Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Entity Central Index Key | 0001365767 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2021 |
Entity File Number | 001-33129 |
Entity Registrant Name | ALLOT LTD |
Entity Incorporation State Country Code | IL |
Entity Address, Address Line One | 22 Hanagar Street |
Entity Address, Address Line Two | Neve Ne’eman Industrial Zone B |
Entity Address, City or Town | Hod-Hasharon |
Entity Address, Country | IL |
Entity Address, Postal Zip Code | 4501317 |
Title of 12(b) Security | Ordinary Shares, par value ILS 0.10 per share |
Trading Symbol | ALLT |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Auditor Attestation Flag | true |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 36,491,480 |
Auditor Name | KOST FORER GABBAY & KASIERER |
Auditor Location | Tel-Aviv, Israel |
Auditor Firm ID | 1281 |
Business Contact [Member] | |
Contact Personnel Name | Rael Kolevsohn |
Entity Address, Address Line One | 22 Hanagar Street |
Entity Address, Address Line Two | Neve Ne’eman Industrial Zone B |
Entity Address, City or Town | Hod-Hasharon |
Entity Address, Country | IL |
Entity Address, Postal Zip Code | 4501317 |
City Area Code | 972 |
Local Phone Number | (9) 762-8419 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 11,717 | $ 23,599 |
Restricted deposits | 1,480 | 1,200 |
Short-term bank deposits | 60,720 | 47,225 |
Available-for-sale marketable securities | 11,531 | 27,178 |
Trade receivables, net (net of allowance for credit losses of $ 2,398 and $ 2,309 on December 31, 2021 and 2020, respectively) | 30,829 | 20,685 |
Other receivables and prepaid expenses | 8,490 | 14,205 |
Inventories | 11,092 | 12,586 |
Total current assets | 135,859 | 146,678 |
NON-CURRENT ASSETS: | ||
Long-term bank deposits | 215 | 215 |
Severance pay fund | 407 | 434 |
Operating lease right-of-use assets | 8,513 | 4,458 |
Trade receivables, net | 6,643 | 0 |
Deferred taxes | 0 | 420 |
Other assets | 1,639 | 2,975 |
Property and equipment, net | 15,000 | 11,993 |
Intangible assets, net | 3,455 | 2,744 |
Goodwill | 31,683 | 31,683 |
Total non-current assets | 67,555 | 54,922 |
Total assets | 203,414 | 201,600 |
CURRENT LIABILITIES: | ||
Trade payables | 3,940 | 2,092 |
Employees and payroll accruals | 14,636 | 14,138 |
Deferred revenues | 22,138 | 26,658 |
Short-term operating lease liabilities | 2,785 | 2,813 |
Other payables and accrued expenses | 11,614 | 13,161 |
Total current liabilities | 55,113 | 58,862 |
LONG-TERM LIABILITIES: | ||
Deferred revenues | 15,942 | 9,782 |
Long-term operating lease liabilities | 5,467 | 1,835 |
Accrued severance pay | 884 | 969 |
Total long-term liabilities | 22,293 | 12,586 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
SHAREHOLDERS' EQUITY: | ||
Share capital - Ordinary shares of NIS 0.1 par value - Authorized: 200,000,000 shares at December 31, 2021 and 2020; Issued: 37,307,480 and 36,198,638 shares at December 31, 2021 and 2020, respectively; Outstanding: 36,491,480 and 35,382,638 shares at December 31, 2021 and 2020, respectively | 929 | 896 |
Additional paid-in capital | 293,803 | 283,065 |
Treasury share at cost - 816,000 shares at December 31, 2021 and 2020. | (3,998) | (3,998) |
Accumulated other comprehensive income | 271 | 146 |
Accumulated deficit | (164,997) | (149,957) |
Total shareholders' equity | 126,008 | 130,152 |
Total liabilities and shareholders' equity | $ 203,414 | $ 201,600 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Paretheticals 1) - ₪ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | ₪ 0.1 | ₪ 0.1 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Parentheticals 2) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 2,398 | $ 2,309 |
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 |
Ordinary shares, shares issued | 37,307,480 | 36,198,638 |
Ordinary shares, shares outstanding | 36,491,480 | 35,382,638 |
Treasury stock, shares | 816,000 | 816,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Total revenues | $ 145,600 | $ 135,922 | $ 110,100 |
Cost of revenues: | |||
Total cost of revenues | 44,553 | 40,082 | 33,834 |
Gross profit | 101,047 | 95,840 | 76,266 |
Operating expenses: | |||
Research and development (net of grant participations of $ 167, $ 339 and $ 378 for the years ended December 31, 2021, 2020 and 2019, respectively) | 47,093 | 43,447 | 31,461 |
Sales and marketing | 52,337 | 47,528 | 47,105 |
General and administrative | 15,145 | 13,894 | 6,678 |
Total operating expenses | 114,575 | 104,869 | 85,244 |
Operating loss | (13,528) | (9,029) | (8,978) |
Financial income, net | 339 | 1,857 | 1,960 |
Loss before income tax expense | (13,189) | (7,172) | (7,018) |
Income tax expense | 1,851 | 2,176 | 1,641 |
Net loss | (15,040) | (9,348) | (8,659) |
Unrealized gain (loss) on available-for-sale marketable securities | (359) | 191 | 666 |
Net amount reclassified to earnings from available-for-sale marketable securities | (15) | (40) | 4 |
Total comprehensive gain (loss) from available-for-sale marketable securities | (374) | 151 | 670 |
Unrealized gain (loss) on foreign currency cash flow hedges transactions | 1,269 | 723 | (332) |
Net amount reclassified to earnings from hedging transactions | (770) | (203) | (96) |
Total comprehensive gain (loss) from hedge transactions | 499 | 520 | (428) |
Total comprehensive loss | $ (14,915) | $ (8,677) | $ (8,417) |
Net loss per share: | |||
Basic and diluted | $ (0.42) | $ (0.27) | $ (0.25) |
Weighted average number of shares used in per share computations of net loss: | |||
Basic and diluted | 36,050,540 | 35,007,201 | 34,250,582 |
Product [Member] | |||
Revenues: | |||
Total revenues | $ 88,229 | $ 92,524 | $ 67,440 |
Cost of revenues: | |||
Total cost of revenues | 31,603 | 28,524 | 22,743 |
Service [Member] | |||
Revenues: | |||
Total revenues | 57,371 | 43,398 | 42,660 |
Cost of revenues: | |||
Total cost of revenues | $ 12,950 | $ 11,558 | $ 11,091 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Grants participations excluded from research and development costs | $ 167 | $ 339 | $ 378 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Ordinary shares [Member] | Additional paid-in capital [Member] | Treasury share [Member] | Accumulated other comprehensive income (loss) [Member] | Accumulated deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 853 | $ 271,765 | $ (3,998) | $ (767) | $ (131,950) | $ 135,903 |
Balance, shares at Dec. 31, 2018 | 33,896,261 | |||||
Exercise of share options and restricted share units | $ 18 | 974 | 0 | 0 | 0 | 992 |
Exercise of share options and restricted share units, shares | 624,467 | |||||
Share-based compensation | $ 0 | 3,373 | 0 | 0 | 0 | 3,373 |
Other comprehensive income (loss) | 0 | 0 | 0 | 242 | 0 | 242 |
Net loss | 0 | 0 | 0 | 0 | (8,659) | (8,659) |
Balance at Dec. 31, 2019 | $ 871 | 276,112 | (3,998) | (525) | (140,609) | 131,851 |
Balance, shares at Dec. 31, 2019 | 34,520,728 | |||||
Exercise of share options and restricted share units | $ 25 | 1,810 | 0 | 0 | 0 | 1,835 |
Exercise of share options and restricted share units, shares | 861,910 | |||||
Share-based compensation | $ 0 | 5,143 | 0 | 0 | 0 | 5,143 |
Other comprehensive income (loss) | 0 | 0 | 0 | 671 | 0 | 671 |
Net loss | 0 | 0 | 0 | 0 | (9,348) | (9,348) |
Balance at Dec. 31, 2020 | $ 896 | 283,065 | (3,998) | 146 | (149,957) | $ 130,152 |
Balance, shares at Dec. 31, 2020 | 35,382,638 | 35,382,638 | ||||
Exercise of share options and restricted share units | $ 33 | 2,778 | 0 | 0 | 0 | $ 2,811 |
Exercise of share options and restricted share units, shares | 1,108,842 | |||||
Share-based compensation | $ 0 | 7,960 | 0 | 0 | 0 | 7,960 |
Other comprehensive income (loss) | 0 | 0 | 0 | 125 | 0 | 125 |
Net loss | 0 | 0 | 0 | 0 | (15,040) | (15,040) |
Balance at Dec. 31, 2021 | $ 929 | $ 293,803 | $ (3,998) | $ 271 | $ (164,997) | $ 126,008 |
Balance, shares at Dec. 31, 2021 | 36,491,480 | 36,491,480 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net loss | $ (15,040) | $ (9,348) | $ (8,659) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 5,575 | 4,312 | 4,359 |
Share-based compensation | 8,000 | 5,198 | 3,420 |
Capital loss | 0 | 18 | 0 |
Increase (decrease) in accrued severance pay, net | (58) | 128 | (54) |
Decrease (increase) in other assets | 1,006 | (2,048) | (326) |
Decrease in accrued interest and amortization of premium on available-for sale marketable securities | 182 | 357 | 343 |
Decrease (increase) in operating lease right-of-use asset | (4,055) | 1,910 | (6,368) |
Increase (decrease) in operating leases liability | 3,604 | (2,323) | 6,971 |
Decrease (increase) in trade receivables | (16,787) | 8,323 | (2,915) |
Decrease (increase) in other receivables and prepaid expenses | 4,902 | (7,272) | (3,168) |
Decrease (increase) in inventories | 1,494 | (1,918) | (253) |
Decrease (increase) in long-term deferred taxes, net | 420 | 96 | (236) |
Increase (decrease) in trade payables | 1,848 | (9,584) | 3,863 |
Increase in employees and payroll accruals | 458 | 2,047 | 4,635 |
Increase (decrease) in deferred revenues | 1,640 | (5,182) | 23,520 |
Increase (decrease) in other payables and accrued expenses | (1,559) | 3,061 | (9,040) |
Net cash provided by (used in) operating activities | (8,370) | (12,225) | 16,092 |
Cash flows from investing activities: | |||
Decrease (increase) in restricted deposits | (280) | 32,896 | (33,374) |
Redemption of (Investment in) short-term deposits | (13,495) | (41,883) | 16,986 |
Purchase of property and equipment | (7,642) | (7,582) | (3,708) |
Investment in available-for sale marketable securities | 0 | (1,219) | (39,950) |
Proceeds from sales and maturity of available-for sale marketable securities | 15,094 | 34,847 | 43,555 |
Net cash provided by (used in) investing activities | (6,323) | 17,059 | (16,491) |
Cash flows from financing activities: | |||
Proceeds from exercise of share options | 2,811 | 1,835 | 993 |
Net cash provided by financing activities | 2,811 | 1,835 | 993 |
Increase (decrease) in cash and cash equivalents | (11,882) | 6,669 | 594 |
Cash and cash equivalents at the beginning of the year | 23,599 | 16,930 | 16,336 |
Cash and cash equivalents at the end of the year | 11,717 | 23,599 | 16,930 |
Cash paid during the year for: | |||
Taxes | 633 | 410 | 473 |
Non-cash activity: | |||
Right-of-use assets obtained in the exchange for operating lease liabilities | $ 6,746 | $ 1,080 | $ 1,208 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1: - GENERAL a. Allot Ltd. (the "Company") was incorporated in November 1996 under the laws of the State of Israel. The Company is engaged in developing, selling and marketing of leading innovative network intelligence (“Allot Smart”) and security solutions (“Allot Secure”) for mobile and fixed service providers as well as enterprises worldwide. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security including mobile security, distributed denial of service (DDoS) protection, IoT security, and more. Allot Smart generates insightful intelligence that allows CSPs to analyze every packet of network, user, application and security data, CSPs can see, control and secure their networks, optimizing performance, minimizing costs and maximizing end-user QoE. Allot Secure provide security service for the mass market and SMB at home, at work and on the go for mobile, fixed and 5G converged networks. Allot Secure enables customers to detect security breaches and protect networks and network users from attacks. The Company's Ordinary Shares are listed in the NASDAQ Global Select Market under the symbol "ALLT" from its initial public offering in November 2006. Since November 2010, the Company's Ordinary Shares have been listed for trading in the Tel Aviv Stock Exchange as well. The Company holds twelve wholly-owned subsidiaries (the Company together with it's subsidiaries shall collectively be referred to as "Allot"): Allot Communications, Inc. in Burlington, Massachusetts, United-States (the "U.S. subsidiary"), which was incorporated in 1997 under the laws of the State of California, Allot Communication Europe SARL in Sophia, France (the "European subsidiary"), which was incorporated in 1998 under the laws of France, Allot Communications Japan K.K. in Tokyo, Japan (the "Japanese subsidiary"), which was incorporated in 2004 under the laws of Japan, Allot Communication (UK) Limited (the "UK subsidiary"), which was incorporated in 2006 under the laws of England and Wales, Allot Communications (Asia Pacific) Pte. Ltd. ("the Singaporean subsidiary"), which was incorporated in 2006 under the laws of Singapore, Allot India Private Limited. (the "Indian subsidiary”), which was incorporated in 2012 under the laws of India and commenced its activity in 2013, Allot Communications Africa (PTY) Ltd. (the "African subsidiary”), which was incorporated in 2013 under the laws of South Africa, Allot Communications Spain, S.L. Sociedad Unipersonal (the "Spanish subsidiary”), which was incorporated in 2015 under the laws of Spain, Allot Communications (Colombia) S.A.S (the "Colombian subsidiary”), which was incorporated in 2015 under the laws of Colombia and Allot MexSub (the "Mexican subsidiary"), which was incorporated in 2015 under the laws of Mexico, Allot Turkey Komunikasion Hizmeleri limited (the “Turkish subsidiary”), which was incorporated in 2018 under laws of Turkey, Allot Australia (PTY) LTD (the “Australian subsidiary”), which was incorporated in 2018 under the laws of Australia. The French, Singaporean, Indian, Colombian and U.S, subsidiaries are engaged in sales and marketing, technical support services and other services of the Company's products. The European (excluding Spanish), Japanese, UK, African, Turkish and Australian subsidiaries are engaged in sales and marketing and other services. The Spanish and Mexican subsidiaries commenced operations in 2015 and are engaged in the marketing, technical support and development activities of one of the Company's product lines. b. Acquisition: On January 14, 2018 (the "Netonomy acquisition date"), the Company entered into a purchase agreement with the shareholders of Netonomy LTD ("Netonomy"), a developer of software-based cybersecurity solutions for the connected home. The total consideration for the acquisition was $3,765, which consisted of $3,180 paid in cash, holdback amount summing to $303 and additional contingent consideration at a fair value of $282 at the Netonomy acquisition date. As of December 31, 2021, the contingent consideration is estimated at a fair value of $834, The change in fair value of the contingent consideration was recorded to operating expenses. According to the agreement, the holdback amount (“Holdback Amount”) summing to $1,100 would be held to partially satisfy any claims for indemnification. Such amount shall be paid in three installments consisting each one 40%, 40% and 20% of the Holdback amount following the first, second and 30-months anniversaries of the Closing Date, respectively. Notwithstanding the aforementioned, a sum of $797 out of the Holdback amount shall be paid provided that certain employees keep working in the Company during the here mentioned periods (“the Restricted Holdback Amount”). As of December 31, 2021 the Company has no Holdback liability. In this agreement, the contingent consideration was payable over a two-and-a-half-year term, starting April 1, 2018 As of December 31, 2021, the Contingent Consideration Period ended however, the Contingent Consideration was not settled yet. See Note 11c. The acquisition was accounted for using the purchase method of accounting in accordance with ASC No. 805, “Business Combinations” ("ASC No. 805"). Accordingly, the purchase price was allocated according to the estimated fair values of the assets acquired and liabilities assumed and the excess of the purchase price over the net tangible and identified intangible assets was assigned to goodwill. The fair value of intangible assets was determined by management with the assistance of a third-party valuation. On July 2018, the merger of Netonomy with the Company was approved by the Israeli tax authorities with Allot as the receiving company and Netonomy as the transferring company and March 31, 2018 as the Merger Date. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: Fair value Non-current assets $ 4 Account Payable (11 ) Other Payables (142 ) IPR&D 3,659 Goodwill 121 Net assets acquired $ 3,631 The acquired assets are net of cash balance of $132. IPR&D is related to new technology that is still under development. Netonomy’s solution provides a simple, reliable and secure network for connected homes through a minimal footprint agent installed on the home router, which provides visibility into the network and blocks external and internal attacks. Acquisition costs in a total amount of $49 were recorded to operating expenses. The Company started to depreciate the IPR&D asset from Q3 2019 as the R&D phase was completed and the related product was ready to be sold. Unaudited pro forma condensed results of operations: Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company’s consolidated Statements of Comprehensive Loss. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: - SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. b. Financial statements in U.S. dollars: The majority operation of the Company and its subsidiaries are generated in U.S. dollars ("dollar") or linked to the dollar. