Company: ALAR
Filing Date: 2025-03-20
Form Type: 20-F
Source: 0001213900-25-025287
Chunk: 66

Company: Alarum Technologies Ltd.
Filing Date: 2025-03-20
Form: 20-F
Item: Item 5
Chunk 66
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uate due
to a number of major factors, such as: material changes in our customers’ businesses; our customers’ satisfaction with our
solutions; pricing; support; and the competition which may impact the revenues from significant customers due to changes in our customers’
spending levels.

5. A Operating Results

Components of Operating Results

Revenue

We generate SaaS revenues
when customers subscribe to our web data collection and consumer internet access platforms and pay for the packages they choose. In the
web data collection segment packages are usually used for a period of one to twelve months, or for a shorter period if the maximum bandwidth
was utilized. In the consumer internet access platform, packages are primarily used for a period of one month. Our revenue is recognized
on a straight-line basis over the package period.

We believe that our business
is not sensitive to seasonal trends but historical patterns in our business may not be a reliable indicator of our future sales activity
or performance due to the early stage of the businesses we operate and past acquisitions.

Cost of Revenues

Our total cost of revenue
consists mainly of payments related to our data collection solutions with respect to publishers and ISPs for IP addresses, including servers’
costs required for the IP’s routing. We also have amortization of technology purchased in our acquisition of NetNut in June 2019,
and personnel costs associated with our operations and global customer support, including salaries, benefits, bonuses, and share-based
compensation. The personnel consist of post-sales services on-site, such as support teams that provide our customers with on-line support.

Until July 2023, we paid material
traffic acquisition costs and platform providers fees to Apple and Google, related to the consumer segment, before it was scaled down.

Gross Margin

Gross margin, or gross profit
as a percentage of revenue, has been and will continue to be affected by a variety of factors, including the average sales price of our
products and services, the mix of products sold, the costs related to our enterprise access solutions, the amortization of acquired technologies
and the personnel costs involved in the generation of the revenue.

Operating Expenses

Our operating expenses consist
of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component
of our operating expenses and consist of salaries, benefits, bonuses, share-based compensation and, with regards to sales and marketing
expenses, also sales commissions. Operating expenses also include contractors, consultants and other professional services costs, overhead