Rory Wallace

Rory Wallace asked about the book-to-bill ratio for the Smart business in 2025, given recent large orders, and how this contextualizes the 2026 guidance. He also inquired about Allot's modular approach to adding new products like Firewall-as-a-Service and identity protection for SMBs and consumers, and how this differentiates them. Additionally, he sought elaboration on the vision for extending consumer protection beyond data to the 'digital life cycle,' and asked about the near-term SECaaS ARR, promotional activity, and the impact of DRAM shortages on gross margins.

Answer

CEO Eyal Harari confirmed a book-to-bill 'way over one' for the Smart business in 2025, with a strong backlog providing good visibility for continued double-digit growth in 2026. He explained that Allot's enhanced cybersecurity engines offer 360-degree protection, making the portfolio more robust for new customers and providing easier upsell opportunities for existing tier-one customers. The vision for consumer digital life cycle protection involves leveraging network data to expand protection to identity, fraud, and phishing. Eyal Harari reiterated strong potential for SECaaS growth, driven by existing customer promotions and new launches. CFO Liat Nahum stated that while DRAM shortages are factored in, the company still forecasts a 70% gross margin for 2026. CEO Eyal Harari added that profitability will improve due to price increases and the higher-margin SECaaS business.

Rory Wallace inquired about the book-to-bill ratio for the Smart business in 2025, seeking context for the 2026 guidance regarding pipeline conversion. He also asked how Allot's modular addition of products like Firewall-as-a-Service and identity protection positions it uniquely for SMBs and consumers in new carrier bids. Furthermore, he sought elaboration on the vision for extending consumer protection beyond data to the entire digital lifecycle, and how the incremental SECaaS ARR from Q4 might trend given promotional activities. Finally, he asked about the impact of DRAM shortages on gross margins for 2026.

Answer

CEO Eyal Harari confirmed the Smart business book-to-bill was 'way over one' in 2025, with significant new agreements contributing to a strong backlog and good visibility for 2026, supporting double-digit total revenue growth. He explained that Allot's enhanced cybersecurity engines, offering 360-degree protection (network, file, Wi-Fi, DNS, Off-Net, Firewall, DDoS, identity), make its portfolio more robust for new customers and provide easier, quicker upsell opportunities for over 12 existing tier-1 customers. Mr. Harari detailed the digital lifecycle vision, leveraging network data to protect against identity theft, fraud, and phishing attempts, with new capabilities launching in 2026. He expects strong CCaaS growth to continue, driven by existing customer promotions and new launches. CFO Liat Nahum stated that while DRAM shortages are factored in, the company still forecasts a 70% gross margin for 2026. Mr. Harari added that profitability will improve due to price increases, higher-margin SECaaS contribution, and overall growth.