Alarum Technologies Ltd. (ALAR) on Q3 2023 Results - Earnings Call Transcript
Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Alarum Technologies Corporate Update Conference Call for the three and nine months ended September 30, 2023. During today’s presentation, all parties will be in a listen-only mode. Following the presentation conference will be opened for questions. [Operator Instructions] This conference is being recorded today, November 28, 2023. Before we get started, I will read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements include statements about plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are different than historical facts. These forward-looking statements are based on current management expectations and are subject to risks and uncertainties that may result in expectations not being realized and may cause actual outcomes to differ materially from expectations reflected in these forward-looking statements. Potential risks and uncertainties include those discussed under the Risk Factors in Alarum's annual report from 20-F filed with the Securities and Exchange Commission, SEC, on March 31, 2023, and in any subsequent filings with the SEC. All such forward-looking statements, whether written or oral, made on behalf of the company are expressly qualified by these cautionary statements, and such forward-looking statements are subject to risks and uncertainties, and we caution you not to place all undue reliance on these. At this time, I'd like to turn the call over to Shachar Daniel, the company's CEO. The floor is yours.
Shachar Daniel: Thank you very much, and welcome, everyone to Alarum's Technologies third quarter 2023 earnings results conference call. As is customary with me Shai Avnit, our Chief Financial Officer. I am pleased to highlight some key achievements and strategic directions that have shaped our recent performance and our vision for the future. Before we begin, I want to quickly note that reconciliation tables for any non-GAAP or non-IFRS metrics referenced on this call are available in the press release we published earlier today. We are thrilled to announce that we have achieved our first ever profitable quarter. This significant milestone is a testament to the dedication and hard work of our team and demonstrate our commitment to delivering value to our shareholders. At the end of 2022, we made it our leading goal to set our best to profitability. We are excited that in the third quarter, we have managed to achieve our goal and announced on a net profit of $1.1 million. As mentioned, our success can be attributed to the strategic decision we have made in the recent years. We have successfully executed acquisitions that have boosted our capabilities in line with our vision and direction. We have also been agile in making decisions like scaling down low profitable revenues, allowing us to allocate resources more efficiently towards growth and profitability. Most importantly, we are focused on our successful business NetNut, our Enterprise Data collection business. When we took this strategic decision, we know it might have impact on our revenue stream. We are happy to present a positive trajectory with minimal impact due to our directional decision, $6.7 million revenues for the quarter represent a significant growth in our enterprise business and excellent performance quarter-after-quarter. Our accumulated revenues from the beginning of 2023 amounted to a standing $19.4 million and exceeding revenues for the whole year of 2022. In a short period of time, we have managed to generate record revenues and net profit for the first time. Additional highlights for the third quarter include the attractive gross margin of 77% and recorded adjusted EBITDA of $1.9 million. In July 2023, we announced the closing of $4.25 million private placement, a private placement we reached senior management, including myself, took part due to a strong belief in its promising prospects. The investment further strengthened our balance sheet were well funded with approximately $8 million in cash, as of September 30, 2023 no debt and a lower amount of loans. I would like now to elaborate on our Enterprise Data Collection business, NetNut. NetNut was acquired in 2019 with annual revenues of approximately $3 million. Over the past few years, we have transformed NetNut from a small company with minimal revenues into a market leader in the IP Proxy Network segment. This achievements has positioned us at the forefront of the data industry infrastructure layer. Over the last two years, we have invested significant resources to build one of the fastest, most reliable and advanced network. In the past few quarters, we have expanded our product offerings and expanded our footprint to the data collection market estimated by $17.1 billion by Frost & Sullivan. This market is driven by the growing importance of data back decisions for businesses, necessities of a constant flow of data. It is supported also by the AI-based product expansion, in which data collection and labeling play a critical role in model development, accuracy and functioning of AI systems and products. In addition, the social media segment in which monitoring and understanding of social media activity, enabling more effective marketing and improving user experience through digital marketing growth. NetNut is a well-known brand in its field, enabling us to constantly identify and penetrate new market segments, among our recently entered customer segments are the artificial intelligence, power sales intelligence market, feeder market, AI recruitment markets and more. In each field, NetNut has already won multiple new customers and continue to do so. Our vision is to continue our growth in the IP Proxy Network vertical, building on strength and success we have achieved thus far. As the data collection market rapidly grows, it is our mission to introduce new innovative products to meet new emerging needs. In this regard, we took our first step this quarter by releasing our natural products in this vertical the SERP API Scraper. Our overarching goal for the future is to leverage our success in the infrastructure layer of the data collection industry with dozens of satisfied successful customers already on board. We aspire to become the one-stop vendor for all the chain and needs of our customers. This means providing comprehensive solutions that span the entire data collection process from infrastructure to data extraction and beyond. I want to mention one more reason remarkable achievement by NetNut, the granting of our U.S. patent that further strengthened the company assets and innovation. I would like now to turn the call over to Shai to discuss the financials for the quarter in more detail. Shai?
