Good day to all of you, and welcome to Allot's conference call to discuss its financial results for the second quarter, 2026. I would like to thank Allot's management for hosting this conference call. All participants are present in listen-only mode. Following management's formal presentation, instruction will begin for the question-and-answer session. As a reminder, this conference call is being recorded. You should have all received by now the company's press release. If you have not, please check the company website at www.allot.com. With me today on the call are Mr. Eyal Harari, CEO, and Mrs. Liat Nahum, CFO. Following the prepared remarks, we will open the call for the question-and-answer session. All the highlights of the quarter are in today's earning press 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 only 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, delayed launch of services by Allot customers, reduced demand, and the competitive nature of the security service industry, as well as other risks identified in the documents filed by the company with the Securities and Exchange Commission. Also, the financial results of 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 table published in the results press release issued earlier today. We should also include the GAAP to non-GAAP reconciliation table. With that, I would now like to hand over the call to Eyal Harari, Allot's CEO. Eyal, please go ahead. Thank you. We are pleased to report another strong quarter with growth in revenue, profitability, and cash flow. Our fourth consecutive quarter of double-digit year-over-year growth and an acceleration over recent quarters. We were particularly pleased with North America, where strong execution drove a solid increase in sales and backlog, underpinning our confidence in the goals we expect in the second half. Our Security-as-a-Service business, SECaaS, continues to power our growth, with SECaaS revenue growing 47% year- over- year to account for over a third of our revenues, and SECaaS ARR up 44%. This continues to scale our recurring revenue base, which represented two-thirds of total revenue in the quarter, giving us greater visibility into the quarters ahead and improving the predictability of our revenues. Overall, our business is executing well and performing ahead of our expectations. Let me focus on North America, one of the highlights of the quarter. The region made up 31% of the revenues, versus 17% in the second quarter of last year and 14% last quarter. This was driven by very solid product sales, with particularly strong interest in our new Tera III platform and by continued demand for our Allot Smart product line, reflecting the value operators see in the network visibility and control our platform delivers. In addition, our major U.S. SECaaS customer continues to perform very well, in line with our strong expectations. Beyond that, we entered the second half with a strong backlog and healthy demand, giving us added confidence for the rest of the year. North America is a strategic priority for us, and it is very encouraging to see that focus translating into revenue, backlog, and pipeline. Turning to our cybersecurity as a service business. This continues to perform strongly and in line with our expectations. We had several wins during the quarter, each demonstrating a different way in which we are growing the business and all classic examples of our land and expand strategy. We secured four new SECaaS deals in the quarter, all of them in the EMEA region. First, we won an upsell deal in Europe, selling a new service to an existing SECaaS customer, the first sale of our identity monitoring service. This telco will be offering our identity monitoring service to its SMB customers. This is a domain-level identity theft monitoring service. It continues monitoring for exposure of the business' digital identity, and it is designed to alert the customers when credential or other identity data has been compromised so that they can act before that expose is exploit. It is designed to do so for every user across the organization. It is a good example of how are we expanding our SMB security suite beyond the network alongside OffNetSecure, Firewall-as-a-Service, and DDoS protection. Second, we won an expansion to the SMB segment within an existing European-based customer. Third, we secured a new win within one of our large global telco groups, adding our HomeSecure service in another country. The HomeSecure solution enhances threat protection across the telco's mobile and broadband networks. It integrates into the existing home router and provides zero-touch home network visibility, cybersecurity, and parental controls. Finally, we won a new SECaaS deal in Africa with a telco that is already a Smart customer. Together, these wins reflect the breadth of our SECaaS goals, new customers, geographies, end-user segments, and applications all on the same platform. We expect these deals to contribute to our future SECaaS revenue growth in 2027. Our Allot Smart product line remains a highly complementary part of our unified cybersecurity-first platform, built on decades of Allot innovation and delivering best-in-class network intelligence. We continue to execute well on the multimillion-dollar projects won in recent quarters, including deployment and upgrades of our Tera III platform with Tier 1 operators. As a reminder, Tera III is our next-generation, ultra-high-capacity multi-service gateway. It is among the highest capacity platforms of its kind in the market, and it consolidates deep network visibility, traffic management, and cybersecurity services onto a single platform. Customer feedback has been excellent. Operators are running both cybersecurity and traffic intelligence workloads on the same gateways, and they value its carrier-grade stability and reliability, its ability to scale cost efficiently with 5G and fiber traffic growth without expanding their footprint. We also provide a smooth upgrade path from our earlier service gateway generations, which protects