Slide 1: Revolutionizing Consumer & SMB Cybersecurity
allot PS Revolutionizing Lest ; Cybersecurity November 2022 (NASDAQ & TASE: ALLT) mmmte |
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, which express the current beliefs and expectations of Company management. Such statements involve a number of known and unknown risks and uncertainties that could cause our future results, performance or achievements t
Slide 3: Allot Overview
allot Allot Overview MARKET CUSTOMER BASE COMPANY HIGHLIGHTS PROVEN MANAGEMENT TEAM Communication Service Providers (CSPs) Hundreds of CSPs globally * Tier-1 operators » ALLT (NASDAQ, TASE) * 2021 revenue: $146M * 2021 Cybersecurity revenues: $40M * 2017-2021 revenue growth CAGR: 15% Decades of expe
Slide 4: Allot Smart Technology Heritage
Allot Smart Technology Heritage Deployed with hundreds of CSPs worldwide Telco grade solutions High Throughput Multitenancy Quality 5G, cloud native and Virtual AI technology 4
Slide 5: Global CSP Customers
Allot Secure CSPéétistomers More than 20 million global subscribers protected Tier-1 operators trust Allot Tier1 csp { Mert csP Yettelf Tier |p csP Tier 2 CSP allot
Slide 6: The Consumer & SMB Cybersecurity Challenge
The Consumer & SMB Cybersecurity Challenge
Slide 7: Consumer & SMB Cyberthreats Exponentially Growing
Consumer & SMB Cyberthreats • Border between office and work has blurred • COVID accelerated this change Exponentially Growing • 5G will accelerate it further Phishing Attacks Total Malware (Millions) 1,200,000,000 1,313 1,343 1,000,000,000 1,139 800,000,000 1,002 600,000,000 857 400,000,000 200,000
Slide 8: Security Apps Don’t Protect the Mass Market
Security Apps Don’t Protect the Mass Market The opportunity for telecom providers to offer a simple, clear package of cybersecurity protections for homes and families appears significant Consumers don’t Up to 5% of Security apps want to implement consumers do not solve TAG Cyber, March 2022 security
Slide 9: The Opportunity
allot The Opportunity
Slide 10: Consumers are Aware of Threats and Expect CSPs to Provide Solutions
of consumers expect the CSP to provide a security solution to protect them from malware attacks Consumers are Aware of of US consumers worry about Threats and Expect CSPs being a victim of identity theft to Provide Solutions of US consumers worry about Based on survey of 4,000 global participants in
Slide 11: Consumers Willing to Pay for Security Application
MOBILE USERS FIXED BROADBAND USERS of US consumers are wiling Of US consumers are willing to pay for a security to pay for a security application that protects all application that protects their mobile devices their broadband connections minimum of $2 a month excess of $3 a month minimum of $4 a mo
Slide 12: CSPs Well Positioned to Provide Security Services
CSPs Well Positioned to Provide Security Services allot Sole provider of access to the network. Capable of blocking attacks before they reach the customer 12 Multiple touch points with customers: trusted brand, billing, frequent interactions
Slide 13: Network-Based Cybersecurity is the “Next Big Thing” for CSPs
Network-Based Cybersecurity is the “Next Big Thing” for CSPs Value #1 Value #2 Value #3 Brand New Customer loyalty: recognition revenues Churn reduction FA A N G c a n ’ t d o t h i s . 13
Slide 14: CSPs will be Consumer & SMB Cybersecurity Heroes
CSPs will be Consumer & SMB Cybersecurity Heroes allot
Slide 15: Allot Revolutionizing Consumer & SMB Cybersecurity
allot Allot Revolutionizing 3) Consumer & SMB Cybersecurity 7
Slide 16: The Allot Secure Solution
The Allot Secure Solution \ot allot 16 © 10)
Slide 17: Allot Secure
allot NetworkSecure Allot Secure Protecting consumers from threats/crime on the network 560° Security * Any threat » Anywhere * Any device BusinessSecure o SEU
Slide 18: Allot Secure: Unified Security Blanket
Allot Secure 360 The only company to offer a full unified “security blanket’ allot Allot Cloud * Threat Intelligence + Web Categorization * Device Fingerprinting I] Allot Secure Management + One seamless security experience + Subscriber Oriented | || 7 2 @ fn? = ai HomesSecure — BusinessSecure loTSe
Slide 19: The Economics
The Economics allot 19
Slide 20: Multi-Billion Dollar Addressable Market
Multi-Billion Dollar Addressable Market * Source: OECD Trends in Telecommunications Revenue and Investment, April 2020 ** Allot estimations *** Some numbers have been rounded off allot 20 ORO)
Slide 21: Consumers Willing to Pay 5% to 8% of Price Plan for Cybersecurity
Consumers willing to pay 5% to 8% of price plan for Cybersecurity allot ( ») 0.99€/m ~5% of average price plan “Vodafone Secure Net is a unique service that protects you simply and safely on your Vodafone connected devices.” 1.5€/m ~8% of average price plan “The Drei Internet Protection protects Dre
Slide 22: Extraordinary Consumer Take Up Rate
Extraordinary 70% Consumer Take Up Rate Sample EU Markets(1) 60% Take Up Rate 50% Penetration rate 40% by Consumers 30% & SMBs* 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Months from launch SMB Penetration – EU Market (2) 35% 33% 34%
Slide 23: Allot CSP Value Proposition
Provide all required to CSP (hardware, software, professional services, marketing support and support & maintenance) 0 upfront charge Allot CSP Value Proposition 0 financial commitment Revenue share Some operators are willing to share up to 50% of security revenues with Allot. 23
Slide 24: Simple on-boarding provides a key factor
We are facing attach rates of up to Simple on-boarding provides a key factor 80% of new customers. as customers are happy to receive immediate protection with no hassle. Martin Westhoff Allot contributes to a higher NPS and Strategy and Marketing Home boost to our brand. at Hutchison Drei Osterreich
Slide 25: Positioned For Growth
Positioned For Growth allot
Slide 26: 5G Networks Are More Vulnerable to Attacks
allot 5G Networks Are More Vulnerable to Attacks High Many Internet Bandwidth connections Many loT devices 5G NetProtect Protecting Service Provider User Plane from malicious and abnormal network activities 26
Slide 27: 5G Network Protection: Additional Cybersecurity Growth Engine
5G We’ve come to the conclusion that Allot has Network Protection: the most in-depth capabilities to detect, in real time, threats and with a lot of different Additional techniques and capabilities. Cybersecurity Growth Engine for Allot Mark Rouanne Chief Network Officer DISH 27
Slide 28: This is Just the Beginning...