Shai Avnit: Thank you, Shachar, and hello, everyone. I will summarize our third quarter 2023 financial results from continuing activity which are compared to our third quarter of 2022 results from continuing activity unless otherwise stated. All figures in this summary were rounded up for simplicity. Revenue for the third quarter of 2023 totaled $6.7 million, and revenue for the first nine months ended September 30, 2023 was $19.4 million. This compared to revenues of $4.8 million and $13.4 million, respectively, for the equivalent period in 2022. The increase is attributed to the organic growth in the enterprise access business revenues despite a reduction in the consumer access business revenues. Gross profit for the third quarter of 2023 was $5.2 million compared to a gross profit for the corresponding period in 2022 of $2.6 million only. The increase in gross profit was primarily driven by the increased revenues. Gross profit for the nine months of 2023 was $13.5 million compared to a gross profit for the corresponding period in 2022 of $7.3 million. Our third quarter 2023 operating expenses decreased 25% year-over-year to $3.7 million from $5 million in the third quarter of 2022. This decrease is mainly due to operations strategy scaled down in the consumer internet access business. Operating expenses in the first nine months of 2023 sum to $20.8 million, an increase of 22% from the $17 million in the first nine months of 2022. The increase reflects recording a one-time goodwill and intangible asset impairment loss of $8.5 million in the second quarter of this year, which is related to the CyberKick cash generating unit due to the decrease in its forecasted operating results. This increase was partially offset by the company's success in minimizing the actual operating expenses in this segment as well as reducing the general and administrative expenses from $5.3 million to $3.2 million due to lower professional fees. As a result and after the impact of finance expenses and tax benefits, IFRS net profit for the third quarter of 2023 reached $1.1 million or $0.03 basic profit per ordinary share, compared to a net loss of $2.3 million or $0.07 basic loss per ordinary share for the third quarter of 2023. For the first nine months of 2023, IFRS net loss totaled $7.3 million, mainly due to the CyberKick impairment losses or $0.20 basic loss per ordinary share compared to a net loss of $9.4 million or $0.30 basic loss per ordinary share in the first nine months of 2022. The company monitors key business metrics to help it evaluate and establish budgets, measure the effectiveness of the sales and marketing efforts and assess operational efficiencies. The non-IFRS key business metrics the company uses our EBITDA and adjusted EBITDA. EBITDA or EBITDA loss is a non-IFRS financial measure that we define as a net profit or loss before depreciation, amortization -- sorry, amortization and impairment of intangible assets, interest and tax. Adjusted EBITDA or adjusted EBITDA loss is a non-IFRS financial measure that we define as EBITDA or EBITDA loss, as further adjusted to remove the impact of impairment of goodwill, if any and share-based compensation. Adjusted EBITDA for the third quarter of 2023 was positive at $1.9 million compared to adjusted EBITDA loss of $1.6 million in the same period of 2022. For the first nine months of 2023, adjusted EBITDA totaled positive $3 million compared to an adjusted EBITDA loss of $6.5 million in the nine -- first months of 2022. Company's cash and cash equivalents as of September 30, 2023, totaled $7.7 million compared to $3.3 million as of December 31, 2022. As of September 30, 2023, shareholders' equity totaled $10.9 million or approximately $1.87 per outstanding American depository share compared to shareholders' equity of $13.3 million on December 31, 2022. The reduction is due mainly to the goodwill and intangible assets impairment recorded in the second quarter of 2023, offset by September 2023 private placement. Lastly, I wanted to touch base upon our share count as it stands today. On an outstanding basis, we have around 58.6 million ordinary shares of 5.86 million ADSs. On a fully diluted basis, we currently have around 81.4 million shares or 8.14 million ADSs outstanding. With that, I'll turn the call back over to Shachar.