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into U.S. dollars in accordance with Accounting Standards Codification No. 830, "Foreign Currency Matters" ("ASC No. 830"). All transactions gains and losses from the remeasurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate. c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. d. Cash and cash equivalents: The Company considers all unrestricted highly liquid investments which are readily convertible into cash, with a maturity of three months or less at the date of acquisition, to be cash equivalents. e. Restricted deposits: The restricted deposits are held in favor of financial institutions in respect of fulfillment of operating obligations. f. Short-term bank deposits: Short-term bank deposits are deposits with maturities of more than three months but less than one year at the balance sheet date. The deposits are in dollars and bear interest at an annual weighted average rate of 0.71% and 0.85% on December 31, 2021 and 2020, respectively. In connection with the Company's hedging transactions, the Company is required to maintain compensating deposits balances in the bank. Out of the short-term bank deposits, a total of $5,000 and $2,500 is due to the hedging transactions as of December 31, 2021 and 2020. g. Trade Receivable and Allowances: Trade receivables are recorded and carried at the original invoiced amount which was recognized as revenues less an allowance for any potential uncollectible amounts. The Company makes estimates of expected credit losses for the allowance for credit losses and allowance for unbilled receivables based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company’s consolidated statements of income (loss). The following table displays a rollforward of the total allowance for credit losses for the years ended December 31, 2021, 2020, and 2019. 2021 2020 2019 Total allowance for credit losses – January 1 2,309 1,867 1,415 Current-period provision for expected credit losses 293 1,894 866 Write-offs (9 ) (934 ) (3 ) Recoveries collected (195 ) (518 ) (411 ) Total allowance for credit losses – December 31 2,398 2,309 1,867 h. Marketable securities: Marketable securities consist mainly of corporate bonds. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments- Debt and Equity Securities,” the Company classifies marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives. Starting on January 1, 2020, as a result of the adoption of ASC 326, available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in interest and other income (expense), net, on the Company’s consolidated statements of income (loss), and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in Shareholder's equity. As of December 31,2021 and 2020, no credit loss impairment was recorded regarding the available for sale marketable securities. There was no other-than-temporary-impairment charge for any unrealized losses in 2019. i. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising primarily from end of life products and from slow-moving items, technological obsolescence, and excess inventory. Inventory write-offs during the years ended December 31, 2021, 2020 and 2019 amounted to $ 4,593, $ 1,928 and $ 629, respectively, and were recorded in cost of revenues. Provision for slow moving inventory as of December 31, 2021 and 2020 amounted to $ 9,103 and $ 4,624, respectively. Inventory cost is determined using the weighted average cost method. j. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates: % Lab equipment 16 - 25 Computers and peripheral equipment 33 Office furniture 6 SECaaS equipment* 16 Leasehold improvements Over the shorter of the term of the lease or the useful life of the asset *SECaaS equipment – the equipment used for SECaaS revenues k. Goodwill: Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Under Accounting Standards Codification No. 350, "Intangibles-Goodwill and Other" ("ASC No. 350"), goodwill is not amortized, but rather subject to an annual impairment test, or more often if there are indicators of impairment present. In accordance with ASC No. 350 the Company performs an annual impairment test at December 31 each year. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update ("ASU") No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which the Company adopted as of January 1, 2020. The Company operates in one operating segment, and this segment comprises its only reporting unit. The Company has performed an annual impairment analysis as of December 31, 2021 and determined that the carrying value of the reporting unit was lower than the fair value of the reporting unit. Fair value is determined using market value. During the years 2021, 2020 and 2019, no impairment losses were recorded. l. Impairment of long-lived assets, Right-of-use assets, and intangible assets subject to amortization: Property and equipment, Right-of-use assets, and intangible assets subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Intangible assets acquired in a business combination are recorded at fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. Some of the acquired intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such customer relationships as compared to the straight-line method. All other intangible assets are amortized over their estimated useful lives on a straight-line basis. The Company has performed an annual impairment analysis as of December 31, 2021 and determined that there were no circumstances indicate the asset’s carrying value may not be recoverable. During the years 2021, 2020 and 2019, no impairment losses were recorded. m. Revenue recognition: The Company generates revenues mainly from selling its products along with related maintenance and support services. At times, these arrangements may also include professional services, such as installation services or training. Some of the Company’s product sales are through resellers, distributors, OEMs and system integrators, all of whom are considered end-users. The Company also generates revenues from services, in which the Company provides network filtering and security services to its customers. The Company recognizes revenues according to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), effective on January 1, 2018. The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation. Some of the Company's contracts usually include combinations of products and services, that are capable of being distinct and accounted for as separate performance obligations. The products are distinct as the customer can derive the economic benefit of it without any professional services, updates or technical support. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of the total consideration of the contract. For support, the Company determines the standalone selling prices based on the price at which the Company separately sells a renewal support contract on a stand-alone basis. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services on a stand-alone basis. If the standalone selling price is not observable, the Company estimates the standalone selling price by taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligation. Product revenue is recognized at a point in time when the performance obligation is being satisfied. Maintenance and support related revenues are deferred and recognized on a straight-line basis over the term of the applicable maintenance and support agreement. Professional services are usually recognized at a point in time when the performance obligation is being satisfied. The Company elected the practical expedient to not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. In certain contracts, the Company provides the customer with financing for a period exceeding one year. In such circumstances, the Company recognizes revenue based on the amount that reflects the price that would have been paid by the customer in cash on the date of receipt of the goods or services, and the balance is recognized in finance income. The Company also enters into service contracts, in which the Company provides security as a service (SECaaS) solution to operators, which the Company considers as its customers. The Company's security as a service solution is offered to operators on a Revenue Share business model, where both the Company and the operator share the revenue generated from the operator's subscribers. Most of the Company's security as a service contracts contain a single performance obligation comprised of series of distinct goods and services satisfied over time. The contracts consideration is based on usage by the operator's subscribers. As such, the Company allocates the variable consideration in those contracts to distinct service periods in which the service is provided and recognizes revenue for each distinct service period. Deferred revenue includes amounts received from customers for which revenue has not yet been recognized. Deferred revenues are classified as short and long-term based on their contractual term and recognized as (or when) the Company performs under the contract. The portion of the transaction price allocated to remaining performance obligations represents contracts that have not yet been recognized that include deferred revenue and amounts not yet received that will be recognized as revenue in future periods. The aggregate amount of the transaction price allocated to remaining performance obligations that the Company expects to recognize is $89 million of which approximately $53 million is estimated to be recognized before December 31, 2022 and approximately $36 million is estimated to be recognized after December 31, 2022. The Company pays sales commissions to sales and marketing personnel based on their certain predetermined sales goals. The company evaluates its commission and capitalize only incremental commissions costs which are considered recoverable costs of obtaining a contract with a customer. These capitalized sales commissions costs are amortized over a period of benefit which is typically over the term of the customer contracts as initial commission rates are commensurate with the renewal commission rates. Amortization expenses related to these costs are included in sales and marketing expenses in the consolidated statements of operations. For the year ended December 31, 2021, the amortization of deferred commission was $1,394. The Company uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less. The Company estimated variable consideration related to product returns based on its experience with historical product returns and other known factors. Such provisions amounted to $233 and $290 as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, this provision was recorded as part of other payables and accrued expenses. The Company recognizes term-based license agreements at the point in time when control transfers and the associated maintenance revenues over the contract period. n. Cost of revenues: Cost of revenues consists primarily of costs of materials and the cost of maintenance and services, resulting from costs associated with support, customer success and professional services. o. Research and development costs: Accounting Standards Codification No. 985-20, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon the completion of a working model. The Company does not incur material costs between the completion of a working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the consolidated statement of comprehensive loss as incurred. p. Severance pay: The liability in Israel for substantially all of the Company`s employees in respect of severance pay liability is calculated in accordance with Section 14 of the Severance Pay Law -1963 (herein- "Section 14"). Section 14 states that Company's contributions for severance pay shall be in line of severance compensation and upon release of the policy to the employee, no additional obligations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Furthermore, the related obligation and amounts deposited on behalf of such obligation under Section 14, are not stated on the balance sheet, because pursuant to the current ruling, they are legally released from the obligation to employees once the deposits have been paid. There are a limited number of employees in Israel, for whom the Company is liable for severance pay. The Company's liability for severance pay for its Israeli employees was calculated pursuant to Section 14, based on the most recent monthly salary of its Israeli employees multiplied by the number of years of employment as of the balance sheet date for such employees. The Company's liability was partly provided by monthly deposits with severance pay funds and insurance policies and the remainder by an accrual. Severance expense for the years ended December 31, 2021, 2020 and 2019, amounted to $2,465, $3,619 and $2,249, respectively. q. Accounting for share-based compensation: The Company accounts for share-based compensation in accordance with Accounting Standards Codification No. 718, "Compensation - Stock Compensation" ("ASC No. 718") that requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of comprehensive loss. The Company recognizes compensation expenses for the value of its awards based on the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances. The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances if any. The following table sets forth the total share-based compensation expense resulting from share options, restricted share units and Phantoms granted to employees included in the consolidated statements of comprehensive loss, for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Cost of revenues $ 581 $ 355 $ 264 Research and development 2,499 1,368 847 Sales and marketing 3,212 2,145 1,257 General and administrative 1,708 1,330 1,052 Total share-based compensation expense $ 8,000 $ 5,198 $ 3,420 The Company selected the binomial option pricing model as the most appropriate fair value method for its share options awards with the following assumptions for the years ended December 31, 2018: Year ended December 31, 2018 Suboptimal exercise multiple 2.9-3.5 Risk free interest rate 2.09%-3.05% Volatility 26%-47% Dividend yield 0 During 2021, 2020 and 2019 no options were granted by the Company. The computations of expected volatility and suboptimal exercise multiple is based on the average of the Company's realized historical share price. The computation of the suboptimal exercise multiple and the forfeiture rates are based on the grantee's expected exercise prior and post vesting termination behavior. The interest rate for a period within the contractual life of the award is based on the U.S. Treasury Bills yield curve in effect at the time of grant. The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business. The expected life of the share options represents the weighted-average period the share options are expected to remain outstanding and is a derived output of the binomial model. The expected life of the share options is impacted by all of the underlying assumptions used in the Company's model. The option pricing model of the of restricted share units ("RSUs") is based on the closing market value of the underlying shares at the date of grant. The expected annual pre-vesting forfeiture rate affects the number of vested RSUs. Based on the Company's historical experience, the pre-vesting is in the range of 0%-30% in the years 2021, 2020 and 2019. r. Treasury share: In the past, the Company repurchased its Ordinary shares on the open market and holds such shares as treasury share. The Company presents the cost to repurchase treasury share as a reduction of shareholders' equity. s. Concentration of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, short-term bank deposits, trade receivables and derivative instruments. The majority of cash and cash equivalents and short-term deposits of the Company are invested in dollar deposits in major U.S. and Israeli banks. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, the cash and cash equivalents and short-term bank deposits may be redeemed upon demand, and therefore, bear minimal risk. Marketable securities include investments in dollar linked corporate and government bonds. Marketable securities consist of highly liquid debt instruments with high credit standing. The Company’s investment policy, approved by the Board of Directors, limits the amount the Group may invest in any one type of investment or issuer, thereby reducing credit risk concentrations. Management believes that the portfolio is well diversified and, accordingly, minimal credit risk exists with respect to these marketable debt securities. The Company's trade receivables are derived from sales to customers located in EMEA, as well as in APAC, Latin America and the United States. