Alarum Technologies Ltd. Q4 FY2025 earnings call

2025 was a transformational year for Alarm Technologies. The company expanded customer relationships, scaled its infrastructure, and broadened its product platform. Demand from AI - focused customers became a key growth driver in 2025. The company significantly expanded work with several major global technology companies for large - scale data collection. The volume of data processed by the platform rose from between three and four petabytes per month at the beginning of the year to up to 70 petabytes at the end of the year. Alarm Technologies doubled its headcount, expanded offices, and strengthened organization across R & D, products, support, customer success, and account management. The business evolved from a proxy - focused company into a diversified multi - product data infrastructure platform, which is expected to support stronger long - term margins and healthier unit economics and create stronger customer relationships

Fourth - quarter 2025 revenue reached $11.8 million, an increase of approximately 60% year - over - year compared to the fourth quarter of 2024. Full - year 2025 revenue reached nearly $41 million, an increase of approximately 28% compared to 2024. The new AI - focused products, which are growth engines, accounted for about 30% of revenues in 2025, up from around 4% in the previous year. Gross profit in the fourth quarter of 2025 was $6.4 million compared with $5.3 million in the fourth quarter of 2024. Full - year gross profit was $23.8 million compared with $23.9 million in 2024. Fourth - quarter gross margin was 53.8% compared with 72.4% in the fourth quarter of 2024. Full - year gross margin was 58.5% compared with 75.1% in 2024. Net profit in the fourth quarter of 2025 was $0.2 million compared to $0.4 million in the fourth quarter of 2024. Full - year net profit was $1 million compared with $5.8 million in 2024. Adjusted EBITDA in the fourth quarter of 2025 was $1 million compared with $1.5 million in the fourth quarter of 2024. Full - year adjusted EBITDA was $4.4 million compared with $9.4 million in 2024

The company currently expects that in the first quarter of 2026, revenue will be around $11 million with a range of plus or minus 7%, representing approximately 46% year - over - year growth. Adjusted EBITDA for the first quarter of 2026 is expected to be approximately $1.4 million with a range of plus or minus $0.5 million

Potential risks and uncertainties include those discussed under the headings risk factors in allowance annual report on form 20F filed with the Securities and Exchange Commission on March 20, 2025, and in any subsequent filings with the SEC. These risks may result in forward - looking statements' expectations not being realized and actual outcomes differing materially from expectations reflected in these forward - looking statements

Q: Shahar, any update on the state of modern website data collection prevention techniques? I know that the goalposts are always moving. How do you feel like you're keeping up, and what kind of investment do you feel like is needed to keep up specifically on that front?

A: As data is the oxygen of AI and LLMs products, collecting data in scale is challenging. Websites have varying attitudes towards scraping. Our product targets collecting public available data and we are keeping up by seeing it as an opportunity.

Q: You've highlighted the benefits of the long - term infrastructure partnerships with enterprise customers, revenue has declined this quarter, guiding to a decline in Q1. So can you just help us get a better sense of that improving visibility that you have in the business as a result of these longer term partnerships? And I mean, do you see clear seasonality that are emerging? Do you think that the back half could be stronger just based on the timing of when these models could need to be trained or fine - tuned?

A: In 2025, there was exponential growth due to penetrating large LLM customers. Workloads have an impact on revenues as it's not sustainable production. The trend is positive but movements can be affected by short - term factors.

Q: Nearly half of the revenue in Q4 came from customers that you didn't have one year ago, just based on backing into that number from NRR. So I'm just curious how you think that might trend over the course of the next year and just the potential to sign new customers uh any anything you can share with with other engagements that are in the works?

A: The NRR was affected by the new AI vertical. The company is negotiating with many customers, including big and mid - level LLMs, for AI and data collection for training models.

Q: You spoke last call about bringing in more infrastructure in - house and optimizing the network to expand the gross margin. Can you explain a little deeper any progress on these initiatives over the last quarter, and when should we expect to see those start to materially impact margins?

A: The company is investing in expanding the network and making infrastructure more efficient. It's progressing and will continue in 2026.

Q: Are there any updates on your large anchor customer, the Asian online marketplace? How's that partnership going and what have they indicated from a demand perspective?

A: The partnership with the Asian online marketplace is going well, it's stabilized, and demand is here to stay as they need data for model training and refresh