Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Alarum Technologies' First Quarter 2025 Corporate Update Conference Call. During today's presentation, all parties will be in a listen-only mode. Following management's presentation, the conference will be open for questions [Operator Instructions]. This conference call is being recorded today, May 29, 2025. Before we get started, I will 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 facts. For example, when we discuss our second quarter of 2025 guidance, our future strategy and longer term vision, our potential for continued sustainable future growth, the potential of long term collaborations, future opportunities 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 to differ materially from expectations reflected in these forward-looking statements. Potential risks and uncertainties, including those discussed under the heading Risk Factors in Alarum's annual report on Form 20-F filed with the Securities and Exchange Commission SEC on March 20, 2025 and any subsequent filing 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 risks and uncertainties, and we caution you to not play 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 and non-IFRS net profit or loss and non-IFRS basic earnings or loss per share or ADS. The exact definitions and reconciliations of these non-IFRS key business metrics are described in the company's first quarter 2025 financial results press release, which is available on the investor lobby of our Web site, alarum.io/investor/lobby. I'll now turn the call over to Shachar Daniel, Alarum Technologies' Chief Executive Officer. Mr. Daniel, the floor is yours.

Thank you very much, operator. Hi, everyone, and welcome to Alarum Technologies Q1 2025 results conference call. I'm joined today by Shai Avnit, our Chief Financial Officer. I will kick off today's call by reviewing our recent achievements, the main market trends we see shaping the data collection space and how our strategic vision and outlook are coming to life. Shai will then walk through the detailed financials and provide our Q2 2025 guidance. I will come back with the summary before we will open the call for the Q&A session. To highlight the top and bottom line results, first quarter 2025 revenue came in as guided at $7.1 million, net profit was $0.4 million and adjusted EBITDA exceeded the high hand of guidance at $1.3 million. The beginning of 2025 marks a turning point, one that we anticipated and prepared for. As the AI revolution is reshaping every industry at an unmatched rate, Alarum's data collection offering is increasingly becoming a key enabler, a backbone, helping to power the global AI boom. The need for reliable, scalable and the most accurate data is rising steeply. Models must be trained, retrained and fine tuned daily, and to do that, they need infrastructure like ours. We intend to grasp this momentum and opportunity. At the same time, it's important to acknowledge that the market we are operating in is still taking shape, and at this point, continues to be highly dynamic and unpredictable. Volatility may remain high and we are planning accordingly. 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 evolution but to power, lead and accelerate it. I would like to share that both major tech giants and emerging startups are turning us to help…

Thank you, Shachar. And hello, everyone. I will start by reviewing our key financial results for the first quarter of 2025, comparing them to the same period last year unless otherwise stated. Following that, I will provide you guidance for the second quarter of 2025. These are definitions and reconciliations of our non-IFRS key business metrics can be found in our Q1 2025 financial results press release. And one final note before I begin, the figures I will be discussing are rounded for clarity and ease of reference. Turning now to our financial performance. In line with our guidance, revenues in the first quarter of 2025 reached $7.1 million, of which $7 million was attributed to data collection. This compared to $8.4 million in the first quarter of 2024, of which $8.1 million was from data collection. We made a strategic decision to reinvest earnings into scanning operations, expanding infrastructure and strengthening our IP network to meet customers' stability, responsiveness and speed expectations, thereby, positioning our Alarum to capture long term value and meet the demand from AI driven customers. During this phase of transition, we are dedicated to managing our operations efficiently while ensuring we progress toward our long term goals. As a result of this move, our non-IFRS gross margin for the first quarter of 2025 reached 69.4% compared to 80.4% in the first quarter of 2024. Operating expenses in the first quarter of 2025 were $4.5 million compared to $4 million in the first quarter of 2024. The change was driven mainly by the increase in employee salary related costs, primarily as we diligently grew the team to accelerate product development, laying the foundation towards the new AI era. In the first quarter of 2025, we recorded a financial income of $200,000 compared to an expense of…

Thanks, Shai. To summarize, 2025 began with major shifts in the AI landscape. We are closely tracking these trends, which are driving increased demand for data and advanced [indiscernible] solutions. Data is the engine behind it all and this is precisely why we are fully committed to investing and pushing forward to capitalize on the momentum. We aim to create impact and long term strategic advantages by strengthening and expanding our product portfolio, investing in innovation, growing our customer base and deepening collaborations with some of the world's largest and most influential companies. 2025 has begun with growing demand and increasing recognition of Alarum towards empowering the AI data infrastructure. We are seeing strong momentum, deepening relationships with top tier companies and are expanding our operational capacity to meet this moment. While we continue to invest in scale, we remain committed to efficiency, long term profitability and disciplined execution, all supported by a strong balance sheet that positions us well for sustained growth. We are proud of what we've built and even more excited about what lies ahead. With that, we'll now open the call for the Q&A session. Operator, please.

