Alarum Technologies Reports Sharp Profit Decline and Negative Operating Cash Flow Despite Revenue Growth in FY2025
ALAR sits 32% above its 52-week low of $5.445.
Summary
Alarum Technologies reported a 28% revenue increase to $40.7 million in fiscal year 2025, driven by AI demand and new data collection solutions. However, net profit significantly decreased to $1.0 million from $5.8 million, and operating cash flow turned negative, primarily due to a 114% surge in cost of revenues and increased operating expenses.
Key Events · Earnings and Guidance · ALAR
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Revenue Growth
Total revenue increased by 28% to $40.7 million in fiscal year 2025, up from $31.8 million in 2024, primarily due to strong demand from a large AI customer and new data collection solutions.
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Significant Profitability Decline
Net profit plummeted to $1.0 million in 2025 from $5.8 million in 2024, and operating profit fell from $6.7 million to $0.2 million, largely due to a 114% increase in cost of revenues and higher operating expenses.
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Negative Operating Cash Flow
Net cash flow from operating activities shifted from providing $8.9 million in 2024 to using $2.0 million in 2025, reflecting increased costs and working capital needs.
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Declining Net Retention Rate (NRR)
The Net Dollar-Based Retention Rate (NRR) decreased significantly from 1.55 in Q4 2023 to 0.83 in Q4 2025, indicating reduced spending or increased churn among existing customers.
Analysis · ALAR · Technology
Alarum Technologies reported a 28% increase in total revenue to $40.7 million for fiscal year 2025, driven by strong demand from a large-scale AI customer and new data collection solutions. However, this top-line growth was significantly offset by a 114% surge in cost of revenues and increased operating expenses, leading to a substantial decline in net profit from $5.8 million in 2024 to $1.0 million in 2025. Operating profit also fell sharply from $6.7 million to $0.2 million. Critically, the company's net cash flow from operating activities turned negative, moving from $8.9 million provided in 2024 to $2.0 million used in 2025. The Net Dollar-Based Retention Rate (NRR) also saw a considerable drop from 1.55 in Q4 2023 to 0.83 in Q4 2025, indicating a significant reduction in spending or increased churn among existing customers. While the dismissal of class action lawsuits is a positive development, the overall financial performance shows concerning trends in profitability and cash generation, despite revenue expansion.
At the time of this filing, ALAR was trading at $7.21 on NASDAQ in the Technology sector, with a market capitalization of approximately $50.8M. The 52-week trading range was $5.45 to $18.00. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.