Alarum Technologies Ltd.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Alarm Technology second quarter 2024 corporate update conference call. During today's presentation, all parties will be in listen-only mode. Following management's presentation, the conference will be open to questions. If you have a question, please press the star followed by the number one on your touch-tone phone. If you'd like to withdraw your question, please press the star followed by the number two. If you're using a speakerphone, please lift the handset before making your selections. This conference is being recorded today, August 26, 2024. Before we get started, I'll read a forward-looking statements disclaimer. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements include statements about plans, objectives, goals, strategies, future events of performance, and underlying assumptions, and other statements that are different than historical fact. These far-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 in LLM's any report on Form 20-F filed with the Securities and Exchange Commission on March 14, 2024, and any subsequent filings with the SEC. All such forward-looking statements, whether written or oral, made on behalf of the company are expressly qualified by these cautionary statements, and such forward-looking statements are subject to risk and uncertainties, and we caution you not to place undue reliance on these. On the call, the company will also present non-IFRS key business metrics. The non-IFRS key business metrics the company uses are EBITDA and adjusted EBITDA, non-IFRS gross margin, non-IFRS net profit or loss, and non-IFRS basic earnings or loss per share or ADS. The exact definitions of these non-IFRS key business metrics are described in the company's second quarter of 2024 financial results press release. I'll now turn the call over to Shakar Daniel, Alarm Technology CEO.

Mr. Daniel, the floor is now yours. Mr. Daniels, the floor is now yours.

Thank you very much and welcome everyone to Alarm Technologies' second quarter 2024 results conference call. With me here is Shai Avnit, our Chief Financial Officer. I will be covering Alarm's performance, recent developments, The trends we are seeing in the market are a strategy from a long-term vision. Today, for the first time, we provided quarterly guidance and are providing additional KPIs as we constantly strive to enhance transparency. Shai will review the financials and our Q3 2024 guidance. I will then conclude the prepared remarks part with a short summary before opening the call for your questions. starting with a review of our Q2 2024 key achievements. The end of Q2 marked the first full year since we announced our shift to focusing on enterprise Internet access. Total revenues for Q2 increased to $8.9 million, of which $8.7 million were attributed to NetNut, our enterprise Internet access arm. Adjusted EBITDA and Q2 reached a record of $3.4 million, more than three times higher than in the same quarter last year. Revenues for the first six months of 2024 increased to $17.3 million, of which $16.8 million was attributed to net net, a 98% year-over-year increase. From the $8.4 million net net revenues in the first six months of 2023, I'm also very pleased with our continued progress in cash flow generation. Q2 marked our first consecutive quarter of positive cash flow, a significant achievement for a company of our size and stage. We ended the quarter with more than $21 million in cash and cash equivalents. Our cash balance well positions us to invest in opportunities that will drive long-term success and provide a foundation for sustained growth. In line with our strategy and long-term vision, we are on track with our three growth engines. First, increasing our market share in the IP proxy network, the IPPN segment. Second, penetrating the data collection and labeling market. And third, providing our customers with data insights. We continue to make progress in each of these growth engines during the past quarter. We added major and highly regarded brand names of our customer base as we continue to expand and further our network. We made substantial progress into the data collection and labeling market with our new and innovative products, the web unblocker and the AI data collector. And we continue to make progress towards adding AI and the knowledge capabilities to our data products. Advancing on this front, Establishing the broadest data collection and inside offering is the foundation on allowance future growth. As to the first pillar, our IPPN customer base, I'm excited to share that during Q2, we have added to our customer base some of the world's largest and most recognized brands. The significance of these new customers, of leaders in their respective fields, speaks to itself, highlighting the power and robustness of our offerings. We are extremely proud of these additions to our evolving and diversified customer base and look forward to seeing them enhance the usage of NetNut's offer over the time. While I cannot share their specific names, I would like to provide some color about them. These new high-caliber customers include one of the largest social media platforms with over 1 billion active users, as well as a leading B2B sales intelligence, and sales engagement software marketplace company with a database of more than 250 million contracts. A third new Q2 noteworthy customer is one of the world's leading screening and background check providers for identity verification, employment, and health screening. This customer, which conducts over 100 million background checks annually, will be able to reduce the number of manual processes attended today thereby improving its operational efficiency. As you may recall, towards the end of 2023, we stated that our growth strategy includes engaging with and attracting Fortune 500 and leading global companies. I am excited to share that in U3, we won