Allot Ltd. (NASDAQ: ALLT) posted a robust fourth‑quarter and full‑year 2025 performance, reporting total revenue of $102.0 million—an 11% increase from $92.2 million in 2024. The company’s revenue growth was driven by a 14% year‑over‑year rise in the fourth quarter, reflecting strong demand for its carrier‑grade security platform and the continued expansion of its Security‑as‑a‑Service (SECaaS) offering.
Net income for the year rose to $3.7 million, or $0.08 per diluted share, turning a $5.9 million loss in 2024 into a profitable year. The earnings beat the consensus estimate of $0.07 per share by $0.01, a margin that was largely enabled by disciplined cost management and the higher‑margin mix of SECaaS contracts.
Gross margin improved to 71.1% on a GAAP basis, up from 69.1% in 2024. The margin expansion reflects the company’s shift from hardware‑centric sales to recurring‑revenue SECaaS contracts, which carry higher gross margins and lower variable costs. Non‑GAAP gross margin was 72.0%, underscoring the strength of the recurring‑revenue model.
SECaaS revenue for 2025 totaled $26.8 million, up 69% year‑over‑year to an ARR of $30.8 million. The growth was driven by new enterprise contracts and expansion within existing customer accounts, reinforcing the company’s strategy to focus on high‑margin, subscription‑based services.
Operating cash flow reached $17.8 million, and cash and cash equivalents stood at $88 million at year‑end. The company remains debt‑free, giving it ample liquidity to fund further SECaaS development and pursue strategic partnerships, such as recent deals with Verizon Business and a tier‑1 EMEA telecom operator.
Management reiterated its 2026 revenue guidance of $113–$117 million, a 11%–15% increase from 2025. CEO Eyal Harari said, “We are very pleased with our turnaround and continued strong improvements throughout 2025. For the year, we drove double‑digit revenue growth, our highest profit in over a decade, and strong operating cash flow. Our growth was primarily driven by continued excellent performance from our cybersecurity solutions.” He added, “Given the continued growth in our cybersecurity business, strong visibility, and a solid backlog, our momentum is set to continue. In 2026, we expect SECaaS to deliver robust double‑digit ARR growth and guiding for revenues to grow to between $113 and $117 million, with continued profitability improvements.”
Despite the solid results, investors reacted negatively, citing concerns over future growth and broader market conditions. The market’s cautious stance suggests that while Allot’s fundamentals are improving, expectations for accelerated growth remain high and investors are sensitive to any perceived slowdown in the cybersecurity services sector.
Allot’s strategic pivot to a high‑margin, recurring‑revenue model positions it well against competitors in the network‑native security space. The company’s strong backlog, high gross margin, and cash‑rich balance sheet provide a solid foundation for scaling its SECaaS portfolio and pursuing additional partnerships in the telecom and enterprise markets.
In summary, Allot’s Q4 2025 earnings demonstrate a successful transition to a subscription‑based business, with profitability, margin expansion, and liquidity all improving. The company’s forward guidance and management confidence signal continued momentum, though market sentiment remains cautious amid broader industry headwinds.
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