Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Alarum Technologies First Quarter 2023 Corporate Update Conference Call. [Operator Instructions]. This conference is being recorded today, May 30, 2023.

I a started, statements. about get we will disclaimer read forward-looking Before provisions Securities conference addition and meaning within harbor in may other of the historical safe This contain, statements federal to securities call of Reform Litigation Act information, laws. forward-looking the of XXXX Private the

future to on risks expectations subject These in uncertainties other statements are that statements Forward-looking and strategies, different statements management current forward-looking cause and in are expectations performance than statements. to reflected plans, and about may result from or include not may fact. statements that based and are these underlying goals, historical forward-looking expectations objectives, events assumptions realized being differ actual outcomes and materially

the are report and and of or Alarum's written are Factors Potential risks whether risks statements, we SEC. heading such and on forward-looking to XX, on with and undue these. uncertainties Risk statements, the on caution the subject such reliance Securities XX-F All company oral, by statements to place uncertainties annual filed that on Exchange with Commission behalf subsequent filings these XXXX, March forward-looking cautionary not and you under the in any include Form discussed expressly made qualified those

I'd the time, to company's this yours. like over Daniel, call At CEO. turn is to Shachar the The floor

Shachar Daniel

Alarum Quarter XXXX First Call. everyone, Earnings Technologies' Thank to you welcome, much, very Conference and Results

who results to we the milestone will our Chief And history. achieving Avnit, the Officer. adjusted of including first provide Shai open As the I quarter is our call business brief financial in our I Financial before our time accomplishments, first is our the over with Shai, to of discuss summarize customary, me pivotal positive for turn review will a questions. Today, call EBITDA then operations; will

that start today. non-IFRS release begin, referenced available our saying, published consecutive non-GAAP earlier the I'm we reconciliations proud of like these adjusted operating press incredibly contributions in for I note, Alarum we growth. to would quarter to calls positive said, on a quickly the want ninth With or first-ever tables flow metrics alongside positive I revenue by Before are any for from entire their our quarter, and to cash EBITDA team for activities

doubling flow Reaching in adjusted first on is operates us A Alarum process a first access and cash achievement. from during first drive clients an data the time profitable substantial capacity in the the first for rapid which requests, operating positive the year, for of an billions for sustaining IFRS now and enterprise the extraordinary quarter. infrastructure NetNut, growth and this and milestone become quarter. last EBITDA support market it activities basis to in a we Internet which major while the key After or time access was achieving NetNut have our performance driver for fast-growing growth helps network

presence global rapid expanding surging is helped being demand Our met monthly subscriptions. adoption, and drive which with

to best in and to witness and proud we similar becoming see of field known and are thrilled its in brands the America market. strongest We are North one Asian Europe, the access in NetNut

our we to large new further have sales customers. be meaningful of our with NetNut's have can expanded support performance efforts, regional partnerships, network already high and investments To and scaling attributed that yielded team satisfactions customer level performance developed our the offerings.

to in retention, rise and customer a increased our directed a our in seen have we result, traffic customer spending. network spike new a As

to we interest. and As to this Internet capitalize well and growing the on develop positioned continues feel market data solution access expand,

retail analyzing ultimately play to to leading track analytics, decisions, retail analytics such a intelligence purchasing. and brand we forces into providing development businesses competitor make One to better owners the the effective to e-commerce insight on data be in entrants can more. capitalizing the These first role end-to-end with consumer intelligence Retail opportunities businesses entire pricing AI vendors ability reviews, informed that of seen retail crucial By and are retailers, uncover development our from quarter in product and data, to market. and the offer strategies. and inventory platforms sourcing pricing product this into availability, can valuable hidden analyze

NetNut's By allowing data empower core our business. cloud without to data scale need collect focus multiple them to retail can on services utilizing vendor service, websites sources essential data to business-related access at develop collection complex from vendors solutions, intelligence retail data the their and worldwide.

