Israeli telecommunications software company Allot (Nasdaq: ALLT; TASE: ALLT) has announced a streamlining plan designed to cut annual costs by $15 million, which is it believed will include layoffs. The company had 749 employees at the end of 2022, of which 314 (42%) were in Israel.
Allot provides network intelligence and security solutions (SECaaS) for service providers and enterprises worldwide as a service. The company published its second quarter financial results today having previously issued a profit warning. Allot also lowered its annual guidance and sees 2023 revenue of $95-110 million, $11 million from SECaaS, down from $110-120 million ($11-13 million from SECaaS). If the forecast is realized, Allot will end 2023 with revenue down 10.4%-22.6%.
In the second quarter, Allot reported revenue of $25 million, down 23.6% from the corresponding quarter of 2022. GAAP net loss was $20.7 million, compared with a net loss of $6.2 million in the corresponding quarter. Non-GAAP net loss was $18.3 million, quadruple the net loss in the corresponding quarter.
Allot president & CEO Erez Antebi said, "We believe that our strategy of transforming our business towards a recurring SECaaS revenue model will drive sustainable profitable growth and long-term shareholder value. However, the conversion of won SECaaS deals to paying subscribers continues to take longer than expected, and SMART is experiencing lower revenues in light of continued challenging economic conditions. We are committed to our target of reaching profitability in 2024 through the growth of the SECaaS business, combined with tight expense control. As we strive toward our goal of driving profitable growth, we are implementing a cost reduction plan which we expect will reduce our yearly expenses by approximately $15 million."
At the end of trading yesterday, Allot had a market cap of $94 million, after its share price has fallen 27% since the start of 2023. The share price is down a further 12% at $2.20 in premarket trading on Nasdaq.
Published by Globes, Israel business news - en.globes.co.il - on August 31, 2023.
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