Allot (NASDAQ:ALLT) Chief Executive Officer Eyal Harari said the company’s shift toward cybersecurity services for communications service providers is driving growth, improving profitability and increasing revenue visibility, according to comments made during a fireside chat at the TD Securities TMT Conference.
Harari, speaking with TD Securities cybersecurity analyst Shaul Eyal, described Allot as a company focused on making networks “smarter and more protected,” primarily for communications service providers, or CSPs. He said Allot operates two main product lines: security as a service, aimed at protecting the customers of service providers, and network intelligence solutions, which help service providers manage and protect their own networks.
Security as a Service Drives Growth
Harari said Allot undertook a strategic review several years ago and decided to become a “cybersecurity first” company. The company identified an opportunity to combine its network technology with cybersecurity tools and use CSPs as partners to distribute security services to millions of end customers.
“We decided to turn our previous customers, the CSPs, to be our partners,” Harari said, adding that Allot’s technology allows service providers to offer cybersecurity protections to consumers and small businesses that often lack dedicated security resources.
Harari said the company sees a large opportunity among consumers, families, small offices and home offices, and small businesses that remain underprotected compared with large enterprises. He said Allot’s security-as-a-service product line has grown more than 50% year over year for the past two years and is adding more than 40% growth this year. The product line has now crossed one-third of the company’s revenue, he said.
On the network intelligence side, which Allot calls its Smart product line, Harari said carriers continue to value the company’s platform for network optimization, analytics and cybersecurity protection. He said that product line is seeing stabilization and modest single-digit growth.
First-Quarter Results Improve Visibility
Harari said Allot had a strong first quarter of 2026, marking the third consecutive quarter of double-digit total revenue growth. He said the company “scored 40% growth” and improved profitability metrics, including gross margin, operating profit and free cash flow.
He said Allot has moved from roughly breakeven four quarters ago to an EBIT range of 7% to 10%, with about $0.50 of each incremental dollar flowing to the bottom line over the past 12 months.
Allot also generated more than $10 million of free cash flow in the quarter, which Harari said was well above expectations. He attributed the cash generation to profitability, organizational efficiency and progress on large customer projects, including a previously disclosed project worth tens of millions of dollars.
Harari said Allot entered 2026 with guidance for about 13% revenue growth at the midpoint. Following first-quarter execution, including better-than-expected performance in security as a service and a significant multimillion-dollar Smart product deal for the company’s Tera III platform, Harari said Allot now has better visibility for the year and expects to be at the upper end of its guidance range.
He said recurring revenue has crossed 67% of total revenue, a major change for a company that historically had more fluctuating revenue patterns. Nearly all security-as-a-service revenue is annual recurring revenue-based, he said, and about one-third of revenue comes from Smart recurring revenue.
AI Seen as Both Threat and Productivity Tool
Harari said rising awareness of cyber threats, especially those enabled by artificial intelligence, is helping drive demand among consumers and small businesses. He said AI is making fraud, impersonation, phishing, social engineering and targeted attacks easier to execute at scale.
He described the consumer market as still being in a “naive phase,” with many people believing they do not need protection. However, he said surveys conducted with customers show cybersecurity protection becoming a top priority for consumers.
Harari said Allot is also using AI internally across three areas: product development, software engineering and operational efficiency. He said the company is using tools such as Claude Code to accelerate software development and is exploring AI-driven improvements in customer support, sales pipeline management, forecasting, finance and legal processes.
Product Roadmap Focuses on Consumers and Small Businesses
Harari said Allot is building additional cybersecurity protections for two customer groups: consumers and small businesses. For consumers, the focus is on fraud prevention, personal data protection, credential protection, bank account safety and family protection. He said the company is also working on protections for elderly users, who may be more exposed to phishing, impersonation and deepfake-related fraud.
For small businesses, Harari said Allot is adapting concepts used in enterprise cybersecurity, including ZTNA and SASE, and making them more autonomous, simple and affordable for smaller organizations.
Harari said Allot’s growth strategy includes several parallel drivers:
- Winning new CSP partnerships, especially with Tier 1 service providers.
- Expanding within existing partners into more parts of their networks.
- Increasing service adoption and attach rates among end customers.
- Adding new cybersecurity products to increase value and support upsell opportunities.
He cited Verizon as an example of a partner where Allot expanded from fixed wireless access service to mobile business customers. Harari said new offerings include off-net protection, an autonomous firewall and DDoS protection.
“Their success is our success,” Harari said of Allot’s CSP partners, adding that the company supports service providers with best practices and marketing support while the carriers handle direct customer marketing.
About Allot (NASDAQ:ALLT)
Allot Ltd. is a provider of network intelligence and security solutions designed for service providers and enterprises worldwide. The company delivers software and cloud-based services that enable customers to gain real-time visibility into network traffic, enforce security policies and optimize bandwidth usage. Its platforms support a wide range of applications, from DDoS protection and threat prevention to subscriber experience management and network analytics.
Allot’s product portfolio includes managed solutions for mobile and fixed-line operators, as well as cloud-native services that can be deployed across private, public and hybrid environments.
