Alarum Technologies Announces Second Quarter 2024 Results
Concludes strong first half of 2024 with record revenues of $17.3 million, progressing profitability metrics,
solid cash generation and $21.6 million in cash and equivalents
TEL AVIV, Israel, Aug. 26, 2024 (GLOBE NEWSWIRE) -- Alarum Technologies Ltd. (Nasdaq, TASE: ALAR) ("Alarum" or the "Company"), a global provider of internet access and web data collection solutions, today announced financial results for the second quarter ended June 30, 2024.
"Today we announced the results of yet another strong record-breaking quarter, marking the first year since we announced our shift to focusing on Enterprise Internet Access through our NetNut data collection product line," said Mr. Shachar Daniel, Chief Executive Officer of Alarum. "As we intend to establish the broadest data collection and insights offering in the market, we continued to increase our market share in the IP Proxy Network (IPPN) segment, won initial sales in the data collection and labelling market with our new Web-Unblocker and continued to make progress towards providing our customers with artificial intelligence (AI) and analysis capabilities. Our cash balance positions us well to invest in prospects that will provide the foundation for sustained growth."
Mr. Daniel concluded: "Looking into the third quarter of 2024, I am extremely proud that NetNut revenues are expected to surpass the full year 2023 revenue-bar within the first three quarters of 2024. The market we operate in is an ever evolving and nascent market and as we continue to expand our customer base, enhance our offerings and grow the business we may experience some short-term variances. In the third quarter of 2024, we estimate continued year-over-year growth. While third quarter revenues are assumed to be impacted by market dynamics that some of our customers have been experiencing since June, our main growth KPIs are positive: consistent growth in the monthly revenue rates from June to July and into August. We evaluate the value created by new customers over their lifecycle. Our new customer-indicator shows enhanced growth in the second quarter compared to the first quarter, and to the last four quarters' average. Furthermore, we will maintain strong net customer retention rates in the third quarter, in line with our growth strategy and strong balance sheet. These are all clear indicators of the strength and resilience of our business, as Alarum is in it for the long run."
Recent Business Highlights
As the Company focuses on expanding its presence in the Data Collection Market, it:
- Added major and highly regarded brand names to the
NetNut customer base, including a Fortune 100 customer
in Q3 2024
- Onboarded in Q2 2024 dozens of new customers who generated
approximately $400,000 in the first month of activity,
60% higher than the revenue generated from those that
onboarded in Q1 2024 and about 35% higher than the
last four quarters' average
- To date, NetNut customers have been generating revenues
at an average rate of about 15-18 times higher than
their initial month's activity over a period of approximately
three years
- Net Retention Rate ("NRR")(1) reached 1.59 as of June
30, 2024
- Continued to expand and further the Company's network
; its infrastructure is now capable of handling significantly
higher traffic, supporting larger and a growing number
of customers that can drive scalable and profitable
growth
- Continued to invest in and make substantial progress
into the Data Collection and Labelling Market with
the new Web-Unblocker and the AI Data Collection products
- Generated initial revenues from new customers who
placed orders for the Web-Unblocker in Q2 2024
- Continued to advance towards adding AI and analysis
capabilities to the Company's Data Products
(1) NRR represents the average growth rate for the preceding
four quarters compared to the equivalent period in
the prior year, of current customers only, while excluding
revenues generated from new customers but including
up-sales and cross-sales as well as churn.
Summary of Financial Results(2)
(in millions of U.S. dollars, rounded, except per
share amounts and margins)
For the For the
Six Months Ended Three Months Ended
June 30, June 30,
-------------------------------- --------------------------------
2024 2023 2024 2023
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------- ------------- ------------- -------------
Total Revenue 17.3 12.7 8.9 7.0
of which,
NetNut Revenue
was 16.7 8.4 8.7 5.0
Gross profit 13.4 8.3 6.8 4.5
Gross margin (in
percentage) 77.7% 65.3% 76.9% 64.7%
Non-IFRS gross
margin (in
percentage) 79.9% 69.9% 78.5% 71.0%
Total operating
expenses 8.1 17.0 4.2 12.8
Finance income
(expense), net (3.3) 0.1 (2.5) 0.3
Tax benefit
(expense) (0.8) 0.2 (0.5) 0.2
Net profit (loss)
for the period 1.1 (8.4) (0.4) (7.7)
Adjusted EBITDA 6.6 1.2 3.4 1.1
Basic earnings
(loss) per ADS
(in U.S.
Dollars) $ 0.16 $ (2.51) $ (0.05) $ (2.26)
Non-IFRS basic
earnings per ADS
(in U.S.
Dollars) $ 0.86 $ 0.42 $ 0.41 $ 0.45
Cash, cash
equivalents(3) 21.6 3.8 21.6 3.8
Shareholders'
equity(4) 20.4 6.1 20.4 6.1
Second Quarter and First Half 2024 Financial Analysis
-- Revenues grew 27% year-over-year to a Company record
$8.9 million in Q2 2024 (Q2 2023: $7.0 million). The
increase is attributed to the growth of the enterprise
internet access business, NetNut, which increased
to $8.7 million in Q2 2024, up from $5.0 million in
Q2 2023. H1 2024 revenues increased to a record $17.3
million (H1 2023: $12.7 million). NetNut's revenues
reached a record $16.7 million in H1 2024, achieving
99% year-over-year growth (H1 2023: $8.4 million).
-- Operating expenses totaled $4.2 million (Q2 2023:
$12.8 million), and H1 2024 operating expenses totaled
$8.1 million (H1 2023: $17.0 million). The quarterly
and six-month year-over-year decrease resulted mainly
from impairment of goodwill and intangible assets
following the Company's shift to enterprise internet
access (NetNut) from consumer internet access (CyberKick).
In addition, CyberKick's operation expenses were reduced,
while NetNut's operation expenses increased in line
with its growth.
-- Finance expenses in Q2 2024 were $2.5 million (Q2
2023: finance income of $0.3 million), and approximately
$3.4 million in H1 2024 (H1 2023: financial income
of $0.1 million). The year-over-year differences were
mainly from expenses resulting from the fair value
increase of derivative financial instruments (warrants
issued in 2019 to 2020) due to the increase in the
Company's share price. The increase was partially
offset by interest income on short-term bank deposits.
(2) The table below contains certain non-IFRS financial
measures. See "Use of non-IFRS Financial Results"
for additional information regarding these measures
and reconciliations to the most comparable IFRS measures.
(3) As of the last day of the period.
(4) As of the last day of the quarter.
-- Income tax expenses totaled $0.8 million in H1 2024
(H1 2023: tax benefit of $0.2 million), following
the first-time NetNut was profitable for tax purposes.
-- H1 2024 cash flow from operating activities reached
$6.3 million (H1 2023: $(0.1) million).
-- As of June 30, 2024, shareholders' equity totaled
$20.4 million, compared to $6.1 million as of June
30, 2023, and $13.2 million as of December 31, 2023.
The increase was driven by the H1 2024 net profit
as well as warrants and options exercises.
-- Outstanding ordinary share count as of June 30, 2024,
was approximately 68.4 million, or 6.8 million in
ADSs.
Financial Outlook
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