Gross margins have compressed significantly from 77.1% in 2023Q3 to 53.8% in 2025Q4, reflecting the rising costs associated with the company's infrastructure-heavy business model.
| Metric | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 |
|---|
| Sales/Revenue | 40.76M | 31.82M | 26.52M | 18.55M | 9.65M | 4.89M | 3.28M | 1.47M | 1.1M | 843K | 715K | 531K | 0 | 0 | 275.76K | 4.06M | 4.08M | 4.28M | 4.11M | 3.59M |
| Revenue Growth % | 28.06% | 20% | 42.97% | 92.15% | 97.58% | 48.78% | 124.01% | 33.76% | 30.01% | 17.9% | 34.65% | - | - | -100% | -93.2% | -0.54% | -4.68% | 4% | 14.66% | - |
| Cost of Goods Sold | 16.92M | 7.92M | 7.71M | 8.4M | 4.84M | 2.5M | 1.89M | 791K | 583K | 512K | 453K | 503K | 0 | 0 | 180.29K | 2.58M | 2.45M | 2.82M | 2.19M | 1.92M |
| COGS % of Revenue | 41.51% | 24.87% | 29.08% | 45.29% | 50.18% | 51.15% | 57.52% | 53.96% | 53.19% | 60.74% | 63.36% | 94.73% | - | - | 65.38% | 63.53% | 60.09% | 65.98% | 53.29% | 53.57% |
| Gross Profit | 23.84M | 23.91M | 18.81M | 10.15M | 4.81M | 2.39M | 1.4M | 675K | 513K | 331K | 262K | 28K | 0 | 0 | 95.47K | 1.48M | 1.63M | 1.46M | 1.92M | 1.67M |
| Gross Margin % | 58.49% | 75.13% | 70.92% | 54.71% | 49.82% | 48.85% | 42.48% | 46.04% | 46.81% | 39.26% | 36.64% | 5.27% | - | - | 34.62% | 36.47% | 39.91% | 34.02% | 46.71% | 46.43% |
| Gross Profit Growth % | -0.29% | 27.11% | 85.36% | 110.98% | 101.51% | 71.11% | 106.67% | 31.58% | 54.98% | 26.34% | 835.71% | - | - | -100% | -93.55% | -9.12% | 11.82% | -24.25% | 15.37% | - |
| Operating Expenses | 23.37M | 16.8M | 17.98M | 22.23M | 15.21M | 13.72M | 11.19M | 9.88M | 7.81M | 7.68M | 19.35M | 2.89M | 356.84K | 164.16K | 355.55K | 1.81M | 2.07M | 1.99M | 1.58M | 1.37M |
| OpEx % of Revenue | 57.34% | 52.8% | 67.8% | 119.84% | 157.51% | 280.76% | 340.62% | 674.01% | 712.5% | 910.91% | 2706.85% | 543.69% | - | - | 128.93% | 44.56% | 50.72% | 46.53% | 38.51% | 38.09% |
| Selling, General & Admin | 15.66M | 12.15M | 11.66M | 17.41M | 12.19M | 8.37M | 7.54M | 7.47M | 6.2M | 6.59M | 18.29M | 1.75M | 356.84K | 164.16K | 303.48K | 1.15M | 1.46M | 1.31M | 1M | 866.53K |
| SG&A % of Revenue | 38.42% | 38.19% | 43.96% | 93.88% | 126.29% | 171.37% | 229.6% | 509.35% | 565.78% | 782.21% | 2557.48% | 329.76% | - | - | 110.05% | 28.31% | 35.77% | 30.55% | 24.38% | 24.15% |
| Research & Development | 7.53M | 4.5M | 3.56M | 3.82M | 2.63M | 2.2M | 2.48M | 2.41M | 1.61M | 1.08M | 795K | 742K | 0 | 0 | 52.07K | 659.11K | 609.61K | 683.85K | 581.27K | 500.15K |
| R&D % of Revenue | 18.47% | 14.12% | 13.41% | 20.61% | 27.19% | 45.07% | 75.67% | 164.67% | 146.72% | 128.71% | 111.19% | 139.74% | - | - | 18.88% | 16.25% | 14.95% | 15.98% | 14.13% | 13.94% |
