Alarum Technologies Ltd.
(Nasdaq, TASE: ALAR)
(“Alarum” or the “Company”), a global provider of internet
access and data collection solutions, today announced record
financial results for the three- and nine-month ended September 30,
2023.
"We are pleased with the third quarter revenue
results, which were driven by the rapid growth of our enterprise
business. This also reflects the impact of our strategic decision
in July 2023 to scale down our consumer business, which was reduced
to a minimum given the rise of our enterprise business. The revenue
generated this quarter, combined with the achieved net profit,
validates the correctness of our decision," said Shachar Daniel,
Alarum’s Chief Executive Officer.
Key Financial Highlights
for the Third Quarter and First Nine Months of
2023:
- Third quarter revenues amounted to $6.7 million, compared to
$4.8 million for the same period in 2022, representing a growth of
42% even with the strategic decision to scale down the consumer
business in order to focus on enabling the Company’s growth
strategy while reaching profitability.
- Achieved for the first-time net profit of $1.1 million in the
third quarter of 2023 from continuing operations, compared to a net
loss of $2.3 million in the third quarter of 2022.
- Adjusted EBITDA for the third quarter of 2023 reached $1.9
million, compared to Adjusted EBITDA loss of $1.6 million in the
equivalent period in 2022.
- Gross profit margin for the third quarter of 2023 increased to
77%.
- Revenues for the first nine months of 2023 increased to $19.4
million, exceeding the entire revenues of 2022, and representing an
increase of 45% compared to the same period of 2022.
- IFRS net loss for the nine-month period ended September 30,
2023, summed to $7.3 million, compared to IFRS net loss of $9.4
million for the nine months ended September 30, 2022.
- Adjusted EBITDA for the first nine months of 2023 was $3.0
million, compared to an Adjusted EBITDA loss of $6.5 million in the
same period of 2022 from continuing operations.
- As of September 30, 2023, the Company’s cash and cash
equivalents balance totaled $7.7 million, compared to $3.3 million
as of December 31, 2022.
“The third quarter of 2023 marks a turning point
for the Company as we transition to profitability. Less than
eighteen months ago, we set our goal on growing our business, and
implemented strategies focused on achieving profitable revenues. I
am pleased to present investors with the results of our efforts
achieved within a relatively short period,” said Mr. Daniel.
“Our revenues continue the positive trajectory,
fueled by our enterprise business's continuing growth, and the new
products and innovation that will facilitate the Company in
maintaining and strengthening our position as the market continues
to expand. Management’s recent investment in the Company is a
testament to our faith in the strength of our strategies, the
dedication of our team, and our belief that the Company will
continue to grow and evolve. Following this investment, the
Company's cash position is strong, enabling us to support both our
current operations and our future plans,” Mr. Daniel added.
Mr. Chen Katz, Chairman of the Board of
Directors of Alarum, commented, “I commend our exceptional team for
their incredible accomplishments over the past quarters, resulting
in our first-ever net profit. The unwavering motivation,
dedication, and professionalism exhibited by our management and
employees were fundamental in reaching this historic milestone,
transforming the Company into a profitable, rapidly growing
organization.”
Third Quarter of 2023 Operational
Highlights and Recent Business Developments:
NetNut Ltd., the Company’s subsidiary
(“NetNut”), continues its expansion and domination in the internet
access and web data collection:
- Announced a grant of a United States patent;
- Won new customers in the Artificial Intelligence (“AI”)-powered
sales intelligence market;
- Entered the fintech market with multiple new customers;
- Launched new website, enhancing marketing and sales capacity
and experience;
- Expanded its solutions offering - launched new SERP Scraper API
product;
- Enhanced position as a leader in the European privacy market -
showcased its technology in several conferences across Europe;
and
- Secured its first AI recruitment market customer for its
recently launched cloud-based digital technologies and
analytics.
Financial Results from Continuing
Operations for the Three Months Ended September 30,
2023:
- Revenues amounted to $6.7 million (Q3.2022: $4.8 million). The
increase is attributed to the organic growth in the enterprise
access business revenues, despite a reduction in the consumer
access business revenues.
- Cost of revenues totaled $1.5 million (Q3.2022: $2.2 million).
The reduction stems mainly from traffic acquisition costs stoppage
in July 2023 and clearing fees decrease, due to the Company’s
updated scaledown strategy for its CyberKick operations. The
reduction was offset by an increase in enterprise internet access
business costs of addresses and networks and servers used for the
generation of the additional enterprise access business
revenues.
