Ladies and gentlemen, thank you for standing by. Welcome to Allot's First Quarter 2025 Results Conference Call. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Allot's Investor Relations team at EK Global Investor Relations at 1-212-378-8040 or view it in the news section of the company's website at www.allot.com. I would now like to hand over the call to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin, please? Thank you. Good day to all of you, and welcome to Allot's conference call to discuss its financial results for the quarter. I would like to thank Allot's management for hosting this conference call. With me today on the call are Mr. Eyal Harari, CEO, and Ms. Liat Nahum, CFO. Following Eyal's prepared remarks, we will open the call for the question-and-answer session, and both Eyal and Liat will be available to answer those questions. You can all find the highlights of the quarter, including financial highlights and metrics, including those we typically discuss on the conference call, in today's earnings release. Before we start, I'd like to point out the following safe harbor statement. This conference call may contain projections or other forward-looking statements regarding future events or the future performance of the company. Those statements are early predictions, and Allot cannot guarantee that they will, in fact, occur. Allot does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing market trends, delays in the launch of services by Allot customers, reduced demands, and the competitive nature of the securities services industry, as well as other risks identified in the documents filed by the company with the Securities and Exchange Commission. Also, the financial results in this call will be presented mainly on a non-GAAP basis. Allot believes that these non-GAAP financial measures provide more consistent and comparable measures to help investors understand Allot's operating performance in the quarter. For all the data, please refer to the financial tables published in the results press release issued earlier today, which also include the GAAP to non-GAAP financial reconciliation tables. I would now like to hand the call over to Eyal Harari, CEO. Eyal, please go ahead. Thank you, Kenny. Let me begin by saying that we are very pleased to report the strong set of first quarter 2025 results. We top and bottom line growth, as well as continued momentum in our CCaaS growth engine. Our results demonstrate that we are successfully and consistently executing on our security-first strategy, bringing renewed growth and profitability to Allot. Our first quarter revenues increased year over year by 6%, while in 2024, our focus was bringing the business to financial stabilization, 2025 remarks, and return to growth. The primary contributor to that revenue increase was our growth engine, the security-as-a-service solution, CCaaS. For the quarter, CCaaS contributed over a fifth of our revenues, with CCaaS ARR at $21.2 million, up 55% year over year. This growth, combined with the steps we took over the past two years to reduce expenses considerably, has translated into a profitable Q1 on a non-GAAP basis. Our non-GAAP net income was $0.8 million for the quarter versus a loss in the first quarter of last year. We reported positive operating cash flow of $1.7 million in the quarter, and as a result, our cash position at the quarter end increased to over $60 million. This great performance is being driven by our motivated and experienced workforce. I want to thank our employees for their continued focus on execution, their steadfast passion for keeping our customer happy, and their ongoing commitment to achieving our business goals. The growing traction of our security-as-a-service solution demonstrates our increased success in convincing telcos about the importance of providing seamless cybersecurity threat protection to their end customers. We are working closely with our customers to help them market cybersecurity solutions and drive increased adoption among their end customers. We are especially excited about our growing partnership with Vodafone and Verizon, which I will elaborate on further in a few minutes. We also have made solid progress growing a deep and broad pipeline of potential opportunities for both CCaaS and Smart products. We are focused on converting this strong pipeline into new partnerships and agreements. We are very proud of our team's solid execution in securing a significant expansion of our partnership with Verizon Business, a division of one of the largest and most prestigious wireless providers in the United States and in the world. We have been providing network-based cybersecurity protection to Verizon Business Fixed Wireless Access customers, giving their one and a half million subscribers the option to use our service. Our success here led to a new agreement to make our solution available to the full Verizon Business mobile customer base of over 30 million subscribers, as well as any new subscribers that they gain. This exciting lead and expand win represents a significant targeted addressable market and long-term growth opportunity for Allot. A few weeks ago, Verizon Business launched a new mobile service called MyBiz Plan, an attractive mobile plan geared towards small and mid-sized businesses that offers a scalable and fully customizable mobile service plan. Usually, Verizon Business includes mobile internet security as part of the base package rather than an add-on, meaning customers