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. The Company performs ongoing credit evaluations of its customers and establishes an allowance for credit losses on a specific basis. Allowance for credit losses amounted to $2,398 and $2,309 as of December 31, 2021 and 2020, respectively. The Company utilizes foreign currency forward contracts to protect against risk of overall changes in exchange rates. The derivative instruments hedge a portion of the Company's non-dollar currency exposure. Counterparties to the Company’s derivative instruments are all major financial institutions and its exposure is limited to the amount of any asset resulting from the forward contracts. t. Government grants: Grants from the Israel Innovation Authority (IIA): Participation grants from the Israel Innovation Authority (Previously known as the Office of the Chief Scientist) for research and development activity are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and included as a deduction of research and development costs. Research and development non royalty bearing grants recognized amounted to $(42), $339 and $378 in 2021, 2020 and 2019, respectively. Grants from the Spain Tax Authorities: Participation grants from the Spain Tax Authorities for research and development activity are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and included as a deduction of research and development costs. Research and development non royalty bearing grants recognized amounted to $209 in 2021. u. Income taxes: The Company accounts for income taxes in accordance with Accounting Standards Codification No. 740, "Income Taxes" ("ASC No. 740"). ASC No. 740 prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The deferred tax assets and liabilities are classified to non-current assets and liabilities, respectively. ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest related to unrecognized tax benefits in taxes on income. v. Basic and diluted net income (loss) per share: Basic net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year, plus dilutive potential Ordinary Shares considered outstanding during the year, in accordance with FASB ASC 260 "Earnings Per Share". For the years ended December 31, 2021, 2020 and 2019, all outstanding options and RSUs have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. See Note 16. The amount of those options and RSU’s was: 2,613,894, 2,897,273, 3,105,801 respectively. w. Comprehensive loss: The Company accounts for comprehensive loss in accordance with Accounting Standards Codification No. 220, "Comprehensive Income" ("ASC No. 220"). This statement establishes standards for the reporting and display of comprehensive loss and its components in a full set of general The following table shows the components and the effects on net loss of amounts reclassified from accumulated other comprehensive loss as of December 31, 2021: Year ended December 31, 2021 Unrealized gain (losses) on marketable securities Unrealized gains (losses) on cash flow hedges Total Balance as of December 31, 2020 $ 472 $ (326 ) $ 146 Changes in other comprehensive income (loss) before reclassifications (359 ) 1,269 910 Amounts reclassified from accumulated other comprehensive loss to: Cost of revenues - (146 ) (146 ) Operating expenses - (624 ) (624 ) Financial income, net (15 ) - (15 ) Net current-period other comprehensive income (loss) (374 ) 499 125 Balance as of December 31, 2021 $ 98 $ 173 $ 271 There was no income tax expense or benefit allocated to other comprehensive income, including reclassification adjustments for the year ended December 31, 2021. x. Fair value of financial instruments: The carrying amounts of short-term bank deposits, trade receivables, other receivables, trade payables and other payables approximate their fair value due to the short-term maturities of such instruments. The Company measures its cash and cash equivalents, marketable securities, derivative instruments and earn-out considerations at fair value. Fair value is an exit price, representing the amount that would be received if the Company were to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The Company uses a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Include other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs which are supported by little or no market activity. The Company categorized each of its fair value measurements in one of those three levels of hierarchy. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company measures its marketable securities and foreign currency derivative contracts at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company's earn-out considerations were classified within Level 3. In previous years, the valuation methodology used by the Company to calculate the fair value consideration is the discounted cash flow using the Monte-Carlo simulation method by taking into account, forecast future revenues, expected volatility of 20.7% for Netonomy and the weighted average cost of debt of 2%. As of Decem |
AVAILABLE-FOR-SALE MARKETABLE S
AVAILABLE-FOR-SALE MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE MARKETABLE SECURITIES | NOTE 3: - AVAILABLE-FOR-SALE MARKETABLE SECURITIES The following is a summary of available-for-sale marketable securities: December 31, 2021 December 31, 2020 Amortized cost Gross unrealized gain Gross unrealized Fair value Amortized cost Gross unrealized Gross unrealized Fair value Available-for-sale - matures within one year: Corporate debentures 6,334 36 - 6,370 12,611 97 - 12,708 6,334 36 - 6,370 12,611 97 - 12,708 Available-for-sale - matures after one year through three years: Governmental debentures 176 - - 176 379 3 - 382 Corporate debentures 4,920 67 (2 ) 4,985 13,181 364 - 13,545 5,096 67 (2 ) 5,161 13,560 367 - 13,927 Available-for-sale - matures after three years through five years: Corporate debentures - - - - 535 8 - 543 - - - - 535 8 - 543 $ 11,430 $ 103 $ (2 ) $ 11,531 $ 26,706 $ 472 $ - $ 27,178 As of December 31, 2021, the Company had no investments with a significant unrealized loss for more than 12 months. As of December 31,2021, no credit loss impairment was recorded regarding the available for sale marketable securities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 4: - FAIR VALUE MEASUREMENTS In accordance with ASC No. 820, the Company measures its marketable securities and foreign currency derivative instruments at fair value. Cash equivalents and available for sale marketable securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. In previous years, the earn-out liability related to the acquisitions of Netonomy are classified within Level 3 because these liabilities were based on present value calculations and an external valuation model whose inputs include market interest rates, estimated operational capitalization rates and volatilities. The fair value of the consideration was determined according to discounted cash flow. As of December 31, 2021 no valuation was needed for Netonomy earn-outs. The Company's financial net assets measured at fair value on a recurring basis, including accrued interest components, consisted of the following types of instruments as of December 31, 2021 and 2020, respectively: As of December 31, 2021 Fair value measurements using input type Level 1 Level 2 Level 3 Total Available-for-sale marketable securities $ - $ 11,531 $ - $ 11,531 Foreign currency derivative contracts - 902 - 902 Total financial net assets $ - $ 12,433 $ - $ 12,433 As of December 31, 2020 Fair value measurements using input type Level 1 Level 2 Level 3 Total Available-for-sale marketable securities $ - $ 27,178 $ - $ 27,178 Foreign currency derivative contracts - (952 ) - (952 ) Total financial net assets $ - $ 26,226 $ - $ 26,226 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | NOTE 5: - DERIVATIVE INSTRUMENTS The Company enters into hedge transactions with a major financial institution, using derivative instruments, primarily forward contracts and options to purchase and sell foreign currencies, in order to reduce the net currency exposure associated with anticipated expenses (primarily salaries and related expenses that are designated as cash flow hedges), trade receivables and forecasted revenues denominated in currencies other than U.S. dollar. The Company currently hedges such future exposures for a maximum period of two years. However, the Company may choose not to hedge certain foreign currency exchange exposures for a variety of reasons, including but not limited to immateriality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange rates. The Company records all derivatives on the consolidated balance sheets at fair value in accordance with ASC No. 820 at Level 2. Cash flow hedges are recorded in other comprehensive income (loss) until the hedged item is recognized in earnings. The Company does not enter into derivative transactions for trading purposes. The net income (loss) recognized in "Financial income (expense), net" during the years ended December 31, 2021, 2020 and 2019 was $1,272, $1,200 and $534, respectively. The Company had a net unrealized gain (loss) associated with cash flow hedges of $173 and ($326) recorded in other comprehensive loss as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company had outstanding hedge transactions in the net amount of $62,439 and $8,700, respectively. The fair value of the outstanding foreign exchange contracts recorded by the Company on its consolidated balance sheets as of December 31, 2021 and 2020, as assets and liabilities are as follows: Foreign exchange forward and December 31, options contracts Balance sheet 2021 2020 Fair value of foreign exchange hedge transactions Other receivables and prepaid expenses $ 973 $ 2,258 Fair value of foreign exchange hedge transactions Other payables and accrued expenses (11 ) (3,224 ) Total derivatives designated as hedging instruments Other Comprehensive profit (loss) $ 173 $ (326 ) Gain or loss on the derivative instruments, which partially offset the foreign currency impact from the underlying exposures, reclassified from other comprehensive loss to operating expenses and cost of revenues for the years ended December 31, 2021, 2020 and 2019 were $771, $203 and $(96), respectively. Non-designated hedges The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies. These derivatives do not qualify for special hedge accounting treatment. These derivatives are carried at fair value with changes recorded in financial income, net. Changes in the fair value of these derivatives are largely offset by the re-measurement of the underlying assets and liabilities. The derivatives have maturities of up to twelve months. As of December 31, 2021 and 2020, the Company’s outstanding non-hedge transactions were $22,275 and $13,773, respectively. The fair value of the outstanding non-designated foreign exchange contracts recorded by the Company on its consolidated balance sheets as of December 31, 2021 and 2020, as assets and liabilities are as follows: Foreign exchange forward and December 31, options contracts Balance sheet 2021 2020 Fair value of foreign exchange non-designated hedge transactions Other receivables and prepaid expenses $ 7 $ - Fair value of foreign exchange non-designated hedge transactions Other payables and accrued expenses (67 ) (13 ) Total derivatives non-designated as hedging instruments $ (60 ) $ (13 ) |
OTHER RECEIVABLES AND PREPAID E
OTHER RECEIVABLES AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER RECEIVABLES AND PREPAID EXPENSES | NOTE 6: - OTHER RECEIVABLES AND PREPAID EXPENSES December 31, 2021 2020 Prepaid expenses $ 4,029 $ 6,495 Government authorities 2,947 2,403 Prepayment to OEM - 2,359 Foreign currency derivative contracts 980 2,285 Short-term lease deposits 185 231 Grants receivable from the IIA - 103 Others 349 329 $ 8,490 $ 14,205 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 7: - INVENTORIES December 31, 2021 2020 Raw materials $ 1,494 $ 1,299 Finished goods 9,598 11,287 $ 11,092 $ 12,586 As of December 31, 2021 and 2020, the finished products line item above includes deferral of the cost of goods sold for which revenue was not yet recognized in the amount of approximately $413 and $4,246, respectively. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8: - PROPERTY AND EQUIPMENT, NET December 31, 2021 2020 Cost: Lab equipment $ 18,871 $ 17,624 Computers and peripheral equipment 14,316 13,090 Office furniture and equipment 1,510 1,454 Leasehold improvements 3,039 3,134 SECaaS equipment 5,886 2,976 43,622 38,278 Accumulated depreciation: Lab equipment 14,408 13,511 Computers and peripheral equipment 11,164 10,501 Office furniture and equipment 535 575 Leasehold improvements 1,230 1,224 SECaaS equipment 1,285 474 28,622 26,285 Depreciated cost $ 15,000 $ 11,993 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $4,635, $3,704 and $2,752, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 9: - INTANGIBLE ASSETS, NET a. The following table shows the Company's intangible assets for the periods presented: Weighted Average Useful life December 31, (Years) 2021 2020 Original Cost: Technology 3.8 $ 9,111 $ 9,111 Backlog 2.8 1,877 1,877 Customer relationships 4.4 3,592 3,592 Software license 5 1,651 - IP R&D 6 3,659 3,659 $ 19,890 $ 18,239 Accumulated amortization: Technology $ 9,111 $ 9,111 Backlog 1,877 1,877 Customer relationships 3,592 3,592 Software license 330 - IP R&D 1,525 915 $ 16,435 $ 15,495 Amortized cost $ 3,455 $ 2,744 b. Amortization expense for the years ended December 31, 2021, 2020 and 2019 were $940, $610 and $1,607, respectively. c. Estimated amortization expense for the years ending: Year ending December 31, 2022 $ 940 2023 940 2024 940 Thereafter 635 Total $ 3,455 |
OTHER PAYABLES AND ACCRUED EXPE
OTHER PAYABLES AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED EXPENSES | NOTE 10: - OTHER PAYABLES AND ACCRUED EXPENSES December 31, 2021 2020 Accrued expenses $ 7,405 $ 4,920 Deferred revenues from IIA 282 - Government authorities 2,592 3,723 Foreign currency derivative contracts 78 3,237 Holdback and contingent earnout 834 837 Provision for returns 233 290 Advances from customers - 7 Others 190 147 $ 11,614 $ 13,161 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 11: - COMMITMENTS AND CONTINGENT LIABILITIES a. Lease commitments: The Group's facilities are leased under several lease agreements. In addition, the Company has various operating lease agreements with respect to motor vehicles. Lease expenses of office rent and vehicles for the years ended December 31, 2021, 2020 and 2019 were approximately $3,141, $3,282 and $3,129, respectively. Expenses for short- term leases in 2021 were $92. The following table represents the weighted-average remaining lease term and discount rate: Year ended December 31, 2021 Weighted average remaining lease term 2.93 years Weighted average discount rate 1.39% The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease. Maturities of operating lease liabilities were as follows: Year ending December 31, 2022 2,804 2023 2,714 2024 2,302 2025 571 2026 and thereafter 17 Total lease payments 8,408 Less - imputed interest (156 ) Present value of lease liabilities 8,252 During the year ended December 31, 2021 the short-term maturities of operating lease liabilities which were not recognized under ASU No. 2016-02, Leases (ASC 842) were $116. b. Liens and guarantees: As of December 31, 2021, the Company has provided bank guarantees in respect of performance obligation to customers in an aggregate amount of approximately $863, in addition to bank guarantees in favor of leases agreements in an aggregate amount of approximately $481. c. Litigations: On November 2, 2021 two founders of Netonomy Ltd., a company acquired by Allot in January, 2018, filed a civil claim against Allot, alleging that Allot breached certain clauses of the share acquisition agreement claiming damages in the amount of app. NIS 2.6M. Allot has filed its’ defense statement refuting all claims and denying any breach and obligation to compensate. The claim is still in its preliminary stages and the results of this claim are still uncertain. