Allot Sees Over 25% SECaaS Share, Double-Digit ARR Growth and Shekel Headwinds
Allot's SECaaS segment now accounts for over 25% of revenue and is projected to deliver robust double-digit ARR growth in 2026, outpacing the company's 13-14% revenue growth range. A weaker U.S. dollar against the Israeli shekel and planned increases in sales, marketing and R&D expenses will pressure profitability.
1. SECaaS Business Performance
Allot's SECaaS segment drove strong Q4 results as adoption among carriers like Verizon, Vodafone and MasMovil lifted ARR to represent over a quarter of total revenue. Management forecasts robust double-digit ARR growth in 2026, significantly exceeding the company's 13-14% overall revenue growth guidance.
2. Currency Headwinds and Expense Outlook
A weakening U.S. dollar versus the Israeli shekel is expected to weigh on profitability due to substantial shekel-denominated operating costs. The company plans to increase operating expenses in 2026, allocating more to sales and marketing investments alongside a modest rise in R&D spending.
3. MVNO Partnerships and Product Expansion
Allot is embedding its security solutions with two new MVNOs set to launch services in Q2, aiming to expand its total addressable market, though revenue timing remains uncertain. The recently introduced OffNet product has been adopted by existing customers and enhances revenue through higher-tier off-network security offerings, with AI-driven threats fueling demand.