Allot: From Deep Packet Inspection to Cybersecurity-First

Nasdaq: ALLT · TASE: ALLT · Founded 1996 in Hod Hasharon · CEO Eyal Harari · 2026 guidance $113–117M revenue · SECaaS ARR $33.7M (March 2026, +59% YoY) · The Israeli deep packet inspection company that spent two decades inside carrier networks — then bet the whole company on becoming a cybersecurity-first platform.

Allot is the Israeli network-intelligence company that built its business on deep packet inspection — the technology that lets telecommunications operators see, classify, and manage every packet flowing through their networks — and is now executing a turnaround from low-margin hardware vendor to cybersecurity-first SaaS platform. Founded in 1996 by Michael Shurman and Yigal Jacoby, Allot's DPI technology sits inside the operating networks of tier-1 telecommunications operators globally, analyzing traffic at the application layer in real time. The company went public on Nasdaq in November 2006 (ticker: ALLT), dual-listed on the Tel Aviv Stock Exchange in 2010, and by 2024 had pivoted its entire strategy around Security-as-a-Service (SECaaS) — embedding cybersecurity directly into the network layer so that every subscriber is protected without installing anything.

The founding and the DPI era

Allot was founded in 1996 in Hod Hasharon by Michael Shurman and Yigal Jacoby to build deep packet inspection technology — systems that analyze network traffic at the application layer, not just at network headers. The founding thesis was that telecommunications operators needed to see what was actually flowing through their networks in order to manage bandwidth, prioritize traffic, and build new services on top of their infrastructure.

The company raised $38 million across several rounds of Israeli venture capital funding by 2004, building its NetEnforcer bandwidth management hardware and NetXplorer analytics software. In November 2006, Allot went public on the Nasdaq Global Market under the ticker ALLT, raising $78 million. The TASE dual listing followed in November 2010.

Through the 2000s and 2010s, Allot built a global footprint inside carrier networks — deploying deep packet inspection appliances that gave operators real-time visibility into traffic flows, application usage, subscriber behavior, and network performance. The technology enabled traffic shaping, quality-of-service enforcement, parental controls, and the analytics layer that operators used to plan capacity and design service tiers. Allot's Service Gateway platform became the standard DPI infrastructure at dozens of tier-1 operators globally, with revenue distributed roughly evenly across Europe, the Americas, and Asia-Pacific.

The cybersecurity pivot

The structural shift that defines Allot's current trajectory is the transition from bandwidth management hardware to cybersecurity-first SaaS. The company recognized that the same deep packet inspection technology that classified traffic could also detect and block threats — malware, phishing, botnet communication, DDoS attacks — at the network level, protecting every device on the operator's network without requiring subscribers to install endpoint software.

The pivot produced two product families. Allot Secure delivers Security-as-a-Service (SECaaS) — embedded, zero-effort cybersecurity for consumers and small businesses, sold through telecommunications operators as a premium subscription service. Allot Smart provides network intelligence — traffic management, analytics, quality-of-experience monitoring, and policy enforcement. In 2024, Allot formally reorganized into a single unified business unit that integrates cybersecurity and network intelligence into one platform.

The business case for telco-embedded security is the anxiety-action gap: surveys show 61% of mobile users are concerned about cybersecurity, but only 36% use any protection. Operators can close that gap by offering always-on security embedded in the network — no app to download, no configuration required — and Allot provides the technology platform that makes it possible.

The turnaround under Eyal Harari

CEO Eyal Harari has framed 2025 as the year the turnaround became undeniable. The numbers support the claim.

Q4 2025: Revenue of $28.4 million, up 14% year-over-year. SECaaS annual recurring revenue reached $30.8 million, up 69% YoY. Non-GAAP operating profit of $3.6 million — a 101% increase over Q4 2024. For the full year, Allot delivered its highest profit in over a decade and generated $17.8 million in operating cash flow. The company exited 2025 with zero debt.

Q1 2026: Revenue of $26.4 million, up 14% YoY — the third consecutive quarter of double-digit revenue growth. SECaaS revenues of $8.7 million, up 71% YoY. March 2026 SECaaS ARR hit $33.7 million, up 59% YoY. GAAP operating income of $1.5 million (compared to a loss of $0.7 million in Q1 2025). Record operating cash flow of $10.6 million. Recurring revenue reached 67% of total revenue.

For full-year 2026, Allot is guiding for $113–117 million in revenue with continued profitability improvements and robust double-digit SECaaS ARR growth.

The AI threat tailwind

Harari has positioned Allot's growth thesis around the escalation of AI-driven cyber threats. As AI makes attack generation faster, cheaper, and more sophisticated — automated phishing, deepfake social engineering, AI-generated malware — the demand for always-on, network-embedded security increases. Allot's argument is that endpoint-only protection cannot scale to meet AI-generated threat volume, and that network-layer security deployed by the telecommunications operator is the only architecture that can protect entire subscriber bases at once.

The company is developing converged products that combine cybersecurity and network intelligence into single integrated solutions, leveraging its three-decade DPI heritage as the technology foundation for real-time threat detection at carrier scale.

How the revenue model works

Allot sells to telecommunications operators, who then offer Allot-powered security services to their subscribers as premium add-ons. The revenue model has two layers.

Network intelligence (legacy). License and maintenance revenue from DPI appliances and traffic management platforms deployed in carrier networks. This is the traditional Allot business — hardware-adjacent, lower-margin, and cyclically tied to operator capital expenditure.