- Research and development expenses totaled $0.8 million
(Q3.2022: $0.9 million). Reduced expenses in the consumer internet
access business due to the operations scale down and a decrease in
subcontractor costs in the enterprise internet access business were
partially offset by an increase in payroll and related expenses in
this business.
- Sales and marketing expenses totaled $2.0 million (Q3.2022:
$3.0 million). The decrease resulted mainly from the stoppage of
media acquisition costs in July 2023 due to the updated CyberKick’s
operations scale down strategy. This reduction was offset by higher
payroll and related expenses in the enterprise internet access
business.
- General and administrative expenses totaled $0.9 million
(Q3.2022: $1.1 million). The decrease is mainly due to reduced
professional fees.
- Finance expenses reached $0.7 million (Q3.2022: finance income
of $0.03 million). The switch to financial expenses is mainly due
to an increase in finance expenses that resulted from an amendment
of the Company’s agreement with O.R.B. Spring Ltd. and the
Company’s September 2023 private placement of American Depositary
Shares and warrants.
- Tax benefit totaled $0.3 million (Q3.2022: $0.1 million). The
increase is mainly due to the recognition of deferred tax assets in
NetNut as it expects to utilize them against future taxable
income.
- As a result, IFRS net profit from continuing operations reached
$1.1 million, or $0.03 basic profit per ordinary share (Q3.2022:
net loss of $2.3 million, or $0.07 basic loss per ordinary
share).
- Adjusted EBITDA was $1.9 million (Q3.2022: Adjusted EBITDA loss
of $1.6 million).
Financial Results from continuing
operations for the Nine Months Ended September 30,
2023:
- Total revenues amounted to $19.4 million (Q1-Q3.2022: $13.4
million). The increase is attributed to the organic growth in the
enterprise access business revenues, which was offset by a
reduction of revenues in the consumer internet access business.
- Cost of revenues totaled $5.9 million (Q1-Q3.2022: $6.1
million). The slight decrease is mainly a result of the decrease in
the traffic acquisition costs stoppage in July 2023 and reduced
clearing fees due to the updated CyberKick’s operations scale down
strategy in the consumer internet access business. This decrease
was offset by an increase in the core enterprise internet access
business costs of addresses and networks and servers.
- Research and development expenses totaled $2.8 million
(Q1-Q3.2022: $2.8 million). The increase due to a higher payroll
and related expenses in the enterprise internet access was offset
by a decrease in the consumer internet access payroll and related
expenses, as well as lower usage of subcontractors.
- Sales and marketing expenses totaled $8.5 million (Q1-Q3.2022:
$8.3 million). The increase resulted mainly from intangible assets
impairment loss related to CyberKick as well as increases in
payroll and related expenses in the enterprise internet access
business, partially offset by lower media costs in the consumer
internet access business.
- General and administrative expenses totaled $3.2 million
(Q1-Q3.2022: $5.3 million). The decrease is largely due to reduced
professional fees, particularly legal fees related to resolved
patent proceedings in May 2022, partially offset by other
professional fees.
- Goodwill impairment loss of $6.3 million (Q1-Q3.2022: $0.6
million). The Company recorded a goodwill impairment loss related
to the CyberKick cash-generating-unit of $6.3 million due to the
decrease in its forecasted operating results, compared to a
goodwill impairment loss related to the NetNut Networks
cash-generating-unit of $0.6 million.
- Financial expenses reached $0.5 million (Q1-Q3.2022: finance
income of $0.02 million). The switch to financial expenses is
mainly due to an increase in finance expenses resulting from the
O.R.B. Spring Ltd. agreement as well as interest expenses related
to the short-term bank loans, and the September 2023 private
placement.
- Tax benefit totaled $0.5 million (Q1-Q3.2022: $0.2 million).
The increase is mainly due to the recognition of deferred tax
assets in NetNut as well as reduction in deferred taxes liabilities
as a result of the intangible assets impairment.
- IFRS net loss from continuing operations totaled $7.3 million,
or $0.20 basic loss per ordinary share (Q1-Q3.2022: net loss of
$9.4 million, or $0.30 basic loss per ordinary share).
- Adjusted EBITDA was $3.0 million (Q1-Q3.2022: Adjusted EBITDA
loss of $6.5 million).
The Company defines EBITDA (EBITDA loss) as net
profit (loss) from continuing operations before depreciation,
amortization and impairment of intangible assets, interest and tax,
and defines Adjusted EBITDA (Adjusted EBITDA loss) as EBITDA
(EBITDA loss) as further adjusted to remove the impact of (i)
impairment of goodwill (if any); and (ii) share-based compensation
expense.
