Erez Antebi: We will definitely maintain what we — I don’t know if the word minimal is the right, we will maintain a balance between our investment on the SECaaS portion and our drive to reach profitability. And it will limit the amount that we’re able to invest. So no doubt, we will be investing less than we have this year and definitely less than we invested in the year before. You are correct that a significant part of our drive to reach profitability had and continues to be expense control. There is — because when we look at the top line then I would expect SECaaS revenues like we’ve been showing over quite a few last quarters, it’s still consistently growing. So I would expect them to continue to grow into next year, which will help us.
But the absolute numbers themselves are not very high. So we remain with trying to forecast and see how much can we count on the DPI or Allot Smart segment for revenues. That area, which relies heavily on operator spending is still affected by significant headwinds and cost reductions in operator’s budgets. So while I think we’re roughly around the, in a general sense without stating any numbers, I think we’ve roughly reached sort of the bottom of the curve here. I don’t think we can rely on the significant growth in our DPI or Allot Smart segment. So the combination of that leads us to reach profitability by reducing the OpEx, which is what we have been doing so far.
Nehal Chokshi: Just to be clear, would you be able to cut your OpEx further if you believe you needed to in the case that DPI does not stabilize here?
Erez Antebi: We didn’t prepare our ‘24 budget yet, so we don’t know. And as I said, it will be a combination between the revenues which we think will be achievable and the right level of OpEx and we keep our goal to be breakeven next year.
Nehal Chokshi: Last question for me. So as you mentioned, you had announced a special committee to explore options for Allot and subsequently you announced your founder retiring from the Chairman position and a new Chairman. Does that represent the conclusion of that social committee or is that still ongoing? And then what do you expect the new Chairman to bring?
Erez Antebi: So I’ll say a couple of things. One is that the committee was formed, and I’ll reiterate what I said, the committee was formed to work with management to identify and recommend opportunities for improvement, for further improvement, with a focus on driving sustained profitability and enhancing shareholder value. The work between the executive committee and management, one of the results was that, that was the OpEx reduction and cost cutting that we implemented during the third quarter in late August. And that work continues, like I said earlier in this call, continues to work together with management to figure out what is the right operating plan goals and expense levels and budget for 2024. Now Yigal, who was our Chairman until recently, decided to resign for his own reasons, has nothing to do with the executive committee and he’s not a derivative of that in any way, shape or form.
Nehal Chokshi: And do you expect a new |Chairman to bring anything different here?
Erez Antebi: I think the new Chairman, you feel free to ask him yourself, if and when you meet him, but I think anybody that has a different leader or new Chairman, David Reis has, vast industry and operational experience. I think anybody that brings with them a fresh flow, different perspective, can bring significant value to the company and that’s what I believe they’re using for their needs.
Nehal Chokshi: Thank you for taking my questions.
Operator: The next question is from Marc Silk, Silk Investment Advisors. Please go ahead.
Marc Silk : Thank you. So, earlier in the process of SECaaS deals a few years ago, you would basically lay out your capital with no commitment. So, can you kind of explain how going forward that’s going to be? Like, are you going to, before you spend penny number one, you’re going to get a commitment if you hit benchmarks? It’s just trying to clarify, you’re kind of spending in this reward in regards to obtaining more SECaaS customers?
Erez Antebi: Okay. So I’ll give you a bit more detailed answer maybe. You’re right that that’s how we were doing with our network security product in the past. Now when we look at it, we looked at it again about a year and a half or so ago, and we said that okay, the fact that we are outlining capital without getting a firm commitment from the operators and then they take a long time to launch and they take a long time to wrap up and generate revenue and so on, it’s not a good way to go forward. So for most new deals, definitely for the smaller ones, we’re looking for a firm commitment for revenue before we take upon ourselves any commitment to invest capital or deploy the network and so on. And investing capital is not just hardware, right?
It can be hardware, professional services, things like that. Now it’s not all operators are created equal. I can tell you, I don’t think it’s any secret, Verizon was not willing to give us a firm upfront commitment for revenue. But I think the opportunity has proven itself and it was right of us to sign this deal and launch with them even though they didn’t make an upfront minimum revenue commitment to us. So I would expect that there could be other such operators in the future, but we will strive 100% with the small and medium-sized operators. With the large ones, we may need to be more pragmatic, but we will strive with the other ones to get the main hall commitment.