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12: - SHAREHOLDERS' EQUITY a. Company's shares: As of December 31, 2021, the Company's authorized share capital consists of NIS 20,000,000 divided into 200,000,000 Ordinary Shares, par value NIS 0.1 per share. Ordinary Shares confer on their holders the right to receive notice to participate and vote in general meetings of the Company, the right to a share in the excess of assets upon liquidation of the Company, and the right to receive dividends if declared. b. Share option plan: A summary of the Company's share option activity, pertaining to its option plans for employees and related information is as follows: Year ended December 31, 2021 2020 2019 Number of shares upon exercise Weighted average exercise price Number of shares upon exercise Weighted average exercise price Number of shares upon exercise Weighted average exercise price Outstanding at beginning of year 1,134,256 $ 7.68 1,453,741 $ 7.59 1,736,143 $ 7.26 Granted - $ - - $ - - $ - Forfeited (30,861 ) $ 16.78 (28,657 ) $ 17.47 (59,107 ) $ 10.05 Exercised (427,409 ) $ 6.54 (290,828 ) $ 6.25 (223,295 ) $ 4.36 Outstanding at end of year 675,986 $ 7.99 1,134,256 $ 7.68 1,453,741 $ 7.59 Exercisable at end of year 660,986 $ 8.04 1,065,498 $ 7.83 1,240,005 $ 8.01 Vested and expected to vest 675,584 $ 7.99 1,132,007 $ 7.68 1,442,990 $ 7.61 The aggregate intrinsic value represents the total intrinsic value (the difference between the Company's closing share price on the last trading day of the fiscal years 2021, 2020 and 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders exercised their options on December 31, 2021, 2020 and 2019, respectively. This amount may change based on the fair market value of the Company's share. The total intrinsic value of options outstanding as of December 31, 2021, 2020 and 2019, were $3,481, $4,578 and $3,510, respectively. The total intrinsic value of exercisable options as of December 31, 2021, 2020 and 2019, were approximately $3,392, $4,226 and $2,791, respectively. The total intrinsic value of options vested and expected to vest as of December 31, 2021, 2020 and 2019, were approximately $3,479, $4,568 and $3,399, respectively. The total intrinsic value (the difference between the Company's closing share price on the exercise date and the exercise price) of options exercised during the years ended December 31, 2021, 2020 and 2019 were approximately $4,113, $1,437 and $769, respectively. The number of options vested during the year ended December 31, 2021 was 22,897. The weighted-average remaining contractual life of the outstanding options as of December 31, 2021 is 1.92 years. The weighted-average remaining contractual life of exercisable options as of December 31, 2021 is 1.88 years. The options outstanding as of December 31, 2021, have been classified by exercise price, as follows: Exercise price Shares upon exercise of options outstanding as of December 31, 2021 Weighted average remaining contractual life Shares upon exercise of options exercisable as of December 31, 2021 Years $ 23.31-27.58 45,500 0.65 45,500 $ 15.2-17.07 13,000 1.04 13,000 $ 10.0 -14.68 98,007 1.71 98,007 $ 5.01-9.7 140,300 1.9 125,300 $ 0.1-4.95 379,179 2.17 379,179 675,986 660,986 The following provides a summary of the restricted share unit activity for the Company for the two years ended December 31, 2021: Year ended December 31, 2021 2020 Number of shares upon exercise Weighted average share price Number of shares upon exercise Weighted average share price Outstanding at beginning of year 1,763,017 $ 8.63 1,652,060 $ 6.53 Granted 1,149,500 $ 16.26 869,250 $ 10.96 Vested (681,433 ) $ 15.82 (570,000 ) $ 10.69 Forfeited (293,176 ) $ 16.39 (188,293 ) $ 10.01 Unvested at end of year 1,937,908 $ 12.92 1,763,017 $ 8.63 As of December 31, 2021, $28,541 and $18,036,431 unrecognized compensation cost related to share options and RSUs respectively is expected to be recognized over a weighted average vesting period of 2.26 years. Under the terms of the above option plans, options may be granted to employees, officers, directors and various service providers of the Company and its subsidiaries. The options vest over a four-year period, subject to the continued employment of the employee. The options generally expire no later than ten years from the date of the grant. The exercise price of the options at the date of grant under the plans may not be less than the nominal value of the shares into which such options are exercised, any options, which are forfeited or cancelled before expiration, become available for future grants. As of December 31, 2021, 202,910 Ordinary shares are available for future issuance under the option plans. The Company granted 1,149,500 and 869,250 RSUs in 2021 and 2020, respectively under the 2016 option plan. RSUs vest over a period of between three to four years, subject to the continued employment of the employee. RSUs that are cancelled or forfeited become available for future grants. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 13: - TAXES ON INCOME a. Corporate tax rates: The Israeli corporate income tax rate was 23% in 2021, 2020 and 2019. b. Foreign Exchange Regulations: Commencing in taxable year 2012, the Company has elected to measure its taxable income and file its tax return under the Israeli Income Tax Regulations (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income) 1986 ("Foreign Exchange Regulations"). Under the Foreign Exchange Regulations, an Israeli company must calculate its tax liability in U.S. Dollars according to certain rules. The tax liability, as calculated in U.S. Dollars is translated into NIS according to the exchange rate as of December 31st of each year. c. Tax benefits under Israel's law for the Encouragement of Capital Investments, 1959 ("the Law"): In 1998, the production facilities of the Company related to its computational technologies were granted the status of an "Approved Enterprise" under the Law. In 2004, an expansion program was granted the status of "Approved Enterprise". According to the provisions of the Law, the Company has elected the alternative track of benefits and has waived Government grants in return for tax benefits. The period of tax benefits, detailed above, is limited to the earlier of 12 years from the commencement of production, or 14 years from the approval date. According to the provisions of the Law under the alternative track, the Company's income attributable to the Approved Enterprise program may be tax-exempt for a period of two five eight The Law was significantly amended effective April 1, 2005 ("the 2005 - Amendment"). The 2005 - Amendment includes revisions to the criteria for investments qualified to receive tax benefits as a Beneficiary Enterprise and among other things, simplifies the approval process. The Company elected 2006 and 2009 as "year of election" under the 2005 - Amendment. As of December 31, 2021 the Beneficiary Enterprise programs are no longer in effect as the 12-year activation period commencing on the election year has ended. In addition, the 2005-Amendment provides that terms and benefits included in any letter of approval already granted will remain subject to the provisions of the Law as they were on the date of such approval. Therefore, the Company's existing Approved Enterprise will generally not be subject to the provisions of the 2005 - Amendment. The entitlement to the Approved Enterprise benefits is contingent upon the fulfillment of the conditions stipulated in the Law, regulations published thereunder, and the criteria set forth in the specific letters of approval. In the event of failure to comply with these conditions, the benefits may be canceled, and the Company may be required to refund the amount of the benefits, in whole or in part, including interest and linkage to changes in the Israeli CPI. As of December 31, 2021, management believes that the Company meets the aforementioned conditions. If the Company pays a dividend out of exempt income derived from the Approved, it will be subject to corporate tax in respect of the gross amount distributed, including any taxes thereon, at the rate which would have been applicable had it not enjoyed the alternative benefits, generally 10%-25%, depending on the percentage of the Company's Ordinary shares held by foreign shareholders. Following amendment 74 to the Law as part of the Law for Economic Efficiency (Legislative Amendments for Attaining the Budget Goals for Fiscal Years 2021 and 2022), 2021 which was enacted in November 2021, any dividends distributed, or deemed as distributed under the Law, after August 15, 2021, by a company which earned exempt income, which it did not elect to release under the terms of amendment 74, will be allocated pro-rata between exempt income and other sources and taxed accordingly. The dividend recipient is subject to withholding tax at the rate of 15% applicable to dividends from approved enterprises, if the dividend is distributed during the tax exemption period or within twelve years thereafter. The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business. As of December 31, 2021, there is no exempt income earned by the Company “Approved Enterprises”. Income from sources other than the "Approved Enterprise" during the benefit period will be subject to tax at the regular corporate tax rate. As of January 1, 2011, new legislation amending the Law came into effect (the "2011 Amendment"). The 2011 Amendment introduced a new status of "Preferred Company" and "Preferred Enterprise", replacing the then existing status of "Beneficiary Company" and "Beneficiary Enterprise". A Preferred Company is an industrial company owning a Preferred Enterprise which meets certain conditions (including a minimum threshold of 25% export). Under the 2011 Amendment, a uniform corporate tax rate will apply to all qualifying income of the Preferred Company. The uniform corporate tax rate is 7.5% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel. Effective July 1, 2021 income of a Preferred Enterprise attributable to assets other than the industrial assets of the company, such as marketing intangibles, will be subject to the standard corporate tax rate. A dividend distributed from income which is attributed to a Preferred Enterprise/Special Preferred Enterprise will be subject to withholding tax at source at the following rates: (i) Israeli resident corporation – 0%, (ii) Israeli resident individual – 20% as of 2014 and thereafter (iii) non-Israeli resident - 20% as of 2014 and thereafter subject to a reduced tax rate under the provisions of an applicable double tax treaty. In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the 2016 - Amendment") was published. The December 2016 amendment prescribes special tax tracks for technological enterprises, the tax tracks under the amendment are as follows: Preferred technological enterprise - an enterprise whose total consolidated revenues is less than NIS 10 billion. A preferred technological enterprise, located in the center of Israel will be subject to tax at a rate of 12% on profits derived from intellectual property as defined in the Law and the regulations promulgated thereunder (in development area A - a tax rate of 7.5%). Special preferred technological enterprise - an enterprise whose total consolidated revenues exceeds NIS 10 billion. Such enterprise will be subject to tax at a rate of 6% on profits derived from intellectual property, regardless of the enterprise’s geographical location. Income of the Preferred Technological Enterprise or a Special Preferred Technological Enterprise, which is not derived from its intellectual property is subject to tax at the ordinary corporate tax rate. Under the transition provisions of the 2016 Amendment, the Company may decide to irrevocably implement the tax tracks available under the 2016 Amendment, while waiving benefits provided under the prior tax tracks it obtained under the Law, or to remain subject to the prior tax tracks it obtained under the Law. d. Tax benefits under the law for the Encouragement of Industry (Taxes), 1969 (the "Encouragement Law"): The Encouragement Law, provides several tax benefits for industrial companies. An industrial company is defined as a company resident in Israel, at least 90% of the income of which in a given tax year exclusive of income from specified Government loans, capital gains, interest and dividends, is derived from an industrial enterprise owned by it. An industrial enterprise is defined as an enterprise whose major activity in a given tax year is industrial production activity. Management believes that the Company is currently qualified as an "industrial company" under the Encouragement Law and as such, enjoys tax benefits, including: (1) deduction of purchase of know-how and patents and/or right to use a patent over an eight three Eligibility for benefits under the Encouragement Law is not subject to receipt of prior approval from any governmental authority. No assurance can be given that the Israeli tax authorities will agree that the Company qualifies, or, if the Company qualifies, then the Company will continue to qualify as an industrial company or that the benefits described above will be available to the Company in the future. e. Pre-tax income (loss) is comprised as follows: Year ended December 31, 2021 2020 2019 Domestic $ (15,419 ) $ (8,722 ) $ (8,934 ) Foreign 2,230 1,550 1,916 $ (13,189 ) $ (7,172 ) $ (7,018 ) f. A reconciliation of the theoretical tax expenses, assuming all income is taxed at the statutory tax rate applicable to the income of the Company and the actual tax expenses is as follows: Year ended December 31, 2021 2020 2019 Loss before taxes on income $ (13,189 ) $ (7,172 ) $ (7,018 ) Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2021, 2020 and 2019, respectively) $ (3,034 ) $ (1,650 ) $ (1,614 ) Changes in valuation allowance 2,604 1,979 951 Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax - - - Write off of prepaid and withholding taxes 875 1,066 1,536 Foreign tax rates differences related to subsidiaries 14 35 44 Non-deductible expenses 71 72 470 Capital note release taxes 100 - - Other expenses and Exchange rate differences 488 (383 ) (143 ) Non-deductible share-based compensation expense 633 557 397 Change in expense associated with tax positions for current year 100 500 - Actual tax expense $ 1,851 $ 2,176 $ 1,641 g. Income tax expense is comprised as follows: Year ended December 31, 2021 2020 2019 Current taxes $ 334 513 $ 341 Deferred taxes expense (benefit) 420 97 (236 ) Taxes in respect of previous years 122 - - Write off of prepaid and withholding taxes 875 1,066 1,536 Change in expense associated with tax positions for current year 100 500 - 1,851 2,176 1,641 h. Net operating losses carry forward: The Company has accumulated net operating losses for Israeli tax purposes as of December 31, 2021, in the amount of approximately $64,943, which may be carried forward and offset against taxable income in the future for an indefinite period. As of December 31, 2021, the Company recorded a full valuation allowance with respect to its deferred tax assets in Allot Ltd. and wrote-off prepaid and withholding taxes of $5,662 as the Company does not expect to utilize these tax assets in the near future. In addition, the Company has accumulated capital losses for tax purposes as of December 31, 2021, of approximately $26,966, which may be carried forward and offset against taxable capital gains in the future for an indefinite period. Management currently believes that since the Company has a history of losses, and uncertainty with respect to future taxable income, it is more likely than not that the deferred tax assets regarding the loss carry forwards will not be utilized in the foreseeable future. Thus, a valuation allowance was provided to reduce deferred tax assets to their realizable value. The U.S. subsidiary has accumulated losses for U.S. federal income tax return purposes of approximately $3,856 and $5,483 for state taxes. The federal accumulated losses for tax purposes expire between 2026 2037 A portion of the losses are subject to limitations of Internal Revenue Code, Section 382, which in general provides that utilization of net operating losses is subject to an annual limitation if an ownership change results from transactions increasing the ownership of certain shareholders or public groups in the share of a corporation by more than 50 percentage points over a three-year period. The annual limitations may result in the expiration of losses before utilization. i. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income taxes are as follows: December 31, 2021 2020 Deferred tax assets: Operating and capital loss carryforwards $ 22,332 $ 26,731 Research and development 9,161 2,602 Employee benefits 1,629 1,368 Intangible assets 179 282 Other temporary differences mainly relating to reserve and allowances 2,336 1,607 Deferred tax asset before valuation allowance 35,637 32,590 Valuation allowance (30,256 ) (27,652 ) Deferred tax asset net of valuation allowance 5,381 4,938 Deferred tax liability: Intangible assets 3,423 3,493 Other temporary differences mainly relating to reserve and allowances 1,958 1,025 Net deferred tax asset $ - $ 420 As of December 31, 2021, the Company has provided a valuation allowance of approximately $30 million in respect of the Company’s deferred tax assets resulting from tax loss carryforwards and other temporary differences. Realization of deferred tax assets is dependent upon future earnings, if any, the time and amount of which are uncertain. As the Company has accumulated net operating losses for Israeli tax purposes as of December 31, 2021, in the amount of approximately $64,943, so it is more likely than not that sufficient taxable income will not be available for the tax losses to be utilized in the future. Therefore, a valuation allowance was recorded to reduce the deferred tax assets to nil. j. As of December 31, 2021, the Company’s provision in respect of ASC 740-10 is $843. $100 was added in 2021 due to the risk that selling in different foreign countries will be considered by foreign tax authorities as permanent establishment. The accrued interest and penalties related to the provision in income taxes are immaterial. The Company conducts business globally and, as a result, the Company or one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Israel, France, Spain, Japan and the United States. With a few exceptions, the Company is no longer subject to Israeli tax assessment through the year 2016 and the Spanish and U.S. subsidiaries have final tax assessments through 2016 and 2017, respectively. The Company is currently under audit by the Israeli Tax Authorities for the years 2017– 2020. |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 14: - GEOGRAPHIC INFORMATION Allot operates in a single reportable segment. Revenues are based on the location of the Company's channel partners which are considered as end customers, as well as direct customers of the Company: Year ended December 31, 2021 2020 2019 Europe $ 58,414 $ 94,644 $ 36,199 Asia and Oceania 44,227 23,519 42,994 Americas 19,391 8,131 16,576 Middle East and Africa 23,568 9,628 14,331 $ 145,600 $ 135,922 $ 110,100 The following table sets forth the customers that represented 10% or more of the Company’s total revenues in each of the periods set forth below: Year ended December 31, 2021 2020 2019 1 st 11 % 43 % 16 % 2 nd - 11 % 11 % 11 % 54 % 27 % A total percentage of 72%, 83% and 76% of the Company’s revenues for the years ended December 31, 2021, 2020 and 2019, respectively are attributed to network intelligence solutions, while 28%, 17% and 24% are attributed to security solutions for the years ended December 31, 2021, 2020 and 2019, respectively. The following presents total long-lived assets as of December 31, 2021 and 2020: December 31, 2021 2020 Long-lived assets: Israel $ 21,821 $ 14,210 Other 1,692 2,241 $ 23,513 $ 16,451 |