| Other Operating Expenses | 187K | 155K | 2.77M | 992K | 389K | 3.14M | 1.16M | 0 | 0 | 0 | 273K | 394K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 469K | 7.11M | 830K | -12.08M | -10.4M | -11.33M | -9.79M | -9.21M | -7.3M | -7.35M | -19.09M | -2.86M | -356.84K | -164.16K | -260.08K | -327.95K | -440.61K | -535.13K | 337.3K | 298.92K |
| Operating Margin % | 1.15% | 22.33% | 3.13% | -65.13% | -107.69% | -231.91% | -298.14% | -627.97% | -665.69% | -871.65% | -2670.21% | -538.42% | - | - | -94.31% | -8.09% | -10.8% | -12.51% | 8.2% | 8.33% |
| Operating Income Growth % | -93.4% | 756.27% | 106.87% | -16.22% | 8.25% | -15.73% | -6.35% | -26.18% | 0.71% | 61.51% | -567.79% | -701.21% | -117.37% | 36.88% | 20.69% | 25.57% | 17.66% | -258.65% | 12.84% | - |
| EBITDA | 1.61M | 8.02M | 3.6M | -10.04M | -8.61M | -9.97M | -8.67M | -8.86M | -7.02M | -7.07M | -18.81M | -2.57M | -331.75K | -510.95K | 433.66K | -227.21K | -333.14K | -412.62K | 437.97K | 385.1K |
| EBITDA Margin % | 3.94% | 25.2% | 13.56% | -54.12% | -89.2% | -204.01% | -263.98% | -604.64% | -640.33% | -838.43% | -2630.49% | -484.37% | - | - | 157.26% | -5.6% | -8.17% | -9.64% | 10.65% | 10.73% |
| EBITDA Growth % | -79.96% | 123.06% | 135.81% | -16.58% | 13.61% | -14.98% | 2.2% | -26.3% | 0.71% | 62.42% | -631.26% | -675.29% | 35.07% | -217.82% | 290.87% | 31.8% | 19.26% | -194.21% | 13.73% | - |
| D&A (Non-Cash Add-back) | 1.14M | 912K | 2.77M | 2.04M | 1.78M | 1.36M | 1.12M | 342K | 278K | 280K | 284K | 287K | 25.09K | 0 | 0 | 100.74K | 107.47K | 122.52K | 100.67K | 86.18K |
| EBIT | 1.68M | 7.39M | -5.66M | -12.57M | -9.47M | -7.94M | -12.81M | -11.73M | -5.3M | -7.35M | -17.89M | -2.71M | -1.12M | -510.95K | 433.66K | -330.36K | -219.03K | -658.78K | 361.79K | 319.22K |
| Net Interest Income | 736.8K | 402K | -561K | -314K | -113K | -294K | -609K | -527K | -248K | -10K | -159K | -948K | 0 | 4.15K | 24.59K | -43.94K | -8.4K | -20.94K | -39.18K | -41.52K |
| Interest Income | 1M | 795K | 115K | 16K | 8K | 14K | 4K | 10K | 9K | 2K | 150K | 33K | 66.55K | 4.15K | 29.07K | 4.29K | 17.06K | 36.29K | 0 | 6.06K |
| Interest Expense | 268.11K | 393K | 676K | 329K | 121K | 308K | 613K | 537K | 257K | 12K | 309K | 981K | 0 | 0 | 4.47K | 48.23K | 25.46K | 57.23K | 39.18K | 47.58K |
| Other Income/Expense | 1M | -106K | -6.92M | -701K | 926K | 3.24M | -3.18M | -2.54M | 1.98M | -1.57M | 894K | -833K | -764.81K | -346.79K | 689.26K | -226.94K | 178.19K | -190.11K | -27.19K | -27.52K |
| Pretax Income | 1.47M | 7M | -6.09M | -12.78M | -9.47M | -8.09M | -12.97M | -11.75M | -5.31M | -8.92M | -18.2M | -3.69M | -1.12M | -510.95K | 429.18K | -554.89K | -262.43K | -725.25K | 310.11K | 271.4K |
| Pretax Margin % | 3.61% | 22% | -22.96% | -68.91% | -98.09% | -165.6% | -395.1% | -801.3% | -484.67% | -1058.13% | -2545.17% | -695.29% | - | - | 155.63% | -13.68% | -6.44% | -16.95% | 7.54% | 7.56% |
