Allot Ltd (ALLT) 2024 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, welcome to the Allot conference call to discuss today's announcement Allot's results conference call.

女士們、先生們，感謝大家的支持，歡迎參加 Allot 電話會議，討論今天公佈的 Allot 電話會議結果。

(Operator Instructions) As a reminder, this conference is being recorded.

（操作員指示）謹此提醒，本次會議正在錄製中。

You should have all received by now the company's press release, if you have not, please check the company's website at www.allot.com, or call EK Global Investor Relations.

您現在應該已經收到了公司的新聞稿，如果還沒有，請查看公司網站www.allot.com，或致電EK全球投資者關係部門。

I would now hand over the call to Allot Investor Relations Officer, Mr. Kenny Green of EK Global Investor Relations.

現在，我將把電話轉交給 Allot 投資者關係官、EK Global 投資者關係部的 Kenny Green 先生。

Mr. Green, would you like to begin?

格林先生，您想開始嗎？

Thank you, operator.

謝謝你，接線生。

Good day to all of you and welcome to Allot's conference call to discuss the results of the first quarter 2024.

祝大家美好的一天，歡迎參加 Allot 的電話會議，討論 2024 年第一季的業績。

I would like to thank Allot's management for hosting this conference call.

我要感謝 Allot 的管理階層主辦這場電話會議。

With me on the line today are Mr. Eyal Harari, CEO, and Mr. Ziv Leitman, CFO.

今天與我通話的有執行長 Eyal Harari 先生和財務長 Ziv Leitman 先生。

Following Eyal prepared remarks, we will then open the call for the question and answer session.

在埃亞勒準備好發言後，我們將開始問答環節。

And both Eyal and Ziv will be available to answer your questions.

Eyal 和 Ziv 都可以回答您的問題。

You can find the highlights of the quarter, including the financial results and metrics, including those we typically discuss on the conference call in today's earnings press release.

您可以找到本季的亮點，包括財務表現和指標，包括我們通常在今天的收益新聞稿中的電話會議上討論的內容。

Before we start, I'd like to point out the following safe harbor statements.

在開始之前，我想指出以下安全港聲明。

This conference call contains projections or other forward-looking statements regarding future events or the future performance of the company.

本次電話會議包含有關未來事件或公司未來績效的預測或其他前瞻性陳述。

Those statements are only predictions and Allot cannot guarantee that they will in fact occur.

這些陳述只是預測，Allot 不能保證它們實際上會發生。

Allot does not assume any obligation to update that information.

Allot 不承擔更新資訊的任何義務。

Actual events or results may differ materially from those projected, including as a result of changing market trends, delays in the launch of services by Allot's customers, reduced demand and the competitive nature of the security services industry as well as other risks identified in the documents filed by the company with the Securities and Exchange Commission.

實際事件或結果可能與預測有重大差異，包括由於市場趨勢變化、Allot 客戶延遲推出服務、需求減少和安全服務行業的競爭性質以及文件中確定的其他風險該公司向美國證券交易委員會備案。

And with that, I would now like to hand the call over to Eyal Harari, CEO.

現在，我想將電話轉交給執行長 Eral Harari。

Eyal, please go ahead.

埃亞爾，請繼續。

Thank you, Kenny.

謝謝你，肯尼。

I would like to welcome all of you to our first quarter 2024 call, and then we'd like to thank you for joining us today.

歡迎大家參加我們的 2024 年第一季電話會議，感謝您今天加入我們。

I joined Allot as the CEO a few weeks ago, and I am super excited to work with the Board and the entire leadership team to drive a lot to success.

幾週前，我加入 Allot 擔任首席執行官，我非常高興能夠與董事會和整個領導團隊合作，推動成功。

I'm devoting my time to learning, listening and planning the best strategy for the company to achieve long-term profitable growth.

我致力於學習、傾聽和規劃公司的最佳策略，以實現長期獲利成長。

I bring over 20 years of experience working with top-tier telco customers, most recently as CEO for Adcom, and that's the company, a leader in automated service assurance solution for telecom operators running 5G and 4G networks.

