Alarum Technologies Ltd. Q2 FY2024 earnings call

• Q2 2024 key achievements: Total revenues increased to $8.9 million, with NetNut contributing $8.7 million; adjusted EBITDA at $3.4 million, a record. First six months of 2024 saw revenues at $17.3 million, with NetNut contributing $16.8 million, a 98% year-over-year increase.
• Three growth engines: Increasing market share in IP Proxy Network (IPPN), penetrating data collection/labeling market, and providing data insights. Added major brand names to IPPN customer base. Made progress with new products like Web Unblocker and AI Data Collector, and advancing AI and analysis capabilities in data products.
• Customer base: Added world's largest and most recognized brands to IPPN customer base in Q2. Q3 saw winning a Fortune 100 customer, a leading merchandise retailer.

In Q2 2024, total revenues were $8.9 million, with $8.7 million attributed to NetNut, its Enterprise Internet Access arm. For the first six months of 2024, total revenues were $17.3 million, with $16.8 million from NetNut. Adjusted EBITDA in Q2 2024 reached a record $3.4 million, more than three times higher than the same quarter last year. Q2 marked the first consecutive quarter of positive cash flow, ending with over $21 million in cash and cash equivalents.

• Q3 2024 revenue is estimated to be in the range of $7 million ±3%.
• Q3 2024 adjusted EBITDA is expected to range between $0.8 million to $1 million.

Q: With revenue being mostly subscriptions and recurring, why did Q3 revenue drop steeply?

A: In Q3, some customers experienced a slowdown, but from June onwards, positive growth trends were seen with consistent growth from June to July and into August. NRR is an industry standard measuring four times, so quarter-over-quarter drops don't directly impact NRR.

Q: Have you lost any customers?

A: No, customers didn't terminate agreements. Some customers slowed usage, leading to a dip in revenues but renewal and growth continued.

Q: What's the certainty around Q3 2024 revenue guidance of $7 million ±3%?

A: $7 million is the most likely number, and the ±3% gives a range where they're positive to be in 90% or more.

Q: Any changes in go-to-market sales strategy to penetrate upper market?

A: Targeting enterprise sales with reps having enterprise sales skills, and some customers approached them inbound.

Q: Business related to US election?

A: From best knowledge, Alarum has no business related to the US election.