Alarum's AI Bet: Q1 Earnings to Test Data Infrastructure Strategy

TEL AVIV, ISRAEL – May 14, 2026 – Alarum Technologies Ltd. is set to provide the first major update of the year on its aggressive pivot into the artificial intelligence sector, with investors and analysts keenly awaiting its first quarter 2026 financial results, scheduled for release on May 28. The announcement, followed by a conference call with CEO Shachar Daniel and CFO Shai Avnit, will be a critical barometer for the company's high-stakes strategy of sacrificing short-term margins for a long-term foothold in the booming AI data infrastructure market.

As the AI revolution accelerates, the demand for vast, high-quality datasets to train and refine large language models (LLMs) has skyrocketed. Alarum has moved decisively to capture this demand, repositioning itself from a web data collection provider to an essential data infrastructure layer for the AI economy. The upcoming earnings report will offer the first concrete evidence of whether this costly transformation is beginning to pay dividends in 2026.

A Transformative Year's First Test

The company's leadership has consistently framed 2025 as a "transformational year." This transformation was evident in its financial reports, which painted a picture of rapid top-line growth coupled with significant strategic spending. For the full year 2025, Alarum reported revenues of $40.7 million, a respectable 28% increase from the prior year. The fourth quarter was particularly strong, with revenue hitting $11.82 million, a 60% surge year-over-year.

More importantly, the source of this growth underscored the company's strategic shift. Management noted that revenue from AI-focused customers exploded from just 4% of the total in 2024 to approximately 30% in 2025. This rapid adoption validates the market's hunger for AI-ready data solutions.

However, this growth came at a cost. Gross margins, a key indicator of profitability, saw a notable compression. In Q4 2025, gross margin fell to 53.8% from 72.4% in the same period of 2024. Similarly, full-year Adjusted EBITDA declined from $9.4 million in 2024 to $4.4 million in 2025. Management has attributed this decline directly to deliberate investments in scaling its IP network infrastructure, expanding enterprise customer support, and developing next-generation products like its Website Unblocker and AI-ready datasets.

Investors will now be scrutinizing the Q1 2026 results to see if this trend continues. The central question is whether Alarum can sustain its impressive revenue growth while charting a clear path back to higher profitability as these initial investments mature.

Reading the Tea Leaves for Q1

For the upcoming quarter, Alarum's management has guided for revenues to be around $11 million, with a potential variance of 7%. If achieved, this would represent approximately 46% year-over-year growth compared to the $7.1 million reported in Q1 2025. The company also projected an Adjusted EBITDA of roughly $1.4 million, signaling a potential stabilization after the heavy investment cycle of 2025.

Wall Street analysts have set their expectations slightly more conservatively, with a consensus revenue estimate of $10.67 million and an earnings per share (EPS) forecast of $0.02. While the revenue figures are closely aligned, the EPS expectation is modest. This may reflect continued caution regarding the impact of infrastructure costs on the bottom line. It is noteworthy, however, that Alarum has a strong track record of outperforming analyst EPS estimates, having done so for seven consecutive quarters.

A revenue beat, particularly one that exceeds the company's own guidance, would be a strong bullish signal, suggesting that demand from its AI clientele remains robust. The commentary from CEO Shachar Daniel during the conference call will be just as important as the numbers themselves, as he will be expected to provide color on the sales pipeline, customer acquisition, and the performance of the company's newer, AI-centric product offerings.

Riding the AI Infrastructure Wave

Alarum's strategic pivot is not happening in a vacuum. It is a direct response to one of the most significant technological and economic shifts in a generation. The global AI infrastructure market is experiencing explosive growth, with some projections estimating it will surpass $200 billion by 2031. Spending on the full AI stack is forecast to exceed $2 trillion in 2026 alone.

This market is built on a simple premise: AI models are only as good as the data they are trained on. This has created a voracious, ongoing need for structured, reliable data from public online sources—the very service Alarum, through its subsidiary NetNut, is built to provide. The company's solutions, which include a vast network of IPs and proprietary data collection technology, are foundational for organizations ranging from hyperscalers to innovative AI startups.

By investing heavily in its infrastructure, Alarum is positioning itself to handle the massive scale required by modern LLM development, which can involve processing tens of petabytes of data monthly. This move up the value chain—from providing simple data access to offering curated, AI-ready datasets and a full-stack collection platform—is a calculated risk designed to create a more defensible, long-term competitive advantage.

Navigating a Crowded and Complex Market

While the opportunity is immense, the competitive landscape is also formidable. In its core web data collection and proxy business, Alarum competes with established players like Oxylabs and Bright Data, which are known for their premium enterprise solutions. The broader data extraction market is dominated by large platforms such as Segment and Fivetran.

Alarum's strategy appears to be one of specialization. Rather than competing head-on across the entire data landscape, it is carving out a niche as a premier provider of the raw material for the AI economy. Its success will depend on its ability to continue differentiating its offerings through superior technology, speed, and a deep understanding of the unique data requirements of AI model developers.

As the company prepares to share its Q1 results, the investment community will be listening for more than just revenue and profit figures. They will seek insights into the company's competitive positioning, the stickiness of its new AI customers, and the long-term outlook for gross margins. The May 28th conference call will be a crucial opportunity for management to reinforce the narrative that the current financial trade-offs are a necessary and wise investment in becoming an indispensable player in the data infrastructure that powers the future of artificial intelligence.