $77.3 million (gross margin of 70.2%), a 14% improvement compared with $67.8 million (gross margin of 70.7%) in 2018.
Net loss on a GAAP basis for 2019 was $8.7 million, or $0.25 per basic share, an improvement compared with a net loss of $10.4 million, or $0.31 per basic share, in 2018.
Non-GAAP net loss for 2019 was $7.5 million, or $0.22 per basic share, a decrease compared with a non-GAAP net loss of $5.1 million, or $0.15 per basic share, in 2018.
Cash and investments as of December 31, 2019 totaled $117.6 million, compared to $114.8 million as of September 30, 2019 and $103.9 million as of December 31, 2018.
Conference Call & Webcast:
The Allot management team will host a conference call to discuss fourth quarter and full year 2019 earnings results today, February 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: 1-888-668-9141, UK: 0-800-917-5108, Israel: +972-3-918-0609
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
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, restructuring expenses, changes in taxes and headcount related items, 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: 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.
Investors Relations Contact:
GK Investors Relations
Ehud Helft/Gavriel Frohwein
Public Relations Contact:
Director of Corporate Communications