我擁有 20 多年與頂級電信客戶合作的經驗，最近擔任 Adcom 首席執行官，這家公司是為運行 5G 和 4G 網路的電信營運商提供自動化服務保障解決方案的領導者。

Already in my first few weeks, I see an amazing organization with great potential with professional people who are highly experienced and motivated.

在我的前幾週，我看到了一個令人驚嘆的組織，擁有巨大的潛力，擁有經驗豐富、積極進取的專業人士。

I see a company with a long tradition of innovation and excellence with fantastic technologies and a base of top-tier leading customers.

我看到一家擁有悠久創新和卓越傳統的公司，擁有出色的技術和頂級領先客戶群。

In addition, we have a growth engine which has already shown strong double-digit revenue growth and I believe it has significant long-term potential.

此外，我們的成長引擎已經顯示出強勁的兩位數收入成長，我相信它具有巨大的長期潛力。

Over the coming months I will be focused on learning about the business and opportunities as well as meeting our key customers and partners.

在接下來的幾個月裡，我將專注於了解業務和機會以及與我們的主要客戶和合作夥伴會面。

I intend to work with the Board, the leadership team and employees to ensure that we fully capitalize on the opportunities that will drive the company to achieve long-term, sustainable, profitable growth.

我打算與董事會、領導團隊和員工合作，確保我們充分利用機遇，推動公司實現長期、可持續、獲利的成長。

I decided to join the Allot as I see a bright future ahead, I believe strongly in Allot's potential.

我決定加入 Allot，因為我看到了光明的未來，我堅信 Allot 的潛力。

While I joined only after the first quarter was already over, I will provide a short summary of the first quarter results.

雖然我是在第一季結束後才加入的，但我將提供第一季業績的簡短摘要。

A lot made progress in the quarter towards reaching the breakeven level in terms of operating profit and net cash flow.

本季度，在營業利潤和淨現金流方面，許多公司在達到盈虧平衡水平方面取得了進展。

To summarize, first quarter revenue was $22 million, 4% ahead of Q1 last year.

總而言之，第一季營收為 2,200 萬美元，比去年第一季成長 4%。

Gross margins returned to the 70% range, a strong improvement over the average gross margin in 2023, which was 60%.

毛利率回到了 70% 的範圍，比 2023 年的平均毛利率 60% 有了大幅改善。

Stable revenue improved gross margin and a significant decrease in operating expense, which were 25% below those of the first quarter of last year, brought us much closer to the break-even level.

穩定的收入提高了毛利率，營運費用大幅下降，比去年第一季下降了 25%，使我們更接近收支平衡水平。

We reported an operating loss of $1.4 million, negative cash flow of $2.4 million and EBITDA loss just below breakeven at $0.1 million for the quarter.

我們報告本季營運虧損 140 萬美元，負現金流 240 萬美元，EBITDA 虧損略低於損益兩平點，為 10 萬美元。

We saw a growth engine SECaaS achieved revenues of $3.4 million, up 48% year-over-year.

我們看到成長引擎 SECaaS 實現了 340 萬美元的收入，年增 48%。

In March the SECaaS ARR was $13.7 million, 47% higher than ours SECaaS ARR as of March 2023.

3 月份，SECaaS ARR 為 1,370 萬美元，比截至 2023 年 3 月的 SECaaS ARR 高出 47%。

SECaaS revenue now makes up 16% of our total revenue and now becoming a more important part of the overall revenue mix.

SECaaS 收入目前占我們總收入的 16%，並成為整體收入組合中更重要的一部分。

We continue to see SECaaS is our growth engine, and we believe it will continue to grow as a percentage of revenues.

我們仍然認為 SECaaS 是我們的成長引擎，我們相信它佔收入的百分比將繼續成長。

With the goal of driving improved performance and profitable growth.

目標是推動績效改善和利潤成長。

The company has made significant changes in recent quarters.

該公司最近幾個季度發生了重大變化。

There have been several rounds of cost-cutting and restructuring through the last year.

去年已經進行了幾輪成本削減和重組。

And as a result, we have significantly optimized our operational expense and lower our break-even point.

