Alarum Technologies Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the Alarm Technologies conference call for the second quarter 2025. During today's presentation, all parties will be in a listen-only mode. Following management's presentation, the conference will be open to questions. If you have a question, please press star followed by the number one on your touchtone phone. If you would like to withdraw your question, please press star followed by the number two. If you are using a speakerphone, please lift the handset before making your selections. This conference call is being recorded. I will now turn the call over to Kenny Green, Investor Relations at Alarm. Kenny, please go ahead.

Thank you. Good day to all of you and welcome to Alarm's conference call to discuss the results of the second quarter of 2025. I would like to thank management for hosting this call. Today, we are joined by Shahar Daniel, Alarm CEO, and Shai Avni, CFO. Shahar will begin the call with an overview of the course, followed by Shai, who will review key elements of the financials. Finally, we will open the call to our listeners for the question and answer session. Before we get started, I want to highlight the 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 in other statements that are different than historical facts. For example, when we discuss our guidance, our future strategy and long-term vision, our potential for continued sustainable future growth and value creation, sustainable growth, estimated margins, and long-term profitability, the potential of long-term collaboration in the AI landscape, demand for and expansion of our products and services and customer base, future opportunities, momentum, and success we are using forward-looking statements. 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 different materially from expectations reflected in these forward-looking statements. Potential risks. and uncertainties includes those discussed under the heading Risk Statements and Allowance Annual Report from Form 20F filed with the Securities and Exchange Commission on March 20, 2025 and in 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 those cautionary statements and such. Forward-looking statements are subject to risks 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. Non-IFRS key business metrics the company uses are EBITDA, 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 and reconfiliations of these non-IFRS key business metrics are described in the company's financial results press release. which are available on the Investors Lobby of Alarm's website. These non-IFRS measures may differ materially from the similarly titled measures used by other companies and should not be considered in isolation from or as a substitute for financial information read in accordance with IFRS. And now I'll turn the call over to Shachar Daniel, Alarm Technologies Chief Executive Officer. Shachar, please go ahead.

Thank you very much, Kenny. Good morning, everyone, and thank you for joining us today to discuss our results in recent business developments. To highlight our financial results, we reported second quarter revenue of $8.8 million, net profit was $0.3 million, and adjusted EBITDA of $1 million. Our results will add ahead well ahead of the expectations which were announced with quarter one results and in line with the upgraded guidance we issued in early June. I will start with AI market drivers. The key market driver for our strong performance is the youth search for massive amounts of training data for foundational AI models. A recent trend for Allorum in particular is that our customers are increasingly including some major companies, both AI players and e-commerce companies, and their associated deal-sized potential from this type of customers are much larger as well. We now have customers ranging from major tech giants to emerging startups, as well as the small customers that we have traditionally worked with. As data is becoming significantly more valuable in today's world, these customers and potential customers are turning to us to help them overcome the growing barriers to data access, from compliance to geographical distribution and traffic unblocking. We have recently launched new projects with several large-scale AI and e-commerce platforms, including one of the world's largest online marketplace in Asia. This particular customer has launched a very large data collection project with us for a new advanced generative AI model under development that may continue over the coming few months While at lower margin compared to our margins in the past year, and while revenues are not yet guaranteed and are consumption-based, potentially if we generate them, they are expected to be significant for Alarm over the coming months. These collaborations and others we have recently launched cover use cases such as large-scale data collection labeling, as well as collection for model fine-tuning with fresh and accurate public data. As their evolution reshapes every industry, our offerings from our flagship data collector and website unblocker to a highly robust and expanding proxy network are quickly becoming foundational to how companies collect public web data. Our products enable our customers to acquire massive amounts of data, the key fuel to the AI boom. The market's purpose for reliable, scalable, and correct data is broadening massively and accelerating among more and more players as more models are launched or upgraded. Models must be trained, retrained, and fine-tuned daily with new data consistently. And to do that, they need infrastructure like ours to collect it. The opportunities that we have ahead of us with data having become the most valuable commodity on the planet is a once-in-a-generation opportunity. Allowing this position is a perfect nexus. All the current data capture trends, and we are aiming to invest and pursue as many of the opportunities ahead that we reasonably can. We have already started and will continue to invest strongly in our infrastructure to support the significant new demands as well as in our ability to meet the extensive needs of major customers. The investment in our IP proxy infrastructure enabled us to support more throughput and serve more of the massive demand with fast ROI. As I mentioned, the work we are doing with the major customers is being done at lower gross profit margins because the revenue and long-term potential is so high. In addition, The overall investment in expanding our proxy network increased the cost of sales, but it also has the long-term benefit of optimizing our network infrastructure and product delivery. Therefore, by design, we are currently showing lower margins. Over the short, mid, and long term, our investments will allow us to serve more and more customers and, importantly, meet the needs of the major AI players, all of which are investing hundreds of millions of dollars on each model they launch. We want to make sure we are well positioned to capture an increasing portion of this growing pie. We are also growing our high-quality talent pool and developing a comprehensive suite of data collection products designed for the AI era. This is through our R&D investments to expand our capabilities and broaden our product portfolio. The goal is not only to attract new customers, but also be able to cross-sell to existing customers and meet more of our customers' data needs under one roof. While I hope I've been able to share my vision for capturing the opportunity ahead of us, I do want to highlight that it is not likely to be a straight pass up, especially over short periods. It is very early days, and the market we are operating is still in its infancy and taking shape. It is highly dynamic and unpredictable, and even our major customers cannot articulate their needs more than a few short months ahead. They may be powered by major customers as they deal with the data, stabilize models, or adjust strategies which may have outside impact. Volatility is high and we are playing accordingly. I urge investors to judge our development over periods of many quarters, not quarter by quarter. Allowance is ultimately focused on playing the long game. We are building the business not just to meet today's and tomorrow's massive short-term needs, but also over the mid to long term to become the destination for any company, whether a major player startup or small business with significant data collection needs. In summary, with focused execution, a forward-thinking, innovative approach, and growing interest from AI-driven customers, our goal is not just to participate in the AI revolution, but to become one of the central companies spreading it. As I've already shared with you, given the tremendous opportunity we see ahead, we have made a strategic decision to increase our investments by leveraging our profitable operations and reinvest earnings back into the company. We are investing in innovation, in infrastructure, in growing our customer base, and in deepening collaborations with some of the world's largest and most influential companies. While the goal is to remain profitable overall, we may sacrifice short-term profitability for what we believe will be massive long-term revenue and much higher profits stretching over longer periods. At the same time, we remain focused on efficiency and disciplined execution, with backing from our strong balance sheet with cash and liquid investments of approximately $25 million. Alarm stands in the perfect position to benefit from everything going on today in the AI market, and we look forward to cementing our position at the very core of this market. Handing it over to you now, Shai.