Revenue Continues to Set Records;
NetNut’s revenues surged 150% both for the fourth quarter of 2023 and the entire year compared to the equivalent periods in 2022 – the annual revenue amounted to more than
Key highlights for the three months and year ended
- Net Retention Rates (NRR)1- Starting from 2024, the Company plans to update on a quarterly basis its customer retention (NRR). NetNut Ltd.’s (“NetNut”) NRRs were 153% as of
December 31, 2023 , and 144% as ofSeptember 30, 2023 . NRR greater than 100% indicates that the company experiences revenue growth from its existing customer base in the specific period even after accounting for lost revenue due to customers’ churn. Conversely, an NRR lower than 100% suggests that the company loses revenue from existing customers in the specific period due to churn which is higher than revenue gain through up-sells or cross-sells. - IFRS net profit from continuing operations reached
$1.7 million in the fourth quarter of 2023, compared to an IFRS net loss from continuing operations of$3.0 million in the fourth quarter of 2022. - Adjusted EBITDA for the fourth quarter of 2023 continued to grow, reaching
$2.2 million , compared to 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 , an increase of approximately 39% compared to the three months endedDecember 31, 2022 . - Revenues from continuing operations for the full year of 2023 totaled
$26.5 million , an increase of approximately 43% compared to$18.6 million in 2022. - NetNut's 2023 full year revenue amounted to
$21.3 million , reflecting growth of over 150% year-over-year, compared to$8.5 million in revenues for 2022.
"I am proud to share the most successful quarter in the Company's history, as revenue, net profit and Adjusted EBITDA, all meaningfully exceeded results from the previous quarter. We delivered efficient operational execution following our decision, in the second quarter of 2023, to scale down other activities and focus on NetNut's operations," said
Recent Business Developments:
- In
October 2023 , NetNut launched its first data collection product – the SERP Scraper API, which won its first customers. - In late
January 2024 , NetNut introduced its new and innovative Website Unblocker, the second product of the data collection product line. - In
February 2024 , NetNut announced the launch of its revolutionary AI data collector product line. - During the fourth quarter of 2023 and recent months, NetNut won new customers in the AI-powered sales intelligence market and the Fintech market.
- NetNut was granted a
U.S. patent.
"We began 2024 on a high note, by setting new monthly revenue records,"
Financial Results from ContinuingOperations for the Three Months Ended
- Revenues amounted to
$7.1 million (Q4.2022:$5.1 million ). The increase is attributed to the organic growth in the enterprise access business revenues, despite a reduction in the consumer access business revenues. - Cost of revenues totaled
$1.8 million (Q4.2022:$2.3 million ). The reduction stems mainly from CyberKick’s traffic acquisition costs stoppage inJuly 2023 and clearing fees decrease, due to the Company’s updated scale down strategy for its CyberKick operations. The reduction was offset by an increase in enterprise internet access business costs of addresses and networks and servers used for the generation of the additional enterprise access business revenues. - Research and development expenses totaled
$0.8 million (Q4.2022:$1.0 million ). Reduced expenses in the consumer internet access business due to the operations scale down and a decrease in subcontractor costs in the enterprise internet access business were offset by an increase in payroll and related expenses in the enterprise business. - Sales and marketing expenses totaled
$1.6 million (Q4.2022:$3.5 million ). The decrease resulted mainly from the stoppage of media acquisition costs inJuly 2023 due to CyberKick’s operations scale down strategy. This reduction was slightly offset by higher payroll and related expenses in the enterprise internet access business. - General and administrative expenses totaled
$1.2 million (Q4.2022:$1.4 million ). The decrease is mainly due to lower salary costs as a result of CyberKick’s operations scale down strategy and lower professional fees. - Finance expenses reached $0.05 million (Q4.2022:
$0.08 million ). - Tax benefit totaled
$0.02 million (Q4.2022:$0 .1 million). - As a result, IFRS net profit from continuing operations reached
$1.7 million , or$0.03 basic profit per ordinary share (Q4.2022: IFRS net loss from continuing operations of$3.0 million , or$0.09 basic loss per ordinary share). - Adjusted EBITDA was
$2.2 million (Q4.2022: Adjusted EBITDA loss of$2.0 million ).
