Zacks Small Cap Research – ALAR: Alarum Technologies: Driving Growth Through Expanding Offerings – Technologist

NASDAQ:ALAR

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Alarum Technologies Ltd. (NASDAQ:ALAR) operates as a leading global supplier of internet access and web data acquisition solutions. The company’s Enterprise Internet Access division, known as NetNut, offers a suite of solutions leveraging a hybrid proxy network, and distinguished by its robust security measures. NetNut’s infrastructure facilitates anonymous data collection from public web sources on a massive scale, providing clients with unparalleled flexibility. This network encompasses a blend of exit points using proprietary reflection technology and an extensive array of servers strategically positioned across the globe through partnerships with internet service providers. The network’s architecture is designed to ensure optimal privacy protection, data quality, operational stability, and connection speed.

Recent Business Highlights

In recent months, NetNut achieved several milestones in product innovation and market expansion. In October 2023, the company announced the launch of its latest product, the Search Engine Results Page (SERP) Scraper Application Programming Interface (API). The launch marked NetNut’s entry into the dynamic data collection and labeling market, expected to reach $17.1 billion by 2030. Developed in collaboration with elite intelligence researchers, the SERP Scraper API automates the retrieval and analysis of SERP data, catering to the needs of enterprises worldwide for tasks such as search engine optimization (SEO) and market research. The API delivers real-time, structured data from global search engines, offering benefits like automated data retrieval and analysis, scalability with high speeds, seamless access to all search engines, and compatibility with multiple devices. This advancement in web scraping technology empowers businesses to make informed decisions by leveraging public data sources more efficiently.

Following this success, in late January 2024, NetNut introduced its second product in the data collection line, the Website Unblocker. This AI-based solution helps automated data collection from public-facing websites without encountering anti-bot restrictions. Integrated seamlessly into NetNut’s data collection network, Website Unblocker enables quick and efficient gathering of large data volumes, catering to various enterprises and organizations across industries.

In February 2024, ALAR announced the launch of an AI data collection product line through NetNut. This solution, set to debut by the end of this year, streamlines data collection with an intuitive, no-code interface. Powered by advanced AI and proprietary unblocking technology, it ensures uninterrupted data extraction, addressing industry challenges more efficiently. Users are able to collect data within minutes by inputting the target URL, data subjects, timing parameters, and preferred download format.

Moreover, during the fourth quarter of 2023 and in subsequent months, NetNut successfully secured new clients within the AI-powered sales intelligence and Fintech sectors, further solidifying its position in the market. Additionally, the company was awarded a U.S. patent, affirming its commitment to technological innovation and intellectual property protection.

Q4 2023 and 2024 Financial Results

NetNut Ltd.’s Net Retention Rates (NRR) stood at 153% as of December 31, 2023, indicating substantial revenue growth from its existing customer base. This represents an improvement from a NRR of 144% reported as of September 30, 2023. Notably, a NRR exceeding 100% suggests sustained revenue growth despite customer churn.

The Company reported an IFRS net profit from continuing operations of $1.7 million in the fourth quarter of 2023, versus a net loss of $3.0 million in the same period of 2022. Adjusted EBITDA for the fourth quarter of 2023 grew to $2.2 million compared to an Adjusted EBITDA loss of $2.0 million in the fourth quarter of 2022. Revenues from continuing operations for the three months ended December 31, 2023, reached a record high of $7.1 million, marking a substantial 39% increase compared to the same period in 2022.

For the full year of 2023, revenues from continuing operations totaled $26.5 million, up 43% from 2022. Additionally, NetNut’s full-year revenue for 2023 amounted to $21.3 million, an increase of over 150% year-over-year compared to $8.5 million in 2022.

Preliminary Q1 2024 Financial Guidance

Alarum announced preliminary financial guidance for the first quarter ended March 31, 2024. The preliminary figures suggest that revenue for the first quarter of 2024 will exceed $8.3 million, marking the highest quarterly revenue to date and representing an approximate 50% increase compared to the same period in 2023. Additionally, the Company estimates cashflow from operating activities of approximately $3.2 million, a significant improvement from negative cashflow of approximately $0.3 million reported for the first quarter of 2023. As of March 31, 2024, Alarum maintains a cash and cash equivalents balance of around $15.0 million.

The Company’s subsidiary, NetNut, experienced outsized growth, with revenues increasing around 140% in the first quarter of 2024 compared to the equivalent period in 2023. Alarum plans to release fully reviewed financial statements for the first quarter of 2024 on or before May 31, 2024.

Conclusion

In summary, Alarum Technologies Ltd. (NASDAQ:ALAR) is a leading global provider of internet access and web data acquisition solutions through its division, NetNut. Recent product launches, including the SERP Scraper API and Website Unblocker, demonstrate the company’s commitment to innovation and market expansion. Financially, Alarum has reported significant growth, with rising revenue expected for the first quarter of 2024 reflecting the company’s momentum and continued success in the industry.

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