| Income Tax | 510K | 1.22M | -482K | -327K | -945K | -246K | 23K | 6K | 1K | 2K | 0 | 0 | 0 | 0 | 0 | 15.81K | 156.74K | 263.34K | 106.8K | 63.17K |
| Effective Tax Rate % | 34.62% | 17.44% | 7.92% | 2.56% | 9.98% | 3.04% | -0.18% | -0.05% | -0.02% | -0.02% | 0% | 0% | 0% | 0% | 0% | -2.85% | -59.73% | -36.31% | 34.44% | 23.28% |
| Net Income | 963K | 5.78M | -5.53M | -13.15M | -13.13M | -7.84M | -13M | -11.75M | -5.31M | -8.92M | -18.2M | -3.69M | -1.12M | -510.95K | 429.18K | -553.01K | -409.47K | -942.12K | 203.31K | 208.23K |
| Net Margin % | 2.36% | 18.16% | -20.83% | -70.89% | -135.95% | -160.56% | -395.8% | -801.71% | -484.76% | -1058.36% | -2545.17% | -695.29% | - | - | 155.63% | -13.63% | -10.04% | -22.02% | 4.94% | 5.8% |
| Net Income Growth % | -83.34% | 204.62% | 57.99% | -0.2% | -67.3% | 39.64% | -10.59% | -121.21% | 40.45% | 50.97% | -392.9% | -229.16% | -119.52% | -219.05% | 177.61% | -35.06% | 56.54% | -563.39% | -2.36% | - |
| Net Income (Continuing) | 963K | 5.78M | -5.61M | -12.46M | -8.53M | -7.84M | -13M | -11.75M | -5.31M | -8.92M | -18.2M | -3.69M | -1.12M | -510.95K | 429.18K | -570.7K | -419.17K | -988.59K | 203.31K | 208.23K |
| Discontinued Operations | 0 | 0 | 82K | -695K | -4.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 10K | 72K | 0 | 0 | -75.96K | -53.59K | -43.69K | 0 | 0 |
| EPS (Diluted) | 0.13 | 0.85 | -1.40 | -4.20 | -4.80 | -4.30 | -78.00 | -1156.00 | -2305.00 | -6192.00 | -22042.00 | -7166.00 | -4074.00 | -341070.00 | 228000.00 | -526390.00 | -38153.00 | -88306.00 | 18640.00 | 18309.00 |
| EPS Growth % | -84.71% | 160.71% | 66.67% | 12.5% | -11.63% | 94.49% | 93.25% | 49.85% | 62.77% | 71.91% | -207.59% | -75.9% | 98.81% | -249.59% | 143.31% | -1279.68% | 56.79% | -573.74% | 1.81% | - |
| EPS (Basic) | 0.14 | 0.85 | -1.40 | -4.20 | -4.80 | -4.30 | -78.00 | -1156.00 | -2305.80 | -6192.00 | -22042.00 | -7166.00 | -4074.00 | -341070.00 | 311750.00 | -526390.00 | -38153.00 | -88306.00 | 19045.00 | 19803.00 |
| Diluted Shares Outstanding | 7.44M | 6.84M | 4.14M | 3.13M | 2.71M | 1.82M | 167.15K | 10.17K | 2.31K | 1.44K | 825 | 515 | 515 | 1 | 1 | 1 | 10 | 10 | 10 | 11 |
| Basic Shares Outstanding | 7.08M | 6.84M | 4M | 3.13M | 2.71M | 1.82M | 167.15K | 10.17K | 2.3K | 1.44K | 825 | 515 | 515 | 1 | 1 | 1 | 10 | 10 | 10 | 10 |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 35.91% | 32.33% |
ISP partnership dependency
According to recent financial filings, Alarum's revenue growth has fluctuated significantly, reaching a peak of 80.9% in 2025Q3 before moderating, suggesting that the transition toward usage-based billing in the NetNut segment introduces inherent lumpiness that investors should monitor closely as the company scales its infrastructure.
