Allot Ltd. Plunges 10.09% on Stock Offering

Allot Ltd. (ALLT) experienced a significant drop of 10.09% in pre-market trading on June 25, 2025, marking a notable decline in its stock price.

Allot Ltd. recently priced a new stock offering at $8.00 per share, which is below its last recorded closing price of $9.61. This move is part of a broader strategy to raise $40 million, with the proceeds aimed at eliminating $31.41 million in debt. The largest shareholder has agreed to convert the remaining balance, further streamlining the company's financial obligations.

The company's first-quarter financial results showed a 6% year-over-year increase in revenues, driven significantly by its Security as a Service Solution, CIA, which saw a 55% year-over-year increase. Allot also reported a non-GAAP net income of $0.8 million, a positive turnaround from a loss in the same quarter last year. The company's cash position has been bolstered by positive operating cash flow of $1.7 million, bringing its total cash reserves to over $60 million.

Despite these positive developments, Allot faces several challenges. The official launch of Verizon's mobile service in mid-April resulted in minimal contribution to Q1 results. Additionally, the company's growth projections are heavily reliant on the marketing efforts of service providers, introducing a level of uncertainty. The transition of Vodafone's partnership to a CCAS revenue structure is still ongoing, with some agreements not yet fully realized. The competitive nature of the industry and reliance on external service providers' marketing strategies pose risks to growth projections.