across understanding data-driven and opportunity data world, anonymously, today's providing innovative wealth targeted us various make provide NetNut's management; as amounts customer business chain platform, profitability. identifying behavior; us. In into new the large a and data-driven their and accessing data which ultimately, gaining help for optimizing business enhancing to is supply enable businesses retailers insight for sectors, for combines opportunities; scale imperative data such of collection functions decisions, competition; that

employ more portfolio, Internet model, business we the of white-label access white-label service outside multi-month us new in a launched privacy growth privacy we after we new for Internet a further solution launch the On for of solution end. consumers our our customer quarter's traditional drive the opportunities our Part to believe up access quarters the ahead. where our enhance base flexible consumer and new is opening will a side, effort

with our brands. to several our ability while solution profitability revenue in to and this results discussions are growth our in efficiency. remain under drive path to consumers we vendors clear addition Overall, a to their operational on offering their interested marketing maintaining In showcase already efforts, we own

year-over-year up in sequentially. the to $X.X quarter, approximately increased XX% Revenues a record of nearly high XX% and up million first

remain our and for the that as on resources, this positive achieving reaching to continuing believe year-ago profitability milestone ability the to our to to recognize and a the $X.X is right We invest quarter, in earlier, first-ever major us improvement positions, journey EBITDA services. we revenues, path that million accelerate We of profitability. adjusted successfully during first maintaining for generated significantly a our the period. milestone while in manage growing while a we loss mentioned adjusted goal growth from our products addition In and company, critical over tremendous EBITDA focused are to net our

our also we contributed will to optimize with goals financial stability. that our in as our to growth to We the our resources future, balancing our and exceptional value facilitate position our believe deliver efforts continue while have substantial customers to financial

turn quarter would like the the over discuss Shai? to the for to I more now to Shai call in detail. financials

Shai Avnit

hello, everyone. Thank you, and Shachar,

million, first $X As were the Compared first first quarter million, results, saw Revenue up up XXXX. comparisons approximately I XXXX fourth $X.X quarter our growth of XXXX totaled business revenues XX%. will fourth The the be quarter access well for to generated the driven over the first of XX% as first XXXX I financial of nearly as quarter to of quarter XXXX the making million in enterprise in the revenues. which discuss quarter of were primarily organic of $X.X XXXX, revenues quarter XXXX. by revenues the for

percentage $X.X growth. cost business, to strong costs relative XX% all access This in of profit in efficiency XXXX. a up compared of our by our XX% driven revenues XX% acquisition margins revenue resulting in as the of primarily minimal resulted of first period, business Internet to year-ago Internet lower revenue the from in in in $X.X Gross the gross increase quarter to user million increased and access in resources the consumer million, increased enterprise of

of in expenses year-over-year down result general of operating expenses $X.X was million a QX XXXX. by administrative as primarily million, R&D patent in Our and expenses XXXX, XX% the This sales XX% in a in improvement decrease XXXX decreased XX% proceeding first and the lower May expenses. marketing $X.X to a from tremendous quarter driven and drop resource

As the or quarter quarter significantly XXXX $X.XX in share and the from per share, $X.X net of per million million revenues was a net or result changes loss above of in XXXX. of for first a loss of the $X.XX $X.X first expenses, down

XXXX, As XX, -- $XX.X loss mainly equity million or company's totaled The on is American depository reduction during XXXX. December the shareholders' IFRS of the on approximately XX, per outstanding to shareholders' net share $X.XX of to quarter $XX.X million March basis. compared due of equity

As company's an funds not account $X.X under XX, additional balance facility to and available investment $X.X equivalents the to on credit $X.X totaled cash million company's of cash in XXXX, compared its December up financing. for does and The million XXXX. million March cash balance XX,

it And basis, shares million X.X lastly, I today. On on around million as outstanding our X have or stands XX an representing diluted wanted million XX basis, around we have to a ADSs count share touch fully we currently shares base ordinary ADSs. outstanding. million On

that, back call I'll over turn With to the Shachar.

Shachar Daniel

recent years. to the we as like to would a and the a goals I future. accomplishments take our to for Shai. ourselves share Alarum's set for in on reflect ambitious moment Today, stands Alarum aspirations testament Thanks,

Both record adjusted Our our positive been nonfinancial an to quarter achieve perfectly and advantages Not also been strategic key have our with growth EBITDA and the milestone only first is And aligned the quarter vision. engines significant ninth of and in revenue quarter, in key path we are have moving consecutive marked of we our our but did achieving metrics our revenue first-ever financial important on our growth. profitability. right realized, competitive direction crystallized.

