Allot Ltd. Secures Strategic Advantage in SECaaS with Play Partnership

Allot Ltd. (NASDAQ: ALLT) has taken a significant step forward in its push to dominate the Security-as-a-Service (SECaaS) market with its expanded partnership with Play, Poland's leading convergent operator. By extending its cybersecurity protections to Play's fixed broadband customers, Allot is not only unlocking new revenue streams but also reinforcing its position as a go-to provider for telecom operators seeking end-to-end network security solutions. This strategic move underscores the company's ability to capitalize on the growing demand for SECaaS, a sector projected to exceed $10 billion by 2027.

The Play Partnership: A Blueprint for Recurring Revenue Growth

Play's existing relationship with Allot dates back to 2021, when it deployed the company's NetworkSecure solution for mobile customers. The April 2025 agreement to extend this protection to fixed broadband subscribers via Allot's DNS Secure solution marks a pivotal expansion. DNS Secure's “light touch” integration—deployed either standalone or alongside NetworkSecure—ensures seamless cybersecurity management across both fixed and mobile networks. This unified approach is critical for operators like Play, which aim to offer a consistent, converged security experience to millions of customers.

The partnership's financial implications are equally compelling. Allot's Q1 2025 results reveal SECaaS revenue surged 49% year-over-year to $5.1 million, while its SECaaS Annual Recurring Revenue (ARR) jumped 54% to $21.2 million. These metrics highlight the scalability of Allot's subscription-based model, which generates predictable cash flows and reduces reliance on one-time hardware sales.

Why This Matters for Market Leadership

Allot's deal with Play exemplifies its strategy to lock in tier-1 telecom operators with specialized, network-native solutions. By addressing threats like malware, phishing, and ransomware at the infrastructure level, Allot's offerings align perfectly with operators' needs to monetize cybersecurity as a value-added service. This is particularly true in Europe (EMEA), where 72% of Allot's Q1 2025 revenue originated and demand for converged security is rising.

The partnership also mitigates a key risk for Allot: customer concentration. Play's commitment to expanding its relationship—from mobile to fixed broadband—demonstrates the stickiness of Allot's ecosystem. Meanwhile, the integration of its SG Tera-III platform and OffNetSecure solution (which extends protection to off-network scenarios) creates a moat against competitors like Cisco and Fortinet, which lack telecom-specific expertise.

Data-Driven Momentum and Analyst Sentiment

Allot's financial trajectory supports its growth narrative:
- Operating cash flow turned positive in Q1 2025 ($1.7 million) for the first time in years.
- Management has guided for SECaaS revenue and ARR to grow 50% or more in 2025 compared to 2024.

Analysts have taken note. Northland Securities recently raised its price target to $15, citing the Play deal and Allot's pipeline of multi-million-dollar agreements with tier-1 operators. The firm estimates product revenue could hit $47 million in fiscal 2026, driven by demand for the SG Tera-III platform and SECaaS subscriptions.

Risks and Considerations

While Allot's strategy is promising, challenges remain. The telecom cybersecurity market is fiercely competitive, and Allot must continue to innovate to stay ahead. Additionally, delays in large contracts or macroeconomic downturns could pressure margins. However, the Play partnership—alongside wins with Verizon Business and others—suggests Allot is well-positioned to weather these risks.

Investment Thesis: A Play for SECaaS Dominance

Allot's expansion into fixed broadband cybersecurity with Play is more than a single deal—it's a catalyst for sustained growth in recurring revenue and market share. With its SECaaS ARR growing at a blistering 54% annually and a product portfolio that meets operators' evolving needs, Allot is primed to capitalize on a secular trend. Investors seeking exposure to the telecom security boom should view dips in ALLT's stock as buying opportunities, especially with analysts forecasting further upside.

In short, Allot's partnership with Play isn't just about securing fixed broadband customers—it's about securing a leadership position in a market that's only getting bigger.