the investment that they've already made. This quarter, demand for our Allot Smart product was particularly strong in North America. As part of the Allot Smart product innovation, we recently ran a case study with Tier 1 operator to demonstrate Allot's new zero-rating fraud detection and mitigation service. Zero-rated applications and app-based charging plans creates value for subscribers, but they also open the door to fraud. Attackers are increasingly exploiting vulnerabilities to bypass charging system and consume data without payment. Our solution helps CSP identify fraud, and a case study showed that we reduced fraudulent traffic by 87%. This shows how operators can recover lost revenue while protecting the integrity of their zero-rating offers. We are already building our backlog for 2027 with an additional win of an important Tera III upgrade project with a customer for a new site expansion. Our pipeline remains healthy, with existing customers planning their Tera III platform upgrade and new engagement advancing through our sales process, and these multi-year projects are expected to provide good revenue visibility into 2027 and beyond. During the second quarter, we presented and met customers at a number of key industry conferences. This included DTW in Copenhagen, FutureNet World in London, Interop in Tokyo, Network X Americas in Dallas, and CommsDay in Sydney. Feedback was very positive, with customers and prospects continuing to respond well to our converged cybersecurity and network intelligence positioning. Events like these continue to build our pipeline, and it is clear that our cybersecurity-first strategy resonates well with operators globally. At the end of the second quarter, our board of directors approved a share purchase program of up to $40 million. This reflects our confidence in Allot's strategy and financial strength. With more than $100 million in cash and no debt, we are well positioned to increase value to shareholders while continuing to invest in the long-term growth of the business. In summary, we are very pleased with our second quarter performance. Our fourth consecutive quarter of solid improvement with accelerating growth, continued momentum in SECaaS, standout performance in North America, and further gains in margin profitability and cash flow. As we are performing ahead of our expectations, we are raising and narrowing our 2026 revenue guidance to between $115 million and $118 million from the previous range of $113 million to $117 million with ongoing improvement in profitability. This is driven by accelerating order momentum from our North American customers, our backlog, and the continued high growth of CTAS. Allot is in its strongest position in over a decade, and it is well positioned to build on its profitable cash generation, recurring revenue-led growth in the quarters and years ahead. Now, 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 $27.7 million in the quarter, up 15% year-over-year. Revenue from our Growth Engine, Security-as-a-Service, was $9.4 million in the quarter, up 47% year-over-year, comprising 34% of our total revenue. Our Security-as-a-Service annual recurring revenue as of June 30, 2026, was $36.1 million, up 44% year-over-year. Deferred revenue, which includes recurring maintenance and support, continued to grow both year-over-year and quarter-over-quarter, increasing the strong visibility we have into remaining 2026 and 2027 revenue. 67% of our overall revenue this quarter was recurring in nature. I will now discuss the non-GAAP financial measures. For all our financial results, including the GAAP financial measure and the other various breakdowns of our revenue, please refer to the table in our results press release. Our non-GAAP gross margin in the quarter was 71.8%, compared with 73.4% in the second quarter of last year. The year-over-year decline mainly reflects the product mix in the quarter. That said, gross margin remains strong and consistent with our expectation of around 70% for 2026. Non-GAAP operating expense for the quarter was $17.2 million, compared with $16.4 million in the second quarter of last year. The increase reflects our continued investment in sales and marketing to support our pipeline build. General and administrative expenses in the quarter increased compared with the second quarter of last year, mainly due to one-time costs associated with the modification of one of our office lease agreements following change we made in this office. While making this selective investment in sales and marketing, we remain disciplined and operationally efficient with operating expenses as a percentage of revenue declining to 62% from 68% a year ago. We reported non-GAAP operating income of $2.7 million, with an operating margin of 9.9%, compared with a non-GAAP operating income of $1.2 million or an operating margin of 5% in the second quarter of last year. Allot has 501 full-time employees as of June 30, 2026. In terms of non-GAAP net profit, we reported $4.6 million in the quarter, or a profit of $0.09 per diluted share, compared with a non-GAAP net income of $1.5 million or a profit of $0.03 per diluted share in the second quarter of last year. On a GAAP basis, net income for the quarter was $2.6 million, or $0.05 per diluted share, compared with a net loss of $1.7 million, or a loss of $0.04 per diluted share in the second quarter of last year. GAAP net income for the quarter included a one-time $1.2 million financial gain related to our office lease modification, reflecting the remeasurement of our lease liability. We do not expect this to reoccur. We generated particularly strong operating cash flow of $8.5 million in the second quarter, compared with $4 million in the second quarter of last year, reflecting robust profitability and strong cash collection. On June 23rd, our board of directors approved a share repurchase program of up to $40 million, which we will execute in line with market conditions. Repurchase may be made at management discretion in the open market. The timing and the