Alarum Technologies .(ALAR) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q3 2024 reached $7.2 million, a 6.6$6.8 million in Q3 2023, with NetNut contributing $7 million, up 13.7$6.1 million in Q3 2023 [20][23] - Non-IFRS gross margin for Q3 2024 was 73.6%, down from 79.4% in Q3 2023, attributed to investments in expanding the IP network [21] - IFRS net profit increased to $4.2 million in Q3 2024, up from$1.1 million in Q3 2023, primarily due to higher finance income [23] - Cash and cash equivalents at the end of Q3 2024 were $24 million, up from$10.9 million as of December 31, 2023 [25] Business Line Data and Key Metrics Changes - The data collection business unit, NetNut, accounted for nearly 100% of the company's business in Q3 2024 [7] - The company introduced a new dashboard for the IP proxy network, enhancing customer experience and receiving positive feedback [11] Market Data and Key Metrics Changes - The company is expanding its market share in the IP proxy network and data collection and labeling market, with a focus on addressing evolving market needs [10][15] - A Fortune 200 company expanded its subscription to include the Website Unblocker product shortly after initial engagement, indicating strong market demand [14] Company Strategy and Development Direction - The company is focused on expanding its customer base and investing in technological innovation to drive long-term growth [28] - The strategy includes consistent investment in the network to support customer demand and enhance profitability [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong customer retention rates and projected revenue growth for Q4 2024, estimating revenues of $7.5 million [26] - The company aims to leverage its investments in NetNut to capitalize on the growing demand for data collection solutions [16] Other Important Information - The company has no immediate need for capital despite filing for a capital raise, as it is well-funded and profitable [55] - The total number of warrants outstanding is approximately 240,000 ADSs, with exercise prices around$33 and $12 [56] Q&A Session Summary Question: Clarification on IPPN network investments - Management indicated that investments were driven by customer feedback and are essential for maintaining a reliable network, with expectations to keep gross margins stable unless unique opportunities arise [32][33] Question: Details on the Fortune 200 customer win - Management could not disclose specific revenue figures but noted that the engagement is expected to renew and potentially expand [34] Question: Insights on Net Revenue Retention (NRR) - Management stated that approximately 80% of revenues come from existing customers, with an NRR of 1.42 indicating strong customer growth over time [36][37] Question: Changes in business development pace - Management reported that business development metrics improved compared to the previous quarter, with no significant changes anticipated in the current quarter [42] Question: Pricing model for the Website Unblocker - The pricing model is based on duration and usage, with ongoing evaluations to determine the best approach for scaling [44] Question: Industry challenges and customer usage trends - Management noted that some customers have not returned to increase usage, but the focus remains on improving retention and adding new customers [49][50]