The following table presents the reconciled
effect of the above on the Company’s Adjusted EBITDA or Adjusted
EBITDA loss from continuing operations for the three and nine
months ended September 30, 2023 and 2022, and the year ended
December 31, 2022:
|
|
|
For the Nine-Month Period EndedSeptember 30, |
|
|
For theThree-Month Period Ended September 30, |
|
For the yearEndedDecember 31, |
| (millions of U.S.
dollars) |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit (loss) from continuing operations |
|
(7.3 |
) |
|
(9.4 |
) |
|
|
1.1 |
|
|
|
(2.3 |
) |
|
(12.4 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation, amortization and
impairment of intangible assets |
|
3.4 |
|
|
1.2 |
|
|
|
0.4 |
|
|
|
0.4 |
|
|
2.0 |
|
| Finance expense, net |
|
0.5 |
|
|
* |
|
|
|
0.7 |
|
|
|
* |
|
|
* |
|
| Tax benefit |
|
(0.5 |
) |
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
(0.1 |
) |
|
(0.3 |
) |
| EBITDA (EBITDA loss) |
|
(3.9 |
) |
|
(8.4 |
) |
|
|
1.9 |
|
|
|
(1.9 |
) |
|
(10.7 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
| Impairment of goodwill |
|
6.3 |
|
|
0.6 |
|
|
|
- |
|
|
|
- |
|
|
0.6 |
|
| Share-based compensation |
|
0.6 |
|
|
1.3 |
|
|
|
* |
|
|
|
0.3 |
|
|
1.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
(Adjusted EBITDA loss) |
|
3.0 |
|
|
(6.5 |
) |
|
|
1.9 |
|
|
|
(1.6 |
) |
|
(8.5 |
) |
*Less than $0.1 million
Balance Sheet Highlights:
- As of September 30, 2023, shareholders’ equity totaled $10.9
million, or approximately $1.87 per outstanding American Depositary
Share, compared to shareholders’ equity of $13.3 million as of
December 31, 2022. The reduction is due mainly to the goodwill and
intangible assets impairment recorded in the second quarter of
2023, offset by September 2023 private placement.
- As of September 30, 2023, the Company’s cash and cash
equivalents balance totaled $7.7 million, compared to $3.3 million
as of December 31, 2022.
Use of Non-IFRS Financial
ResultsIn addition to disclosing financial results
calculated in accordance with International Financial Reporting
Standards (IFRS), as issued by the International Accounting
Standards Board, this press release contains non-IFRS financial
measures of EBITDA, EBITDA loss, Adjusted EBITDA and Adjusted
EBITDA loss for the periods presented that exclude depreciation,
amortization and impairment of intangible assets, interest and tax,
as further adjusted for the effect of impairment of goodwill and
share-based compensation expenses. The Company’s management
believes the non-IFRS financial information provided in this
release is useful to investors’ understanding and assessment of the
Company’s ongoing operations. Management also uses both IFRS
and non-IFRS information in evaluating and operating its business
internally, and as such deemed it important to provide this
information to investors. The non-IFRS financial measures
disclosed by the Company should not be considered in
isolation, or as a substitute for, or superior to, financial
measures calculated in accordance with IFRS, and the financial
results calculated in accordance with IFRS and reconciliations to
those financial statements should be carefully
evaluated. Investors are encouraged to review the
reconciliations of these non-IFRS measures to their most directly
comparable IFRS financial measures provided in the financial
statement tables herein.
Third Quarter 2023 Financial Results
Conference Call
Mr. Shachar Daniel, Chief Executive Officer of
Alarum, and Mr. Shai Avnit, Chief Financial Officer of Alarum, will
host a conference call today, on November 28, 2023, at 8:00 a.m.
ET, to discuss the third quarter of 2023 financial results,
followed by a Q&A session.
To attend the conference call, please dial one
of the following teleconferencing numbers. Please begin by placing
your call five minutes before the conference call commences. If you
are unable to connect using the toll-free number, please try the
international dial-in number:
|
Date: |
Tuesday, November 28, 2023 |
|
Time: |
8:00 a.m. Eastern time, 5:00 a.m. Pacific time |
|
Toll-free dial-in number: |
1-877-407-0789 or 1-201-689-8562 |
|
Israel Toll Free: |
1 809 406 247 |
|
|
|
Participants will be required to state their
name and company upon entering the call. If you have any difficulty
connecting with the conference call, please contact Michal Efraty
on behalf of Alarum at +972-(0)-52-3044404.
