Allot (NASDAQ: ALLT) reported second-quarter FY26 revenue of $27.7 million, a 15% year-over-year increase, driven primarily by strong demand for its cybersecurity-as-a-service (C-SaaS) offerings. The company also raised its full-year revenue guidance to $115-$118 million.

North America emerged as a key growth engine, with regional revenue share jumping to 31% from 17% in the prior year period. This expansion was fueled by robust sales of the Tera 3 platform and consistent C-SaaS adoption. The board approved a $40 million share repurchase program, citing a debt-free balance sheet with over $100 million in cash.

Financial Performance

Allot’s non-GAAP net profit rose to $4.6 million ($0.09 per diluted share), compared to $1.5 million ($0.03 per diluted share) in the same quarter last year. GAAP net income was $2.6 million ($0.05 per diluted share), reversing a net loss of $1.7 million ($0.04 per diluted share) in Q2FY25. The GAAP result included a one-time financial gain of $1.2 million related to an office lease modification.

Operating cash flow more than doubled year-over-year to $8.0 million, reflecting strong collections. Non-GAAP operating income improved to $2.7 million, with an operating margin of 9.9%, up from 5% in the prior year.

*Revenue for Q2FY25 derived from reported 15% YoY growth on $27.7 million.

What the Numbers Show

The company’s recurring revenue model is gaining significant traction. C-SaaS revenue grew 47% year-over-year to $9.4 million, accounting for 34% of total revenue. With annual recurring revenue (ARR) for this segment rising 44% to $36.1 million, recurring streams now represent two-thirds of total revenue. This shift enhances earnings visibility, although gross margin contracted slightly to 71.8% from 73.4% last year due to product mix shifts.

Operational Highlights

• C-SaaS Expansion: Secured four new deals in EMEA, including an upsell for Identity Monitoring services and expansion into the SMB segment.
• Product Demand: Strong interest in the Tera 3 platform, particularly in North America, contributing to a healthy backlog for 2027.
• Guidance Update: Raised full-year 2026 revenue guidance to $115-$118 million from $113-$117 million, expecting C-SaaS revenue growth of 40% or more.
• Balance Sheet: Cash and equivalents totaled $107 million as of June 30, 2026, up from $88 million at year-end 2025, with zero debt.

Allot Ltd (NASDAQ: ALLT) (TASE: ALLT) announced on Aug. 18, 2026, that it is a founding member and Chair of a new Post-Quantum Communications (PQC) Consortium. The initiative aims to develop technologies that secure communications networks against future quantum computing threats.

Supported by the Israel Innovation Authority's Technological Infrastructure Division, the consortium brings together leading technology companies and academic institutions to accelerate innovation in quantum-safe communications.

Consortium Members

The group includes Allot alongside Ceragon, Classiq, Gilat Satellite Networks, Heqa, Elta, NVIDIA, RAD, and Ribbon. Academic partners include Bar-Ilan University, Ben-Gurion University of the Negev, The Hebrew University of Jerusalem, The Open University of Israel, the Technion, and the University of Haifa.

Technology Focus

PQC enables secure communications that can withstand attacks from future quantum computers, which are expected to render many of today's encryption methods vulnerable. As governments, enterprises, and communications providers prepare for the quantum era, the need for quantum-resistant security technologies has become a critical cybersecurity priority.

The consortium will develop and evaluate technologies based on PQC, Quantum Key Distribution (QKD), and hybrid approaches that combine both. Research efforts will address multiple network layers and environments, including optical, Ethernet, IP, mobile, satellite, data center, and internet-based communications.

Leadership Statement

"The transition to quantum-safe communications is one of the most important cybersecurity challenges facing the world today," said Dr. Yaakov Stein, VP CTO of Allot, Chair of the Consortium Board, and Head of the Scientific Committee. "We are proud that Allot is a founding member of this initiative, working alongside NVIDIA, RAD, leading technology innovators, and Israel's top academic institutions. Together, we will help create the technologies needed to protect global communications networks, enterprises and users in the quantum era."

What the Numbers Show

The formation of this consortium signals a strategic shift toward pre-emptive infrastructure hardening rather than reactive security patching. By securing support from the Israel Innovation Authority and aligning with hardware giants like NVIDIA and academic leaders like the Technion, Allot positions itself at the intersection of policy, hardware capability, and theoretical research. This multi-layered approach—covering optical to internet-based communications—suggests that quantum resistance will be treated as a foundational network requirement rather than an add-on service.