Allot Ltd.

Allot reported Q2 2026 revenue of $27.7 million, up 15% year over year. Non-GAAP gross margin was 71.8% versus 73.4% in Q2 last year; non-GAAP operating income was $2.7 million with a 9.9% margin versus $1.2 million and 5% last year; and non-GAAP net income was $4.6 million, or $0.09 per diluted share, versus $1.5 million, or $0.03, a year ago. GAAP net income was $2.6 million, or $0.05 per diluted share, versus a GAAP net loss of $1.7 million, or $(0.04), last year. SECaaS revenue was $9.4 million, up 47% year over year, and SECaaS ARR was $36.1 million, up 44%; 67% of total revenue was recurring. Cash flow from operations was $8.5 million, and cash, bank deposits, restricted deposits, and investments totaled $107 million, with no debt. For 2026, management raised revenue guidance to $115 million-$118 million, expects SECaaS revenue growth of 40% or more, gross margin around 70%, and operating expense run rate roughly similar to Q2 excluding the one-time lease-related item, with continued profitability improvement expected through the year.

CEO Eyal Harari framed the quarter as another step-up in Allot’s execution, highlighting four straight quarters of double-digit year-over-year growth and accelerating momentum. He emphasized North America as a strategic priority, citing strong product sales, backlog, and pipeline, and said the company is entering the second half with confidence. He also pointed to the company’s 'cybersecurity first' strategy, the growing recurring revenue base, and the new $40 million buyback as evidence of confidence in the business and its financial strength.

CFO Liat Nahum said revenue reached $27.7 million, SECaaS revenue was $9.4 million, and SECaaS ARR was $36.1 million, all supporting strong visibility into 2026 and 2027. She noted non-GAAP gross margin of 71.8%, down from 73.4% due mainly to product mix, but still consistent with the company’s expectation of around 70% for 2026. She also highlighted disciplined cost control: operating expenses were $17.2 million versus $16.4 million last year, but OPEX fell to 62% of revenue from 68%. Cash generation was strong at $8.5 million in operating cash flow, and cash and investments rose to $107 million from $88 million at year-end 2025; she said the board approved a share repurchase program of up to $40 million, to be executed at management discretion under market conditions.

Analysts focused on the sustainability of North America strength, the role of product versus SECaaS, and whether backlog/RPO is at unusually high levels. Management said North America’s strength came from both SECaaS and smart products, but the extra lift this quarter was mainly from smart-product sales, which are nonrecurring, while SECaaS remains the more predictable driver. On backlog and deferred revenue, management said visibility is very strong, with deferred revenue growth reflecting both product deals not yet recognized and recurring support/maintenance; they also said $7.5 million of long-term deferred revenue will begin materializing only in the second half of 2027. Analysts also pressed on the step-up needed in 2H 2026 SECaaS ARR, and management said growth depends on partner execution and onboarding across existing customers, expansion into new segments, new applications, and new logos.