automatically opt in at the start, and we get paid by Verizon for each account that is connected. The potential for us from just this deal is substantial. Verizon recently started actively marketing the new offering to both their existing customer base as well as new customers. It has only been a few weeks since launch, and we are very pleased by the initial traction. Given the success of the launch, together with a fixed wireless access customer already using our service, Verizon has become the largest contributor to CCaaS revenues in the first quarter, and we expect it to only grow further from here. We have built a solid working relationship with Verizon Business, and we hope to further extend our collaboration with them in the coming years. Together with other customers that have launched cybersecurity services based on our CCaaS offering, including Vodafone, O2, NEO, and others, which all are progressing nicely, we feel comfortable with our growth estimates, and we expect that for the full year 2025, CCaaS revenues and ARR will achieve strong year-over-year increase at around 50% or more. Last month, we launched our Off-Net Secure solution at RSA Conference in San Francisco. This new cybersecurity solution allows operators to protect their customers against cyber threats when they are off network, meaning they are connected to the internet through means other than the operators' own network. This type of broad connectivity gives the service providers an additional branded channel for staying in touch with their subscriber. Previously, off network was a blind spot for the service providers. Our Off-Net Secure solution is an extension of the Allot Secure cybersecurity platform. The service is activated as part of the provider's branded customer app already running on the customer's device. This offering completes the circle of protection provided by our unified Allot Secure suite and offers telecom providers a new potential premium add-on revenue stream. Our Smart Product is a significant and important part of the overall Allot business. Built on decades of Allot experience, offering top-notch technology and innovation, this solution continues to be a market-leading offering. As a reminder, following our decision to combine our two business units into a single division, our Smart Product is being sold as part of our unified security-first platform. We recently signed several multi-million dollar agreements with new customers for our Smart Product, which will contribute to our overall future growth. These orders were received from multiple different countries. Start to 2025 for Smart gives us confidence in the ongoing demand for these products and services. At the end of last year, we launched our new service gateway, the Tera III Multi-Service Platform, geared toward top-tier telecom operators. The product is a highly attractive solution for Tier 1 networks, offering strong visibility into network traffic, all in one unified platform. We are seeing a lot of interest in this new product, and it has contributed to our strong pipeline of opportunities. During the recent quarters, we have grown our pipeline nicely. We have added both existing customers that may want to upgrade to our new platform, as well as new customers that appreciate the value added that this new product can bring to them. The pipeline includes multi-million dollar opportunities, including a few eight-figure deals. Our current pipeline, therefore, represents a significant future upside potential. A few weeks ago, we attended the RSA Conference, which was held in San Francisco. It was a highly productive event for Allot's marketing team, with multiple meetings and excellent feedback from both existing and potential customers. Customers are clearly supportive of our security-first strategy, with strong interest in our combined offering, especially given our recent top-tier customer wins. Key themes emerged at RSA that reinforce why our security-first strategy is so well-timed. Protecting home and small office networks has moved from a nice-to-have to a must-have service, and the rise of AI has added a new dimension of risk, as well as new solutions which need protection. At our booth, prospects highlighted the value of an in-the-cloud service that delivers real-time visibility and enforcement. These conversations underscore the power of our Allot Secure suite and especially our new Off-Net Secure product. Our solutions address market needs, positioning us to capitalize on the accelerating demand for cybersecurity solutions geared toward consumers and SMB segments. In summary, we are very pleased with our first quarter 2025 performance and our return to year-over-year growth in revenue and profit. We are especially excited about the strong growth in both CCaaS revenue and ARR. Our offerings across the board continue to gain momentum, as has been demonstrated by recent new contract wins and service launches at leading customers. Looking ahead over the remainder of 2025, given our recent successes, we expect that for full year 2025, we will achieve profitable growth, with CCaaS revenue and ARR achieving strong year-over-year increases at around 50% or more. I'm increasingly optimistic about our future. I would like to hand it over to our CFO, Liat Nahum, for the financial summary. Liat, please go ahead. Thanks, Eyal. We reported revenue of $23.2 million in the quarter, up 6% year-over-year. Revenue from our growth engine, CCaaS, was $5.1 million in the quarter, in