This is Just the Beginning... Allot is placed in a strategic location within the network and sees all the traffic. Future Values: Enhanced Consumer Data Driven Privacy Security 28
Slide 29: 4 Growth Vectors to the Future
4 Growth Vectors to the Future Increase # of CSPs Increase # of Increase the value Protect the 5G network that launch consumer consumers & SMBs that we give (protection, (starting with Dish…) & SMB security subscribe to the service privacy, etc.) 29
Slide 30: Allot Transformation Journey
Allot Transformation Journey 2022+ Increase SECaaS Revenues 2020-21 Initial SECaaS Revenues 2019 Signing Security 2018 Mainly DPI Rev-Share Deals CAPEX Deals 30
Slide 31: Seizing the Opportunity
Threats to consumers & SMBs are growing Consumers & SMBs are vulnerable, existing solutions are not enough Seizing the Customers are aware, look to CSPs for Opportunity solutions and are willing to pay for them Allot is revolutionizing consumer cybersecurity with a network-based security service off
Slide 32: Financial Overview
Financial Overview allot ©=U0
Slide 33: Attractive and healthy financial profile… Security driving the next phase of growth…
Attractive and healthy financial profile… LTM Revenue Scale FY2017-FY2021 Non-GAAP Cash and investments* Revenue CAGR Q3/2022 Gross Margin As of Sep 30, 2022 Security driving the next phase of growth… Security Revenue Contribution in the Future Recurring Revenue in the Future *Including: cash and ca
Slide 34: Revenue ($M), Gross Margin
Revenue ($M), Gross Margin* Qi mQ2 AL Q3 39 38 Q4 35 31 29 31 28 23) 2019 2020 2021 allot 34
Slide 35: Transition to Security
Transition to Security (% of total company revenues) Smart Security Future Target 2021 $40M <50% 28% $106M >50% 72% 35
Slide 36: Hypothetical CSP Example - SafeTelCo
Hypothetical CSP Example - SafeTelCo 6 Penetration • Assumptions Rev. ($) $5M Rate 5 25% • 5M mobile applicable subs (TAM) • $20/month ARPU $4M • SECaaS Pricing: 4 20% • $1/month for security (5%) • MAR Calculation*: 3 15% • Allot rev-share 33% $2.4M • MAR** = $20M (5M*$4) ($1*12*33%=$4/sub/year) 2
Slide 37: SECaaS Revenues MAR
SECaaS Revenues MAR* ($M) 473 $4M 193 193 $2M 280 88 2020 Target 2021 *MAR (maximum annual revenue potential of concluded transactions) was estimated by 2022 Allot upon transaction signature and constitutes an approximation of the theoretical annual revenues Allot would receive if 100% of the custom
Slide 38: Improving Revenue Visibility
Improving Revenue Visibility Future target $42M More than $33M $34M $32M $60M in recurring revenue 38
Slide 39: $M Revenues Q3-2022
$M 2019 2020 2021 Q3-2022 2022 Target YTD 125-130 Revenues 110 136 146 90 trending toward the lower end Gross Margin 70% 71% 70% 69% 69%-70% OPEX 85 100 108 80 109-111 Operating Profit (Loss) (8) (3) (5) (18) (23)-(24) SECaaS revenues 0.2 1.9 4.1 4.9 ~7 SECaaS ARR (last month run-rate) 0.5 2.7 5.2 6
Slide 40: Allot Secure strengths & challenges
Allot Secure strengths & challenges Solutions Competitors Financial CSP (Zero touch) (360 Solution) resources priorities/GTM Problem TAM Company Launch period (Pain points) infrastructure (delays) 40
Slide 41: Thank You!