Wednesday, August 7, 2013

Allot Sees Growth in VAS Projects, Led by Parental Control; Has 15-20 Cache Customers

Allot Communications published its Q2 results (revenues of $21.5M, here) showing revenue decline compared to Q2, 2012 (-18.6%) and Q1 2013 (-11.2%). Allot explained it with a revenue recognition delay for a Tier1 EMEA project of $5M (which could have brought it to the same revenue level of 2012).

The company also hinted a promising 2nd half for 2013 - ".. not only book-to-bill ratio was once again over 1, but we also reached the record level of bookings during the quarter, a level which is 20% higher compared with 2Q -- with Q2 last year. We feel confident with all of our booking environment as we go into the second half of 2013 and we believe that revenues during the second half of the year will exceed those achieved during the first half".

Allot stated that its VAS revenues accounted for 26% of total booking. During the earning call, Rami Hadar, President and CEO said, in regard to VAS:
  • The growing portion of VAS in our booking is a direct outcome of our DPI-enabled Service Gateway strategy .. Our lineup of VAS offerings is growing rapidly. On top of video caching and optimization we acquired last year, we now have service protection web page, quality of experience monitoring, network analytics and network-based parental control, which we introduced last quarter
  • the leading Value-Added Services product that contribute to the growth in our VAS numbers into the 30%, one of them actually, is parental control
  • We see enhanced demand for VAS that enables service providers to generate new revenue sources, improve quality of experience and create real customer differentiation. In several of our new deals, at least 1 or 2 value-added services are included in the initial rollout
  • Regarding our 2 recent video positions, from operational point of view, both companies are fully integrated into Allot. And on the products front, we expect that by the end of the year, as planned, they will be fully integrated with our Service Gateway platform. Video caching was roughly 5% of our Q2 booking and showing a growing funnel. Video optimization is undergoing several promising trials with 3 Tier 1 service providers
  • we are quite unique in our Value-Added Services offering, and that's the key differentiator and sometimes it makes the whole difference in winning
  • Allot has roughly 5 caching customers from the date we outsourced. And in an OEM basis, our OEM solution and over 3 are brought to us in different shots -- in shapes, maybe 10 additional ones .. I would say we have 15, maybe 20 caching customers, some are using our caching as standalone and some of them are joined with our DPI solution
See "Allot Communications Management Discusses Q2 2013 Results - Earnings Call Transcript', by SeekingAlpha - here.

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