Reflecting through the history of a publicly traded company, investors can often find monumental events or turning points. Sometimes it can be a decision, an acquisition, a new product, or some other catalyst that effectively changed the trajectory of a company’s future, for better or worse.
For Alarum Technologies (NASDAQ: ALAR) investors, the key catalyst that has turned the company into a growth machine was the acquisition of NetNut, Ltd. Back in April 2019, Alarum (then known as Safe-T Group) announced an agreement to purchase the business proxy network solutions company for $9.7 million. When it was acquired in 2019, NetNut had reported full-year revenues of $0.8 million in 2017 and $2.2 million in 2018.
Fast forward to the present day, NetNut is now the centerpiece of Alarum’s operations, which generated revenue of $21.3 million during the full-year 2023 and has already kicked 2024 off with stellar results during the first quarter.
Alarum Made Major Upgrades to NetNut in the First Half of 2020
The success of NetNut didn’t just happen overnight, however. Alarum began to work on some significant upgrades on the subsidiary shortly after completing its acquisition. By June 2020, management unveiled the launch of NetNut’s newest product, a data center proxy network. At the time, the network was made possible through connective agreements with key carriers across the United States. This allowed customers to utilize the proxy network quickly and reliably.
Since its launch, Alarum has continued to invest in upgrades and further development of its network, which features a hybrid infrastructure of over 1,000 servers and more than 700 proxies around the globe. These servers are connected to 85 million IP addresses from internet service providers and major data centers to provide NetNut’s vast global customer base with complete coverage as well as speed and scalability.
NetNut’s capabilities have certainly turned heads across the technology industry. Today, the subsidiary counts notable customers including Lenovo, PriceLabs, RocketReach, Apollo.io, Import.io, Zyte, and more. These companies and others within the NetNut ecosystem utilize its proxy network solutions to complete tasks associated with dynamic pricing, email verification, social media data collection, SEO, market research, ad verification, scaping-as-a-service, and more.
NetNut Continues Innovation, Customer NRR Hits High in Q1 2024
Despite the strong operational results NetNut has continued to churn out, management still has big plans to further expand the subsidiary’s capabilities. The company has recently unveiled and launched new products including its popular Website Unblocker service, as well as an innovative artificial intelligence-powered web data collection tool.
The Website Unblocker product provides automated web data collection tools to access any public-facing website and its respective data without being blocked by anti-bot or firewall solutions. The AI web data collection product represents a major upgrade that will allow clients to collect website data faster and much more efficiently than ever before.
During the Q1 2024 earnings call, as well as through other public discussions, Alarum management has provided investors with the company’s plan to continue developing products and services for NetNut that will continue to provide further value for its vast customer base. This has certainly been evident when examining NetNet’s net retention rates (NRR), which reached a high of 1.66, as of March 31, 2024.
The NRR of 1.66 (166%) effectively represents the average growth rate of current customers and does not include revenues generated from new customers. In other words, the NRR growth shows that current customers are expanding via up-sales and cross-sales. An NRR figure above 100% demonstrates the company is expanding revenue growth from its existing customers, even after accounting for lost revenue from customer churn.
Summary
In conclusion, the acquisition of NetNut, Ltd. in April 2019 marked a pivotal moment in Alarum Technologies’ history, transforming the company into a formidable growth entity. The strategic enhancements and continuous innovations introduced by Alarum have propelled NetNut to the forefront of its operations, resulting in a significant revenue surge from $2.2 million in 2018 to $21.3 million in 2023.
With an impressive net retention rate of 166% as of Q1 2024, NetNut’s robust infrastructure and cutting-edge products have garnered a prestigious clientele, cementing its reputation within the technology industry. As Alarum continues to invest in NetNut’s capabilities, the subsidiary is poised for sustained growth, further solidifying its role as a cornerstone of Alarum’s success and driving future revenue expansion.
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