Alarum Technologies (ALAR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached $8.9 million, with $8.7 million from the NetNut enterprise internet access segment, marking a 27.2% increase year-over-year and a 98% increase in NetNut revenues for the first half of 2024 compared to the prior year.

• Achieved record H1 2024 revenues of $17.3 million, with NetNut revenues nearly doubling year-over-year to $16.7 million in H1 2024.

• Net profit for H1 2024 was $1.1 million, reversing a loss of $8.4 million in H1 2023.

• Adjusted EBITDA hit a record $3.4 million in Q2 2024, more than tripling year-over-year, and the company achieved its first consecutive quarter of positive cash flow.

• Major new customers include a top social media platform, a leading B2B sales intelligence company, and a Fortune 100 merchandise retailer, with expanded offerings in data collection and AI capabilities.

Financial highlights

• Q2 2024 revenue was $8.9 million, up from $7 million in Q2 2023; H1 2024 revenue was $17.3 million, up from $12.7 million in H1 2023.

• Non-IFRS gross margin improved to 78.5% in Q2 2024; Q2 2024 gross margin was 76.9%.

• Operating expenses dropped to $4.2 million from $12.8 million, with prior year including $8.5 million in impairment charges.

• Q2 2024 IFRS net loss was $0.4 million, compared to a $7.7 million loss in Q2 2023; adjusted EBITDA was $3.4 million.

• Cash and cash equivalents rose to $21.6 million as of June 30, 2024, from $10.9 million at year-end 2023.

Outlook and guidance

• Q3 2024 revenue is expected to be around $7 million, plus or minus 3%, representing year-over-year growth but a sequential decline due to customer usage slowdowns.

• Q3 2024 adjusted EBITDA is projected between $0.8 million and $1 million.

• NetNut revenues projected to surpass full-year 2023 total within the first nine months of 2024.

• Management observes a return to growth in monthly revenues from June through August, driven by strong retention and new customer additions.

• Management expects strong net customer retention and positive growth KPIs despite some short-term market variances.