'Create a culture of winners': New CEO of Allot tells Oninvest about turnaround

Allot is a veteran player in the network intelligence and cybersecurity space, serving major mobile operators and internet service providers. Founded in Israel in 1996, the company has been listed on the Nasdaq since 2006.

In May 2024, Allot named a new CEO: Eyal Harari. He joined the company after nearly two decades at Radcom, a provider of service assurance and analytics solutions for telecom operators, in search of fresh challenges.

Harari talked to OnInvest about how he has succeeded in leading Allot to profitability for the first time in its nearly 30-year history and why his goal is not making the company a unicorn.

When asked about the most challenging part of his first year at the helm, Harari points to the early months. With a new company, a new market, and a new team, he wanted to deliver results as quickly as possible. One of the key difficulties, he says, was winning over employees who were accustomed to working within long-established frameworks. "I wanted to create a culture of winners, a culture of a can-do approach," Harari told us.

"My professional view is that I believe that public companies, especially those that have been around for a while, need to be profitable and fund their future growth," he added. Although Allot had been in business for more than 25 years, it had never turned a profit prior to Harari’s arrival. Just eight months into his tenure, the company reported its first-ever adjusted net income (non-GAAP), of $1.6 million, for 2024. For comparison, Allot posted a full-year loss of $53.3 million in 2023.

Harari notes that profitability is often not the primary goal for growth-stage companies. Startups typically reinvest earnings into expansion and strive to become market leaders. At the same time, "Finding the right balance for the company is always the most challenging goal for a CEO. Because if you don't invest enough, you are sacrificing the future. If you are investing too much, then you are risking the future," he pointed out.

Harari came to Allot with a three-step plan for turning the company around.

"The first step was to stabilize the company, as it required a turnaround, to ensure that our top-line is stable and to make sure that the operational model is sustainable and that we can be profitable," he says. "The second step was, after we achieved this goal, how we can achieve sustainable profitable growth. And the third is how we can further transform and expand ourselves to become a larger and bigger company." At present, Allot remains a small-cap company, with a market capitalization of around $360 million.

According to its first-quarter 2025 results, revenue rose 6% year over year to $23.2 million, while adjusted net income (non-GAAP) jumped more than 180% to $800,000.

Describing his management style, Harari calls it informal. Unlike Jeff Bezos, who follows the “two-pizza rule” and avoids teams larger than 6-10 people, Harari has opted to consolidate teams while making them less hierarchical and to give regional units more latitude. He stresses that it is regional sales teams that take care of the business on the ground.

Today, Allot’s largest market is Europe, Middle East, and Africa. Prior to Harari’s arrival, the company had been more focused on domestic clients in Israel. He is now working to position Allot as a more globally competitive player. In addition to its Israeli headquarters, the company has established a global footprint with 30 offices worldwide and staff based in countries such as Australia, Japan, Brazil, and Colombia.

Harari views North America as a critical market for communications and cybersecurity providers, which prompted his relocation from Israel to New Jersey several years ago. Allot has already scored a major win in the region: In February, Verizon, the largest U.S. mobile operator, became one of its clients. North America is currently the dominant force in the network security market, expected to account for around 54% of global revenue in 2024, according to Fortune Business Insights. The total market is projected to reach $24.5 billion this year and grow to $73.0 billion over the next five years.

In late June, Allot raised $40 million through a share offering and debt conversion. An additional $15 million came from option holders and the Lynrock Fund, which holds Allot’s convertible bonds and sought to increase its equity stake, Harari said. When asked why the company would raise capital now that it has reached profitability, the CEO joked that he likes to do his homework on time.

As of the end of the first quarter, Allot had $60 million in cash on its balance sheet. However, it also carried $40 million in convertible bonds due in February 2026. Harari said the decision was made to retire the debt early, citing a strong year for the company and investor confidence.

"I believe that small cap companies should be as debt-free as possible. As well as that, we felt that our debt, which was a convertible note, was an overhang on the company’s share price. Because whenever we reach a certain level, a certain stock price, it becomes more appealing for the holders of the debt to convert and dilute the other shareholders of the company," he explains.

Harari added that summer 2025 was an opportune moment to raise fresh capital, as the company had turned a profit and was enjoying strong investor support. Since the start of the year, Allot’s share price has climbed nearly 35% to $7.80, and is up 172% over the last 12 months.

According to Zacks, Allot stock currently has just three analyst ratings, all "holds," and an average target price of $15 per share, nearly double current quotes.

Allot’s next goal after reaching profitability is to achieve sustained, profitable growth. To that end, the company aims to expand its cybersecurity portfolio by 50% and continue growing organically. "We are now expanding our go-to-market teams in order to go after additional customers and partners, and at the same time, we continue to invest in our R&D," Harari told us. This is reflected in the company’s vacancies: Allot is currently hiring sales managers across key markets, including North America, Germany, Italy, and the UK.

Harari is not aiming to turn Allot into a unicorn, i.e., a company valued at $1 billion or more. Rather, he says, "My personal goal is to make Allot a bigger and more scalable company and a dominant player in a cybersecurity space." He is targeting $180 million in annual revenue and over $100 million in annual recurring revenue (ARR) from subscriptions and long-term contracts. Reaching those figures would mark a milestone, he argues. It would signal the emergence of a large and repeatable business model and, Harari notes, make Allot a decacorn, i.e., a company valued above $10 billion. In his view, "Companies with over $100 million in ARR, are potentially more valuable than the unicorns in most cases, because there are some unicorns that sell only few dozens of million dollars." The company now expects ARR for cybersecurity products to be about $29 million in 2025.

"I believe in the next three years from 2025 to 2027, this is the focus, to really scale up the company, increase the top line, increase our cybersecurity revenue at strong double-digit growth and start to improve on the bottom line as well, as we have proved that we can make money out of this as well," Harari concludes.

The AI translation of this story was reviewed by a human editor.