Comverse plunges after disappointing results
The bandwidth management solutions company earned $5 million in the second quarter on $26.4 million revenue.
Bandwidth management solutions developer Allot Communications Ltd. (Nasdaq:ALLT; TASE: ALLT) today published its financial report for the second quarter of 2012 and announced the acquisition of Oversi Networks Ltd. for $21 million.
Allot's revenue rose 43% to $26.4 million for the second quarter from $18.5 million for the corresponding quarter of 2011. GAAP-based net profit rose to $2.7 million ($0.08 per share) for the second quarter from $1.6 million for the corresponding quarter, and non-GAAP net profit rose to $5 million ($0.15 per share) from $2.7 million.
"Allot continued to demonstrate sustained revenue growth during the quarter," said Allot president and CEO Rami Hadar. "The demand for network optimization and revenue generating solutions which we offer through our Service Gateway continues to increase as data traffic continues to grow throughout the world. With today's announcement regarding the acquisition of Oversi, we now offer the most comprehensive video solution in the industry."
Allot acquired Israeli start-up Oversi, a global provider of rich-media caching and content delivery solutions for Internet video and peer-to-peer (P2P) markets, for $21 million. Allot will pay $16 million in cash, and up to $5 million based on Oversi's performance during 2012. The acquisition is subject to the satisfaction of certain closing conditions, and is expected to close during the third quarter of 2012. Allot expects that Oversi will contribute $2 million revenue per quarter, but that expenses will increase by $2 million per quarter, which will reduce fourth quarter earnings per share by $0.02. Allot expects the acquisition to break even by the first quarter of 2013.
"By joining Allot, we will now be able to further our joint market vision more effectively," said Oversi CEO David Tolub. "While we have seen growing traction for our leading edge caching solutions, we believe that integrating our solution into the Allot Service Gateway will accelerate our market penetration by offering a more robust video solution."
Allot's share price rose 5.7% in morning trading on the TASE today to NIS 106, after rising 0.5% on Nasdaq yesterday to $24.68, giving a market cap of $764 million.
Published by Globes [online], Israel business news - www.globes-online.com - on July 31, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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