因此，我們顯著優化了營運費用並降低了損益平衡點。

Allot's full-time employees count as of March 2024 was 505 compared to 749 at the end of 2022.

截至 2024 年 3 月，Allot 的全職員工人數為 505 人，而 2022 年底為 749 人。

Employee headcount has been reduced by 35% since the peak in September 2022.

自 2022 年 9 月高峰以來，員工人數已減少 35%。

Our goal is to bring business to breakeven during 2024, at the same time, we intend to maintain disciplined investments in the parts of our business that we believe will drive profitable long-term growth.

我們的目標是在 2024 年實現業務收支平衡，同時，我們打算對我們認為將推動盈利的長期增長的業務部分保持嚴格的投資。

I would like now to provide you with a short update on the two business lines, Allot Smart and Allot Secure.

我現在想向您提供有關 Allot Smart 和 Allot Secure 這兩個業務線的簡短更新。

On the Allot Smart front, I believe we have highly competitive product.

在Allot Smart方面，我相信我們擁有極具競爭力的產品。

However, there remains market weakness due to the cutbacks in spending by our customers as well as challenging macroeconomic trends.

然而，由於客戶支出削減以及宏觀經濟趨勢充滿挑戰，市場仍然疲軟。

Looking ahead, we have a healthy pipeline with good mix of opportunities in different stages and across different territories.

展望未來，我們擁有健康的管道，在不同階段和不同地區提供良好的機會組合。

Despite the reduction in overall resource due to the cost cutting initiatives, we have increased the resources for Allot Smart sales in very specific areas where we believe that we can capitalize on the pipeline.

儘管由於成本削減措施導致整體資源減少，但我們在我們認為可以利用通路的特定領域增加了分配智慧銷售的資源。

On the Allot Secure front seekers revenues continue to grow at a high double-digit rate with a Tier 1 customer base. [For motives seen] so far, Allot Secure with a very effective and highly differentiated product.

Allot Secure 前沿搜尋者的收入繼續以兩位數的速度成長，並擁有一級客戶群。 [就動機可見] 到目前為止，Allot Secure 是一款非常有效且高度差異化的產品。

We are the market leader in network native security solution for the mass market.

我們是大眾市場網路原生安全解決方案的市場領導者。

The clearest evidence of our leadership and the differentiation of our product is the significant list of Tier 1 customers we have launched network native security services for the customer, including Verizon, Vodafone, Telefonica and Archison, just to name a few.

我們的領先地位和產品差異化的最明顯證據是我們為客戶推出的網路原生安全服務的重要一級客戶名單，其中包括 Verizon、Vodafone、Telefonica 和 Archison，僅舉幾例。

This strong customer base is a testament to the quality of our solution and demonstrates the long-term potential to further expand within these customers as well as additional Tier 1 accounts.

這一強大的客戶群證明了我們解決方案的質量，並展示了在這些客戶以及其他一級客戶中進一步擴展的長期潛力。

I see SECaaS a solution is a key potential long-term growth driver and believe we are well positioned with existing customer as well as potential new customers.

我認為 SECaaS 解決方案是一個關鍵的潛在長期成長驅動力，並相信我們在現有客戶和潛在新客戶方面處於有利地位。

We are focusing our efforts on our existing SECaaS customers.

我們將重點放在現有的 SECaaS 客戶上。

We believe that more aggressive go-to-market strategy and have them expanded customer base to more services are offered.

我們相信，更積極的進入市場策略可以讓他們擴大客戶群並提供更多服務。

For new SECaaS customers, we are being very selective and focusing on specific strategic opportunities.

對於新的 SECaaS 客戶，我們非常挑剔並專注於特定的策略機會。

Our most exciting launch in 2023 was Verizon Business, which successfully launched its network native security service incorporating Allot network secure.

我們在 2023 年最令人興奮的發布是 Verizon Business，它成功推出了包含 Allot 網路安全的網路原生安全服務。

The launch is going well.

發射進展順利。

And today, Verizon is the largest science SECaaS opportunity for Allot.

如今，Verizon 是 Allot 最大的科學 SECaaS 機會。

The number of customers continued to grow and we are discussing with Verizon several potential expansion opportunities for different customer segments.