The revenue trajectory appears heavily influenced by the successful scaling of the NetNut proxy business, which has likely offset the stagnation of legacy cybersecurity offerings. However, the inconsistency in quarterly growth rates suggests that the company's reliance on usage-based billing may create unpredictable revenue cycles that complicate long-term forecasting.
As reported in quarterly income statements, gross margins have compressed from 77.1% in 2023Q3 to 53.8% by 2025Q4, indicating that the rising costs of bandwidth and ISP partnerships are increasingly weighing on the company's ability to maintain the high profitability typical of pure-play software providers.
This margin erosion suggests that Alarum's infrastructure-heavy model requires significant capital to maintain network quality, effectively creating a structural ceiling on profitability. Investors should investigate whether this trend reflects increased competitive pricing pressure or simply the higher variable costs associated with expanding the NetNut proxy network.
Based on the provided income statement data, operating margins have narrowed significantly from 22.2% in 2023Q3 to 2.5% in 2025Q4, demonstrating that aggressive reinvestment in sales and R&D is currently absorbing the majority of gross profit gains rather than flowing through to the bottom line.
The lack of meaningful operating leverage suggests that the company is prioritizing market share acquisition over immediate profitability. While this may be a rational strategy for a growth-stage firm, the thin operating margins leave little room for error should revenue growth decelerate or infrastructure costs spike unexpectedly.
Analysis of recent financial disclosures reveals that stock-based compensation has become a material factor, with 2025Q4 figures showing a $2.9M impact, which significantly obscures the underlying cash-generating capability of the business and warrants caution regarding the true economic profitability of the current operational model.
The reliance on equity-based incentives to manage cash burn appears to be a recurring theme, potentially masking the true cost of talent acquisition. Investors should carefully adjust net income figures to account for these non-cash expenses to determine if the company is truly self-sustaining on an operational basis.
Data from recent filings suggests that Alarum's reliance on third-party ISP partnerships creates a fundamental risk, as the company's ability to maintain its competitive moat depends on external commercial agreements that could be jeopardized by larger, better-capitalized competitors bidding for the same network access.
Short-sellers might focus on the potential for margin compression if bandwidth costs continue to rise or if regulatory scrutiny limits the legality of data scraping. The company's pivot to a proxy-first model, while promising, remains vulnerable to external shocks that could render its current infrastructure-heavy cost structure unsustainable.
Quick answers to the most common questions about buying ALAR stock.
For fiscal year 2025, Alarum Technologies Ltd. (ALAR) reported total revenue of $40.8M. This represents a 1036.0% increase compared to $3.6M in 2006.
Alarum Technologies Ltd. (ALAR) is profitable, generating $1.0M in net income for the fiscal year ending 2025 with a net profit margin of 2.4%.
Alarum Technologies Ltd. (ALAR) reported an operating income of $0.5M, resulting in an operating profit margin of 1.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Alarum Technologies Ltd. (ALAR) generated $23.8M in gross profit for the year, representing a gross profit margin of 58.5%. This demonstrates the company's core pricing power and production efficiency.