a Fortune 100 customer, a leading merchandise retailer. Before selecting NetNut, they've all evaluated our capabilities, verifying they're comprised with their strict performance scalability, and reliability standards. These wins are a clear testament to our robustness of our products, the innovation driving our development, and our growing reputation as an industry leader. As part of our strategy to increase our market share in the IPPN segment, we continue to invest in expanding better our network, which has now become one of the leading networks in the industry. According to the 2024 Proxy Way market research, which is a comprehensive public report on the IPPN industry, NetNet network is recognized as a top performer, which is a significant endorsement of our technology capabilities and potential scale. What really sets us apart in the size of our network is stability and robust functionality coupled with our ongoing global expansions. Our infrastructure now is capable of handling significantly more traffic. This is a remarkable achievement as it will allow us to scale our revenue significantly while improving our gross margin. This highlights both the robustness of our network and our strategy of building an infrastructure that can drive scalable and profitable growth. Moving on to the second pillar, product innovation in the data collection and labeling market. We continue to focus on and invest in broadening the scope of our data collection offerings. Over the past quarter, we made a significant progress with our new products targeting this market, the web and broker, and the AI data collector. The web and broker and the AI data collector are key components in facilitating our long-term growth and accomplishments in a huge multi-billion dollar prospective market. According to both market research data and our internal assessments, the data collection and labeling market is expected to continue and grow rapidly over the next years. I'm happy to share that in Q2, we started generating initial revenues for new customers who placed order for the web and broker. We see a growing pipeline of opportunities for the web and broker, which has been tested and rated as the best on the market by industry experts. The robust web and broker is also a key to the success of our AI data collector. Data data collector will enable enterprises to easily generate a collector within minutes thanks to its intuitive no-code interface. Its advanced AI will enable it to automatically adapt to website changes while ensuring continuous data collection with minimal downtime. With these innovations, we continue to push the boundaries of what's possible in our industry. We also continue to make inroads in our third generation long-term growth pillar data insights. In Q2, we continued working intensively on bringing to life our vision of adding AI and analysis capabilities to our data products, aiming to create the most comprehensive solution in the market. The significant investment we have made in Aetna in the recent years is the gateway to our penetration into the data world. The meteoric rise of the artificial intelligence threatens the underlying principle behind this investment. We all acknowledge the importance of data in every aspect of our lives. The conflict between AI and traditional websites as it relates to access to transparent, high-quality information is at the core of how data consumption and analysis is evolving. AI relies on data sources and on products that generate insights from existing processes, provide recommendations, and focus. I would like to touch upon what we are seeing in the market and specifically in our Q3 business so far. The market we operate in is an ever-evolving and nascent market. Therefore, as we continue to expand our customer base, enhance our offerings, and grow the business, we may experience some short-term variances. Q3 2024 projected revenues assume a year-over-year increase but are also expected to be lower than due to the market dynamics that some of our customers are experiencing, which have impacted revenues since June. However, as we approach the end of August, we are now observing a positive trend with consistent growth in the monthly revenues rate from June to July, continuing into August. This positive trend is driven primarily by the strong performance and retention of our existing customers and complemented by new customers. These represent an excellent opportunity to share some KPIs we use internally to measure our performance and projected mid-term revenue growth. Analyzing data from the past three years shows that on average, our NetNets customers have been generating approximately 15 to 18 times the revenues compared to their initial month activity. In Q2 2024, we generated total revenues of nearly $400,000 from dozens of new customers in their first month of activity. This was approximately 60% higher than the revenues generated from new customers that onboarded in the prior quarter, Q1 2024, and was also approximately 35% higher than the average of the last four prior quarters. According to our model, These new Q2 customers are expected to generate revenues of about $6 to $7.2 million over the next few years alone. This is a clear indicator of the resilience of our business model. In Q3, in line with the projected EOV growth, we expect to continue to enjoy strong, solid customer retention rates across most verticals. In fact, NetNet is expected to surpass the full year 2023 revenue bar within the first three quarters of 2024. Our ongoing growth trend will be driven by continued investment in our record. The success of our new products, expansion of the markets which we anticipate, will lead to increasing demand for our solutions. Allowance is in need for the long run. focused on maintaining a steady focus on sustained growth and profitability. I will now turn the call over to Shai for a review of the financials. Shai, go ahead.