The conference call will be broadcast live and
available for replay here.
A replay of the conference call will be
available after 11:30 a.m. Eastern time November 28, 2023, through
December 26, 2023:
|
Toll-free replay number: |
1-844-512-2921 or 1-412-317-6671 |
|
Replay ID: |
13742710 |
|
|
|
About Alarum Technologies
Ltd.
Alarum Technologies Ltd. (Nasdaq, TASE: ALAR) is
a global provider of internet access and data collection
solutions.
The solutions by NetNut, our enterprise internet
access and data collection arm, are based on our world’s fastest
and most advanced and secured hybrid proxy network, enabling our
customers to collect data anonymously at any scale from any public
sources over the web. Our network comprises both exit points based
on our proprietary reflection technology and hundreds of servers
located at our ISP partners around the world. The infrastructure is
optimally designed to guarantee privacy, quality, stability, and
the speed of the service.
For more information about Alarum and its
internet access solutions, please visit www.alarum.io.
Follow us on Twitter
Subscribe to our YouTube channel
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the “safe harbor” Words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and similar expressions or variations of such words are
intended to identify forward-looking statements. Alarum is using
forward-looking statements in this press release when it discusses
the Company’s ability to continue and drive revenue growth,
maintain operational efficiency, grow profitability, the impact of
its strategic decisions and the sufficiency of the Company's cash
to support both current operations and future plans. Because such
statements deal with future events and are based on Alarum’s
current expectations, they are subject to various risks and
uncertainties and actual results, performance or achievements of
Alarum could differ materially from those described in or implied
by the statements in this press release. The forward-looking
statements contained or implied in this press release are subject
to other risks and uncertainties, including those discussed under
the heading “Risk Factors” in Alarum’s annual report on Form 20-F
filed with the Securities and Exchange Commission (“SEC”) on March
31, 2023, and in any subsequent filings with the SEC. Except as
otherwise required by law, Alarum undertakes no obligation to
publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. References and
links to websites have been provided as a convenience, and the
information contained on such websites is not incorporated by
reference into this press release. Alarum is not responsible for
the contents of third-party websites.
Investor Relations
Contacts:
Michal Efraty+972-(0)52-3044404 investors@alarum.io
|
Consolidated Statements of Financial Position(In thousands of
USD) |
|
|
September 30, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2022 |
|
|
(Unaudited) |
|
(Audited) |
|
Assets |
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
7,741 |
|
|
3,865 |
|
|
3,290 |
|
| Short-term restricted
deposits |
- |
|
|
559 |
|
|
560 |
|
| Trade receivables |
1,862 |
|
|
1,096 |
|
|
1,790 |
|
| Other receivables |
434 |
|
|
537 |
|
|
760 |
|
| |
10,037 |
|
|
6,057 |
|
|
6,400 |
|
| |
|
|
|
|
|
| Non-current
assets: |
|
|
|
|
|
| Long-term restricted
deposits |
3 |
|
|
147 |
|
|
127 |
|
| Long-term deposit |
99 |
|
|
73 |
|
|
21 |
|
| Other non-current assets |
167 |
|
|
222 |
|
|
228 |
|
| Property and equipment,
net |
80 |
|
|
119 |
|
|
92 |
|
| Right of use assets |
841 |
|
|
263 |
|
|
190 |
|
| Deferred tax asset |
202 |
|
|
- |
|
|
- |
|
| Goodwill |
4,118 |
|
|
10,429 |
|
|
10,429 |
|
| Intangible assets, net |
1,547 |
|
|
5,749 |
|