Financial Results from continuing operations for the year Ended December 31, 2023:
- Total revenues amounted to
$26.5 million (2022:$18.6 million ). The increase is attributed to the organic growth in the enterprise access business revenues, which was offset by a reduction of revenues in the consumer internet access business. - Cost of revenues totaled
$7.7 million (2022:$8.4 million ). The decrease is mainly a result of the decrease in the traffic acquisition costs stoppage inJuly 2023 and reduced clearing fees due to CyberKick’s operations scale down strategy in the consumer internet access business. This decrease was offset by an increase in the core enterprise internet access business costs of addresses and networks and servers and intangibles impairment that resulted from the consumer business scale down. - Research and development expenses totaled
$3.6 million (2022:$3.8 million ). The decrease is due to lower subcontractors’ costs and lower salary and share-based compensation related to the consumer internet access business, partially offset mainly by higher payroll and related expenses in the enterprise internet access business. - Sales and marketing expenses totaled
$10.0 million (2022:$11.8 million ). The decrease resulted mainly from lower media costs and payroll and related expenses in the consumer internet access business, partially offset by intangible assets impairment loss related to CyberKick as well as an increase in payroll and related expenses in the enterprise internet access business. - General and administrative expenses totaled
$4.4 million (2022:$6.7 million ). The decrease is largely due to reduced professional fees, particularly legal fees related to resolved patent proceedings inMay 2022 . Goodwill impairment loss was$6.3 million (2022:$0.6 million ). The Company recorded a goodwill impairment loss related to the CyberKick cash-generating-unit of$6.3 million due to the decrease in its forecasted operating results, compared to a goodwill impairment loss during 2022 related to the NetNut Networks cash-generating-unit (NetNut’s subsidiary) of$0.6 million .- Financial expenses reached
$0.6 million (2022:$0.1 million ). The increase is mainly due to an increase in finance expenses resulting from theO.R.B. Spring Ltd. agreement as well as interest expenses related to the short-term bank loans, and theSeptember 2023 private placement. - Tax benefit totaled
$0.5 million (2022:$0.3 million ). The increase is mainly due to the recognition of deferred tax assets in NetNut as well as a reduction in deferred taxes liabilities as a result of the intangible assets impairment related to CyberKick. - IFRS net loss from continuing operations totaled
$5.6 million , or$0.14 basic loss per ordinary share (2022: IFRS net loss from continuing operations of $12.4 million, or$0.39 basic loss per ordinary share). - Adjusted EBITDA was
$5.2 million (2022: Adjusted EBITDA loss of$8 .5 million).
The Company defines EBITDA (EBITDA loss) as net profit (loss) from continuing operations before depreciation, amortization and impairment of intangible assets, interest and tax, and defines Adjusted EBITDA (Adjusted EBITDA loss) as EBITDA (EBITDA loss) as further adjusted to remove the impact of (i) impairment of goodwill (if any); and (ii) share-based compensation expense.
The following table presents the reconciled effect of the above on the Company’s Adjusted EBITDA or Adjusted EBITDA loss from continuing operations for the three and full year ended
For the year Ended | For the Three-Month Period Ended | ||||||||||||||
(millions of | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net profit (loss) from continuing operations | (5.6 | ) | (12.4 | ) | 1.7 | (3.0 | ) | ||||||||
Adjustments: | |||||||||||||||
Depreciation, amortization and impairment of intangible assets | 3.5 | 2.0 | 0.1 | 0.8 | |||||||||||
Finance expense, net | 0.6 | * | 0.1 | * | |||||||||||
Tax benefit | (0.5 | ) | (0.3 | ) | * | (0.1 | ) | ||||||||
EBITDA (EBITDA loss) | (2.0 | ) | (10.7 | ) | 1.9 | (2.3 | ) | ||||||||
Adjustments: | |||||||||||||||
Impairment of goodwill | 6.3 | 0.6 | - | - | |||||||||||
Share-based compensation | 0.9 | 1.6 | 0.3 | 0.3 | |||||||||||
Adjusted EBITDA (Adjusted EBITDA loss) | 5.2 | (8.5 | ) | 2.2 | (2.0 | ) | |||||||||
*Less than |
Balance Sheet Highlights:
- As of
December 31, 2023 , shareholders’ equity totaled$13.2 million , or approximately$2.20 per outstanding American Depositary Share, compared to shareholders’ equity of$13.3 million as ofDecember 31, 2022 . The reduction is due mainly to the goodwill and intangible assets impairment recorded in the second quarter of 2023, offset by theSeptember 2023 private placement. - As of
December 31, 2023 , the Company’s cash and cash equivalents balance totaled$10.9 million , compared to$3.3 million as ofDecember 31, 2022 .
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
Full Year 2023 Financial Results Conference Call
Mr.
To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your call five minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number:
Date: | |
Time: | |
Toll-free dial-in number: | 1-877-407-0789 or 1-201-689-8562 |
1 809 406 247 |
Participants will be required to state their name and company upon entering the call. If you have any difficulty connecting with the conference call, please contact
The conference call will be broadcast live and available for replay here.
A replay of the conference call will be available after
Toll-free replay number: | 1-844-512-2921 or 1-412-317-6671 |
Replay ID: | 13744883 |
About Alarum Technologies Ltd.
The solutions by NetNut, our enterprise internet access and data collection arm, are based on our world’s fastest and most advanced and secured hybrid proxy network, enabling our customers to collect data anonymously at any scale from any public sources over the web. Our network comprises both exit points based on our proprietary reflection technology and hundreds of servers located at our ISP partners around the world. The infrastructure is optimally designed to guarantee privacy, quality, stability, and the speed of the service.
