Allot Ltd raises 2026 guidance on SECaaS growth and North American momentum
Cybersecurity as a Service segment drives recurring revenue expansion, prompting a $40 million share buyback and an uplift in full-year outlook.
Allot Ltd has reported its second-quarter 2026 results, marking its fourth consecutive quarter of double-digit revenue growth. The company attributed the performance to strong execution in North America and the continued scaling of its Cybersecurity as a Service (SECaaS) business. North American revenue share rose to 31 per cent from 17 per cent in the prior year, driven by high-capacity Tera III platform sales and steady demand for smart network intelligence products.
The SECaaS segment emerged as a key growth vector, with revenue increasing 47 per cent year-on-year to account for over one-third of total revenue. This shift towards recurring subscription fees has improved long-term predictability. In the EMEA region, the company secured four new SECaaS deals, including its first sale of a new identity monitoring service to an existing customer, reinforcing its 'land and expand' strategy.
Allot Ltd raised its full-year 2026 revenue guidance to $115 million–$118 million, citing accelerating order momentum and a robust backlog. Management anticipates SECaaS revenue growth of 40 per cent or more for the full year, supported by user onboarding, segment expansion, new applications, and new customer logos. The company also highlighted a significant opportunity in zero-rating fraud mitigation, with a case study demonstrating an 87 per cent reduction in fraudulent traffic for a Tier 1 operator.
Operational efficiency improved during the quarter, with operating expenses as a percentage of revenue declining to 62 per cent from 68 per cent, despite increased investments in sales and marketing. Gross margin stood at 71.8 per cent, a slight year-on-year decline attributed to a higher concentration of hardware-heavy smart product sales. Operating cash flow was recorded at $8.5 million, following a one-time cash advancement in the previous quarter.
Reflecting confidence in its financial position, Allot Ltd announced a $40 million share repurchase program. The company holds $107 million in cash and maintains a debt-free balance sheet, supported by seven consecutive quarters of positive cash flow. Management also recorded a one-time $1.2 million GAAP financial gain from an office lease modification, which is not expected to recur.
