# Alarum Technologies Report Record Revenues in the First Quarter of 2023

- Link: https://www.directorstalkinterviews.com/alarum-technologies-report-record-revenues-in-the-first-quarter-of-2023/4121120828
- Published: 2023-05-30T13:38:15+01:00
- Author: Anthony Fox

**_Key Financial Highlights _****_for the First Quarter of 2023_****_:_**

**Alarum Technologies**** **(Nasdaq, TASE: ALAR), a global provider of enterprise
and consumers internet access solutions, has today announced record financial results
for the three months ended March 31, 2023. 

 * Revenues climbed to a record high of $5.7 million, an increase of approximately
   41% compared to the first quarter of 2022.
 * Net loss decreased by 85% to $0.7 million, compared to a net loss of $4.7 million
   during the first quarter of 2022.
 * Achieved positive cashflow from operating activities, and Adjusted EBITDA, for
   the first time, of $0.06 million, up from an Adjusted EBITDA loss of $3.2 million
   in the first quarter of 2022.
 * NetNut Ltd. (“NetNut”), the Company’s internet access arm for business and enterprise
   customers, became profitable for the first time.

> “I am incredibly proud of the entire Alarum team for their contributions to the
> generation of cashflow from our operating activities and the first-ever positive
> Adjusted EBITDA this quarter, alongside our ninth consecutive quarter of revenue
> growth. We’ve significantly improved our revenue stream, our net loss and the 
> Adjusted EBITDA compared to the previous year as well as the prior quarter. Our
> key metrics, both financial and non-financial, are moving in the right direction
> and aligning with our strategic vision. As our enterprise access solutions continue
> to scale, we believe that we are well positioned for continuous success,” **said
> Mr. Shachar Daniel, Chief Executive Officer of Alarum.**

> “Achieving positive cash flow from our operating activities is a significant milestone
> for Alarum, especially when accompanied by continuously sustaining substantial
> growth. We believe this is a strong indicator of the financial success of our 
> core business activities.  With another solid quarter behind us and sufficient
> financial resources to support our growth initiatives, we believe that we remain
> on path to profitability. Our results showcase our ability to drive revenue growth
> while maintaining operational efficiency, ultimately creating value for our stakeholders,”**
> concluded Mr. Daniel.**

> **Mr. Chen Katz, the Company’s chairman of the board of directors, added**, “We
> began fiscal year 2023 with a solid foundation, delivering robust top-line growth,
> primarily by expanding sales of our value-added products. We are also demonstrating
> operational leverage as we maintain cost discipline across the organization and
> invest wisely to fuel further growth. The impressive results achieved by Alarum
> are a testament of the successful efforts by our talented leading teams, and I
> have full confidence in the Company’s ability to continue to thrive.”

**_First Quarter of 2023 Operational Highlights and Recent Business Developments:_**

 * NetNut experienced surging demand and rapid adoption in Asia, with monthly subscriptions
   tripling
 * NetNut Announced launch of a new white-label consumer internet access privacy
   solution
 * NetNut expanded into the retail artificial intelligence (“AI”) market, securing
   its first customer for digital technologies and analytics solutions
 * CyberKick Ltd., the Company’s Consumer Internet Access subsidiary, extended its
   $2.0 million revolving line of credit agreement with United Mizrahi-Tefahot Bank
   Ltd., to support consumer privacy solutions operations, through May 25, 2024
 * Further to Alarum’s February 22, 2023, announcement regarding an investigation
   into potential illegal short selling of the Company’s American Depository Shares,
   the Company continues to assess suspicious trading activity and will take appropriate
   corrective actions if necessary

