Allot's Strategic Shift to CSaaS Drives Revenue Growth but Stock Slides to 459th in Trading Volume

On August 15, 2025, Allot (NASDAQ: ALLT) traded with a 0.92% decline, closing with a daily trading volume of $0.22 billion, ranking 459th in market activity. The stock’s performance followed a mixed earnings report and strategic updates.

Allot reported second-quarter 2025 non-GAAP revenue of $24.1 million, a 9% year-over-year increase, driven by a record $25.2 million in Cybersecurity as a Service (CSaaS) annual recurring revenue, up 73% annually. The CSaaS segment now accounts for 27% of total revenue, reflecting a strategic shift toward high-margin recurring models. Key contracts with Verizon and a European telecom operator underscored market expansion potential.

A $46 million equity offering eliminated all debt, leaving the company with $72 million in cash and no outstanding liabilities. Non-GAAP operating income turned positive at $1.2 million, while gross margins improved to 73.4%. The balance sheet strengthening and recurring revenue focus position Allot to sustain profitability amid growth.

A $10s of millions-dollar contract with a Tier 1 European telecom, set for execution over 2026-2027, added to a robust pipeline. The deal, leveraging Allot’s SGterra3 platform, is expected to generate long-term maintenance revenue and validate its capabilities in large-scale deployments.

Management raised full-year 2025 revenue guidance to $98–$102 million and projected CSaaS ARR growth of 55–60% year-over-year. The company also plans to expand headcount to 500 by year-end, reflecting confidence in its strategic direction.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered moderate returns. The total profit grew steadily over the period, with a few fluctuations due to market dynamics. As of the latest data, the strategy's total profit stands at $10,720, with a cumulative return of 1.08 times the initial investment. This approach highlights the importance of trading volume in identifying potentially active and valuable stocks.