amount of the repurchase will depend on market conditions, share price, liquidity, and other factors. According to the company regulation in Israel, we are obliged to give 30 days notice, during which any creditor may object to the buyback. The 30 days have now passed, and there were no objections. Allot has a robust balance sheet with no debt. Cash and cash equivalents, bank deposits, restricted deposits, and investments as of June 30, 2026, totaled $107 million versus $88 million as of December 31, 2025. Looking ahead to the rest of 2026. Given our performance in the first half of the year and the strength of our backlog, as Eyal mentioned, we are raising our full-year 2026 revenue guidance to between $115 million to $118 million. For the full year, we expect Security-as-a-Service revenue growth of 40% or more. Our gross margin expectation for the full year remains in the range of 70%, with a specific gross margin in any given quarter depend on our product mix. On the operating expense side, we expect to continue at a similar run rate to the current quarter, excluding the one-time expense. Overall, we continue to expect profitability improvement over the current quarters of 2026. 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. Your questions will be polled in the order they are received. Please stand by while we poll for your question. The first question is from Shaul Eyal from TD Cowen. Thank you. Good morning. Good afternoon, everybody. Congrats on yet another very solid set of results and guidance. Liat, actually, I want to start with you and ask about operating cash flow. Still more than doubling year-over-year this quarter, but slightly below last quarter, which, if I recall correctly, has some cash advancement. Just asking if there are any unusual items this quarter, we should be mindful of. And I have a follow-up. Yes. As we shared last quarter, we had a very strong operating cash flow in Q1 related to the major deal that we reported a year ago, and we started collecting. Last quarter indeed it was a one-time event. We continue to see a very quality momentum in our cash flow. We finished the quarter at 8.5 million, and I think this represents also our business model and our, let's say, future expectations around the deals that we are signing. Overall, no major one-time event this quarter around the operating cash flow. Just continue the momentum around our business model of the Security-as-a-Service, which is generating a very good cash flow. Understood. Thank you for this color. Eyal or Liat, I know you don't disclose backlog or RPO metrics on a quarterly basis, but given your improved profitability and visibility, what kind of qualitative commentary can you offer us as we think about backlog or RPO? Is it fair to assume it's pretty much at all-time highs right now? We reported in our yearly report, RPO, and as you could see, I believe end of March, it is really in a very high level of backlog. We are going to issue mid-year reports as we do every year, and the KPI will be available there. Overall, our performance and booking is strong and following the announcements we made in the last 12 months, it's fairly assumed that this continues to be very high. Loud and clear. Thank you so much. Good luck. Congrats. Thank you very much, Shaul. The next question is from Matt Calitri from Needham. Please go ahead. Hey, guys. This is Matt Calitri over at Needham. Thank you for taking our questions. Is there any more color you can provide on the strength you saw in North America? Maybe just anything on how much of the strength you would attribute to product versus SECaaS, and then where are you getting the confidence that this is a sustainable long-term opportunity? Thank you, Matt. As we commented on the prepared remarks, we see strengths both on the SECaaS and the Allot Smart product line. The SECaaS is obviously more recurring and consistent as it's quarter-over-quarter subscription fees, and therefore more sustainable and predictable. As we noted, this quarter we had also very strong Allot Smart product sales, which increased the share of North America in the region. Product sales are obviously non-recurring, and therefore it's not every quarter is going to be the same. But we do continue to invest in the region as we see this as strategic region to support our long-term growth. So, we are very pleased with our performance with both product lines. In specific to this quarter, the extra strengths came from the Allot Smart product line on top of the large contribution to the SECaaS. Got it. That is clear. Thank you. Are you able to dive into at all, was a lot of the strength associated with the top 10 customer, or what drove the large increase in top 10 customers as a percentage of revenue in the quarter? Yeah. We have some large deals, and as noted, on the product side, we see a demand for the Tera III platform. Tera III platform is sizable deals. Usually, it is seven-digit opportunities, and we had a few of them in the last few quarters that we announced, and they are now translating into revenue. Therefore, on the quarterly level, it increased the share of those top customers. Usually, the Tera III is purchased by the larger carriers because it is high capacity IN platform, and on a quarterly basis, it usually gets them into the top 10 accounts. We still see that the company is very healthy with relatively low concentration. As of last year, we did not have any 10% account, and we continue to see demand coming from all regions and from multiple accounts. Great. Awesome. Then maybe just one more on those other regions. So, revenue in EMEA and APAC actually declined sequentially. What do you see there during the quarter, and how did that compare to expectation? Because we have deals that are in the multimillion-dollar range, therefore, it depends on the timing of the exact revenue recognition. This is very normal for Allot, and this was always the case, and this is part of the plan, and we have and expect to see different balance between regions, between quarters. It depends on