Allot Q1 Earnings Miss Estimates Amid Challenging Market Conditions

Allot Ltd ALLT reported a Q1 2023 revenue decline of 34% Y/Y to $21.1 million, missing the estimate of $24.2 million.
SECaas revenue stood at $2.3 million in the quarter, with an ARR of $9.3 million at the end of March 2023.
The non-GAAP gross margin contracted to 67.2% from 70.3% a year ago.
Non-GAAP EPS loss of $(0.21) missed the analyst estimate loss of $(0.18).
Allot held $77 million in cash and equivalents and used $(8.8) million in operating cash flow.
2023 Outlook Reiterated: Allot expects total revenue of $110 million - $120 million (consensus: $113.39 million), with SECaaS revenues of $11 million-$13 million.
Allot projects an ARR of $56 million – $63 million at the end of December 2023 and operating loss and net negative cash flow of between $(15) million-$(20) million for 2023.
"In light of continued challenging economic conditions and our lower revenues, we have been continuously working to reduce our expenses. We remain committed to our target of reaching profitability in 2024 through the growth of the SECaaS business, combined with tight expense control. 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," said CEO Erez Antebi.
The company reiterated its expectations to be profitable in 2024.
Price Action: ALLT shares are trading lower by 7.93% at $2.57 on the last check Tuesday.