line with our expectations, and up 49% year-over-year, comprising 22% of our revenue in the quarter. Our CCaaS annual recurring revenue as of March 2025 was $21.2 million. I will now discuss the non-GAAP financial measures. For all our financial results, including the GAAP financial measures and the various other breakdowns of our revenue, please refer to the table in our results press release. Our non-GAAP gross margin in the quarter was 70.4%, the same as the first quarter of last year. While the non-GAAP gross margin depends on the specific product mix sold in the quarter, our expectation for gross margin in the coming year is in the range of 70%. As CCaaS revenue continues growing as a percentage of overall revenue, we expect our gross margin to continue increasing. Non-GAAP operating expense for the quarter was $15.9 million, 5% below $16.6 million in the first quarter of last year. Allot had 483 full-time employees as of March 2025. We expect this to gradually increase toward 500 by year-end. We reported a non-GAAP operating income of $0.4 million compared with a non-GAAP operating loss of $1.2 million in the first quarter of last year. In terms of non-GAAP net profit, we reported $0.8 million in the quarter, or a profit of $0.02 per share, as compared with a non-GAAP net loss of $0.9 million or a loss of $0.03 per share in the first quarter of last year. We reported positive operating cash flow in the first quarter of $1.7 million. Cash, short-term bank deposit, and investment as of March 31, 2025, totaled $60.7 million versus $58.8 million as of year-end 2024. That ends my summary. Eyal and I are now happy to take your questions. Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Please stand by while we pull for your questions. The first question is from Nshlj Chokshi of Northland Capital Markets. Please go ahead. Thank you. Congratulations. Fantastic results here. You probably said this in your prepared remarks, Eyal, but just to be clear, did Verizon Business Mobile Internet Security actually contribute to your Q1 CCaaS ARR results? Thank you, first of all, for the congratulations. As mentioned in the prepared remark, the official launch of the service happened only in mid-April. We have very minimal contribution for the Q1 CCaaAS numbers from this service, only from the pre-launch, and most of it would come in the current quarter, Q2, and it will accelerate as we proceed, as Q2 also was only a partial quarter. We are seeing good growth and good traction for the service, so we expect this to be significant, contributing to our CCaaS over the year. Got it. So then what was the big driver for, I believe, your biggest CCaaS ARR, incremental CCaaS ARR quarter ever, by a far margin? We start to see the new agreement, the new service launches that announced last quarter and the quarter before start to kick in and contribute to our revenue. Part of them relates to the Vodafone agreements, part of them to the NEO, to the O2 check, all the announcements we had in previous quarters. They are starting to go in the numbers. Some of them are still not in full effect, and we are expecting to have further growth for those accounting to the year. This is why we feel comfortable that our yearly CCaaS revenue in ARR are going to be around 50% growth year-over-year, as indicated in our press release. Okay. Great. Fantastic. Yes, indeed. Noted the big change in language from just simply a year-digit CCaaS revenue in ARR growth to around 50% or more. Just double-clicking on the wording of around 50% or more, are you trying to indicate that there is a decent probability that CCaaS ARR grows less than 50%? We are talking about services that are under the marketing and full control of the service providers. So we are relied on their campaigns and their focus numbers. We feel comfortable to say around 50%, but there are still lots of moving parts, and we are getting contribution from multiple services, some of them like Verizon just launched, and we want to be—we are trying to give the best estimate. It might be a bit lower than the 50%, but as indicated, it can also might go above 50%. So it's the best we have now is that it should be around this number. But we are not anticipating, for example, it will be at the 30% level. If you're asking whether it can go to 45%, maybe, as there are still some uncertainties for us, as we are relied on the different service providers, their marketing plans, and we are still very early in the year. Got it. You also mentioned that within the quarter, Verizon became the largest consumer of CCaaS revenue. Did I hear that correctly? Correct. Verizon, with the initial launch of the Verizon mobile service, as well as the good traction of the Verizon fixed wireless access, became our number one account for the CCaaS revenue. It is still in the early days for the VMIS, for the Verizon mobile security service, though we are expecting it to be even larger and more strategic as we go. Okay. Great. Just a couple more questions for me here. In your April slide deck, I believe you introduced a lot of new slides, but slide 21 is particularly very interesting, where you're showing increasing penetration rates, I think, across multiple different vendors. I guess I just want to make sure that this is indeed Allot specific telecom data, and then maybe just walk us through the narrative that you're trying to tell us with this chart here as well. The company mentioned before, and the audience and myself do not have specifically