|
4,884 |
|
| Total non-current
assets |
7,057 |
|
|
17,002 |
|
|
15,971 |
|
| Total
assets |
17,094 |
|
|
23,059 |
|
|
22,371 |
|
| |
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
| Trade payables |
498 |
|
|
2,230 |
|
|
2,167 |
|
| Other payables |
1,978 |
|
|
1,951 |
|
|
2,350 |
|
| Current maturities of
long-term loan |
469 |
|
|
441 |
|
|
617 |
|
| Short-term bank loans |
- |
|
|
700 |
|
|
1,606 |
|
| Contract liabilities |
1,545 |
|
|
582 |
|
|
1,170 |
|
| Derivative financial
instruments |
2 |
|
|
161 |
|
|
26 |
|
| Short-term lease
liabilities |
351 |
|
|
257 |
|
|
204 |
|
| Total current
liabilities |
4,843 |
|
|
6,322 |
|
|
8,140 |
|
| |
|
|
|
|
|
| Non-current
liabilities: |
|
|
|
|
|
| Long-term loans |
733 |
|
|
342 |
|
|
606 |
|
| Long-term contract
liabilities |
- |
|
|
4 |
|
|
- |
|
| Long-term lease
liabilities |
573 |
|
|
36 |
|
|
13 |
|
| Deferred tax liabilities |
- |
|
|
413 |
|
|
301 |
|
| Liability with respect to the
Israeli Innovation Authority |
- |
|
|
205 |
|
|
- |
|
| Total non-current
liabilities |
1,306 |
|
|
1,000 |
|
|
920 |
|
| Total
liabilities |
6,149 |
|
|
7,322 |
|
|
9,060 |
|
| |
|
|
|
|
|
| Equity: |
|
|
|
|
|
| Ordinary shares |
- |
|
|
- |
|
|
- |
|
| Share premium |
99,875 |
|
|
94,897 |
|
|
95,077 |
|
| Other equity reserves |
15,075 |
|
|
14,752 |
|
|
15,042 |
|
| Accumulated deficit |
(104,005 |
) |
|
(93,912 |
) |
|
(96,808 |
) |
| Total
equity |
10,945 |
|
|
15,737 |
|
|
13,311 |
|
| Total liabilities and
equity |
17,094 |
|
|
23,059 |
|
|
22,371 |
|
|
Consolidated Statements of Profit or Loss(In thousands of USD,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, |
|
For the Three Months Ended September 30, |
|
|
For the YearEndedDecember 31, |
|
|
|
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
19,414 |
|
|
|
13,424 |
|
|
6,750 |
|
|
4,767 |
|
|
18,550 |
|
| Cost of revenues |
|
5,933 |
|
|
|
6,103 |
|
|
1,543 |
|
|
2,151 |
|
|
8,402 |
|
| Gross
profit |
|
13,481 |
|
|
|
7,321 |
|
|
5,207 |
|
|
2,616 |
|
|
10,148 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development
expenses |
|
2,762 |
|
|
|
2,805 |
|
|
814 |
|
|
928 |
|
|
3,824 |
|
| Sales and marketing
expenses |
|
8,456 |
|
|
|
8,324 |
|
|
1,984 |
|
|
2,952 |
|
|
11,823 |
|
| General and administrative
expenses |
|
3,199 |
|
|
|
5,287 |
|
|
913 |
|
|
1,101 |
|
|
6,661 |
|
| Impairment of goodwill |
|
6,311 |
|
|
|
569 |
|
|
- |
|
|
- |
|
|
569 |
|
| Operating
expenses |
|
20,728 |
|
|
|
16,985 |
|
|
3,711 |
|
|
4,981 |
|
|
22,877 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
loss |
|
(7,247 |
) |
|
|
(9,664 |
) |
|
1,496 |
|
|
(2,365 |
) |
|
(12,729 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Finance income (expense),
net |
|
(536) |
|
|
|
25 |
|
|
(652) |
|
|
35 |
|
|
(54 |
) |
| Tax benefit |
|
504 |
|
|
|
215 |
|
|
266 |
|
|
64 |
|
|
327 |
|
| Profit (loss) from continuing
operations |
|
(7,279 |
) |
|
|
(9,424 |
) |
|
1,110 |
|
|
(2,266 |
) |
|
(12,456 |
) |
| Profit (loss) from
discontinued operations |
|
82 |
|
|
|
(831 |
) |
|
82 |
|
|
(104 |
) |
|
(695 |
) |
| Net profit
(loss) |
|
(7,197 |
) |
|
|
(10,255 |
) |
|
1,192 |
|
|
(2,370 |
) |
|
(13,151 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted
profit (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing
operations |
|
(0.20 |
) |
|
|
(0.30 |
) |
|
0.03 |
|
|
(0.07 |
) |
|
(0.39 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Discontinued
operations |
|
0.00 |
|
|
|
(0.03 |
) |
|
0.00 |
|
|
(0.00 |
) |
|
(0.03 |
) |
| |
|
(0.20 |
) |
|
|
(0.33 |
) |
|
0.03 |
|
|
(0.07 |
) |
|
(0.42 |
) |
Alarum Technologies (NASDAQ:ALAR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alarum Technologies (NASDAQ:ALAR)
Historical Stock Chart
From Apr 2023 to Apr 2024
