Alarum Technologies Q1 2026 Results Beat Guidance, Revenue Up 64% to $11.7M; Adjusted EBITDA Also Exceeds Expectations

What happened

Alarum Technologies reported Q1 2026 revenue of $11.7 million, a 64% year-over-year increase, exceeding both management's guidance range of $10.2-11.8 million and the midpoint of $11.0 million. The company also generated positive IFRS net income of $0.6 million and Adjusted EBITDA of $2.1 million, well above the guided ~$1.4 million, signaling improved operating leverage. However, the release did not disclose gross margin details, which is the critical factor—FY2025 gross margin had compressed to 58.5%, and the DeepValue thesis hinges on margin repair. Customer concentration remains elevated, with top 6 customers representing ~49% of revenue, and net retention rate (NRR) stood at 0.83 as of December 2025, indicating ongoing churn among existing accounts. While the Q1 beat is encouraging, it does not yet validate that the delivery-cost step-up has normalized, making sustained margin improvement the next key checkpoint.

Implication

The strong Q1 results support the base case scenario and improve the probability of margin stabilization, but the investment thesis still requires proof that gross margin can recover above 62% and that customer concentration and net retention improve. Until those are demonstrated, the stock remains a wait.

Thesis delta

Q1 2026 results exceeded guidance on both revenue and Adjusted EBITDA, reducing the probability of the bear case (30%) and increasing confidence in the base case (50%). However, the lack of gross margin disclosure means the margin repair thesis is unconfirmed; the bull case (20%) still requires gross margin above 62% and declining customer concentration. The near-term re-assessment window remains active—the next quarter must show whether delivery cost intensity is truly normalizing.