3/29/2022

speaker
Operator/Moderator
Conference Moderator

Greetings and welcome to the Safety Group fourth quarter and full year 2021 earnings results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Steve Gersten, Director of Investor Relations. Thank you, sir. You may begin.

speaker
Steve Gersten
Director of Investor Relations

Thank you, Operator. Good morning, ladies and gentlemen. Welcome to Safety Group's fourth quarter and year-end 2021 earnings results conference call. I'm Steve Gersten, Director of Investor Relations for Safety Group. Before we get started, I will read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of the federal securities laws regarding safety group. Forward-looking statements include statements about plans, objectives, goals, strategies, future events of performance, and underlying assumptions and other statements that are different and that historical fact. These forward-looking statements are based on current management expectations and are subject to risks and uncertainties that may result in expectations not being realized and may cause actual outcomes to differ materially from expectations reflected in these forward-looking statements. Potential risks and uncertainties include those discussed under the heading risk factors and safeties annual report on form 20F filed with the Securities Exchange Commission on March 29th, 2022 and in any subsequent filings with the SEC. All such forward looking statements whether written or made on behalf of the company are expressly qualified by these cautionary statements and such forward-looking statements are subject to risks and uncertainties, and we caution you not to place undue reliance on these. At this time, I'd like to turn the call over to Shakar Daniel, the company's CEO. Go ahead, Shakar.

speaker
Shakar Daniel
Chief Executive Officer

Thank you, Steve, and welcome, everyone, to today's fourth quarter and 2021 UN Corporate Update Conference Call for Safety Group. With me is Shai Arnit, our Chief Financial Officer. Our main goal for 2021 was the focus on substantial growth, and I am happy to share our financial results for the year, which clearly demonstrate the achievement of this goal. The actions we implemented during 2021 enabled us to achieve more than 100% growth in annual revenue compared to last year, and to expand our business quarter over quarter and year over year. Our efforts resulted in another record total with revenues increasing 191% compared to the last quarter of 2020, lifted by strong organic growth of our privacy business, as well as our penetration into the exciting consumer market. In addition to record financial results, other annual highlights include the expansion to new markets worldwide, including penetration to new sectors, such as privacy for the NFT sector, and the launch of few and exciting products, including an anti-malvertising solution and more. I would like to summarize our accomplishments in 2021 and year to date, and then discuss our roadmap for the reminder of 2022 and beyond. Over the last few years, the global pandemic and more recently international geopolitical events have emphasized the need to prepare for unforeseeable situations and elevated the need for data security and privacy. Against this backdrop, we believe that the current environment requires advanced privacy and cybersecurity solutions now more than ever. Looking back at 2021, safety was well positioned to address a wide range of requirements and demands for such solutions. In 2021, we introduced several new offerings focused on cybersecurity and privacy, which addresses enterprises on the one end and consumers on the other end. In July 2021, we acquired CyberKick, a transaction that significantly contributes and complements our overall offering within the large consumer marketplace. Our technology is based on a business IP proxy platform which was incorporated in the second half of 2019. Our privacy solution for organizations based on an IP proxy platform is the world's fastest, most advanced, and secure business network providing our clients with accurate, transparent, and tailored personal data driven from public online sources. During the year, we launched our next generation IP proxy network, targeting largest business and B2B customer markets. We also launched a new enterprise data collection solution, or data collection as a service, DSAS, enabling unlimited collections of online public web-based data for business analytics, and secured a first business project with a global data services company. Our enterprise privacy business continues to grow rapidly, recording 63% annual growth in 2021 and gaining more momentum in the Asia-Pacific region with over 75 new clients, including e-commerce and NFT organizations. Our privacy solution for consumers includes thousands of paying users that utilize our IP proxy platform today. As mentioned before, The acquisition of CyberKick significantly expanded and boosted our privacy for consumer business with the integration of thousands of CyberKick customers. Our privacy solutions for consumers continue to gain traction, and in the beginning of 2022, our first product is nearing the 15,000 subscriber milestone. In addition, we launched a new malvertising protection product for Apple iOS devices named AdBlocker Pro. We believe that the privacy market for consumers has a great potential, and we plan to accelerate our offering and effort in this segment during 2022. As planned, we launched the first generation of iShield, our most advanced cybersecurity product for consumers, quickly adding a new layer of protection to help consumers and small and mid-sized business defend against emerging ransomware attacks. During 2022, we are planning to introduce a significant upgrade of the iShield product, that will include new important features. According to market research, the digital and security consumer market is expected to reach 19 billion by 2024, and we believe that cybersecurity in this segment will be one of the catalysts for our growth in 2022. In 2021 and the beginning of 2022, global events reinforce the growing demand and need for solid tools for overcoming new cyber threats. The number And the increasing scope of cyber attacks taking advantage of remote access was massive, causing unprecedented damage to organizations. That is why, after we established a worldwide network of enterprise channel partners, we made a strategic decision to collaborate with TerraZone, a global information security specialist who will accelerate global sales, marketing, and the further development of our Zone Zero Trust network access software technology. Through our collaboration with Terrazone, we expect to lower our operational expenses commencing for the third quarter of 2022, while still benefiting from the huge untapped potential of this product. More recently, we partnered with Terrazone and DreamVPS, a global provider of cloud services, to launch a first-of-its-kind virtual private workplace, workforce, cloud service, and new solutions that provide a secure, flexible way conduct and manage remote R&D teams and programs. Through these kinds of creative partnerships, we believe we can more quickly and cost-effectively expand our footprint in the global enterprise market. As an innovative company with advanced technologies, we believe that we have a social responsibility to support organizations dedicated to driving positive change in our world. As such, in February 2022, we launched the NetBridge program to provide a pro bono service support academic and non-profit research organizations involved in, among other things, detection and prevention of criminal activities, including violations of human rights. Shortly after, we added the Washington-based Center for Advanced Defense Studies as the first partner to join our NetBridge social responsibility program. We are committed to expanding this initiative to drive positive global change through web data collection and research by adding additional partners to our programs. During 2021, our products gained validation from consumers that download and paid to use our tools for privacy and protection, as well as enterprise customers in new market sectors and geographic territories who choose our solutions. We were also named leaders by several international market research organizations, including Gartner and Forrester. All of these market validations helped drive our performance, achieving a record of more than $10 million in revenue. I would like to address a subject that impacted the company's expenses during 2021. Alongside calculated operational efficiency, we did the ongoing legal proceeding board by Luminati Networks, now Great Data. In the last two years, Bright Data has filed several intellectual property-related complaints against various players in the IP proxy sector, and we believe that these claims are aimed primarily to weaken their profit and loss with significant legal expenses and hinder innovation. We already demonstrated that their first complaint against us was without merit, as it was dismissed without prejudice, with no monetary payment paid by us to ByData, and with no effect on our ongoing services for customers. In June 2021, ByData filled another action, and this case is still ongoing, And as in the first case, we disagree with each of Bright Data claims brought against us in this second complaint, and we are consistently challenging the patentability of Bright Data patents to date. Each of our United States Patent and Trademark Office challenges has reached a preliminary decision on the merits. And in each decision, the USPTO has preliminarily agreed with our position that Bright Data patents are likely unpatentable. Although patent litigation in the United States is expensive, we believe that our position is strong, and we intend to continue to defend our operations while offering our unique technology and solutions, despite broad data tactics. Now, before going further, I would like to turn the call over to Shai to discuss the financials for the year. Shai, go ahead.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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