Allot Ltd. (ALLT) Fortifies Rakuten Mobile with AI-Powered Network Protection

In the ever-evolving landscape of cybersecurity, Allot Ltd. (ALLT) has emerged as a formidable player, leveraging AI-powered network protection solutions to safeguard some of the world's leading telecommunications providers. One of its most recent and significant partnerships is with Rakuten Mobile, a move that underscores the growing importance of AI in enhancing cybersecurity capabilities. Let's delve into how Allot's innovative solutions are fortifying Rakuten Mobile's defenses and what this means for the broader market.

The Power of AI in Cybersecurity

Allot Ltd.'s AI-powered network protection solutions are designed to provide cloud-native network protection and deep network intelligence. This technology is not just about detecting threats; it's about predicting and mitigating them before they can cause damage. For Rakuten Mobile, this means enhanced cybersecurity protection for its customers' mobile devices, safeguarding them against a wide range of threats, including malware and viruses.

The Partnership: Allot and Rakuten Mobile

The partnership between Allot and Rakuten Mobile is a testament to the growing demand for advanced cybersecurity solutions. Rakuten Mobile, known for its innovative approach to telecommunications, has chosen Allot's solutions to bolster its cybersecurity capabilities. This collaboration brings several specific benefits to Rakuten Mobile's customers:

1. Network-Native Mobile Cybersecurity: Allot's solutions offer network-native mobile cybersecurity functionality, which helps protect customers from mobile threats. This is a significant advantage in an era where mobile devices are increasingly targeted by cybercriminals.

2. Enhanced Protection: The partnership allows Rakuten Mobile to offer enhanced cybersecurity protection for its customers' mobile devices. This ensures that Rakuten Mobile's customers are safeguarded against a wide range of cyber threats, thereby improving their overall security and trust in the service provider.

3. Scalability and Flexibility: Allot's cloud-native solutions are designed to be scalable and flexible, allowing Rakuten Mobile to adapt to changing cybersecurity threats and customer needs.

Financial Metrics: A Look at Allot's Performance

Allot Ltd.'s AI-powered network protection solutions have shown significant success through several key financial metrics and performance indicators. Here are the key points:

1. Revenue Growth: Allot Ltd. reported revenues of $24.9 million for the fourth quarter of 2024, which represents a 2% year-over-year increase and a 7% sequential increase. This return to revenue growth is a positive indicator of the success of their AI-powered solutions.

2. SECaaS Revenue Growth: Security as a Service (SECaaS) revenues continued to grow strongly, increasing 49% year-over-year to $4.8 million. This high double-digit growth rate in SECaaS revenues is a clear indicator of the success of their AI-powered network protection solutions.

3. Gross Margin Improvement: Non-GAAP gross margin for the fourth quarter of 2024 was 69.7%, a significant improvement from 51.7% in the fourth quarter of 2023. This improvement in gross margin indicates that Allot Ltd. is effectively managing its costs while growing its revenues.

4. Operating Profit: Allot Ltd. reported a non-GAAP operating profit of $1.8 million for the fourth quarter of 2024, compared to an operating loss of $17.0 million in the fourth quarter of 2023. This return to profitability is a strong indicator of the success of their AI-powered solutions.

5. Operating Cash Flow: Allot Ltd. generated strong positive operating cash flow of $4.1 million in the fourth quarter of 2024. This positive cash flow generation is a key indicator of the financial health of the company and the success of their AI-powered solutions.

6. SECaaS ARR Growth: December 2024 SECaaS Annual Recurring Revenue (ARR) grew to $18.2 million, an increase of 43% year-over-year. This growth in ARR is a strong indicator of the success of their AI-powered network protection solutions and the potential for long-term recurring revenue.



Industry Comparison

The software industry in the US is forecasted to grow at a 12% rate, while Allot Ltd. is expected to grow at a 7.1% rate over the next three years. Although Allot's growth rate is lower than the industry average, the company's focus on SECaaS and network protection solutions positions it well for future growth. The partnership with Rakuten Mobile is a strategic move that could accelerate this growth, as it expands Allot's customer base and enhances its reputation in the cybersecurity market.

Conclusion

Allot Ltd.'s AI-powered network protection solutions are not just enhancing Rakuten Mobile's cybersecurity capabilities; they are setting a new standard for the industry. With strong financial performance and a growing customer base, Allot is well-positioned to continue its success in the cybersecurity market. As the demand for advanced cybersecurity solutions continues to grow, Allot's innovative approach to network protection will be a key differentiator in the market. Investors and industry watchers alike should keep a close eye on Allot Ltd. as it continues to fortify the digital landscape with its cutting-edge technology.