Security-as-a-Service (growth). Recurring revenue from SECaaS — Allot provides the cybersecurity platform, the operator sells the service to subscribers, and Allot earns a share of the subscriber revenue. This is the high-growth, high-visibility segment: SECaaS ARR growing 59–69% YoY, now representing over a third of total revenue, with recurring revenue overall at 67% of the Q1 2026 total.

The mix shift from hardware to SaaS is the structural story — it drives margin expansion, revenue predictability, and the valuation re-rating that Allot's management is pursuing. The company's path from $0.6 million in non-GAAP operating profit (full year 2024) to $8.9 million (full year 2025) to guided further improvement in 2026 traces directly to the recurring-revenue pivot.

Key deployments

Allot's SECaaS platform is deployed with major telecommunications operators across multiple continents. The company's cybersecurity services launched with Telefónica in Spain, Brazil, Peru, and Argentina — one of the earliest large-scale telco-embedded security deployments. Subsequent expansions have brought Allot's security services to operators across Europe, Latin America, and Asia-Pacific. The company does not publicly name most of its operator customers, but the operator base spans tier-1 and tier-2 mobile and fixed-line providers globally.

Allot in the Israeli network-infrastructure cohort

Allot sits alongside Ceragon Networks (wireless backhaul), AudioCodes (enterprise voice), Gilat Satellite Networks (satellite communications), and CEVA (semiconductor IP for wireless connectivity) in the Israeli telecommunications-infrastructure cluster — a cohort of Nasdaq-listed, central-Israel-headquartered companies that provide critical infrastructure layers to global telecommunications operators.

Where Ceragon carries the radio-frequency transport, AudioCodes carries the voice layer, CEVA licenses the chip architecture, and Gilat routes through satellite, Allot inspects the traffic — seeing, classifying, and securing every packet at wire speed. The DPI position gives Allot a structural role inside carrier networks that is difficult to displace once deployed, because replacing a DPI vendor requires re-certifying the entire traffic-management and security stack.

All five companies share the same profile: Israeli engineering depth, multi-decade operator relationships, Nasdaq and TASE dual listings, and the capacity to compound through technology-generation transitions. They are the Israeli operating economy — companies that employ hundreds of Israeli engineers and generate consistent global revenue without the venture-capital exit arc that dominates Israeli technology headlines.

Watch points

• SECaaS ARR velocity — whether the 59–69% YoY growth rate sustains or normalizes as the base scales. The $33.7M March 2026 ARR is the metric to track.
• Revenue guidance execution — $113–117M for 2026 represents continued acceleration. Whether the mix shift to recurring revenue sustains double-digit top-line growth.
• Margin expansion — the path from near-breakeven to meaningful profitability depends on SECaaS scale. Each incremental SECaaS dollar carries higher margins than the legacy DPI business.
• Operator adoption curve — how many new operator deployments Allot wins in 2026, and how quickly deployed operators convert their subscriber bases to paid cybersecurity services.
• AI threat escalation — whether AI-driven cyber threats accelerate demand for network-embedded security faster than the company's current growth rate implies.
• Competitive positioning — Allot competes with Cisco, Sandvine (acquired by Francisco Partners), and operator-built solutions. Whether the cybersecurity-first pivot creates durable differentiation.

Frequently Asked Questions

What is Allot?
Allot Ltd. (Nasdaq: ALLT, TASE: ALLT) is an Israeli network intelligence and cybersecurity company founded in 1996 in Hod Hasharon. The company uses deep packet inspection technology to provide Security-as-a-Service (SECaaS) and network intelligence solutions for telecommunications operators and enterprises globally.

Who is Allot's CEO?
Eyal Harari. Under Harari, Allot has executed a turnaround from near-breakeven to its highest profitability in over a decade, driven by the pivot to cybersecurity-first SaaS.

What is Allot's annual revenue?
2026 guidance is $113–117 million. Q1 2026 revenue was $26.4 million, up 14% year-over-year — the third consecutive quarter of double-digit growth.

What is deep packet inspection?
DPI is the technology that analyzes network traffic at the application layer in real time — seeing not just where a packet is going but what it contains and what application generated it. Allot has built DPI technology since its 1996 founding.

What is Allot Secure?
Allot's Security-as-a-Service (SECaaS) platform. It embeds cybersecurity directly into the telecommunications network so that every subscriber is protected without installing endpoint software. Operators sell Allot Secure as a premium subscription service. SECaaS ARR reached $33.7 million in March 2026, growing 59% year-over-year.

Who founded Allot?
Michael Shurman and Yigal Jacoby, in 1996 in Hod Hasharon, Israel.

Is Allot profitable?
Yes. GAAP operating income of $1.5 million in Q1 2026. Non-GAAP operating profit of $8.9 million for full year 2025 — the highest in over a decade. Zero debt as of December 2025. Record operating cash flow of $10.6 million in Q1 2026.

Where is Allot headquartered?
22 Hanagar Street, Neve Neeman Industrial Zone B, Hod Hasharon, Israel.

Primary Sources

• Allot Q1 2026 earnings release (May 12, 2026)
• Allot Q4/FY 2025 earnings release (February 25, 2026)
• Allot corporate site (allot.com)
• Allot SEC filings via EDGAR
• TASE filings under ALLT

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The Olam Editorial Team