FINANCIAL INCOME (EXPENSES), NE
FINANCIAL INCOME (EXPENSES), NET | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
FINANCIAL INCOME (EXPENSES), NET | NOTE 15: - FINANCIAL INCOME (EXPENSES), NET Year ended December 31, 2021 2020 2019 Financial income: Interest income $ 1,045 $ 1,754 $ 2,551 Exchange rate differences and other - 231 - Financial expenses: Exchange rate differences and other 630 - 334 Amortization/accretion of premium/discount on marketable securities, net 76 128 257 $ 339 $ 1,857 $ 1,960 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Net loss per share: | |
EARNINGS (LOSS) PER SHARE | NOTE 16: - EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted net loss per share: Year ended December 31, 2021 2020 2019 Numerator: Net loss $ (15,040 ) $ (9,348 ) $ (8,659 ) Denominator: Weighted average number of shares outstanding used in computing basic and diluted net loss per share 36,050,540 35,007,201 34,250,582 Basic and diluted net loss per share $ (0.42 ) $ (0.27 ) $ (0.25 ) |
RELATED PARTIES BALANCES AND TR
RELATED PARTIES BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES BALANCES AND TRANSACTIONS | NOTE 17: - RELATED PARTIES BALANCES AND TRANSACTIONS The Company’s board approved Galil Software pursuant to which the Company acquired services amounting to approximately $ 147 and $ 894 for the years ended December 31, 2020 and 2021, respectively. As of December 31, 2020 and 2021, the Company had other payables balance due to its related party in amount of approximately $ 40 and $ 118, respectively. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 18: - SUBSEQUENT EVENT On February 14, 2022, the Company entered into a securities purchase agreement with Lynrock Lake Master Fund LP (the “Purchaser”), providing for the issuance to the Purchaser of a senior unsecured convertible promissory note, convertible into the Company’s ordinary shares, par value NIS 0.10 per share, in an aggregate principal amount of $40 million which was received on February 18, 2022. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of estimates | a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Financial statements in U.S. dollars | b. Financial statements in U.S. dollars: The majority operation of the Company and its subsidiaries are generated in U.S. dollars ("dollar") or linked to the dollar. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into U.S. dollars in accordance with Accounting Standards Codification No. 830, "Foreign Currency Matters" ("ASC No. 830"). All transactions gains and losses from the remeasurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate. |
Principles of consolidation | c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. |
Cash and cash equivalents | d. Cash and cash equivalents: The Company considers all unrestricted highly liquid investments which are readily convertible into cash, with a maturity of three months or less at the date of acquisition, to be cash equivalents. |
Restricted deposits | e. Restricted deposits: The restricted deposits are held in favor of financial institutions in respect of fulfillment of operating obligations. |
Short-term bank deposits | f. Short-term bank deposits: Short-term bank deposits are deposits with maturities of more than three months but less than one year at the balance sheet date. The deposits are in dollars and bear interest at an annual weighted average rate of 0.71% and 0.85% on December 31, 2021 and 2020, respectively. In connection with the Company's hedging transactions, the Company is required to maintain compensating deposits balances in the bank. Out of the short-term bank deposits, a total of $5,000 and $2,500 is due to the hedging transactions as of December 31, 2021 and 2020. |
Trade Receivable and Allowances | g. Trade Receivable and Allowances: Trade receivables are recorded and carried at the original invoiced amount which was recognized as revenues less an allowance for any potential uncollectible amounts. The Company makes estimates of expected credit losses for the allowance for credit losses and allowance for unbilled receivables based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company’s consolidated statements of income (loss). The following table displays a rollforward of the total allowance for credit losses for the years ended December 31, 2021, 2020, and 2019. 2021 2020 2019 Total allowance for credit losses – January 1 2,309 1,867 1,415 Current-period provision for expected credit losses 293 1,894 866 Write-offs (9 ) (934 ) (3 ) Recoveries collected (195 ) (518 ) (411 ) Total allowance for credit losses – December 31 2,398 2,309 1,867 |
Marketable securities | h. Marketable securities: Marketable securities consist mainly of corporate bonds. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments- Debt and Equity Securities,” the Company classifies marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives. Starting on January 1, 2020, as a result of the adoption of ASC 326, available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in interest and other income (expense), net, on the Company’s consolidated statements of income (loss), and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in Shareholder's equity. As of December 31,2021 and 2020, no credit loss impairment was recorded regarding the available for sale marketable securities. There was no other-than-temporary-impairment charge for any unrealized losses in 2019. |
Inventories | i. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising primarily from end of life products and from slow-moving items, technological obsolescence, and excess inventory. Inventory write-offs during the years ended December 31, 2021, 2020 and 2019 amounted to $ 4,593, $ 1,928 and $ 629, respectively, and were recorded in cost of revenues. Provision for slow moving inventory as of December 31, 2021 and 2020 amounted to $ 9,103 and $ 4,624, respectively. Inventory cost is determined using the weighted average cost method. |
Property and equipment, net | j. Property and equipment, net: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates: % Lab equipment 16 - 25 Computers and peripheral equipment 33 Office furniture 6 SECaaS equipment* 16 Leasehold improvements Over the shorter of the term of the lease or the useful life of the asset *SECaaS equipment – the equipment used for SECaaS revenues |
Goodwill | k. Goodwill: Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Under Accounting Standards Codification No. 350, "Intangibles-Goodwill and Other" ("ASC No. 350"), goodwill is not amortized, but rather subject to an annual impairment test, or more often if there are indicators of impairment present. In accordance with ASC No. 350 the Company performs an annual impairment test at December 31 each year. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update ("ASU") No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which the Company adopted as of January 1, 2020. The Company operates in one operating segment, and this segment comprises its only reporting unit. The Company has performed an annual impairment analysis as of December 31, 2021 and determined that the carrying value of the reporting unit was lower than the fair value of the reporting unit. Fair value is determined using market value. During the years 2021, 2020 and 2019, no impairment losses were recorded. |
Impairment of long-lived assets, Right-of-use assets, and intangible assets subject to amortization | l. Impairment of long-lived assets, Right-of-use assets, and intangible assets subject to amortization: Property and equipment, Right-of-use assets, and intangible assets subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Intangible assets acquired in a business combination are recorded at fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. Some of the acquired intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such customer relationships as compared to the straight-line method. All other intangible assets are amortized over their estimated useful lives on a straight-line basis. The Company has performed an annual impairment analysis as of December 31, 2021 and determined that there were no circumstances indicate the asset’s carrying value may not be recoverable. During the years 2021, 2020 and 2019, no impairment losses were recorded. |
Revenue recognition | m. Revenue recognition: The Company generates revenues mainly from selling its products along with related maintenance and support services. At times, these arrangements may also include professional services, such as installation services or training. Some of the Company’s product sales are through resellers, distributors, OEMs and system integrators, all of whom are considered end-users. The Company also generates revenues from services, in which the Company provides network filtering and security services to its customers. The Company recognizes revenues according to ASC 606, "Revenue from Contracts with Customers" ("ASC 606"), effective on January 1, 2018. The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation. Some of the Company's contracts usually include combinations of products and services, that are capable of being distinct and accounted for as separate performance obligations. The products are distinct as the customer can derive the economic benefit of it without any professional services, updates or technical support. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of the total consideration of the contract. For support, the Company determines the standalone selling prices based on the price at which the Company separately sells a renewal support contract on a stand-alone basis. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services on a stand-alone basis. If the standalone selling price is not observable, the Company estimates the standalone selling price by taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligation. Product revenue is recognized at a point in time when the performance obligation is being satisfied. Maintenance and support related revenues are deferred and recognized on a straight-line basis over the term of the applicable maintenance and support agreement. Professional services are usually recognized at a point in time when the performance obligation is being satisfied. The Company elected the practical expedient to not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. In certain contracts, the Company provides the customer with financing for a period exceeding one year. In such circumstances, the Company recognizes revenue based on the amount that reflects the price that would have been paid by the customer in cash on the date of receipt of the goods or services, and the balance is recognized in finance income. The Company also enters into service contracts, in which the Company provides security as a service (SECaaS) solution to operators, which the Company considers as its customers. The Company's security as a service solution is offered to operators on a Revenue Share business model, where both the Company and the operator share the revenue generated from the operator's subscribers. Most of the Company's security as a service contracts contain a single performance obligation comprised of series of distinct goods and services satisfied over time. The contracts consideration is based on usage by the operator's subscribers. As such, the Company allocates the variable consideration in those contracts to distinct service periods in which the service is provided and recognizes revenue for each distinct service period. Deferred revenue includes amounts received from customers for which revenue has not yet been recognized. Deferred revenues are classified as short and long-term based on their contractual term and recognized as (or when) the Company performs under the contract. The portion of the transaction price allocated to remaining performance obligations represents contracts that have not yet been recognized that include deferred revenue and amounts not yet received that will be recognized as revenue in future periods. The aggregate amount of the transaction price allocated to remaining performance obligations that the Company expects to recognize is $89 million of which approximately $53 million is estimated to be recognized before December 31, 2022 and approximately $36 million is estimated to be recognized after December 31, 2022. The Company pays sales commissions to sales and marketing personnel based on their certain predetermined sales goals. The company evaluates its commission and capitalize only incremental commissions costs which are considered recoverable costs of obtaining a contract with a customer. These capitalized sales commissions costs are amortized over a period of benefit which is typically over the term of the customer contracts as initial commission rates are commensurate with the renewal commission rates. Amortization expenses related to these costs are included in sales and marketing expenses in the consolidated statements of operations. For the year ended December 31, 2021, the amortization of deferred commission was $1,394. The Company uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less. The Company estimated variable consideration related to product returns based on its experience with historical product returns and other known factors. Such provisions amounted to $233 and $290 as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, this provision was recorded as part of other payables and accrued expenses. The Company recognizes term-based license agreements at the point in time when control transfers and the associated maintenance revenues over the contract period. |
Cost of revenues | n. Cost of revenues: Cost of revenues consists primarily of costs of materials and the cost of maintenance and services, resulting from costs associated with support, customer success and professional services. |
Research and development costs | o. Research and development costs: Accounting Standards Codification No. 985-20, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on the Company's product development process, technological feasibility is established upon the completion of a working model. The Company does not incur material costs between the completion of a working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the consolidated statement of comprehensive loss as incurred. |
Severance pay | p. Severance pay: The liability in Israel for substantially all of the Company`s employees in respect of severance pay liability is calculated in accordance with Section 14 of the Severance Pay Law -1963 (herein- "Section 14"). Section 14 states that Company's contributions for severance pay shall be in line of severance compensation and upon release of the policy to the employee, no additional obligations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee. Furthermore, the related obligation and amounts deposited on behalf of such obligation under Section 14, are not stated on the balance sheet, because pursuant to the current ruling, they are legally released from the obligation to employees once the deposits have been paid. There are a limited number of employees in Israel, for whom the Company is liable for severance pay. The Company's liability for severance pay for its Israeli employees was calculated pursuant to Section 14, based on the most recent monthly salary of its Israeli employees multiplied by the number of years of employment as of the balance sheet date for such employees. The Company's liability was partly provided by monthly deposits with severance pay funds and insurance policies and the remainder by an accrual. Severance expense for the years ended December 31, 2021, 2020 and 2019, amounted to $2,465, $3,619 and $2,249, respectively. |