**_Financial Results for the Three Months Ended March 31, 2023:_**

 * Revenues amounted to $5.7 million (Q1.2022: $4.0 million). The growth is attributed
   to the organic increase in the enterprise access business revenues.
 * Cost of revenues totaled $1.9 million (Q1.2022: $1.9 million). The additional
   costs for resources in the enterprise internet access business were offset by
   lower user acquisition costs in the consumer internet access business and lower
   amortization of intangible assets.
 * Research and development expenses totaled $1.1 million (Q1.2022: $1.4 million).
   The decrease is attributed mainly to reduced expenses in the enterprise security
   segment after outsourcing to TerraZone Ltd., a global security reseller, in 2022.
 * Sales and marketing expenses totaled $2.2 million (Q1.2022: $3.0 million). The
   decrease resulted mainly from lower media acquisition costs in the consumer internet
   access business and reduced sales and marketing expenses in the enterprise security
   business after outsourcing to TerraZone Ltd. in 2022.
 * General and administrative expenses totaled $1.0 million (Q1.2022: $2.25 million).
   The decrease is largely due to reduced professional consulting fees, particularly
   legal fees related to resolved patent proceedings in May 2022.
 * As a result, net loss improved to $0.69 million, or $0.02 basic loss per ordinary
   share (Q1.2022: net loss of $4.7 million, or $0.16 basic loss per ordinary share).
 * Adjusted EBITDA was positive at $0.06 million (Q1.2022: Adjusted EBITDA Loss 
   of $3.2 million).

The Company defines Adjusted EBITDA as net loss before depreciation, amortization,
interest, tax and impairment of intangible assets, as further adjusted to remove
the impact of (i) impairment of goodwill (if any); (ii) share-based compensation
expense; and (iii) contingent consideration measurement (if any).

The following table presents the reconciled effect of the above on the Company’s
Adjusted EBITDA or Adjusted EBITDA loss for the year and three months ended March
31, 2023 and 2022, and the years ended December 31, 2022 and 2021:

|   | ** ** | **For the Three-Month
Period EndedMarch 31, |   | For the YearEndedDecember 31, | 
| (millions of U.S. dollars) |   | 2023 |   | 2022 |   | 2022 |   | 2021 | 
|   |   |   |   |   |   |   |   |   | 
| Net loss for the period |   | (0.69) |  |   | (4.73) |  |   | (13.15) |  |   | (13.13) |  | 
| Adjustments: |   |   |   |   |   |   |   |   | 
| Assets depreciation, amortization and impairment |   | 0.25 |   |   | 0.43 |   |   | 2.21 |   |   | 1.51 |   | 
| Finance expense (income), net |   | 0.20 |   |   | 0.24 |   |   | 0.05 |   |   | (0.94) |  | 
| Tax benefit |   | \* |   |   | (0.08) |  |   | (0.33) |  |   | (0.94) |  | 
| EBITDA loss from continuing operations |   | (0.24) |  |   | (4.14) |  |   | (11.22) |  |   | (13.50) |  | 
| Adjustments: |   |   |   |   |   |   |   |   | 
| Impairment of goodwill |   | – |   |   | – |   |   | 0.57 |   |   | 0.70 |   | 
| Contingent consideration measurement |   | – |   |   | – |   |   | – |   |   | (0.68) |  | 
| Share-based compensation |   | 0.30 |   |   | 0.94 |   |   | 1.68 |   |   | 2.36 |   | 
| Adjusted EBITDA (Adjusted EBITDA loss) for the period |   | 0.06 |   |   | (3.20) |  |   | (8.97) |  |   | (11.12) |  |

*Less than $0.01

**_Balance Sheet Highlights:_**

 * As of March 31, 2023, shareholders’ equity totaled $12.9 million, or approximately
   $3.93 per outstanding American Depository Share, compared to shareholders’ equity
   of $13.3 million on December 31, 2022. The reduction is due mainly to the Company’s
   net loss during the first quarter of 2023.
 * As of March 31, 2023, the Company’s cash and cash equivalents balance totaled
   $3.7 million, compared to $3.3 million on December 31, 2022. The Company’s cash
   balance does not account for up to an additional $2.2 million in funds available
   under its credit facility and investment financing.

**Use of Non-IFRS Financial Results**
In 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, Adjusted EBITDA and Adjusted EBITDA Loss 
for the periods presented that exclude depreciation and amortization, interest and
tax, as further adjusted for the effect of impairment of goodwill, contingent consideration
adjustments 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.

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