the specific timing of the larger deals that we recognize. Very clear. Thanks so much. Thank you, Matt. The next question is from Nehal Chokshi from Northland. Please go ahead. Nehal Chokshi from Northland, please go ahead. Sorry, I had myself on mute there. Thank you, and congrats on another strong quarter. Two questions, if I may. First one is, current portion of deferred revenue is up to $7.5 million in Q2, which is on top of another $13.4 million from Q1. The driver of these big increases presumably is term product revenue and associated maintenance. Is that correct? Yes. As you mentioned, indeed, Q2 versus Q1, our deferred revenue increased, and if you look at the entire six months, also you see the big increase in our deferred revenue. Deferred revenue usually for us represents those product deals that have not yet been recognized. As we shared that quarter, we had a large, deferred revenue related to the big deal that we announced last year. In addition, deferred revenue represents the support and the maintenance recurring revenue. Overall, for us, it is a very good positive sign because when we look at our deferred revenue growing quarter over quarter, it gives us a very good visibility for the remaining of 2026 and 2027. Given that this is deferred revenue, you expect it to roll off obviously within the next 12 months. Can you give us a sense within which of the quarters of the next 12 months we can expect this to roll off into the income segment? It really depends if it is product, as Eyal mentioned, product can fluctuate between quarters. If you look at our support and maintenance, this being more or less on the same runway. As you can see, we have short-term deferred revenue, but we have also long-term deferred revenue. Short-term deferred revenue, if you look, should be recognized in the next 12 months, and then we have additional $7.5 million of long-term deferred revenue, which will materialize only starting the second half of 2027. Okay. All right. In order to hit the guided SECaaS ARR growth of at least 40%, incremental SECaaS ARR for 2H26 will need to be $7 million. How should we think about the sequencing of that incremental SECaaS ARR in Q3 and Q4? It is very hard to predict the exact number, but you could see from the past performance, the run rate is relatively in a similar level, and it is quite stable. We are always relied on the performance of our partners on the CSPs that are marketing the service, and depends on their marketing campaigns and marketing activities, this would go a bit faster or slower in a specific quarter. But overall, on the full year, we see that we are in a quite sustainable growth rate. Okay. And just to be clear, this does imply that the step-up in the SECaaS ARR in 2H26 relative to 2026. What do you expect to be the driver of that step up? ARR is driven by a four vector of growth, as we always mention. The first and most short term is additional customers that are onboarding to the SECaaS service with our existing customers that already market the service. The second one, as we announced this quarter, it is about existing partners that add additional solutions, either into new network domains, like one customer that used to work with them only on consumer, and now they are expanding it into the SMB segment. All customers that already offer to a segment like the SMB and now add another application like the identity theft monitoring, which create and accelerated their growth potential. Last is, of course, new partnerships, new logos. We had one of those this quarter as well. In this quarter, it was an existing Allot Smart customer that is now going to start offering the SECaaS, and those four vectors are driving growth over time. In the short, more quarter-by-quarter changes, it really relies on how many end customers are onboarding to the services already available in the market, and this is what we need our partners to execute well in order to achieve growth. All right. Thank you. Thank you, Nehal. The next question is from Jonathan Ruykhaver from Cantor. Please go ahead. Yeah, thank you. Eyal, I wanted to dig down a little bit more in terms of the Tera III adoption you're seeing and the correlation to the opportunity around the Allot Smart platform. What I understand is that some of those carriers that are on an older version of the hardware infrastructure need to migrate to Tera III first. So maybe you can talk to that dynamic as it relates to demand you see for the Allot Smart platform. Sure. The new Tera III platform that we launched during 2025 is high-end capacity that can reach up to 3 terabits of capacity, but it also provides high-density communication, like 400G links and many 100G ports for traffic management. We see a demand both from new customers that are now going into RFPs, and definitely also from existing customers that are using our previous generations, that their networks are growing. They are refreshing their data centers, their sites to support more capacity, and this creates a demand for expansion. I will note that this Tera III, as mentioned before, is for the larger opportunities. It usually ends with seven-digit deals, and therefore, we are talking about relatively, I would say, small number of opportunities, but with very large impact. The larger amount of our customers are not requiring many terabits in different sites, obviously, and they can use different products that we have that are designed for the, let's say, the mid-market and the smaller carriers. We do see very good feedback from customers. They really love the product. They like the ability to see both network intelligence and cybersecurity use case over the same platform. They really like the future-proof of this architecture that is built cloud native to allow us to support and scale capacity, and this is what creates the demand. I think in the last 12 months, we announced about half a dozen of Tera III deals, and this was building our backlog, and we still have many more opportunities like that in our pipeline. We expect this refresh cycle to