客戶數量持續成長，我們正在與 Verizon 討論針對不同客戶群的幾個潛在擴展機會。

We remain excited about the long-term potential of our SECaaS growth engine.

我們對 SECaaS 成長引擎的長期潛力仍然感到興奮。

We SECaaS opportunities as operators continue to be interested in launching network-based security services with our differentiated, scalable solution.

隨著營運商繼續有興趣透過我們的差異化、可擴展的解決方案推出基於網路的安全服務，我們獲得了 SECaaS 機會。

Before we move on to the Q&A, I want to highlight that our CFOs, Ziv Leitman, will be leaving the note at the end of June.

在我們進行問答之前，我想強調一下，我們的財務長 Ziv Leitman 將於 6 月底留下這份說明。

And joining us will be Liat Nahum, as the new CFO.

Liat Nahum 將加入我們，擔任新任財務長。

Liat brings more than 20 years of experience, great talent and skill, both in finance and business leadership.

Liat 在金融和商業領導方面擁有 20 多年的經驗、卓越的才能和技能。

We talked to you high-tech companies, most recently at Amdocs, a public NASDAQ listed one dimensional telecom technology company.

我們與高科技公司進行了交談，最近一次是在 Amdocs，這是一家在納斯達克上市的一維電信技術公司。

I am confident she will significantly contribute to our finance and business strategy ahead.

我相信她將為我們未來的財務和業務策略做出重大貢獻。

On behalf of the employees, management and the Board, I would also like to thanks Ziv, for his 4.5 years of financial leadership and I him every success going forward.

我還要代表員工、管理階層和董事會感謝 Ziv 4.5 年的財務領導，並祝他今後取得成功。

In summary, I am optimistic that Allot will execute on its opportunity to drive sustainable, profitable long-term growth allotted significant untapped potential, a high experienced and motivated workforce, strong technological edge and powerful growth engine and range of top-tier leading customers.

總而言之，我樂觀地認為Allot 將抓住機遇，推動可持續、盈利的長期成長，並擁有巨大的未開發潛力、經驗豐富、積極主動的員工隊伍、強大的技術優勢、強大的成長引擎以及一系列頂級領先客戶。

I look forward to capitalize on our strengths to fully realize the opportunities ahead.

我期待利用我們的優勢充分實現未來的機會。

And now I would like to open the calls for Q&A, and Ziv and myself will be available to answer your questions.

現在我想開始問答環節，Ziv 和我自己將可以回答你們的問題。

Operator?

操作員？

(Operator Instructions)

（操作員說明）

Nehal Chokshi, Northland Capital Markets.

Nehal Chokshi，北國資本市場。

Yes, hi.

是的，嗨。

Thank you for taking our questions.

感謝您接受我們的提問。

Hello, all.

大家好。

You talked about how you want to focus more on existing SECaaS customers.

您談到了您希望如何更專注於現有的 SECaaS 客戶。

Can you delve deeper on to why you're wanting to choose to focus more on existing SECaaS customers.

您能否更深入探討為什麼您希望選擇更專注於現有的 SECaaS 客戶。

Nehal, good morning.

內哈爾，早安。

So as the company already updated as of last year, the decision is to be very focused and selective on the SECaaS business we are pursuing.

因此，由於該公司去年已經進行了更新，因此決定非常專注並選擇性地專注於我們正在追求的 SECaaS 業務。

So we identify a key strategic accounts that we want to work with.

因此，我們確定了我們想要合作的關鍵策略客戶。

Some of them are, of course, our key Tire 1 existing customers and selecting new additional customers we are pursuing in order to be very focused and build a relationship with those customer.

當然，其中一些是我們主要的 Tire 1 現有客戶，以及我們正在追求的新客戶，以便非常專注並與這些客戶建立關係。

We see the highest potential for long-term success.

我們看到了長期成功的最大潛力。

So in this respect, this is not new and we are continuing in 2024 with the same strategy.

因此，從這方面來說，這並不新鮮，我們將在 2024 年繼續採用相同的策略。

Got it.

知道了。

Understood.

明白了。

Okay.