[Operator Instructions] Our first question today is coming from Brian Kinstlinger of Alliance Global Partners.

I'm curious, the second quarter revenue guidance suggests a more meaningful sequential pickup from usage from your customer base after what we saw was about three quarters of slower flatline demand trends. Is the stronger second quarter revenue guidance the result of one or two customers or is it a more broad based pickup in demand?

So basically, more or less same diversity, meaning it's not coming from one untypical customer or bigger than our current big customers. It's just growing its new customers, its current customers that are upselling and the usual business, not something unique.

I guess my follow-up is, we've discussed and you've been clear about the challenges that are becoming more difficult to scrape data. Is the increased guidance scraping from data or is it more the unblocker product? And then I guess a follow-up to that is, can you speak to the competitive landscape of Web site unblocking?

So basically -- first of all, let's start from this. The demand and the revenues that have been generated in the last period and looking ahead from the new products, which are the data collectors and the unblocker are growing. So growing -- one second here. So they are growing and even growing dramatically from two quarters ago. The increase in revenues is coming from both, although the ratio is still much stronger -- much higher. So for the proxy -- so according to this ratio, so also the ratio of the growth is coming, most of it, from the data collection, meaning from the IP proxy network and this infrastructure. But we see demand that is growing for our data collectors and the unblocker. Now for your second question about the unblocker competitive landscape. So I think more or less it's the same competitive landscape. As I said a few times in the past, this is -- let's say, this is almost technology product, a lot of technology inside. We build it with a dedicated team that came from the special unit of the Israeli army. And we see from one side as the trend of the data is coming into our life, of course, it makes the life of those that want to collect data more challenging, because Web sites are trying to block more and more this traffic, so the demand for unblocking for scrapers that knows how to bypass this technology of the Web site is growing. From the other side, it's a product that needs to be maintained and revised on a permanent basis because it's like at the end of the day, it's like a cat and a mouse game that is playing on a daily -- it can be on a weekly, sometimes on a daily basis. We don't have the accurate data about feature versus feature with our competitors. But I can tell you that the feedback that we are getting from our customers and especially one of them that is the biggest customer at this point of time for this broker, which is a Fortune 200 company is that we have, if not the best, but one of the best products in the market. And that's why this customer is growing actually and very satisfied for this point of time.

Let me just make sure I understand -- ask a follow-up on that piece. There are companies, several companies that are doing web scraping that also have unblocking products or there's only a couple? I just didn't understand…

Yes, of course, our competitors, some of them have also done unblocking products. Yes, absolutely.

Is there a clear leader in the market in terms of revenue?

In the market of the unblocker or generally…

Yes, unblocker…

I don't have formal and accurate data, so I don't want to miss it…

My last question is you've got the second quarter that's stronger revenue than the first quarter but lower adjusted EBITDA. Does that reflect further investments compared to the first quarter that drive pressure on the gross margin? Maybe if not, you can speak to any more investments or incremental driving down EBITDA for 2Q compared to 1Q.

So as I mentioned now in my part in the call, so we took a strategic decision a few months ago as we started to see the boom. Meaning the demand -- by the way, it's unbelievable growing demand. And the fact that it's maybe once in a lifetime opportunity for a company to be part of a revolution and to be maybe a major part, because if you will now generate your leadership and become a significant player, it might stay for years as in other revolutions in the past. So we are investing and growing our network sometimes even not without proportion to the revenues but much more than current revenues in order to be ready for each and every big or medium, it can be, but especially for these giants that they want to come in now and start to scale up with you. We don't want to be in a point that we are losing one or two or maybe more customers, because we saved some few dollars in the bank. So we are profitable for many quarters. Our balance sheet is strong enough. We think that for the best of the company and for the best of our investors that are expected from us to invest our money in the company in order to build the future, because there is a promising future for this industry. And that's why you can see that the projection for the EBITDA for this quarter, meaning the second quarter, and maybe others in the future. But on the other side, I can tell you that if we will take a decision or we took a decision that now profitability is the main thing to allow, so this EBITDA can change even significantly with a decision. But it's not the place now that we want to be. And it's not only the COGS, we hire talents, we invest in our employees, in trainings, in AI trainings, in meeting our customers abroad, meaning we are growing and we take the company few levels up.