the slide in front of us, but in general, we are seeing that the adoption of the security service, based on our experience with different launches with other carriers, is picking up between two to three years. The range of adoption is typically between 15% on the lower end up to 50%, 5-0 on the upper end, with most carriers reaching 20%-30% adoption. I think this gives some important clarity for our investors to see what is the potential you can expect from any new service launch based on the customer addressable market. Of course, this actual pace of adoption, as well as the actual performance of specific carriers, it really, really depends on their marketing approach. It depends on how much they invest their marketing budgets and how committed the leadership is to this service. Got it. Makes a lot of sense. Okay. And then looking at the Smart business here, you talked about increased pipeline. Is the telecom customers that are in the Smart business, are you seeing increased opportunity to also cross-sell your CCaaS solutions? And if so, how big of an opportunity do you see that being outside of the sort of big elephants that you're already seeing good success with, that being Vodafone and Verizon? Definitely part of our security-first strategy, we are looking into creating synergies and value-added by combining our two business units and running under one team, one business, and creating a synergetic product. We are well-known in the telecom space. We have a lot of relationships with many service providers around the globe from the 20 years and more of Allot success in the space. Part of our advantage is that we are providing the security service, leveraging partnerships with the service providers. We definitely see synergy and potential in any existing Smart customer, and any new Smart customer is a potential for expansion into CCaaS and vice versa. We are especially excited to see our pipeline growing also on the Smart side. This is something we talked over the last few quarters, that demand was softer in the last few years, and we saw less revenues coming from the Smart, and we were asked a lot of questions about what is our view. Last quarter, we discussed that we are expecting to have similar revenues on the Smart as of previous year and with the potential upside. Our pipeline and seeing some large deals advancing gave us more optimism that the demand for our product, and specifically for the newly launched Tera III platform, is high. We are really excited with the market reaction to this new product launch and the potential that it creates. We see both Smart-specific opportunities in our pipeline. We see new pipelines for new CCaaS deals. Some of them can materialize still in 2025. Some are building pipeline in 2026. Sales cycles are long and take some time, but we are working full force in order to invest in our future growth. Agreed. Just quickly, in terms of a competitive space on the Smart side of the business, is that contributing to the improved pipeline that you're seeing, i.e., the troubles that Sandvine seem to still be going through? We are focused on our technology and offering. We are seeing, as I said, good traction to our technology. People really like the Tera III platform, the highest capacity and most scalable platform in the market, really appealing for large tier-one carriers. Overall, we are continuing to focus on both product lines, with our growth engine in our strategic focus. That said, also the Smart Product line shows increasing pipeline in the recent quarters. Okay. Great. Thank you very much for taking all my questions. Thank you. The next question is from Rory Wallace of Outerbridge Capital. Please go ahead. Hey, Eyal. Thanks for taking my questions. I was wondering on the decision by Verizon to include Allot as the base security feature in its flagship Business Mobile plan, do you think this is something that will cause other operators to consider following the same playbook as far as bundling and including Allot as more of a default option and security as a core service? We see that Verizon are taking cybersecurity very seriously. I think they show a lot of vote of confidence with their FWA service, the fixed wireless service cybersecurity launch in the last 15 months that show good result and good customer feedback, that they want to make it pivotal to their newly launched MyBiz new service plan for their business customers. Definitely, once a carrier is introducing its reducing services as part of their offering, it's a very competitive and small market, and I'm sure that Verizon competitors are considering their moves. In general, telco is a small village, and operators are looking what's successful for others around the globe and trying to imitate it. I would believe that people are aware of what we are doing and what Verizon are doing, and their success will be probably something that others will want to replicate. Got it. Thank you. You spoke a little bit about the launch of Off-Net Secure and your experience at RSA and giving a snapshot of the different drivers of the security market. I was wondering if you could talk a bit about some of the other product offerings that you have sort of soft launched here, like the NetProtect as a service, and how your product strategy and roadmap is converging now as you look into 2025 and beyond. When we announced our new security-first strategy, what we shared is that we are looking to see how we can take assets that we have currently under the