Accounting for share-based compensation | q. Accounting for share-based compensation: The Company accounts for share-based compensation in accordance with Accounting Standards Codification No. 718, "Compensation - Stock Compensation" ("ASC No. 718") that requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of comprehensive loss. The Company recognizes compensation expenses for the value of its awards based on the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances. The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances if any. The following table sets forth the total share-based compensation expense resulting from share options, restricted share units and Phantoms granted to employees included in the consolidated statements of comprehensive loss, for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Cost of revenues $ 581 $ 355 $ 264 Research and development 2,499 1,368 847 Sales and marketing 3,212 2,145 1,257 General and administrative 1,708 1,330 1,052 Total share-based compensation expense $ 8,000 $ 5,198 $ 3,420 The Company selected the binomial option pricing model as the most appropriate fair value method for its share options awards with the following assumptions for the years ended December 31, 2018: Year ended December 31, 2018 Suboptimal exercise multiple 2.9-3.5 Risk free interest rate 2.09%-3.05% Volatility 26%-47% Dividend yield 0 During 2021, 2020 and 2019 no options were granted by the Company. The computations of expected volatility and suboptimal exercise multiple is based on the average of the Company's realized historical share price. The computation of the suboptimal exercise multiple and the forfeiture rates are based on the grantee's expected exercise prior and post vesting termination behavior. The interest rate for a period within the contractual life of the award is based on the U.S. Treasury Bills yield curve in effect at the time of grant. The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business. The expected life of the share options represents the weighted-average period the share options are expected to remain outstanding and is a derived output of the binomial model. The expected life of the share options is impacted by all of the underlying assumptions used in the Company's model. The option pricing model of the of restricted share units ("RSUs") is based on the closing market value of the underlying shares at the date of grant. The expected annual pre-vesting forfeiture rate affects the number of vested RSUs. Based on the Company's historical experience, the pre-vesting is in the range of 0%-30% in the years 2021, 2020 and 2019. |
Treasury share | r. Treasury share: In the past, the Company repurchased its Ordinary shares on the open market and holds such shares as treasury share. The Company presents the cost to repurchase treasury share as a reduction of shareholders' equity. |
Concentration of credit risks | s. Concentration of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, short-term bank deposits, trade receivables and derivative instruments. The majority of cash and cash equivalents and short-term deposits of the Company are invested in dollar deposits in major U.S. and Israeli banks. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, the cash and cash equivalents and short-term bank deposits may be redeemed upon demand, and therefore, bear minimal risk. Marketable securities include investments in dollar linked corporate and government bonds. Marketable securities consist of highly liquid debt instruments with high credit standing. The Company’s investment policy, approved by the Board of Directors, limits the amount the Group may invest in any one type of investment or issuer, thereby reducing credit risk concentrations. Management believes that the portfolio is well diversified and, accordingly, minimal credit risk exists with respect to these marketable debt securities. The Company's trade receivables are derived from sales to customers located in EMEA, as well as in APAC, Latin America and the United States. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. The Company performs ongoing credit evaluations of its customers and establishes an allowance for credit losses on a specific basis. Allowance for credit losses amounted to $2,398 and $2,309 as of December 31, 2021 and 2020, respectively. The Company utilizes foreign currency forward contracts to protect against risk of overall changes in exchange rates. The derivative instruments hedge a portion of the Company's non-dollar currency exposure. Counterparties to the Company’s derivative instruments are all major financial institutions and its exposure is limited to the amount of any asset resulting from the forward contracts. |
Government grants | t. Government grants: Grants from the Israel Innovation Authority (IIA): Participation grants from the Israel Innovation Authority (Previously known as the Office of the Chief Scientist) for research and development activity are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and included as a deduction of research and development costs. Research and development non royalty bearing grants recognized amounted to $(42), $339 and $378 in 2021, 2020 and 2019, respectively. Grants from the Spain Tax Authorities: Participation grants from the Spain Tax Authorities for research and development activity are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and included as a deduction of research and development costs. Research and development non royalty bearing grants recognized amounted to $209 in 2021. |
Income taxes | u. Income taxes: The Company accounts for income taxes in accordance with Accounting Standards Codification No. 740, "Income Taxes" ("ASC No. 740"). ASC No. 740 prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The deferred tax assets and liabilities are classified to non-current assets and liabilities, respectively. ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest related to unrecognized tax benefits in taxes on income. |
Basic and diluted net income (loss) per share | v. Basic and diluted net income (loss) per share: Basic net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year, plus dilutive potential Ordinary Shares considered outstanding during the year, in accordance with FASB ASC 260 "Earnings Per Share". For the years ended December 31, 2021, 2020 and 2019, all outstanding options and RSUs have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. See Note 16. The amount of those options and RSU’s was: 2,613,894, 2,897,273, 3,105,801 respectively. |
Comprehensive loss | w. Comprehensive loss: The Company accounts for comprehensive loss in accordance with Accounting Standards Codification No. 220, "Comprehensive Income" ("ASC No. 220"). This statement establishes standards for the reporting and display of comprehensive loss and its components in a full set of general The following table shows the components and the effects on net loss of amounts reclassified from accumulated other comprehensive loss as of December 31, 2021: Year ended December 31, 2021 Unrealized gain (losses) on marketable securities Unrealized gains (losses) on cash flow hedges Total Balance as of December 31, 2020 $ 472 $ (326 ) $ 146 Changes in other comprehensive income (loss) before reclassifications (359 ) 1,269 910 Amounts reclassified from accumulated other comprehensive loss to: Cost of revenues - (146 ) (146 ) Operating expenses - (624 ) (624 ) Financial income, net (15 ) - (15 ) Net current-period other comprehensive income (loss) (374 ) 499 125 Balance as of December 31, 2021 $ 98 $ 173 $ 271 There was no income tax expense or benefit allocated to other comprehensive income, including reclassification adjustments for the year ended December 31, 2021. |
Fair value of financial instruments | x. Fair value of financial instruments: The carrying amounts of short-term bank deposits, trade receivables, other receivables, trade payables and other payables approximate their fair value due to the short-term maturities of such instruments. The Company measures its cash and cash equivalents, marketable securities, derivative instruments and earn-out considerations at fair value. Fair value is an exit price, representing the amount that would be received if the Company were to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The Company uses a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Include other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and Level 3 - Unobservable inputs which are supported by little or no market activity. The Company categorized each of its fair value measurements in one of those three levels of hierarchy. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company measures its marketable securities and foreign currency derivative contracts at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company's earn-out considerations were classified within Level 3. In previous years, the valuation methodology used by the Company to calculate the fair value consideration is the discounted cash flow using the Monte-Carlo simulation method by taking into account, forecast future revenues, expected volatility of 20.7% for Netonomy and the weighted average cost of debt of 2%. As of December 31, 2021, no fair value measurement is required for the earn-out. See Note 4 and 11c. |
Derivatives and hedging | y. Derivatives and hedging: The Company accounts for derivatives and hedging based on Accounting Standards Codifiation No. 815, "Derivatives and Hedging" ("ASC No. 815"). The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. Derivative instruments that are not designated and qualified as hedging instruments must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in shareholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As a result of adopting new accounting guidance discussed in Note 2, " Recently adopted accounting pronouncements," beginning January 1, 2019, gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into in the same accounting period in which the designated forecasted transaction or hedged item affects earnings. To apply hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. |
Business combinations | z. Business combinations: The Company accounts for business combinations in accordance with ASC No. 805. ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over the purchase price is recorded as goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and acquired income tax positions are to be recognized in earnings. |
Lease | aa. Lease: The company accounts for leases under ASC 842, Leases. The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of an identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout lease period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use (“ROU”) asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The implicit rate within the company's operating leases is generally not determinable, therefore the Company uses it’s Incremental Borrowing Rate (“IBR”) based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. Payments under our lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by common area maintenance and utility charges. |
Warranty costs | ab. Warranty costs: The Company generally provides three months software and a one-year hardware assurance for its products. A provision is recorded for estimated warranty costs at the time revenues are recognized based on the Company's experience. Warranty expenses for the years ended December 31, 2021, 2020 and 2019 were immaterial. |
Recently Issued Accounting Pronouncement Not Yet Adopted | ac. Recently Issued Accounting Pronouncement Not Yet Adopted: In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The company does not expect a material impact of ASC 2020-06 on the consolidated financial statements. |
GENERAL (Tables)
GENERAL (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of pro forma revenue and net loss | Fair value Non-current assets $ 4 Account Payable (11 ) Other Payables (142 ) IPR&D 3,659 Goodwill 121 Net assets acquired $ 3,631 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Allowance of Credit Losses | 2021 2020 2019 Total allowance for credit losses – January 1 2,309 1,867 1,415 Current-period provision for expected credit losses 293 1,894 866 Write-offs (9 ) (934 ) (3 ) Recoveries collected (195 ) (518 ) (411 ) Total allowance for credit losses – December 31 2,398 2,309 1,867 |
Schedule of Estimated Useful Lives at an Annual Rate | % Lab equipment 16 - 25 Computers and peripheral equipment 33 Office furniture 6 SECaaS equipment* 16 Leasehold improvements Over the shorter of the term of the lease or the useful life of the asset |
Schedule of Stock-Based Compensation Expense | Year ended December 31, 2021 2020 2019 Cost of revenues $ 581 $ 355 $ 264 Research and development 2,499 1,368 847 Sales and marketing 3,212 2,145 1,257 General and administrative 1,708 1,330 1,052 Total share-based compensation expense $ 8,000 $ 5,198 $ 3,420 |
Schedule of Stock-Based Compensation Assumptions | Year ended December 31, 2018 Suboptimal exercise multiple 2.9-3.5 Risk free interest rate 2.09%-3.05% Volatility 26%-47% Dividend yield 0 |
Schedule of Accumulated Other Comprehensive Income | Year ended December 31, 2021 Unrealized gain (losses) on marketable securities Unrealized gains (losses) on cash flow hedges Total Balance as of December 31, 2020 $ 472 $ (326 ) $ 146 Changes in other comprehensive income (loss) before reclassifications (359 ) 1,269 910 Amounts reclassified from accumulated other comprehensive loss to: Cost of revenues - (146 ) (146 ) Operating expenses - (624 ) (624 ) Financial income, net (15 ) - (15 ) Net current-period other comprehensive income (loss) (374 ) 499 125 Balance as of December 31, 2021 $ 98 $ 173 $ 271 |
AVAILABLE-FOR-SALE MARKETABLE_2
AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of summary of Available-for-Sale Marketable Securities | December 31, 2021 December 31, 2020 Amortized cost Gross unrealized gain Gross unrealized Fair value Amortized cost Gross unrealized Gross unrealized Fair value Available-for-sale - matures within one year: Corporate debentures 6,334 36 - 6,370 12,611 97 - 12,708 6,334 36 - 6,370 12,611 97 - 12,708 Available-for-sale - matures after one year through three years: Governmental debentures 176 - - 176 379 3 - 382 Corporate debentures 4,920 67 (2 ) 4,985 13,181 364 - 13,545 5,096 67 (2 ) 5,161 13,560 367 - 13,927 Available-for-sale - matures after three years through five years: Corporate debentures - - - - 535 8 - 543 - - - - 535 8 - 543 $ 11,430 $ 103 $ (2 ) $ 11,531 $ 26,706 $ 472 $ - $ 27,178 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | As of December 31, 2021 Fair value measurements using input type Level 1 Level 2 Level 3 Total Available-for-sale marketable securities $ - $ 11,531 $ - $ 11,531 Foreign currency derivative contracts - 902 - 902 Total financial net assets $ - $ 12,433 $ - $ 12,433 As of December 31, 2020 Fair value measurements using input type Level 1 Level 2 Level 3 Total Available-for-sale marketable securities $ - $ 27,178 $ - $ 27,178 Foreign currency derivative contracts - (952 ) - (952 ) Total financial net assets $ - $ 26,226 $ - $ 26,226 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Designated as Hedging Instrument [Member] | |
Schedule of the Fair Value of Open Foreign Exchange Contracts | Foreign exchange forward and December 31, options contracts Balance sheet 2021 2020 Fair value of foreign exchange hedge transactions Other receivables and prepaid expenses $ 973 $ 2,258 Fair value of foreign exchange hedge transactions Other payables and accrued expenses (11 ) (3,224 ) Total derivatives designated as hedging instruments Other Comprehensive profit (loss) $ 173 $ (326 ) |
Not Designated as Hedging Instrument [Member] | |
Schedule of the Fair Value of Open Foreign Exchange Contracts | Foreign exchange forward and December 31, options contracts Balance sheet 2021 2020 Fair value of foreign exchange non-designated hedge transactions Other receivables and prepaid expenses $ 7 $ - Fair value of foreign exchange non-designated hedge transactions Other payables and accrued expenses (67 ) (13 ) Total derivatives non-designated as hedging instruments $ (60 ) $ (13 ) |
OTHER RECEIVABLES AND PREPAID_2
OTHER RECEIVABLES AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other accounts receivable and prepaid expense | December 31, 2021 2020 Prepaid expenses $ 4,029 $ 6,495 Government authorities 2,947 2,403 Prepayment to OEM - 2,359 Foreign currency derivative contracts 980 2,285 Short-term lease deposits 185 231 Grants receivable from the IIA - 103 Others 349 329 $ 8,490 $ 14,205 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | December 31, 2021 2020 Raw materials $ 1,494 $ 1,299 Finished goods 9,598 11,287 $ 11,092 $ 12,586 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | December 31, 2021 2020 Cost: Lab equipment $ 18,871 $ 17,624 Computers and peripheral equipment 14,316 13,090 Office furniture and equipment 1,510 1,454 Leasehold improvements 3,039 3,134 SECaaS equipment 5,886 2,976 43,622 38,278 Accumulated depreciation: Lab equipment 14,408 13,511 Computers and peripheral equipment 11,164 10,501 Office furniture and equipment 535 575 Leasehold improvements 1,230 1,224 SECaaS equipment 1,285 474 28,622 26,285 Depreciated cost $ 15,000 $ 11,993 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Weighted Average Useful life December 31, (Years) 2021 2020 Original Cost: Technology 3.8 $ 9,111 $ 9,111 Backlog 2.8 1,877 1,877 Customer relationships 4.4 3,592 3,592 Software license 5 1,651 - IP R&D 6 3,659 3,659 $ 19,890 $ 18,239 Accumulated amortization: Technology $ 9,111 $ 9,111 Backlog 1,877 1,877 Customer relationships 3,592 3,592 Software license 330 - IP R&D 1,525 915 $ 16,435 $ 15,495 Amortized cost $ 3,455 $ 2,744 |
Schedule of Estimated Amortization Expense | Year ending December 31, 2022 $ 940 2023 940 2024 940 Thereafter 635 Total $ 3,455 |
OTHER PAYABLES AND ACCRUED EX_2
OTHER PAYABLES AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Other Payables and Accrued Expenses | December 31, 2021 2020 Accrued expenses $ 7,405 $ 4,920 Deferred revenues from IIA 282 - Government authorities 2,592 3,723 Foreign currency derivative contracts 78 3,237 Holdback and contingent earnout 834 837 Provision for returns 233 290 Advances from customers - 7 Others 190 147 $ 11,614 $ 13,161 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Weighted Average Remaining Lease Term And Discount Rate | Year ended December 31, 2021 Weighted average remaining lease term 2.93 years Weighted average discount rate 1.39% |
