Allot Announces Fourth Quarter and Full Year 2019 Financial Results
HOD HASHARON, Israel, Feb. 4, 2020 /PRNewswire/ -- Allot Ltd. (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.
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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.
Financial Outlook
-- 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;
Management Comment
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."
Q4 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
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, 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.
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 Year Ended December 31, December 31, --- 2019 2018 2019 2018 --- (Unaudited) (Unaudited) (Unaudited) (Audited) Revenues $30,567 $26,885 $110,100 $95,837 Cost of revenues 9,784 8,296 33,834 29,349 Gross profit 20,783 18,589 76,266 66,488 --- Operating expenses: Research and development costs, net 8,563 6,632 31,461 25,418 Sales and marketing 12,186 10,754 47,105 40,849 General and administrative 1,954 2,616 6,678 10,416 --- Total operating expenses 22,703 20,002 85,244 76,683 Operating loss (1,920) (1,413) (8,978) (10,195) Financial and other income, net 600 601 1,960 2,208 --- Loss before income tax expenses (1,320) (812) (7,018) (7,987) Tax expenses 362 1,005 1,641 2,428 --- Net Loss (1,682) (1,817) (8,659) (10,415) === Basic net loss per share $(0.05) $(0.05) $(0.25) $(0.31) Diluted net loss per share $(0.05) $(0.05) $(0.25) $(0.31) Weighted average number of shares used in computing basic net loss per share 34,450,317 33,860,114 34,250,582 33,710,507 === Weighted average number of shares used in computing diluted net loss per share 34,450,317 33,860,114 34,250,582 33,710,507 ===
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 Year Ended December 31, December 31, 2019 2018 2019 2018 (Unaudited) (Unaudited) GAAP cost of revenues $9,784 $8,296 $33,834 $29,349 Share-based compensation (1) (76) (60) (264) (316) Amortization of intangible assets (2) (152) (233) (853) (930) Changes in taxes and headcount related items (5) - (17) 75 (17) Non-GAAP cost of revenues $9,556 $7,986 $32,792 $28,086 --- GAAP gross profit $20,783 $18,589 $76,266 $66,488 Gross profit adjustments 228 310 1,042 1,263 Non-GAAP gross profit $21,011 $18,899 $77,308 $67,751 --- GAAP operating expenses $22,703 $20,002 $85,244 $76,683 Share-based compensation (1) (942) (634) (3,156) (2,546) Amortization of intangible assets (2) (189) (175) (754) (700) Income (Expenses) related to M&A activities (3) 1,246 (93) 3,980 (394) Restructuring expenses (4) - (62) (62) Changes in taxes and headcount related items (5) - (40) (31) (420) Non-GAAP operating expenses $22,818 $18,998 $85,283 $72,561 --- GAAP financial and other income $600 $601 $1,960 $2,208 Expenses related to M&A activities (3) - (75) (224) Exchange rate differences* (119) 83 - Non-GAAP Financial and other income $481 $526 $2,043 $1,984 --- GAAP taxes on income $362 $1,005 $1,641 $2,428 Tax expenses in respect of net deferred tax asset recorded (25) (123) (74) (116) Non-GAAP taxes on income $337 $882 $1,567 $2,312 === GAAP Net Loss $(1,682) $(1,817) $(8,659) $(10,415) Share-based compensation (1) 1,018 694 3,420 2,862 Amortization of intangible assets (2) 341 408 1,607 1,630 Expenses (Income) related to M&A activities (3) (1,246) 18 (3,980) 170 Restructuring expenses (4) - 62 62 Changes in taxes and headcount related items (5) - 57 (44) 437 Exchange rate differences (119) 83 - Tax expenses in respect of net deferred tax asset recorded 25 123 74 116 Non-GAAP Net Loss $(1,663) $(455) $(7,499) $(5,138) === GAAP Loss per share (diluted) $(0.05) $(0.05) $(0.25) $(0.31) Share-based compensation 0.03 0.02 0.10 0.08 Amortization of intangible assets 0.01 0.01 0.05 0.05 Expenses (Income) related to M&A activities (0.04) (0.12) 0.01 Restructuring expenses - 0.00 Changes in taxes and headcount related items - (0.00) 0.01 Exchange rate differences (0.00) 0.00 - Tax expense in respect of net deferred tax asset recorded 0.00 0.01 0.00 0.01 Non-GAAP Net loss per share (diluted) $(0.05) $(0.01) $(0.22) $(0.15) === Weighted average number of shares used in computing GAAP diluted net loss per share 34,450,317 33,860,114 34,250,582 33,710,507 Weighted average number of shares used in computing non-GAAP diluted net loss per share 34,450,317 33,860,114 34,250,582 33,710,507 * 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 COMMUNICATIONS 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 Year Ended December 31, December 31, 2019 2018 2019 2018 (Unaudited) (Unaudited) (1) Share-based compensation: Cost of revenues $76 $60 $264 $316 Research and development costs, net 230 174 847 678 Sales and marketing 350 227 1,257 928 General and administrative 362 233 1,052 940 $1,018 $694 $3,420 $2,862 (2) Amortization of intangible assets Cost of revenues $152 $233 $853 $930 Sales and marketing 189 175 754 700 $341 $408 $1,607 $1,630 (3) Expenses (Income) related to M&A activities General and administrative $(1,374) $ - $(4,882) $69 Research and development costs, net 128 93 902 325 Financial income (75) (224) $(1,246) $18 $(3,980) $170 (4) Restructuring expenses General and administrative $ - $62 $ - $62 $ - $62 $ - $62 (5) Changes in taxes and headcount related items Sales and marketing $ - $40 $16 $262 Cost of revenues 17 (75) 17 General and administrative 15 158 $ - $57 $(44) $437 (*) Excluding share-based compensation related to the restructuring plan, which was already included under restructuring expenses.