好的。

And the new CEO and CFO, what changes, if any, do you expect to bring to the table?

新任執行長和財務官，您預計會帶來哪些變化（如果有的話）？

So when I joined Allot, a bit more than two weeks ago.

兩週多前，當我加入 Allot 時。

And I mean this stage, mainly busy on learning and then listening to the employees, customers, partners and establishing my plan moving forward.

我的意思是這個階段，主要忙於學習，然後傾聽員工、客戶、合作夥伴的意見，並制定我的前進計劃。

I came from -- I have a lot of experience in the telco industry, and I work over 20 years with the [many people ones] globally.

我來自——我在電信行業擁有豐富的經驗，並且在全球範圍內與[多人]一起工作了 20 多年。

And I'm looking to see where we need to focus and adjust in order to make a lot successful as possible.

我正在尋找我們需要關注和調整的地方，以便盡可能取得成功。

And as mentioned already previous calls, we are looking this year we have turnaround here and get the company to towards breakeven point, allowing us to stabilize the business and align moving forward to a strategic focus that we are now analyzing to make sure that we are using all the potential of the company.

正如先前的電話會議中所提到的，我們希望今年我們能夠扭轉局面，讓公司達到盈虧平衡點，從而使我們能夠穩定業務並朝著我們現在正在分析的戰略重點前進，以確保我們充分發揮公司的全部潛力。

So in this stage, I have nothing yet to share, give you some time to continue learning, analyzing again suggesting, and I'm sure that within a few quarters, like we'll be able to give you some more color about the new directions and the adjustments.

所以在這個階段，我還沒有什麼可以分享的，給你一些時間繼續學習，再次分析建議，我相信在幾個季度內，我們將能夠給你更多關於新的色彩方向和調整。

[Okay, great].

[好的，太好了]。

And then on the core DPI Business, what are the -- talked about that there's still market declines.

然後，關於核心 DPI 業務，我們談到市場仍在下滑。

I think there was our percent brine occurred downgrade, implying that they're also seeing significant declines as well, what are you seeing in terms of market share occurring and what appears to still be a declining market?

我認為我們的鹽水百分比發生了降級，這意味著他們也看到了顯著下降，您認為市場份額發生了什麼以及市場似乎仍在下降？

So the smart product line is based on very advanced deep technology that was invested in the along the many years and hundreds of R&D menus and it's very unique and advancing the market.

因此，智慧產品線基於非常先進的深層技術，這些技術是經過多年投資和數百個研發菜單而形成的，它非常獨特並推動市場。

We are a -- we feel that the technology we have is a advanced and very competitive.

我們是——我們覺得我們擁有的技術是先進的並且非常有競爭力。

While (inaudible) we see the [CSPs], the operators are now under pressure to cut costs and reduce CapEx due to the macro economy and overall dealing with the 5G network reduction.

雖然（聽不清楚）我們看到了 [CSP]，但由於宏觀經濟和整體應對 5G 網路縮減的情況，營運商現在面臨著削減成本和資本支出的壓力。

I'm confident that the unique technology we have, we can capitalize on our assets.

我相信我們擁有的獨特技術可以充分利用我們的資產。

We are looking to find the right differentiators and use cases that will provide us the advantage over our competitors and provide the most value to our customers and eventually when you provide the right value a business will follow.

我們正在尋找正確的差異化因素和用例，這將使我們比競爭對手更具優勢，並為我們的客戶提供最大的價值，最終當您提供正確的價值時，企業就會追隨。

So we continue to invest in this very important business line and making sure we have the right solutions for the customer demand.

因此，我們繼續投資這條非常重要的業務線，並確保我們擁有滿足客戶需求的正確解決方案。

Okay.

好的。

And then you mentioned I believe -- yes?

然後你提到我相信──是嗎？

And Nehal, if I may add in our strategy, let me remind all of you is that we assume the DPI market is stable and our strategy for profitable growth will come from the increase in the SECaaS business.

Nehal，如果我可以補充我們的策略，請容我提醒大家，我們假設 DPI 市場穩定，我們的獲利成長策略將來自 SECaaS 業務的成長。

And for instance, this quarter, the SECaaS revenues are 50% higher than the comparable quarter, and this was also the growth rate in previous years.