Schedule of Maturities of Operating Lease Liabilities | Year ending December 31, 2022 2,804 2023 2,714 2024 2,302 2025 571 2026 and thereafter 17 Total lease payments 8,408 Less - imputed interest (156 ) Present value of lease liabilities 8,252 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Option Activity | Year ended December 31, 2021 2020 2019 Number of shares upon exercise Weighted average exercise price Number of shares upon exercise Weighted average exercise price Number of shares upon exercise Weighted average exercise price Outstanding at beginning of year 1,134,256 $ 7.68 1,453,741 $ 7.59 1,736,143 $ 7.26 Granted - $ - - $ - - $ - Forfeited (30,861 ) $ 16.78 (28,657 ) $ 17.47 (59,107 ) $ 10.05 Exercised (427,409 ) $ 6.54 (290,828 ) $ 6.25 (223,295 ) $ 4.36 Outstanding at end of year 675,986 $ 7.99 1,134,256 $ 7.68 1,453,741 $ 7.59 Exercisable at end of year 660,986 $ 8.04 1,065,498 $ 7.83 1,240,005 $ 8.01 Vested and expected to vest 675,584 $ 7.99 1,132,007 $ 7.68 1,442,990 $ 7.61 |
Schedule of Stock Options Outstanding | Exercise price Shares upon exercise of options outstanding as of December 31, 2021 Weighted average remaining contractual life Shares upon exercise of options exercisable as of December 31, 2021 Years $ 23.31-27.58 45,500 0.65 45,500 $ 15.2-17.07 13,000 1.04 13,000 $ 10.0 -14.68 98,007 1.71 98,007 $ 5.01-9.7 140,300 1.9 125,300 $ 0.1-4.95 379,179 2.17 379,179 675,986 660,986 |
Summary of Restricted Stock Unit Activity | Year ended December 31, 2021 2020 Number of shares upon exercise Weighted average share price Number of shares upon exercise Weighted average share price Outstanding at beginning of year 1,763,017 $ 8.63 1,652,060 $ 6.53 Granted 1,149,500 $ 16.26 869,250 $ 10.96 Vested (681,433 ) $ 15.82 (570,000 ) $ 10.69 Forfeited (293,176 ) $ 16.39 (188,293 ) $ 10.01 Unvested at end of year 1,937,908 $ 12.92 1,763,017 $ 8.63 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Pre-tax Income (Loss) | Year ended December 31, 2021 2020 2019 Domestic $ (15,419 ) $ (8,722 ) $ (8,934 ) Foreign 2,230 1,550 1,916 $ (13,189 ) $ (7,172 ) $ (7,018 ) |
Schedule of the Reconciliation of the Theoretical Tax Expenses | Year ended December 31, 2021 2020 2019 Loss before taxes on income $ (13,189 ) $ (7,172 ) $ (7,018 ) Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2021, 2020 and 2019, respectively) $ (3,034 ) $ (1,650 ) $ (1,614 ) Changes in valuation allowance 2,604 1,979 951 Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax - - - Write off of prepaid and withholding taxes 875 1,066 1,536 Foreign tax rates differences related to subsidiaries 14 35 44 Non-deductible expenses 71 72 470 Capital note release taxes 100 - - Other expenses and Exchange rate differences 488 (383 ) (143 ) Non-deductible share-based compensation expense 633 557 397 Change in expense associated with tax positions for current year 100 500 - Actual tax expense $ 1,851 $ 2,176 $ 1,641 |
Schedule of Income Tax Expense | Year ended December 31, 2021 2020 2019 Current taxes $ 334 513 $ 341 Deferred taxes expense (benefit) 420 97 (236 ) Taxes in respect of previous years 122 - - Write off of prepaid and withholding taxes 875 1,066 1,536 Change in expense associated with tax positions for current year 100 500 - 1,851 2,176 1,641 |
Schedule of Deferred Income Taxes | December 31, 2021 2020 Deferred tax assets: Operating and capital loss carryforwards $ 22,332 $ 26,731 Research and development 9,161 2,602 Employee benefits 1,629 1,368 Intangible assets 179 282 Other temporary differences mainly relating to reserve and allowances 2,336 1,607 Deferred tax asset before valuation allowance 35,637 32,590 Valuation allowance (30,256 ) (27,652 ) Deferred tax asset net of valuation allowance 5,381 4,938 Deferred tax liability: Intangible assets 3,423 3,493 Other temporary differences mainly relating to reserve and allowances 1,958 1,025 Net deferred tax asset $ - $ 420 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Location | Year ended December 31, 2021 2020 2019 Europe $ 58,414 $ 94,644 $ 36,199 Asia and Oceania 44,227 23,519 42,994 Americas 19,391 8,131 16,576 Middle East and Africa 23,568 9,628 14,331 $ 145,600 $ 135,922 $ 110,100 |
Schedule of Major Customers | Year ended December 31, 2021 2020 2019 1 st 11 % 43 % 16 % 2 nd - 11 % 11 % 11 % 54 % 27 % |
Schedule of Long-Lived Assets by Geographic Location | December 31, 2021 2020 Long-lived assets: Israel $ 21,821 $ 14,210 Other 1,692 2,241 $ 23,513 $ 16,451 |
FINANCIAL INCOME (EXPENSES), _2
FINANCIAL INCOME (EXPENSES), NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Financial Income, Net | Year ended December 31, 2021 2020 2019 Financial income: Interest income $ 1,045 $ 1,754 $ 2,551 Exchange rate differences and other - 231 - Financial expenses: Exchange rate differences and other 630 - 334 Amortization/accretion of premium/discount on marketable securities, net 76 128 257 $ 339 $ 1,857 $ 1,960 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Net loss per share: | |
Schedule of the Computation of Basic and Diluted Net Earnings (Loss) per Share | Year ended December 31, 2021 2020 2019 Numerator: Net loss $ (15,040 ) $ (9,348 ) $ (8,659 ) Denominator: Weighted average number of shares outstanding used in computing basic and diluted net loss per share 36,050,540 35,007,201 34,250,582 Basic and diluted net loss per share $ (0.42 ) $ (0.27 ) $ (0.25 ) |
GENERAL (Narrative) (Details)
GENERAL (Narrative) (Details) - USD ($) $ in Thousands | Jan. 14, 2018 | Dec. 31, 2021 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Net cash acquired assets | $ 132 | ||
Acquisition costs recorded to operating expenses | 49 | ||
Netonomy LTD [Member] | |||
Business Acquisition [Line Items] | |||
Acquisition date | Jan. 14, 2018 | ||
Total consideration | $ 3,765 | ||
Cash paid to acquire entity | 3,180 | ||
Acquisition transaction costs | 303 | ||
Fair value of contingent liability | 282 | $ 834 | |
Holdback amount | $ 1,100 | ||
Description of claims for indemnification | paid in three installments consisting each one 40%, 40% and 20% of the Holdback amount following the first, second and 30-months anniversaries of the Closing Date | ||
Amount of payments cap | $ 1,100 | ||
Restricted holdback amount | $ 797 | $ 797 | |
Total purchase consideration | $ 3,631 |
GENERAL (Schedule of Estimated
GENERAL (Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 14, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 31,683 | $ 31,683 | |
Netonomy LTD [Member] | |||
Business Acquisition [Line Items] | |||
Non-current assets | $ 4 | ||
Account Payable | (11) | ||
Other Payables | (142) | ||
IPR&D | 3,659 | ||
Goodwill | 121 | ||
Net assets acquired | $ 3,631 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Short-term deposits, weighted average interest rate | 0.71% | 0.85% | ||
Short-term bank deposits due to hedging transacations | $ 5,000 | $ 2,500 | ||
Inventory write-offs | 4,593 | 1,928 | $ 629 | |
Cumulative inventory write-off | 9,103 | 4,624 | ||
Reserve for sales returns | 233 | 290 | ||
Severance expense | 2,465 | 3,619 | 2,249 | |
Allowance for credit losses | 2,398 | 2,309 | 1,867 | $ 1,415 |
Grants participations excluded from research and development costs | $ 167 | 339 | 378 | |
Weighted average cost of debt | 2.00% | |||
ROU assets | $ 8,513 | 4,458 | ||
ROU lease liabilites | 8,252 | |||
Remaining performance obligations as of the balance date for long- term | 89,000 | |||
Amortization of deferred commission | 1,394 | |||
Revenues | $ 145,600 | $ 135,922 | $ 110,100 | |
Restricted Stock Units (RSUs) [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Outstanding options and warrants excluded from the calculation of diluted income per share | 2,613,894 | 2,897,273 | 3,105,801 | |
Netonomy [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Expected volatility | 20.70% | |||
Minimum [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Annual pre-vesting forfeiture rate | 0.00% | 0.00% | 0.00% | |
Remaining performance obligations as of the balance date for short-term | $ 53,000 | |||
Maximum [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Annual pre-vesting forfeiture rate | 30.00% | 30.00% | 30.00% | |
Remaining performance obligations as of the balance date for long- term | $ 36,000 | |||
Grants from the Israel Innovation Authority [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Grants participations excluded from research and development costs | (42) | $ 339 | $ 378 | |
Grants from the Spain Tax Authorities [Member] | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Grants participations excluded from research and development costs | $ 209 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Allowance of Credit Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Total allowance for credit losses – January 1 | $ 2,309 | $ 1,867 | $ 1,415 |
Current-period provision for expected credit losses | 293 | 1,894 | 866 |
Write-offs | (9) | (934) | (3) |
Recoveries collected | (195) | (518) | (411) |
Total allowance for credit losses - December 31 | $ 2,398 | $ 2,309 | $ 1,867 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Estimated Useful Lives at Annual Rates) (Details) | 12 Months Ended | |
Dec. 31, 2021 | ||
Lab equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives, annual rate | 16.00% | |
Lab equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives, annual rate | 25.00% | |
Computers and peripheral equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives, annual rate | 33.00% | |
Office furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives, annual rate | 6.00% | |
SECaaS equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives, annual rate | 16.00% | [1] |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | Over the shorter of the term of the lease or the useful life of the asset | |
[1] | SECaaS equipment – the equipment used for SECaaS revenues |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 8,000 | $ 5,198 | $ 3,420 |
Cost of revenues [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 581 | 355 | 264 |
Research and development [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 2,499 | 1,368 | 847 |
Sales and marketing [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 3,212 | 2,145 | 1,257 |
General and administrative [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 1,708 | $ 1,330 | $ 1,052 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Assumptions) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Suboptimal exercise multiple, minimum | 2.9 |
Suboptimal exercise multiple, maximum | 3.5 |
Risk free interest rate, minimum | 2.09% |
Risk free interest rate, maximum | 3.05% |
Volatility, minimum | 26.00% |
Volatility, maximum | 47.00% |
Dividend yield | 0.00% |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | $ 146 | ||
Changes in other comprehensive income (loss) before reclassifications | 910 | ||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Net current-period other comprehensive income (loss) | 125 | $ 671 | $ 242 |
Balance | 271 | 146 | |
Unrealized gains (losses) on cash flow hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | (326) | ||
Changes in other comprehensive income (loss) before reclassifications | 1,269 | ||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Net current-period other comprehensive income (loss) | 499 | ||
Balance | 173 | (326) | |
Unrealized gain (losses) on marketable securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance | 472 | ||
Changes in other comprehensive income (loss) before reclassifications | (359) | ||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Net current-period other comprehensive income (loss) | (374) | ||
Balance | 98 | $ 472 | |
Cost of revenues [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | (146) | ||
Cost of revenues [Member] | Unrealized gains (losses) on cash flow hedges [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | (146) | ||
Cost of revenues [Member] | Unrealized gain (losses) on marketable securities [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||
Operating expenses [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | (624) | ||
Operating expenses [Member] | Unrealized gains (losses) on cash flow hedges [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | (624) | ||
Operating expenses [Member] | Unrealized gain (losses) on marketable securities [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||
Financial income, net [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | (15) | ||
Financial income, net [Member] | Unrealized gains (losses) on cash flow hedges [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||
Financial income, net [Member] | Unrealized gain (losses) on marketable securities [Member] | |||
Amounts reclassified from accumulated other comprehensive loss to: | |||
Amounts reclassified from accumulated other comprehensive loss | $ (15) |
AVAILABLE-FOR-SALE MARKETABLE_3
AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 11,430 | $ 26,706 |
Gross unrealized gain | 103 | 472 |
Gross unrealized loss | (2) | 0 |
Fair value | 11,531 | 27,178 |
Available-for-sale securities matures within one year [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 6,334 | 12,611 |
Gross unrealized gain | 36 | 97 |
Gross unrealized loss | 0 | 0 |
Fair value | 6,370 | 12,708 |
Available-for-sale securities matures within one year [Member] | Corporate debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 6,334 | 12,611 |
Gross unrealized gain | 36 | 97 |
Gross unrealized loss | 0 | 0 |
Fair value | 6,370 | 12,708 |
Available-for-sale securities matures after one year through three years [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 5,096 | 13,560 |
Gross unrealized gain | 67 | 367 |
Gross unrealized loss | (2) | 0 |
Fair value | 5,161 | 13,927 |
Available-for-sale securities matures after one year through three years [Member] | Governmental debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 176 | 379 |
Gross unrealized gain | 0 | 3 |
Gross unrealized loss | 0 | 0 |
Fair value | 176 | 382 |
Available-for-sale securities matures after one year through three years [Member] | Corporate debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 4,920 | 13,181 |
Gross unrealized gain | 67 | 364 |
Gross unrealized loss | (2) | 0 |
Fair value | 4,985 | 13,545 |
Available-for-sale securities matures after three year through five years [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 535 |
Gross unrealized gain | 0 | 8 |
Gross unrealized loss | 0 | 0 |
Fair value | 0 | 543 |
Available-for-sale securities matures after three year through five years [Member] | Corporate debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 535 |
Gross unrealized gain | 0 | 8 |
Gross unrealized loss | 0 | 0 |
Fair value | $ 0 | $ 543 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale marketable securities | $ 11,531 | $ 27,178 |
Foreign currency derivative contracts | 902 | (952) |
Total financial net assets | 12,433 | 26,226 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale marketable securities | 0 | 0 |
Foreign currency derivative contracts | 0 | 0 |
Total financial net assets | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale marketable securities | 11,531 | 27,178 |
Foreign currency derivative contracts | 902 | (952) |
Total financial net assets | 12,433 | 26,226 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale marketable securities | 0 | 0 |
Foreign currency derivative contracts | 0 | 0 |
Total financial net assets | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS (Narrati
DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Net losses recognized from currency transactions | $ 1,272 | $ 1,200 | $ 534 |
Unrealized gain (loss) on forward contracts, net | 173 | (326) | |
Outstanding hedge transactions | 62,439 | 8,700 | |
Gain (loss) on derivative instruments reclassified from OCI to operating expenses | 771 | 203 | $ (96) |
Non-designated hedge transactions | $ 22,275 | $ 13,773 |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of the Fair Value Open Foreign Exchange Contracts) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Fair value of foreign exchange hedge transactions | $ 973 | $ 2,258 |
Fair value of foreign exchange hedge transactions | (11) | (3,224) |
Total derivatives designated as hedging instruments | $ 173 | $ (326) |
DERIVATIVE INSTRUMENTS (Sched_2
DERIVATIVE INSTRUMENTS (Schedule of the Fair value of the outstanding non-designated foreign exchange contracts) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments Schedule Of Fair Value Of Outstanding Non Designated Foreign Exchange Contracts | ||
Fair value of foreign exchange non-designated hedge transactions | $ 7 | $ 0 |
Fair value of foreign exchange non-designated hedge transactions | (67) | (13) |
Total derivatives non-designated as hedging instruments | $ (60) | $ (13) |
OTHER RECEIVABLES AND PREPAID_3
OTHER RECEIVABLES AND PREPAID EXPENSES (Schedule of Other Accounts Receivable and Prepaid Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 4,029 | $ 6,495 |
Government authorities | 2,947 | 2,403 |
Prepayment to OEM | 0 | 2,359 |
Foreign currency derivative contracts | 980 | 2,285 |
Short-term lease deposits | 185 | 231 |
Grants receivable from the IIA | 0 | 103 |
Others | 349 | 329 |
