ALLT · Allot Ltd.

Allot’s Q1 2026 results reflect a material acceleration in both top-line growth and profitability, driven overwhelmingly by its Security-as-a-Service (SECaaS) segment. Revenue grew 14% YoY to $26.4 million—the third straight quarter of double-digit growth—while SECaaS revenue surged 71% YoY to $8.7 million, now representing a larger share of total revenue and contributing directly to the jump in recurring revenue to 67% of total. Gross margin improved modestly to 70.9% GAAP (up from 69.3%), but the more significant shift occurred at the operating level: GAAP operating income turned positive at $1.5 million versus a $0.7 million loss a year earlier, and non-GAAP operating income more than sextupled to $2.6 million. This inflection reflects disciplined cost management and scale benefits from higher-margin recurring contracts. Management explicitly attributes the strength to ‘robust expansion in our cybersecurity business’ and cites strong organic growth in SECaaS ARR ($33.7M, +59% YoY) as evidence of increasing telco adoption of Allot-powered security services. The company reaffirmed its full-year revenue guidance of $113–$117 million and upgraded its SECaaS growth outlook to ‘40% or more’ for 2026—indicating confidence in sustained execution and visibility. Operating cash flow of $10.6 million (versus $1.7M YoY) further validates the quality of earnings, fueled by a $14.97M increase in deferred revenues and improved working capital management. With cash and equivalents at $98 million as of March 31, 2026, the balance sheet remains strong, supporting continued investment in R&D and sales capacity to capture growing demand for network-native cybersecurity solutions.