Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alarum Technologies Ltd (ALAR, Financial) achieved a record annual revenue of $31.8 million in 2024, with 97% attributed to data collection.
- The company reported a record adjusted EBITDA of $9.4 million for 2024, indicating strong financial performance.
- Alarum Technologies Ltd (ALAR) successfully executed its strategic vision to focus solely on data collection, phasing out other activities.
- The company expanded its IP network coverage in 2024, enhancing infrastructure and capacity to handle massive data traffic.
- Alarum Technologies Ltd (ALAR) initiated AI model training and analysis trial projects with new customers, including a global online marketplace corporation, indicating potential for long-term collaboration.
Negative Points
- The non-IFRS gross margin for the fourth quarter of 2024 decreased to 74.3% from 77.2% in the same quarter of 2023.
- Operating expenses in the fourth quarter of 2024 increased to $5 million from $3.6 million in the fourth quarter of 2023, primarily due to higher employee salary-related costs.
- The company's net retention rate declined for the third consecutive quarter, indicating potential challenges in maintaining customer engagement.
- Alarum Technologies Ltd (ALAR) anticipates slower revenue growth in the short term due to industry adjustments and evolving market conditions.
- The company is experiencing revenue fluctuation and volatility due to the dynamic environment and competition between AI platforms and traditional web-based information sources.
Q & A Highlights
Q: You mentioned navigating a period of adjustment as the industry evolves, leading to slower revenue growth. Can you explain this in light of the spike in demand for large-scale data extraction?
A: Shachar Daniel, CEO: We are seeing large companies entering the AI space and approaching us for cooperation. There's a technological competition between AI platforms and websites, as AI can replace website traffic. This has led to volatility as websites implement measures to block AI engines. While this causes short-term fluctuations, long-term demand for large-scale data extraction remains strong, positioning us favorably as a data enabler.
Q: Is the decline in net retention rate due to customers using less of your services?
A: Shachar Daniel, CEO: Yes, the volatility in net retention rate is directly related to the fluctuations in demand as customers adjust their strategies in response to changes in the market.
Q: Can you update us on the progress with the Fortune 200 company using your Website Unblocker?
A: Shachar Daniel, CEO: The customer is satisfied and has increased usage. The annual run rate is over $500,000. The opportunity with such large customers can be significant, both in terms of revenue and long-term strategic cooperation, especially as they aim to become significant players in the AI space.
Q: How do you plan to approach new product development versus acquisitions?
A: Shachar Daniel, CEO: Currently, we focus on internal development for data collection products, leveraging talent from the Israeli tech ecosystem. While we are open to acquisitions if a unique opportunity arises, our main plan is to develop internally. For AI and data insights, we are considering acquisitions to quickly advance our capabilities.
Q: How important are alternative data types like audio and video to AI-driven customers, and how are you positioned?
A: Shachar Daniel, CEO: Alternative data types are crucial for AI-driven companies, especially those transitioning to AI-focused business models. Our solutions, like scrapers and unblockers, enable these companies to collect large-scale data necessary for training AI models, positioning us as a significant player in this space.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
