Allot reported second quarter 2025 results on August 14, 2025, delivering 9% year-over-year revenue growth to $24.1 million (non-GAAP) and a record Cybersecurity as a Service (CSaaS) annual recurring revenue (ARR) of $25.2 million, up 73% year over year. The company turned a non-GAAP operating loss into $1.2 million in non-GAAP operating income, completed a $46 million equity offering, eliminated all debt, and raised full-year 2025 revenue and CSaaS growth guidance. Major contract wins, including Verizon Business and a Tier one European telecom, signal a significant expansion in Allot(ALLT -8.18%) addressable market and financial outlook.

CSaaS revenue mix transforms Allot growth

CSaaS contributed 27% of total revenue (non-GAAP) in Q2 2025, a substantial increase from prior periods. Additional ARR growth was driven by Vodafone’s migration to the new CSaaS platform, as well as the successful launch of Verizon’s My Business Plan, with results presented mainly on a non-GAAP basis.

"FICAS ARR was up 73% year over year. We ended the quarter at $25.2 million. TICUS contributed over a quarter of our revenues for the first time. In line with our strategy, it is becoming a sizable and increasing portion of our overall revenue with each passing quarter. We also reported 9% year-over-year overall revenue growth with improved margins, growth in profitability, and solid operating cash generation."
-- Eyal Harari, CEO

The rapid expansion of CSaaS not only diversifies Allot’s revenue streams but also supports higher gross margins and improved profitability, strengthening the company’s long-term business model.

European telco deal expands Allot pipeline

A newly signed agreement with a Tier one EMEA telecom operator, valued in the tens of millions of dollars, will be executed over 2026 and 2027 and leverages Allot’s new SGterra3 platform for both mobile and fixed network security and intelligence. This is the company’s largest deal in five years and adds to a robust and growing pipeline.

"This new business win was with a Tier one telco operator in EMEA. It is a pivotal win for Allot, the largest in five years, and it validates our ability to expand our security and network intelligence footprint. The agreement is valued in the range of tens of millions of dollars. The project will be executed over 2026 and 2027. It includes a long-term recurring revenue tail of maintenance and support revenues."
-- Eyal Harari, CEO

This landmark CapEx-driven contract not only secures significant future revenue but also enhances Allot’s credibility and visibility among major telecom operators, positioning the company for further large-scale opportunities.

Allot balance sheet strengthens after equity raise

During the quarter, Allot completed a $46 million follow-on share offering, receiving $40 million in proceeds before quarter-end and the remainder after, then repaid $31.4 million of convertible notes and converted $8.6 million into equity, resulting in zero debt and $72 million in cash and equivalents at June 30, 2025. The company posted $1.5 million in non-GAAP net profit, generated $4.4 million in operating cash flow, and improved non-GAAP gross margin to 73.4% from 70.6% year over year.

"We completed a share offering and combined with our positive operating cash flow, we ended the quarter with over $72 million in net cash and equivalents and no debt. We have a strong balance sheet and expect to continue generating positive operating cash flow. We are executing well on our strategy and are driving sustainable, profitable growth."
-- Eyal Harari, CEO

A strengthened balance sheet and visible profitability reduce financial risk, support ongoing investment, and increase Allot’s appeal to institutional investors seeking sustainable growth.

Looking Ahead

Management raised full-year 2025 revenue guidance to $98 million to $102 million and set CSaaS ARR growth expectations for 2025 at 55%-60% year over year (non-GAAP). Execution of the landmark European telco contract is expected to generate significant CapEx and recurring revenue starting in 2026 and continuing through 2027. Headcount is projected to increase gradually from 487 as of June 2025 toward 500 by year end.