Alarum Technologies (NASDAQ:ALAR) reported sharp year-over-year revenue growth in the fourth quarter and full year 2025, driven largely by demand from customers building large-scale AI models, while profitability and margins were pressured by planned investments and higher infrastructure costs tied to serving those workloads.
Fourth quarter and full-year results
CEO Shachar Daniel said fourth-quarter revenue was $11.8 million, up 60% from $7.4 million in the prior-year period. For the full year, revenue reached $40.7 million, up 28% from $31.8 million in 2024. Daniel described 2025 as a “transformational year,” emphasizing both growth and major scaling efforts.
CFO Shai Avnit added that gross profit in the fourth quarter was $6.4 million versus $5.3 million a year earlier, while full-year gross profit was $23.8 million, roughly flat with $23.9 million in 2024.
AI-driven demand and rapidly rising workloads
Management repeatedly pointed to AI-related demand as the primary growth driver. Daniel said that in 2025, Alarum’s new AI-focused products accounted for about 30% of revenue, up from roughly 4% the year before. He also said the company expanded work with “several major global technology companies” developing AI systems, covering large-scale data collection for model training, dataset creation, and ongoing refinement.
One of the most notable operational changes was the growth in platform workload. Daniel said data volumes rose from about 3–4 petabytes per month at the beginning of the year to up to 70 petabytes by year-end. He characterized the ability to operate at that scale as a competitive advantage, while acknowledging the increased operational complexity.
During the Q&A session, Daniel described the demand pattern from large AI developers as inherently variable, depending on where customers are in model development cycles and dataset refresh timing. He said this can result in quarter-to-quarter fluctuation that may look like “decline” when viewed sequentially, even if the longer-term trend remains positive. He also indicated that shifts in customer needs—such as different data types required at different development stages—can change consumption patterns.
Margins pressured by scale, infrastructure, and third-party costs
Avnit said gross margin fell significantly as the company supported large-scale AI deployments. Fourth-quarter gross margin was 53.8%, down from 72.4% in the prior-year quarter. Full-year gross margin was 58.5% compared with 75.1% in 2024.
According to Avnit, the decline was driven by the needs of large AI customers, which require data gathering at “significantly greater scale” and higher initial infrastructure costs, including increased server volumes and higher-quality infrastructure. He also said new product sales triggered related third-party costs that the company expects to decrease in coming quarters. Avnit framed the margin impact as consistent with a strategy of pursuing “large scale, highly strategic opportunities” despite lower short-term margins, and he said the company expects to benefit from operating leverage as revenue grows.
Operating expenses rose alongside investment and expansion. Avnit reported fourth-quarter operating expenses of $6.4 million versus $5.0 million a year earlier. For the full year, operating expenses were $23.6 million, up from $17.2 million in 2024. He said the increase was driven primarily by research and development expenses and, to a lesser extent, sales and marketing, reflecting broader operations and strategic investment.
On profitability, Avnit said fourth-quarter net profit declined to $0.2 million from $0.4 million a year earlier, while full-year net profit fell to $1.0 million from $5.8 million in 2024. Adjusted EBITDA also declined year over year, to $1.0 million in the fourth quarter from $1.5 million, and to $4.4 million for the year from $9.4 million. Basic earnings per ADS were $0.03 for the quarter (from $0.06) and $0.14 for the year (from $0.87).
Platform expansion and enterprise focus
Daniel said Alarum is evolving from a proxy-focused company into a “diversified multi-product data infrastructure platform,” citing progress during 2025 across websites and blockers, self-service solutions, datasets, and core proxy infrastructure. He said the shift toward a broader platform and deeper enterprise relationships requires more support functions such as performance monitoring, documentation, and long-term collaboration, which increases operational complexity but can strengthen customer relationships and improve the quality of the revenue base over time.
In response to questions about website data-collection prevention techniques, Daniel said the increasing difficulty of collecting reliable data at scale is an opportunity because it raises barriers to entry. He also described Alarum’s aim as collecting publicly available data while differentiating those activities from cyberattacks, including “shaking hands” with websites at the start of the interaction.
Daniel also addressed customer concentration dynamics and vendor strategies among large AI players, noting that many customers typically use more than one vendor—often two or three—and that Alarum’s share of a customer’s demand can shift over time.
Balance sheet and first-quarter 2026 outlook
Avnit said shareholders’ equity was $32.1 million as of December 31, 2025, up from $26.4 million a year earlier. Cash equivalents and debt investments (including accrued interest) were approximately $22.5 million, down from $25.0 million at the end of 2024. He said the company ended 2025 with zero debt. Avnit also reported approximately 72.5 million ordinary shares outstanding, representing about 7.25 million U.S.-listed ADSs.
For the first quarter of 2026, the company guided to revenue of about $11 million with a range of ±7%, which Avnit said implies approximately 46% year-over-year growth. Adjusted EBITDA is expected to be approximately $1.4 million, with a range of ±$0.5 million.
Daniel said the company is in a “building phase,” prioritizing infrastructure expansion, product capability development, and deeper enterprise relationships. He also stated that he believes Alarum is on a path to achieving a revenue run rate exceeding $100 million as the market develops, while reiterating that near-term demand can vary based on AI developers’ training cycles.
About Alarum Technologies (NASDAQ:ALAR)
Alarum Technologies Ltd. provides internet access and web data collection solutions in North, South, and Central America, Europe, Southeast Asia, the Middle East, and Africa. The company operates through two segments, Enterprise Internet Access Solutions and Consumer Internet Access Solutions. The company offers security blanket against ransomware, viruses, phishing, and other online threats, as well as secured and encrypted connection, masking the customers online activity and keeping them safe from hackers.