Smart Product line and offer them and leverage them into our security offering. Part of those solutions, we are looking to create new innovations like the Off-Net Secure just announced this quarter, as some of them are trying to leverage existing products like the NetProtect, that is a product we already offer for a few years, into network infrastructure protection and come and offer them as part of our security as a service and offering it, what's mentioned, network protection as a service to potential customers. We are seeing that this concept and this synergy makes a lot of sense, and customers we talk to are really excited with the opportunity to further protect and further enhance their protection layer with us. These are just initial work. We are having, as you mentioned, some soft launches and early introductions of those technologies, and we are starting to get traction. I'm sure that with the progress and our R&D guys and product guys are working day in and day out to think about additional innovations and working closely with customers to provide more value as part of our growth strategy into becoming a security-first company. Thanks. With the Smart Product line, very encouraging commentary around the pipeline and recent deal flow. Did I hear correct that you called out several eight-figure deals in the pipeline? I think that's the first time in several years that that level of business has been visible as a potential upside for the company. If you could just talk a little bit more about, are those large deals related to expansion opportunities with existing customers, or are these actually greenfield or government projects? Any more color you can share on that? I think first and foremost is that we are investing and increasing our go-to-market efforts. Part of the changes we did for the company, we organized our sales team into regional organization, and we start to see the value of having our teams closer to the customers and more focused offer all of our product lines. This helps us drive more pipeline both for our CCaaS, as we are offering it now with larger teams into more carriers, as well as we have more focus into our smart products. What we see, as mentioned, as opposed to what we saw before, is increasing some of the pipeline for the smart, and this is driven by stable and good demand from existing customers. Some new projects, as mentioned in our press release earlier today, part of the good result this quarter was wins of multiple multi-million dollar deals that already secured. Some of them contributed into our Q1 numbers. Some of them are, and most of them are going to contribute into our visibility towards 2025. We still have some additional multi-million opportunities in the pipeline. Some of them are, as mentioned, eight figures, a mix of existing and new projects. Overall, we are seeing good demand, and it's driven a lot by our new platform, by the Tera III, that we see customers existing and new looking to leverage this technology as networks are becoming very sizable, and they are looking for a high-end scalable solution to fully support their growing network. Overall, it's definitely a positive indication that the pipeline is there. Of course, it's a lot about execution. We need our sales team to be focused on their opportunities and translate them into new business, and hopefully, we will continue to execute well in the remainder of the year and start to see the result and able to translate the pipeline into orders. Understood. And then just one more for me on you discussed Verizon quite a bit on the call, and I was wondering, you did mention Vodafone, but in less detail. I think back in Q2 of 2024, you talked about expanding a partnership with a tier-one European operator to transition to a CCaaS revenue structure from a perpetual license deal. And I was wondering if you have any updates on how that's progressing, whether we've seen the bulk of that revenue contribution already flow through the results, or whether there might still be additional upside from that transition to come. And I know it's region by region too. So anything you're able to share about that would be helpful. We can share that part of Q1, we already have some revenues from the CCaaS from those agreements. We still have some of the agreements not yet fully, I would say, peaked. We are expecting to see growth from those announced agreements Vodafone Group, both the CCaaS for their mobile customers and the CCaaS for their home networks. This is part of our trajectory to get around 50% or more growth in the CCaaS revenue in ALL. We are also, as mentioned in previous calls, working to see how we can further extend into more geographies, as Vodafone is a group built from multiple operations, multiple opcos. Each country will, it's a different sales cycle that we can leverage the group agreement, but we still need to execute in the different regions. We have some countries already committed and part of the agreement, some are in the pipeline, and Vodafone will continue to be a very important customer for us in the coming years. Definitely a lot more potential to grow with them over the years. Thanks a lot for sharing that. Congratulations. It's been a big first year for you and Liat, and I think everyone would agree that things appear to be on the right track. Thank you very much. Thank you very much, Rory. There are no further questions at this time. This concludes the Allot First Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.