Allot Ltd.

Welcome to the conference call services. You are now being placed in the conference. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Bye. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Ladies and gentlemen, thank you for standing by. The call will begin shortly. Ladies and gentlemen, thank you for standing by. Welcome to a Lotz Results conference call. All participants are at present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not, please check the company's website at www.allote.com or call EK Global Investor Relations. I would now hand over the call. to Allot Investor Relations Officer, Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin?

Thank you. Good day to all of you and welcome to Allot's conference call to discuss its financial results for the quarter. I would like to thank Allot's management for hosting this conference call. With me today on the call are Mr. Eyal Harari, Following Eyal's prepared remarks, we will open the call for the question and answer session, and both Eyal and Liat will be available to answer those questions. You can all find the highlights of the quarter, including financial highlights and metrics, including those we typically discuss on the conference call, in today's earnings release. Before we start, I'd like to point out the following Safe Harbor Statement. This conference A lot does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing market trends, delays in the launch of services by a lot of customers, reduced demands, and the competitive nature of the securities services industry, as well as other risks identified in the documents filed by the company with the Securities and Exchange Commission. Also, the financial results in this call will be presented mainly on a non measures to help investors understand Allot's operating performance in the quarter. For all the data, please refer to the financial tables published in the results press release issued earlier today, which also include the gaps of non-gap financial reconciliation tables. And with that, I would now like to hand the call over to Eyal Harari, CEO. Eyal, please go ahead.

Thank you, Kenny. I would like to welcome all of you to our result conference call and thank you for joining us today. I am pleased with the results of the second quarter as we have clearly made good progress. Most notably, I am happy that Allot generated positive operating cash flow and increased its overall net cash position for the first time in three years. This success was driven by our efforts, which drove a significant decrease in operating expenses, while also stabilizing revenue and gross margins. In the past couple of quarters, we have significantly optimized operational expenses, which are approximately 25% lower than last year. We undertook these actions to bring the business to sustainable profitability and to grow the cash position. I want to spend a few moments talking about the various parts of our business. starting with AdoptSecure, our main growth engine. We continue to invest in our CCAS growth engine, and the business continues to gain traction. In the second quarter, CCAS revenue increased by 54% year over year. Our extensive list of Tier 1 customers enabled us to pursue further expansions within these large accounts, while also providing us with high-quality references as we look to attract new logos. We recently signed an expansion agreement with one of our Tier 1 European CSP customers for the provision of CCAS to its customer base. The expansion agreement should start contributing to our revenue at the end of this year, representing additional CCAS growth potential for a lot in 2025. Our most exciting CCAS launch last year was with Varun. The engagement continues to be mutually beneficial, and as a result, we are discussing several potential expansion opportunities within Verizon's different customer segments. I want to point out that Verizon highlighted Allot's contribution to their security solution in the recent published 2024 Mobile Security Index Report, validating Allot as one of their trusted partners in protecting their network and customers. Specifically, the report noted that the growth of the mobile computing and IoT is exponentially expanding the attack surface that needs protection, which in turn would require a matching focus on ensuring sufficient mobile security processes, policies, and investments. Overall, I believe the SICA solution is a key long-term growth driver for a lot in the security space. For Allot Smart, in the second quarter, we saw increasing traction, converting some of our pipeline into contracts. We achieved an improved level of sales to new customers, as well as an expansion of sales to current customers. Allot is a trusted, long-term supplier of its smart products to a strong customer base. This is highlighted by our relationship with Rakuten Mobile. Rakuten is the fourth mobile network operator in Japan with a fully virtualized cloud-native network. Allot has been working closely with Rakuten since 2019 when they were rolling out their network infrastructure. Rakuten recently announced that their subscriber base crossed 7 million. Allot continues to provide Rakuten with solutions as they grow the network to support an expanding subscriber base. Since joining Galot earlier this year, I have been meeting with our key customers and partners globally. I am focused on identifying ways we can leverage our technology to better serve our customers with a goal to reignite growth by expanding within our installed base. Galot has a long tradition of innovation. We differentiate a technology and a top-tier global customer base. I have spent time with employees We have a strong team of professional and talented individuals, many with deep technology know-how and capabilities in the networking and the security space, which stands at the epicenter of TIT's spending priorities. I'm currently working closely with the board and management, including our new CFO, Liat Nahum, who joined us at the beginning of Q3. to formulate a strategic plan to drive renewed revenue growth and long-term profitability. I want to share my initial thoughts. We are looking for long-term profitable growth opportunities that leverage a lot of core capabilities. The cybersecurity market continues to experience rapid growth as threats continue to emerge and increase in sophistication. The mobile cybersecurity market is projected by analytics to be an $8 billion market with over 20% compound average growth over the next decade. Cybersecurity is one of a lot growth engines, and we are considering improvements and innovations to our SICA solution to bring additional value and even better cyber protection to our customers. We are also looking at additional go-to-market strategies for CCaaS to expand our customer base and address the market. Another trend we are looking at is 5G revolution. As new 5G networks continue to be rolled out, the demand for advanced security solution is growing significantly, with analysts expecting compound annual growth rate in excess of 40% over the next five years. A recent report indicates that around 70% of large companies and 40% of small businesses have adopted at least one cloud service to date. The movement to the cloud is being driven by the increasing need for remote work solution, digital transformation initiatives, and the desire to optimize cost and enhance business agility. We are exploring the potential of our products to address and provide additional value to the cloud and 5G markets as we strive for further penetrating these markets. While our go-to-market strategy is global in its outlook, we are under-penetrated in North America market. Allot has seen initial success in the region in recent years, and we have strong references, including Verizon. We are exploring ways in which we can leverage our early success to deepen our engagement in this region, which today is leading many of the security growth trends. We see a significant opportunity for Allot in North America. Allot works with many large enterprises and leading CSPs, and it is clear that customer success and deepening relationships are key drivers to potentially expanding our business within our install base. we are looking at ways to make a lot more customer-centric as we strive to further cement customer relationships, enabling us to penetrate further into organizations with our products and services. A goal would be to structure our organization to better support our customers' business goals, as we believe this will allow us to increase business from existing customers. I am working closely with the board and the management on a strategic plan term profitability. We will provide more details as we progress. In summary, with the research management, we believe we are at the start of a new chapter for Halot. In the second quarter, we stabilized revenues and significantly reduced expenses. We returned the business to the operating profit break-even range with positive cash generation. I believe we are well positioned to drive sustainable, profitable long-term growth, and I am optimistic that Talot will execute on the many opportunities ahead. And now, I would like to hand it over to our CFO, Liat Nahoum, for the financial summary. Liat, please.