continue in the next few years as different carriers are upgrading and need this capacity earlier, but some probably will need those 400G capabilities, and so on, a bit later down the road. That's very helpful. How important is the integration of some of the SECaaS offerings into that platform to competitiveness in winning deals? Is that something you're seeing attach rates for, or is it mostly the high-performance requirement that's driving that growth? We believe it's both, but the beauty about the ability to run the SECaaS service on this platform is that this could change that from being an investment in the network infrastructure, that is always important, but budgets are tight, to a product that can help you to monetize and make money. What our customer really love is that now multiple organizations from the CTO organization, operation, the CISO, but now also the product can share the infrastructure investment, and therefore, in a very CapEx-tight environment for the CSP, that they are under pressure to improve profitability and show ways to maintain and hopefully increase their output for their customers. This is a very appealing proposition. It's really positioned as different when we are competing with just network infrastructure providers, and I believe this is a great value proposition for our customers, and this is why we are seeing success in this area. Yeah. Okay. Very helpful. Thank you very much. Thank you. The next question is from Jonathan Ho from William Blair. Please go ahead. Hi, good morning. I just wanted to maybe start with your identity services. Can you talk a little bit about the initial reception from customers and pipeline build opportunity around some of these SECaaS services, and what does that look like from an uplift standpoint? Jonathan, we just started to market this in the market, and we are seeing the demand coming from two directions. One is existing customers that are looking to add more value to their customers. We see some customers that are looking on this as an opportunity to increase their monthly fee, but they want to show more value to their customers. In some other cases, they see it as a need because of competitive pressure. Maybe their competitor operator in the country is already offering similar service, and therefore they need to add it to the cybersecurity package they offer. It really depends on the specific market conditions. We don't see it as a core offering for our product. We still focus on the network security. This is where our strength, but I think the beauty of this application is the ability to complement and provide 360 degrees protection for our customers. In addition, with new customers, now that we are going into new opportunities, we have a more robust product offering. Not all of the solutions for cybersecurity can offer you one platform with all the cyber protections you need. We believe that eventually people are looking for simplicity, and this is why we continue to add more and more applications into the portfolio. I wouldn't view it as one application that is going to be a game changer, but more of holistic view that the platform as being able to provide multiple additional values and really comprehensive protection is what's going to create the biggest effect over time. Got it. Maybe a little bit more color on the zero-rating fraud prevention that you talked about. How big of a market opportunity could that be? Is this similar in terms of maybe improving the competitiveness of your product, but not necessarily standalone market on its own? I just want to get a sense for how you think about that zero-rating product as well. Yeah. The zero-rate product is not a market by its own. It is more of another use case on the Tera III platform and network intelligence. People that implement our Allot Smart product lines, they want to see how they can better manage and optimize the network, and as mentioned in previous question, this is a cost. This is an infrastructure investment to improve quality, manage bottlenecks, and so on. Identifying use case like that actually creates re-monetization for the operator because we unblock even revenue leakage, and by that we can recover them data packages that they are being ripped off, and they can recover and get more money. This is more in an indirect way for them to justify the reason for the platform. This is the way we view it, and this is the way we position it, and it is mainly relevant for customers in regions that fraud is popular. We know that in some regions you can just get all-you-can-eat package, like in North America. In these cases, people tend less to do those frauds. But in some regions, more in developing countries, this is a big issue because they still pay per gigabyte, and we are helping our customers to avoid the revenue leakage. That makes sense. Just one last one for me. How do you think about your capital allocation priorities? I am just wondering why the share buyback now, and how do you sort of balance returning value to customers with continued investment? Thank you. Reason and timing is really because of the strength we see in the business. We see that we have four consecutive quarters of double- digit growth. We see that we are cash flow positive, I believe, for three or four quarters, if I'm not wrong. And we see that we have enough cash today to have the balance both on investing in our product growth and investing in organic growth, have the option to explore inorganic growth opportunities, as well as we wanted to keep the optionality to have buyback in case, we see the market terms are suitable. I think this is in general a vote of confidence of the board in the company's strength, and it shows our maturity. Like many other companies, this is a, I would say, normal course of business to have a buyback plan in place, so we can leverage in case of the relevant market conditions allow that. Thank you. Thank you, Jonathan. This concludes Allot’s second quarter 2026 conference call. Thank you for your participation. You may go ahead and disconnect.