committed potential while ahead to our paving to focus maximizing We agile and growth way business remain quarters initiatives. in our the long-term to profitability

on perception raising development, business performance the price, and and Bridging company's that to dedicated and our growth we acknowledge gap both awareness in sustainable true there U.S. our primary are is is achievements. beyond. gap XXXX, for of about one our goals and our share a this Regarding between market's the the of we and

important an ago. reiterate to made a want also by moment Shai I point

the not to financing available additional in XXXX. during million increased $X.X for first the us. $X.X an up And balance $X.X cash Our year-end does this quarter, from have at we million to of non-dilutive up account million

As such, requiring see and to new we scenario us additional executing funds. are to position no term continue in raise great

I for express this gratitude confidence like ongoing my our to take trust, and to support. their opportunity would to shareholders

continuous well-defined have we and growth encompasses map innovation, profitability. ahead, look we strategic that near-term technological road a As

We future plan building the Alarum are improved optimistic business support results. efforts diligently for financial are and our of to our about

forward you you thank on coming and closing, the quarters. progress we us our today, In for look updating joining in to

like ahead. to please any call would Operator, open I Now go the for questions.

Operator

Instructions]. [Operator

from Kinstlinger Our Global comes first Brian the question line with Partners. of Alliance

Brian Kinstlinger

drove the what percentage in Can also sequential what of consumer numbers. roughly versus rates quarter? revenue year-over-year enterprise comes the Interested growth quarter you quite time. the Nice dollars from best during some revenue and in you saw first in quantify

Shachar Daniel

right. you. thank All Brian,

Meaning, around for all NetNut regarding the the revenues, CyberKick. consumer split Brian, you around the -- our for for business. and enterprise if the questions? the XX% So other XX% XX% of around and XX% for so can repeat business

Brian Kinstlinger

kind us kind give are growing NetNut's how It growing. growth curious the X I'm rate. you faster. roughly of of sounds can businesses if like Yes, year-over-year year-over-year Maybe these

Shachar Daniel

Year-over-year, meaning the enterprise and between split the consumer? the

Brian Kinstlinger

the XX%, grow grew XX%, something NetNut that? The yes. like CyberKick Yes,

Shachar Daniel

Yes, yes, yes. to No problem. want Shai, it? you Shai? muted. are take Shai, you

Shai Avnit

do the Brian, Yes. during mean XXXX? you we experienced ratio that

Shachar Daniel

No, he no. -- the Shai, quarter. first

Brian Kinstlinger

quarter the I of consumer. were of in rates first versus year-over-year growth enterprise mean, what the XXXX,

Shai Avnit

of enterprise consumer growth of each The vs or the... one

Shachar Daniel

No, first quarter only the take quarter Shai, the versus the you XXXX, yes. of the XXXX Shai, in Shai. first if enterprise enterprise will in

Shai Avnit

Okay.

So it's but... not one against the other,

Shachar Daniel

No, not against [indiscernible]. against the other,

Shai Avnit

course. Of

consumer enterprises, It it was So the a the enterprise, with growth, And respect stable XX% for it the enterprise almost basically double. without about growth. or business, access was year-over-year to or... was businesses

Brian Kinstlinger

enterprise, the change? as or how And both rates certainly you talk change growth not these sequentially. about businesses, on And the then if you macro, any, impact, Can did think Yes. about might you fantastic consumer?

Shachar Daniel

Okay. impact what The of brand?

Brian Kinstlinger

macro. challenging The

Shachar Daniel

because times few think the I us, think a least we it in challenging a year year. macro at with the I is discussed that last here about

if till of get so at stay higher if economic world, situation, worse, we the become this aspect, will we stable significant now. the see don't sure, Unless to see we will in or and -- was growth the this it know we positive in from better, market and to If that we better can current on any time, better, potential impact the start situation the real better business. So and on for the is never point situation. didn't But due see the experience things it any know. situation that will impact has so even don't we even then -- become the the will

Brian Kinstlinger

doubling, choosing over solutions. NetNut's the then And organic, that maybe remind from that it's investors I would now get all Okay. think it other helpful, NetNut be benefit enterprises and

Shachar Daniel

Okay.

solutions. split other So X, general answer my I over will for and in

is way, and that everybody, in the due especially every of watch the to each solutions. to data. kinds is the everything. Everybody to the data by environment, needs -- going the website, the in our to of every penetration industries So to Due in amount general, -- the world, use you'll minute, and on collect to of needs the every data. everybody are using life, I'm hour cases today AI needs blood competitive know so inviting our what's these presentation in see Everybody

to So are data get real anonymously using and collect products. of in one set scale to and data, order and companies