Other receivables and prepaid expenses | $ 8,490 | $ 14,205 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,494 | $ 1,299 |
Finished goods | 9,598 | 11,287 |
Total inventory | 11,092 | 12,586 |
Cost of goods sold, deferred finished goods inventory | $ 413 | $ 4,246 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 43,622 | $ 38,278 | |
Accumulated depreciation | 28,622 | 26,285 | |
Deprecated cost | 15,000 | 11,993 | |
Depreciation | 4,635 | 3,704 | $ 2,752 |
Lab equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 18,871 | 17,624 | |
Accumulated depreciation | 14,408 | 13,511 | |
Computers and peripheral equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 14,316 | 13,090 | |
Accumulated depreciation | 11,164 | 10,501 | |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 1,510 | 1,454 | |
Accumulated depreciation | 535 | 575 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,039 | 3,134 | |
Accumulated depreciation | 1,230 | 1,224 | |
SECaaS equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 5,886 | 2,976 | |
Accumulated depreciation | $ 1,285 | $ 474 |
INTANGIBLE ASSETS, NET (Narrati
INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 940 | $ 610 | $ 1,607 |
INTANGIBLE ASSETS, NET (Schedul
INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 19,890 | $ 18,239 |
Accumulated amortization | 16,435 | 15,495 |
Total | $ 3,455 | 2,744 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful life (Years) | 3 years 9 months 18 days | |
Cost | $ 9,111 | 9,111 |
Accumulated amortization | $ 9,111 | 9,111 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful life (Years) | 2 years 9 months 18 days | |
Cost | $ 1,877 | 1,877 |
Accumulated amortization | $ 1,877 | 1,877 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful life (Years) | 4 years 4 months 24 days | |
Cost | $ 3,592 | 3,592 |
Accumulated amortization | $ 3,592 | 3,592 |
Software license [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful life (Years) | 5 years | |
Cost | $ 1,651 | 0 |
Accumulated amortization | $ 330 | 0 |
IP R&D [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful life (Years) | 6 years | |
Cost | $ 3,659 | 3,659 |
Accumulated amortization | $ 1,525 | $ 915 |
INTANGIBLE ASSETS, NET (Sched_2
INTANGIBLE ASSETS, NET (Schedule of Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 940 | |
2023 | 940 | |
2024 | 940 | |
Thereafter | 635 | |
Total | $ 3,455 | $ 2,744 |
OTHER PAYABLES AND ACCRUED EX_3
OTHER PAYABLES AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
OTHER PAYABLES AND ACCRUED EXPENSES [Abstract] | ||
Accrued expenses | $ 7,405 | $ 4,920 |
Deferred revenues from IIA | 282 | 0 |
Government authorities | 2,592 | 3,723 |
Foreign currency derivative contracts | 78 | 3,237 |
Holdback and contingent earnout | 834 | 837 |
Provision for returns | 233 | 290 |
Advances from customers | 0 | 7 |
Others | 190 | 147 |
Total other payables and accrued expenses | $ 11,614 | $ 13,161 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) $ in Thousands, ₪ in Millions | Nov. 02, 2021ILS (₪) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 3,141 | $ 3,282 | $ 3,129 | |
Short-term lease expense | 92 | |||
Bank guarantees | 863 | |||
Short-term maturities of operating lease liabilities | 116 | |||
Guarantees in favor of lease | $ 481 | |||
Damages claimed by Netonomy Ltd | ₪ | ₪ 2.6 |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Weighted-Average Remaining Lease Term and Discount Rate) (Details) | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining lease term | 2 years 11 months 4 days |
Weighted-average discount rate | 1.39% |
COMMITMENTS AND CONTINGENT LI_5
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 2,804 |
2023 | 2,714 |
2024 | 2,302 |
2025 | 571 |
2026 and thereafter | 17 |
Total lease payments | 8,408 |
Less - imputed interest | (156) |
Present value of lease liabilities | $ 8,252 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) ₪ / shares in Units, ₪ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2021ILS (₪)₪ / sharesshares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020₪ / shares | Dec. 31, 2020USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share capital, amount authorized | ₪ | ₪ 20,000,000 | ||||||
Common Stock, Shares Authorized | shares | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common Stock, Par or Stated Value Per Share | ₪ / shares | ₪ 0.1 | ₪ 0.1 | |||||
Intrinsic value of options outstanding | $ 3,510 | $ 3,481 | $ 4,578 | ||||
Intrinsic value of options exercisable | 2,791 | 3,392 | 4,226 | ||||
Intrinsic value of options vested and expected to vest | 3,399 | 3,479 | $ 4,568 | ||||
Intrinsic value of options exercised | $ 4,113 | $ 1,437 | $ 769 | ||||
Stock options vested during period | shares | 22,897 | ||||||
Weighted average remaining contractual life of options outstanding | 1 year 11 months 1 day | ||||||
Weighted-average remaining contractual life of exercisable options | 1 year 10 months 17 days | ||||||
Stock Compensation Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost related to non-vested stock options | $ 28,541 | ||||||
Unrecognized compensation cost, recognition period | 2 years 3 months 3 days | ||||||
Shares available for future issuance | shares | 202,910 | 202,910 | |||||
Vesting period for plan | 4 years | ||||||
Options, expiration period | 10 years | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost related to non-vested stock options | $ 18,036,431 | ||||||
Unrecognized compensation cost, recognition period | 2 years 3 months 3 days | ||||||
Granted | shares | 1,149,500 | 869,250 | |||||
Restricted Stock Units (RSUs) [Member] | 2006 option plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period for plan | 4 years | ||||||
Restricted Stock Units (RSUs) [Member] | 2016 option plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted | shares | 1,149,500 | 869,250 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares upon exercise | |||
Outstanding at beginning of year | 1,134,256 | 1,453,741 | 1,736,143 |
Granted | 0 | 0 | 0 |
Forfeited | (30,861) | (28,657) | (59,107) |
Exercised | (427,409) | (290,828) | (223,295) |
Outstanding at end of year | 675,986 | 1,134,256 | 1,453,741 |
Exercisable at end of year | 660,986 | 1,065,498 | 1,240,005 |
Vested and expected to vest | 675,584 | 1,132,007 | 1,442,990 |
Weighted average exercise price | |||
Outstanding at beginning of year | $ 7.68 | $ 7.59 | $ 7.26 |
Granted | 0 | 0 | 0 |
Forfeited | 16.78 | 17.47 | 10.05 |
Exercised | 6.54 | 6.25 | 4.36 |
Outstanding at end of year | 7.99 | 7.68 | 7.59 |
Exercisable at end of year | 8.04 | 7.83 | 8.01 |
Vested and expected to vest | $ 7.99 | $ 7.68 | $ 7.61 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Options Outstanding) (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Shares upon exercise of options outstanding as of December 31, 2019 | 675,986 | 1,134,256 | 1,453,741 | 1,736,143 |
Weighted average remaining contractual life | 1 year 11 months 1 day | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 660,986 | 1,065,498 | 1,240,005 | |
$23.31-27.58 [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise Prices, minimum | $ 23.31 | |||
Exercise Prices, maximum | $ 27.58 | |||
Shares upon exercise of options outstanding as of December 31, 2019 | 45,500 | |||
Weighted average remaining contractual life | 7 months 24 days | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 45,500 | |||
$ 15.2 -17.07 [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise Prices, minimum | $ 15.2 | |||
Exercise Prices, maximum | $ 17.07 | |||
Shares upon exercise of options outstanding as of December 31, 2019 | 13,000 | |||
Weighted average remaining contractual life | 1 year 14 days | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 13,000 | |||
$10.0-14.68 [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise Prices, minimum | $ 10 | |||
Exercise Prices, maximum | $ 14.68 | |||
Shares upon exercise of options outstanding as of December 31, 2019 | 98,007 | |||
Weighted average remaining contractual life | 1 year 8 months 15 days | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 98,007 | |||
$5.01-9.7 [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise Prices, minimum | $ 5.01 | |||
Exercise Prices, maximum | $ 9.7 | |||
Shares upon exercise of options outstanding as of December 31, 2019 | 140,300 | |||
Weighted average remaining contractual life | 1 year 10 months 24 days | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 125,300 | |||
$0.1-4.95 [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise Prices, minimum | $ 0.1 | |||
Exercise Prices, maximum | $ 4.95 | |||
Shares upon exercise of options outstanding as of December 31, 2019 | 379,179 | |||
Weighted average remaining contractual life | 2 years 2 months 1 day | |||
Shares upon exercise of options exercisable as of December 31, 2019 | 379,179 |
SHAREHOLDERS' EQUITY (Summary o
SHAREHOLDERS' EQUITY (Summary of Restricted Stock Unit Activity) (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of shares upon exercise | ||
Outstanding at beginning of year | 1,763,017 | 1,652,060 |
Granted | 1,149,500 | 869,250 |
Vested | (681,433) | (570,000) |
Forfeited | (293,176) | (188,293) |
Unvested at end of year | 1,937,908 | 1,763,017 |
Weighted average share price | ||
Outstanding at beginning of year | $ 8.63 | $ 6.53 |
Granted | 16.26 | 10.96 |
Vested | 15.82 | 10.69 |
Forfeited | 16.39 | 10.01 |
Unvested at end of year | $ 12.92 | $ 8.63 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | |
Taxes On Income [Line Items] | |||||
Revenues | $ 145,600 | $ 135,922 | $ 110,100 | ||
Israeli Income tax rate | 23.00% | 23.00% | 23.00% | ||
Tax-exempt period | 2 years | ||||
Dividend, withholding tax rate | 15.00% | ||||
Patent use right, period | 8 years | ||||
Expense deductible period | 3 years | ||||
Net operating loss carry forwards | $ 64,943 | ||||
Capital loss carry forwards | 26,966 | ||||
Provision | 843 | ||||
Amounts added to provision for ASC 740-10 during year | 100 | ||||
Deferred tax assets valuation allowance | $ 30,256 | $ 27,652 | |||
Israeli resident corporation [Member] | |||||
Taxes On Income [Line Items] | |||||
Dividend, withholding tax rate | 0.00% | 0.00% | 0.00% | ||
Israeli resident individual [Member] | |||||
Taxes On Income [Line Items] | |||||
Dividend, withholding tax rate | 20.00% | 20.00% | 20.00% | ||
non-Israeli resident [Member] | |||||
Taxes On Income [Line Items] | |||||
Dividend, withholding tax rate | 20.00% | 20.00% | 20.00% | ||
Minimum [Member] | |||||
Taxes On Income [Line Items] | |||||
Change in corporate tax rate | 10.00% | ||||
Tax-exempt period | 5 years | ||||
Maximum [Member] | |||||
Taxes On Income [Line Items] | |||||
Change in corporate tax rate | 25.00% | ||||
Tax-exempt period | 8 years | ||||
Preferred Enterprise [Member] | |||||
Taxes On Income [Line Items] | |||||
Revenues | $ 10,000,000 | ||||
Israeli Income tax rate | 12.00% | ||||
Special Technological Preferred Enterprise [Member] | |||||
Taxes On Income [Line Items] | |||||
Revenues | $ 10,000,000 | ||||
Israeli Income tax rate | 6.00% | ||||
Israel [Member] | |||||
Taxes On Income [Line Items] | |||||
Write-off prepaid and withholding taxes | $ 5,662 | ||||
United States of America [Member] | Minimum [Member] | |||||
Taxes On Income [Line Items] | |||||
Net operating loss carry forwards | $ 3,856 | ||||
Expiration of operating loss carry forward | Dec. 31, 2026 | ||||
United States of America [Member] | Maximum [Member] | |||||
Taxes On Income [Line Items] | |||||
Net operating loss carry forwards | $ 5,483 | ||||
Expiration of operating loss carry forward | Dec. 31, 2037 | ||||
Development Zone A [Member] | |||||
Taxes On Income [Line Items] | |||||
Israeli Income tax rate | 7.50% | 7.50% | |||
Outside Development Zone [Member] | |||||
Taxes On Income [Line Items] | |||||
Israeli Income tax rate | 16.00% | 16.00% |
TAXES ON INCOME (Schedule of Pr
TAXES ON INCOME (Schedule of Pre-tax Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (15,419) | $ (8,722) | $ (8,934) |
Foreign | 2,230 | 1,550 | 1,916 |
Pre-tax income (loss) | $ (13,189) | $ (7,172) | $ (7,018) |
TAXES ON INCOME (Schedule of th
TAXES ON INCOME (Schedule of the Reconciliation of the Theoretical Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Loss before taxes on income | $ (13,189) | $ (7,172) | $ (7,018) |
Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2021, 2020 and 2019, respectively) | (3,034) | (1,650) | (1,614) |
Changes in valuation allowance | 2,604 | 1,979 | 951 |
Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax | 0 | 0 | 0 |
Write off of prepaid and withholding taxes | 875 | 1,066 | 1,536 |
Foreign tax rates differences related to subsidiaries | 14 | 35 | 44 |
Non-deductible expenses | 71 | 72 | 470 |
Capital note release taxes | 100 | 0 | 0 |
Other expenses and Exchange rate differences | 488 | (383) | (143) |
Non-deductible share-based compensation expense | 633 | 557 | 397 |
Change in expense associated with tax positions for current year | 100 | 500 | 0 |
Actual tax expense | $ 1,851 | $ 2,176 | $ 1,641 |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | $ 334 | $ 513 | $ 341 |
Deferred taxes expense (benefit) | 420 | 97 | (236) |
Taxes in respect of previous years | 122 | 0 | 0 |
Write off of prepaid and withholding taxes | 875 | 1,066 | 1,536 |
Change in expense associated with tax positions for current year | 100 | 500 | 0 |
Income tax expense | $ 1,851 | $ 2,176 | $ 1,641 |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Operating and capital loss carryforwards | $ 22,332 | $ 26,731 |
Research and development | 9,161 | 2,602 |
Employee benefits | 1,629 | 1,368 |
Intangible assets | 179 | 282 |
Other temporary differences mainly relating to reserve and allowances | 2,336 | 1,607 |
Deferred tax asset before valuation allowance | 35,637 | 32,590 |
Valuation allowance | (30,256) | (27,652) |
Deferred tax asset net of valuation allowance | 5,381 | 4,938 |
Deferred tax liability: | ||
Intangible assets | 3,423 | 3,493 |
Other temporary differences mainly relating to reserve and allowances | 1,958 | 1,025 |
Net deferred tax asset | $ 0 | $ 420 |
GEOGRAPHIC INFORMATION (Schedul
GEOGRAPHIC INFORMATION (Schedule of Revenue by Geographic Location) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | $ 145,600 | $ 135,922 | $ 110,100 |
Europe [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 58,414 | 94,644 | 36,199 |
Asia And Oceania [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 44,227 | 23,519 | 42,994 |
Americas [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 19,391 | 8,131 | 16,576 |
Middle East And Africa [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | $ 23,568 | $ 9,628 | $ 14,331 |
GEOGRAPHIC INFORMATION (Sched_2
GEOGRAPHIC INFORMATION (Schedule of Major Customers) (Details) - Sales [Member] - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | |||
Concentration risk, threshold percentage | 11.00% | 54.00% | 27.00% |
Network intelligence solutions [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 72.00% | 83.00% | 76.00% |
Security Solutions [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 28.00% | 17.00% | 24.00% |
Customer A [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 11.00% | 43.00% | 16.00% |
Customer B [Member] | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 0.00% | 11.00% | 11.00% |
GEOGRAPHIC INFORMATION (Sched_3
GEOGRAPHIC INFORMATION (Schedule of Long-Lived Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-lived assets | $ 23,513 | $ 16,451 |
Israel [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-lived assets | 21,821 | 14,210 |
Other [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Long-lived assets | $ 1,692 | $ 2,241 |
FINANCIAL INCOME (EXPENSES), _3
FINANCIAL INCOME (EXPENSES), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Financial income: | |||
Interest income | $ 1,045 | $ 1,754 | $ 2,551 |
Exchange rate differences and other | 0 | 231 | 0 |
Financial expenses: | |||
Exchange rate differences and other | 630 | 0 | 334 |
Amortization/accretion of premium/discount on marketable securities, net | 76 | 128 | 257 |
Financial and other expenses, total | $ 339 | $ 1,857 | $ 1,960 |
EARNINGS (LOSS) PER SHARE (Sche
EARNINGS (LOSS) PER SHARE (Schedule of Basic and Diluted Net Earnings (loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net loss | $ (15,040) | $ (9,348) | $ (8,659) |
Weighted average number of shares used in per share computations of net earnings (loss): | |||
Weighted average number of shares outstanding used in computing basic and diluted net loss per share | 36,050,540 | 35,007,201 | 34,250,582 |
Basic and diluted net loss per share | $ (0.42) | $ (0.27) | $ (0.25) |
RELATED PARTIES BALANCES AND _2
RELATED PARTIES BALANCES AND TRANSACTIONS (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Other payables balance due to related party | $ 118 | $ 40 |
Galil Software [Member] | ||
Related Party Transaction [Line Items] | ||
Payments to related party for services | $ 894 | $ 147 |
SUBSEQUENT EVENT (Detail Textua
SUBSEQUENT EVENT (Detail Textuals) $ in Millions | Feb. 14, 2022₪ / shares | Feb. 14, 2022USD ($) | Dec. 31, 2021₪ / shares | Dec. 31, 2020₪ / shares |
Subsequent Event [Line Items] | ||||
Ordinary shares, par value | ₪ 0.1 | ₪ 0.1 | ||
Subsequent Event [Member] | Lynrock Lake Master Fund LP [Member] | ||||
Subsequent Event [Line Items] | ||||
Ordinary shares, par value | ₪ 0.10 | |||
Aggregate principal amount | $ | $ 40 |