The next question is coming from Kingsley Crane of Canaccord Genuity.

Just a couple from my side. So I believe last quarter, you were talking about you were in active discussions with a handful of larger customers that were looking at some AI model training trial projects. Just curious how those conversations progressed in Q1, and maybe that's related to your plans to try to increase capacity for some of these larger customers?

So yes, I mentioned it, and I will say it now again. Yes, it's not just discussions. Some of them are current customers. But not just customers, there are customers that are growing and upselling over this quarter, last quarter. So these discussions converted for customers and even for partnerships, which is more strategic than just being a customer. But a partner that together we will sell data maybe to other companies or we will embed ourselves in the infrastructure of these customers in order to be their only or major data enabler that allow them to collect data and scale and basically to provide insights and AI outcomes for their customers. So for your second question, so not just for this because we have many other customers, but the answer is absolutely yes. We are investing in our infrastructure, in our network and in bringing more and more employees and talents in order to support the requirements. These customers, they have their own requirements. They expect to get a level of service, a level of professionalism. And we want to fulfill all their requirements because we believe it's a major milestone for our future. So yes, this is one of the major reasons why we are investing more.

And so specifically on the network and the infrastructure, I mean, where do you think you are in terms of capacity today versus where do you want to go? I mean, is this -- it could be a quarter-by-quarter conversation or is it something where you think you need to double, triple over a couple of years? Just kind of curious your thoughts on that part.

The line was broken for one second so just I will repeat to make sure I understand your question. So you are asking from the aspect of the investment, our investment in the network. So what was the question again? Can you repeat?

So specifically, on the network, just thinking about the pace and then the total scope of the investments that you're aiming to make. Is this something where -- is this something like you'd like to double or triple in a couple of years or you just know that you'd like to add capacity now and you were taking it on a quarter-by-quarter basis?

So we are investing in our network based on two main factors. One is the current demand, our current customer base, the amount of traffic and the needs in order to meet these traffic requirements. And the second is the projection. Meaning, how do we see the market in one or two points? How we can, it's a projection at the end of the day. Maybe it will not come to reality but we have analysts that are trying to project all the time the trends in market. So based on these two factors, we take a decision quarter-by-quarter, not quarter, it's day-by-day. If we want, for example, to increase our investment in geographical, more geographical coverage, more servers, more endpoints, et cetera. So we don't ever -- we can not have this market now. It's a market that in these days is defining itself and we are together in this market. So we don't have even -- I think, we don't have even the -- or nobody has accurate data to project where we've been one or two years from now. So we are doing it day-by-day and ongoing process.

And so just on the other side of it, in terms of investing in the people and the processes, just would be nice to hear a little bit more about what types of roles, what geographies you're hiring in and then how you're thinking about the talent market. I mean, definitely with some of the AI capabilities, there are only a handful of people in the world that are able to -- that are well versed in it at this time.

So for this point of time, most -- no, I'm saying -- I would not say 100% but more than 95% of our operation, basically our employees are in Israel, in our headquarter. Now in these days, if you would ask me, it's a two -- one quarter ago, I would say [98%], why? Because now we are trying to scale and to spread the team to be in some different locations in the world. And today, it's still -- we are still in a place that we can support our customers, our operation and even the big customers, we can support them in an online mode and to much more flights just to visit them from time-to-time, to stay ahead, maybe in shifts, because our professional services guys, the architect solutions, these guys that are basically supporting the customer in the proof of concept stage. And then after this, when you become a customer, supporting on a daily basis, trying to meet his requirements and of course trying to offer him more solutions and to maintain his retention and of course try to increase his usage in our system and to upsell. So major part of the, let's say, the vertical of the employees that we are hiring now is this professional services, pre-sales solution architect that know how to support. It's a combination between business and technical knowledge that support customers on site and of course R&D. R&D is the bread and butter and we have many, many -- we have a very rich roadmap with so many features and capabilities and products that we know that there is a demand, that there are customers that are waiting for this items from our side. So it's a combination between this vertical of professional services and architects to R&D to develop products and innovative products.

Thank you. At this time, I would like to turn the floor back over to Mr. Daniel for closing comments.

Okay. So thank you very much, operator. Thank you all for your time today. We look forward to hosting you on Alarum Technologies' second quarter of 2025 results call. Thanks.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.