For more information about Alarum and its internet access solutions, please visit www.alarum.io.
Follow us on Twitter
Subscribe to our YouTube channel
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Alarum is using forward-looking statements in this press release when it discusses its preliminary unaudited revenues for
The Company is providing a
Investor Relations Contacts:
+972-(0)52-3044404
investors@alarum.io
Consolidated Statements of Financial Position | |||||||
(In thousands of USD) | |||||||
2023 | 2022 | ||||||
(Audited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | 10,872 | 3,290 | |||||
Short-term restricted deposits | - | 560 | |||||
Trade receivables, net | 1,994 | 1,790 | |||||
Other receivables | 399 | 760 | |||||
13,265 | 6,400 | ||||||
Non-current assets: | |||||||
Long-term restricted deposits | 3 | 127 | |||||
Long-term deposit | 104 | 21 | |||||
Other non-current assets | 142 | 228 | |||||
Property and equipment, net | 88 | 92 | |||||
Right of use assets | 779 | 190 | |||||
Deferred tax asset | 181 | - | |||||
4,118 | 10,429 | ||||||
Intangible assets, net | 1,386 | 4,884 | |||||
Total non-current assets | 6,801 | 15,971 | |||||
Total assets | 20,066 | 22,371 | |||||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Trade payables | 369 | 2,167 | |||||
Other payables | 2,439 | 2,350 | |||||
Current maturities of long-term loan | 290 | 617 | |||||
Short-term bank loans | - | 1,606 | |||||
Contract liabilities | 1,983 | 1,170 | |||||
Derivative financial instruments | 109 | 26 | |||||
Short-term lease liabilities | 370 | 204 | |||||
Total current liabilities | 5,560 | 8,140 | |||||
Non-current liabilities: | |||||||
Long-term loans | 802 | 606 | |||||
Long-term lease liabilities | 523 | 13 | |||||
Deferred tax liabilities | - | 301 | |||||
Total non-current liabilities | 1,325 | 920 | |||||
Total liabilities | 6,885 | 9,060 | |||||
Equity: | |||||||
Ordinary shares | - | - | |||||
Share premium | 100,576 | 95,077 | |||||
Other equity reserves | 14,938 | 15,042 | |||||
Accumulated deficit | (102,333 | ) | (96,808 | ) | |||
Total equity | 13,181 | 13,311 | |||||
Total liabilities and equity | 20,066 | 22,371 |
Consolidated Statements of Profit or Loss | ||||||||||||||||
(In thousands of USD, except per share amounts) | ||||||||||||||||
For the Year Ended | For the Three Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Audited) | (Audited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenues | 26,521 | 18,550 | 7,107 | 5,126 | ||||||||||||
Cost of revenues | 7,711 | 8,402 | 1,778 | 2,299 | ||||||||||||
Gross profit | 18,810 | 10,148 | 5,329 | 2,827 | ||||||||||||
Research and development expenses | 3,557 | 3,824 | 795 | 1,019 | ||||||||||||
Sales and marketing expenses | 10,035 | 11,823 | 1,579 | 3,499 | ||||||||||||
General and administrative expenses | 4,406 | 6,661 | 1,207 | 1,374 | ||||||||||||
Impairment of goodwill | 6,311 | 569 | - | - | ||||||||||||
Operating expenses | 24,309 | 22,877 | 3,581 | 5,892 | ||||||||||||
Operating profit (loss) | (5,499 | ) | (12,729 | ) | 1,748 | (3,065 | ) | |||||||||
Finance expense, net | (590 | ) | (54 | ) | (54 | ) | (79 | ) | ||||||||
Tax benefit (expense) | 482 | 327 | (22 | ) | 112 | |||||||||||
Profit (loss) from continuing operations, net of tax | (5,607 | ) | (12,456 | ) | 1,672 | (3,032 | ) | |||||||||
Profit (loss) from discontinued operations, net of tax | 82 | (695 | ) | - | 136 | |||||||||||
Net profit (loss) | (5,525 | ) | (13,151 | ) | 1,672 | (2,896 | ) | |||||||||
Basic and diluted profit (loss) per share | ||||||||||||||||
Continuing operations | (0.14 | ) | (0.39 | ) | 0.03 | (0.09 | ) | |||||||||
Discontinued operations | 0.00 | (0.03 | ) | - | 0.00 | |||||||||||
(0.14 | ) | (0.42 | ) | 0.03 | (0.09 | ) | ||||||||||
______________________________
1NRR represent the average growth rates for preceding four quarters compared to the equivalent period a year earlier, of current customers only, without the revenues generated from new customers, but including up-sales and cross-sales on one hand and churn on the other hand.
Source:
2024 GlobeNewswire, Inc., source