TABLE - 3 ALLOT LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) December 31, December 31, 2019 2018 (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash and cash equivalents $16,930 $16,336 Short term deposits 5,557 22,543 Restricted deposit 23,183 465 Marketable securities 61,012 64,290 Trade receivables, net 29,008 26,093 Other receivables and prepaid expenses 6,935 3,647 Inventories 10,668 11,345 Total current assets 153,293 144,719 LONG-TERM ASSETS: Restricted deposit 10,913 257 Severance pay fund 387 345 Operating lease right-of-use assets 6,368 Deferred taxes 517 281 Other assets 519 600 Total long-term assets 18,704 1,483 PROPERTY AND EQUIPMENT, NET 8,135 6,249 GOODWILL AND INTANGIBLE ASSETS, NET 35,037 37,393 Total assets $215,169 $189,844 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $11,676 $7,813 Deferred revenues 36,360 13,855 Short-term operating lease liabilities 3,151 Other payables and accrued expenses 22,255 21,052 Total current liabilities 73,442 42,720 LONG-TERM LIABILITIES: Deferred revenues 5,262 Long-term operating lease liabilities 3,820 4,247 Accrued severance pay 794 Other long term liabilities 806 Total long-term liabilities 9,876 6,168 SHAREHOLDERS' EQUITY 131,851 135,903 Total liabilities and shareholders' equity $215,169 $189,844
TABLE - 4 ALLOT LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Three Months Ended Year Ended December 31, December 31, --- 2019 2018 2019 2018 --- (Unaudited) (Unaudited) (Unaudited) (Audited) Cash flows from operating activities: --- Net Loss $(1,682) $(1,817) $(8,659) $(10,415) Adjustments to reconcile net income to net cash used in operating activities: Depreciation 722 601 2,637 2,204 Stock-based compensation related to options granted to employees 1,018 694 3,420 2,862 Amortization of intangible assets 341 408 1,607 1,630 Capital loss 39 Decrease (Increase) in accrued severance pay, net (21) (18) (54) 16 Decrease in other assets 247 83 81 535 Decrease in accrued interest and amortization of premium on marketable securities 7 193 343 804 Changes in operating leases, net 456 603 - Decrease (Increase) in trade receivables (8,034) 359 (2,915) (3,356) Decrease (Increase) in other receivables and prepaid expenses (2,886) 184 (3,575) (1,101) Decrease (Increase) in inventories (1,387) 607 (138) (3,448) Increase (Decrease) in long-term deferred taxes, net 33 27 (236) 20 Increase (Decrease) in trade payables 4,389 (4,370) 3,863 1,945 Increase (Decrease) in employees and payroll accruals 4,048 (998) 4,635 (1,178) Increase in deferred revenues 5,760 1,421 23,520 3,566 Increase (Decrease) in other payables, accrued expenses and other long term liabilities 464 3,383 (9,040) 6,906 Net cash provided by operating activities 3,475 757 16,092 1,029 --- Cash flows from investing activities: --- Increase in restricted deposit (23,331) (32) (33,374) (294) Redemption of short-term deposits 3,000 1,900 16,986 8,500 Purchase of property and equipment (918) (1,427) (3,708) (3,485) Investment in marketable securities (8,154) (9,584) (39,950) (34,777) Proceeds from redemption or sale of marketable securities 11,173 8,924 43,555 32,651 Acquisitions (3,048) Net cash used in investing activities (18,230) (219) (16,491) (453) --- Cash flows from financing activities: --- Exercise of employee stock options 220 74 993 418 Net cash provided by financing activities 220 74 993 418 --- Increase (Decrease) in cash and cash equivalents (14,535) 612 594 994 Cash, cash equivalents and restricted cash at the beginning of the period 31,465 15,724 16,336 15,342 Cash and cash equivalents at the end of the period $16,930 $16,336 $16,930 $16,336
Investor Relations Contact:
GK Investor Relations
Ehud Helft/Gavriel Frohwein
+1-646-688-3559
allot@gkir.com
Public Relations Contact:
Seth Greenberg, Allot Ltd.
+972-54-922-2294
sgreenberg@allot.com
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SOURCE Allot Ltd.