Thursday, August 7, 2014

Allot: Expects US Growth; VAS Could Reach 50% of Revenues

Allot Communications published its Q2 results (revenues on $28.2M, here). During the earning call, the new President and CEO, Andrei Elefant [pictured], who assumed the CEO position on July 1st, provided some observations on the DPI business:
  • Revenue from EMEA where 62% and bookings from this territory during the quarter indicates a continuous pull up from the 2012 flows. APAC and Americas were each 19% of revenues.
  • In the U.S., we feel that the interest from the side of service providers in application-centric solutions is growing, as the industry approaches the final phase of the new net neutrality rules formation. The FCC will vote on accepting the new net neutrality rule during the second half of September, once the period of comment submission by industry participants is terminated. We believe that the interest in application-centric solutions will grow thereafter. 

    Related post: "Sandvine to the FCC: Internet Fast Lanes are not Needed" - here.
  • We note that the progress to win new customers in the U.S. may be lengthy, but might expedite once the regulatory framework is completed .. we already have projects, a Tier 1 operators in the U.S. And this is something that we won 2 years ago and we have some very nice customers in North America. The comment that I was making [above] is mainly to explain that we believe that the environment is going to look better for us because of the recent changes that we see .. We have some projects in the pipeline ..
Regarding Value-Added services:
  • Our funnel consists of major portion of value-added service projects and we continue to view this segment, spearheaded by revenue-generating services such as analytics, network security and application-centric services, as key catalyst for our ongoing growth
  • we see between 20% to 30% of our booking coming from the value-added services .. [Q: So you're saying it could go 50-50?] A: Yes
  • ..these value-added services are helping us also to penetrate and helping us on the competitive front to differentiate ourselves versus competition
  • Examples for these directions are application-centric services such as zero-rated plans and personalized security services. We are seeing an increased demand for such applications from the side of leading global mobile service providers, and our offering in this space is gradually becoming a meaningful focus of our overall value-added services suite
See "Allot Communications' (ALLT) CEO Andrei Elefant on Q2 2014 Results - Earnings Call Transcript", by SeekingAlpha, here.

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