Allot is an undervalued carrier-cybersecurity turnaround, with 44% SECaaS ARR growth, $107 million of net cash, and asymmetric upside if recurring revenue scales.
Overview
Allot provides carrier-grade network intelligence and cybersecurity to communications service providers and enterprises through AllotSmart DPI platforms and Allot Secure SECaaS products. Historically hardware-led, the company is shifting toward recurring software, maintenance, support, and subscription revenue. Network Intelligence represented 63% of fiscal 2025 revenue, while Security Solutions represented 37%; recurring revenue reached 67% of Q2 fiscal 2026 revenue versus 62% a year earlier. **The operating inflection is visible in SECaaS ARR of $36.10 million, up 44% year over year**, and Q2 revenue of $27.74 million, up 15%, the fourth consecutive quarter of double-digit growth. Adjusted EPS was $0.09 versus $0.03, non-GAAP operating margin expanded to 9.9% from 5.0%, and operating cash flow rose to $8.50 million. Allot ended the quarter with $107 million of cash and zero debt, and raised fiscal 2026 revenue guidance to $115 million–$118 million. At approximately $7.50, the company trades at roughly 2.2x forward EV/Sales against the $116.50 million guidance midpoint. Near-term catalysts are SECaaS ARR growth, Tera III deployments, North American expansion, and the $40 million buyback; principal risks are Sandvine competition, telecom procurement delays, privacy regulation, and Israel-related geopolitical exposure.