Core Insights - Alarum Technologies Ltd. reported Q2 2025 revenues of $8.8 million, a slight decrease from $8.9 million in Q2 2024, with a net profit of $0.3 million and Adjusted EBITDA of $1.0 million [1][9][13] Business Highlights - The company is experiencing strong demand for data from major global players in the AI segment, leading to expanded collaborations with significant AI and e-commerce companies [2][3] - Alarum is investing in infrastructure and operations to support market demand while maintaining operational efficiency [4] - The company anticipates substantial revenue growth in Q3 2025, driven by a new large-scale AI data project expected to contribute approximately $3 million [5][15][16] Financial Performance - For the first half of 2025, total revenue was $15.9 million, down from $17.3 million in H1 2024, primarily due to reduced consumption from large customers [9] - Gross profit for Q2 2025 was $5.4 million, compared to $6.8 million in Q2 2024, with operating expenses increasing to $5.4 million from $4.2 million [11][12] - As of June 30, 2025, shareholders' equity increased to $29.1 million from $26.4 million at the end of 2024 [14] Market Dynamics - The AI market is undergoing significant transformation, with many companies still defining their business models, which may lead to fluctuations in demand for Alarum's services [5][22] - The company is witnessing a shift in customer segments, with strong growth in the AI vertical, while other segments are declining, resulting in a Net Retention Rate of 0.98 [7][29] Future Outlook - The company expects Q3 2025 revenues to be approximately $12.8 million, representing a 78% year-over-year increase, with Adjusted EBITDA projected at around $1.1 million [15] - Alarum's strategic collaborations with major technology players are seen as a significant step to strengthen its position in the AI data collection market [17]

Core Insights - The company reported a revenue of $7.1 million for Q1 2025, aligning with guidance, while net profit was $0.4 million and adjusted EBITDA reached $1.3 million, exceeding expectations [1][12] - The demand for scalable, high-quality data is accelerating, driven by the growth of AI technologies and eCommerce platforms [2][8] - The company is strategically investing in scalable infrastructure and next-gen technologies to meet rising demand for AI-ready data [1][3] Financial Performance - Q1 2025 revenue decreased by 15% year-over-year from $8.4 million in Q1 2024 [13] - Gross profit for Q1 2025 was $4.8 million, with a gross margin of 67.5%, down from 78.5% in Q1 2024 [9][13] - Total operating expenses increased to $4.5 million in Q1 2025 from $4.0 million in Q1 2024, primarily due to higher research and development costs [13] Market Position and Strategy - The company expanded strategic partnerships with major AI and eCommerce players, including a top Asian marketplace and a European AI firm, for large-scale data labeling and model fine-tuning [8] - Alarum is positioned to play a key role in the emerging market for high-quality, scalable data infrastructure, essential for AI model training [8][29] - The company aims to build a robust data access backbone for the AI era, focusing on long-term value delivery for stakeholders [4][8] Future Outlook - The company anticipates Q2 2025 revenues to be around $7.9 million, with adjusted EBITDA expected between $0.5 million and $0.8 million [12] - The net retention rate (NRR) reached 1.13 as of March 31, 2025, indicating strong customer revenue growth [8][25] - Early results from strategic investments and positive pipeline visibility support an optimistic outlook for the second quarter of 2025 [8][12]

Financial Data and Key Metrics Changes - Annual revenue reached a record high of $31.8 million, a 20% increase from 2023, with 97% attributed to data collection [9][22] - Adjusted EBITDA for 2024 was a record $9.4 million, up from $5.2 million in 2023 [9][27] - Non-IFRS gross margin for the full year 2024 grew to 77% from 74.3% in 2023 [23] - IFRS net profit for 2024 increased to $5.8 million from a net loss of $5.6 million in 2023 [26] Business Line Data and Key Metrics Changes - Data collection revenue for Q4 2024 was $7.2 million, a 6.8% increase from Q4 2023 [22] - Data collection revenue for the full year 2024 reached $30.9 million, up 45.2% from $21.3 million in 2023 [22] Market Data and Key Metrics Changes - The data collection segment accounted for 97% of total revenues in both quarterly and annual metrics, up from 80% in 2023 [22] - The company experienced volatility in demand due to competition between AI platforms and traditional websites [12][39] Company Strategy and Development Direction - The company has fully executed its strategic vision to focus solely on data collection, phasing out other activities [8] - Investments were made to expand the IP network and enhance infrastructure to support massive data traffic [14] - The company aims to be a data enabler for AI-driven companies, positioning itself for long-term growth [17][33] Management's Comments on Operating Environment and Future Outlook - Management highlighted a "once in a generation inflection point" due to the AI revolution reshaping the data landscape [14] - The company is navigating a period of adjustment as the industry evolves, with short-term revenue growth expected to be lower [30] - Management emphasized the importance of patience and a long-term approach to capitalize on future opportunities [18] Other Important Information - The company recorded financial income of $300,000 for the full year 2024, compared to a financial expense of $300,000 in 2023 [25] - Shareholders' equity doubled to a record of $26.4 million from $13.2 million on December 31, 2023 [28] Q&A Session Summary Question: Can you describe the period of adjustment as the industry evolves? - Management noted that large companies are approaching them for cooperation, indicating a shift in strategy due to competition between AI platforms and websites [38][39] Question: Is the decline in net retention rate related to customer usage? - Management confirmed that the decline in net retention rate is indeed related to customer usage fluctuations as they reevaluate their strategies [45][46] Question: How has the engagement with a Fortune 200 company evolved? - The company reported increased usage from the Fortune 200 customer, with an annual run rate exceeding $500,000 [48] Question: What is the opportunity with large customers in the future? - Management sees significant potential for both regular and strategic customers, especially those aiming to become major players in AI [51][52] Question: What are the plans for new product launches versus M&A? - The company is focusing on internal development for new products but remains open to acquisitions if unique opportunities arise [57][60]