We the in of this world of data are layer collection. world one of the the

infrastructures the meaning you the collect layer, are We data. infrastructure, cannot without

next stage collection that the data AI is you And the data. get the scrapers. stage the analyze Next tools collectors, can tools the data and is more accurate and

So this are that we the now. is layer

We always have into -- next plans the the in starting meaning and layers, in layers going our how get the industry, in we we space data are think to next to are of industry.

have in we this one a the solid are is biggest the I as network. our fact advantage biggest think very the and brands, mentioned, Regarding that competitive space I of competition, we

have customers best our brands coverage, space. players to X,XXX the good most satisfied. when they is the a more This retention. than makes makes to besides most rate the one our everything, -- this this space, And support advantage -- customers is is our what the We increase what data. And and is to the about brand very locations. are trying in be This the be are and and global of a of this of what gives success we in this is our it this biggest competitive collect very features

Brian Kinstlinger

way NetNut. today get a Great. it to is trying to give we're maybe what my it little there can't your talking year of ago? then remarks versus for what is arms how That's about. rate helpful. a quantify it numbers, a in retention any you If you Is has bit around And kind mentioned wrap much? prepared of Just stronger improved --

Shachar Daniel

Okay.

accurate with a third-party churn, for So very retention, et transparent products honest cetera. use months lifetime value, you, and ago order and an kind and started few Brian, of to clear to start KPIs in just be we to totally have our

So I don't yet. have the numbers accurate

that -- process, still double at you least the in are We but tell themselves. least can I retention at it's

Brian Kinstlinger

new Got enabled a you And application. it. launched privacy white-label recently

I is So if you to And target is your how expect -- you read opportunities? open right, or press Or primary are selling... going new do channel your the resellers? it's partners release

Shachar Daniel

No.

Brian Kinstlinger

Or is this a me direct help white label? understand. Just

Shachar Daniel

no. No,

Okay.

just behind, our well not new make our products. And goes we we to change, believe strategy we are it we direct our resellers, but nice meaning meaning consumer still selling nice checking for opened if be believe the target economics our our are very a white a channel not additional, -- vendors opportunity other channel main sense, can it's approach, is revenue directly So consumers. the label but very product. revenue and economics for We it that a to

Brian Kinstlinger

is -- Okay. expenses. I have The last well question on done

So will should increase? lastly, customer adjusted as the for revenue to increase expenses quarter, acquisition? Or grows EBITDA will first management from we expect choose

Shachar Daniel

this in mean, You quarter?

Brian Kinstlinger

Do XX%? have different will on Management capital expenses in about revenue customer you Or general. as grow strategies slower you grow teams EBITDA on grows that as XX%, your much on I'm increase I'm -- will sorry, talking hope acquisition. No, it capital deployment.

Shachar Daniel

I understand. I question. Yes, your understand

Okay.

said already to So kind remember, game year, already our we don't other profitability. between if I'm or customers. for with of as with at So last okay? we years. hit -- growth, we started that, the want of you a the And our and it's our side, our we and talking time to day, journey all EBITDA innovation -- the game we the growth from stated But talking always a I end audience said are

see as let's a stay will we in in say, financials these So we mode -- reports and you are quarter. this this we -- these in are

be cross-sell not we We customers, leverage already the and want new to and quarters. it that start hundreds profitable minutes release customers are honest, a quarter to for can are acquisition. even using better be new mentioned, because, our only we to looking is platform and and products which if a see to target, penetrate we your and get to question, to the beneficial to for was consumer our as our I few only But most that this markets example, ago, the of into next numbers have fact

on less, clear the the we this and target. and keep balance will very we between will to cannot about growth more if profitability. try on adjusted the will revenues So revenues, in But or be XX% see growth see ratio I you EBITDA. is the in

Operator

gentlemen, comments. and you. our concludes session. for Mr. floor question-and-answer final any Thank I'll Instructions]. to Ladies [Operator turn that Daniel the back

Shachar Daniel

Okay.

you forward much continuing very today. update on you thank for to joining Thanks. us our look We to progress. So

Operator

today's concludes This you. Thank call. conference

You time. you Thank for this your at your disconnect lines may participation.

Alarum Technologies (ALAR) 30 May 232023 Q1 Earnings call transcript