例如，本季度，SECaaS 收入比可比季度高出 50%，這也是往年的成長率。

So we cannot promise the same growth rate for the future, and it can be higher, it can be lower, but no doubt that this is the growth engine of the company and the positive cost will come from the SECaaS business, while the Smart Business will remain

所以我們不能承諾未來同樣的成長率，可以更高，也可以更低，但毫無疑問，這是公司的成長引擎，正向成本將來自SECaaS業務，而智慧業務會維持

[net table].

[網表]。

Got.

得到。

And your SECaaS ARR was up $1 million Q-over-Q, a little less than 10%.

您的 SECaaS ARR 環比增長了 100 萬美元，略低於 10%。

What was the driver of that sequential increase in your SECaaS ARR.

SECaaS ARR 持續增加的驅動因素是什麼？

So eventually we see incremental increase with most of our customers as they are continuing, we do marketing plans and onboard additional subscribers to our services.

因此，最終我們看到大多數客戶的數量不斷增加，因為他們正在繼續，我們制定了行銷計劃並增加了我們服務的訂閱者。

This trend is expected to continue, as we had more customers, small operators who use our services and then their marketing efforts to onboard additional subscriber to those services.

這種趨勢預計將持續下去，因為我們有更多的客戶、小型業者使用我們的服務，然後他們的行銷努力吸引了更多訂戶使用這些服務。

And this is what we are seeing so far, double-digit growth.

這就是我們迄今為止所看到的兩位數成長。

And we are expecting to continue to see that with the addition of the subscriber in the next quarters.

我們預計隨著未來幾季訂閱者的增加，這種情況將繼續出現。

Okay.

好的。

And then you mentioned that Verizon is your largest opportunity or they also the largest SECaaS ARR contributor?

然後您提到 Verizon 是您最大的機會，或者他們也是最大的 SECaaS ARR 貢獻者？

Yes, in general -- definitely our biggest opportunity.

是的，總的來說——這絕對是我們最大的機會。

As a Verizon is very large CSP with a potential to expand into many services in many areas.

作為一個非常大的 CSP，Verizon 有潛力擴展到許多領域的許多服務。

We don't detail (inaudible) a customer ARR but definitely a very important and strategic customer.

我們沒有詳細說明（聽不清楚）客戶 ARR，但絕對是非常重要的策略客戶。

Okay.

好的。

Alright, thank you.

好的，謝謝。

There are no further questions at this time.

目前沒有其他問題。

Before I hand back the call to our Allot, I would like to remind you that a recording of this call will be available from a Allot's website at investors.allot.com within the coming hours.

在我將通話交還給我們的 Allot 之前，我想提醒您，在接下來的幾個小時內，我們將在 Allot 的網站 Investors.allot.com 上提供本次通話的錄音。

And now I would like to hand back the call to Mr. Kenny Green, Allot's Investor Relations to make his concluding statements.

現在，我想將電話轉回給 Allot 投資者關係部門的 Kenny Green 先生，讓他做出總結性陳述。

Thank you, operator.

謝謝你，接線生。

So over the coming months, we will be organizing calls and meetings follow-ups, new management with all our investors.

因此，在接下來的幾個月裡，我們將與所有投資者組織電話會議和後續會議，以及新的管理階層。

If you're interested in meeting or speaking with us, please feel free to reach out to me or anyone in Allot's Investor Relations team.

如果您有興趣與我們會面或交談，請隨時聯繫我或 Allot 投資者關係團隊的任何人。

On behalf of a Allot, I'd like to thank all of you for joining this call and your interest and a Allot.

我謹代表 Allot，感謝大家參加本次電話會議以及您的興趣和 Allot。

And I would like to thank you, Eyal and Ziv, for hosting this call and wish them the best of luck in his future endeavors.

我要感謝 Eyal 和 Ziv 主持這次電話會議，並祝他們在未來的工作中一切順利。

And with that, we end our call and look forward to speaking with you next quarter and have a good day.

至此，我們結束通話，期待下個季度與您交談，祝您有美好的一天。