Shachar Daniel: Thanks, Shai. We undertook ambitious growth in recent years and Alarum's current position is definitely a testament of the remarkable journey and the milestones we have achieved to-date. These achievements underscore our ability to adapt and thrive in dynamic business landscape. Our key growth engines have been realized and our significant competitive advantages have been crystallized. Both our financials and non-financial key metrics are moving in the right direction and aligned perfectly with our strategic vision. In conclusion, we are extremely proud of our recent achievements, especially our first profitable quarter and the growth we have experienced in our core business segment. We are excited about the future as we continue to expand our footprint in the data industry, delivering value to our customers and shareholders alike. Now I would like to open the call for any questions. Operator, please go ahead.
Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Brian Kinstlinger from Alliance Global Partners. Please proceed.
Brian Kinstlinger: Great. Thanks. I've got several questions. First, I wanted to talk about the expense base of the business is it the first time we're seeing results, excluding CyberKick. So just …
Shachar Daniel: Can you change your -- I hear you -- I barely hear you.
Brian Kinstlinger: Okay. Hold on. Can you hear me now?
Shachar Daniel: Yes.
Brian Kinstlinger: Great. So first, I wanted to talk about the expenses. It's the first time we're seeing the results, excluding CyberKick. So the gross margin of 77%, is it sustainable and what would drive that to increase or decrease from here? And then, I'm curious on the OpEx side, are there any significant investments you need to make and are there any significant variable cost to sales?
Shachar Daniel: Okay. First of all, hi. Second, so for your first question, so basically, as you know, we scaled down the CyberKick business due to this, some of the cost of goods, a major part of the cost of goods are not -- we are not expanding -- they are not in our expenses anymore. In addition, as we discussed in the past about our data business, about the enterprise business. So basically, we succeeded to improve our cost of goods in addition to the growth in the revenues made us to achieve this 77%. Regarding the future, and let's talk about, I don't know, next year, for example, we think that the current OpEx structure or expense structure, more or less, not significantly, if you ask, if we need to significantly invest in order to keep the growth. So at this point of time, we don't see significant invest in order to keep the trend of our growth in the IPPN market, including releasing, as I mentioned in my pitch -- this year, one of our targets we started next year is to expand to the next level to the next layer of the data business, which is the products layer of the scrapers and others. So basically, also in order to expand to these markets, we will need to invest, but we don't see a significant change from our current expense structure.
Brian Kinstlinger: Great. And then on the internet access piece that's driving growth, how are you differentiating from the competition? Why are enterprises choosing your solution and what does the competitive landscape look like?
Shachar Daniel: Okay. So I'll do it very simple. It's a question of brand and performance. Maybe brand is driven by the performance. So as I mentioned also in the last two years, and by the way, we are going to do it all the time, but we invested a lot in our product, in our network, in the stability of our network in the geographical coverage. And in our space, customers are very system -- are very sensitive. So to the performance, to the speed, to the downtime, et cetera., so the size of our network, the stability of our network, allowing us now to work with big customers with huge demand, and that's what made us to be a leader in this space together with additional two or three companies. But basically, if I'm looking back for 2.5 years ago, I think that we went all the way from being, I don't know, in the eight place, seven places in this space to be in the first three leading vendors in this space. And again, it's due to the stability to the performance, to the support to the sales teams, et cetera., et cetera. But regarding the competitive advantage, these are the main topics.
Brian Kinstlinger: Great. And then, you mentioned some new customer wins in the AI intelligence market and also entering the fintech market. Can you just maybe tell us where these customers are generally located and can you also describe how they're using your technology?
Shachar Daniel: Yeah. Of course, it's all about data. So in this space, I think 80% of our customers are based in the U.S. And the rest, I think we have one in the Far East, one, maybe one or two in Europe, but basically, most of them are in the U.S. in these spaces. And as I mentioned, Brian, it's all about data. So imagine yourself that you have kind of pricing intelligence. So recruitment intelligence or others that when you say intelligence, so they have their own algorithm that knows how to analyze data for many, many web and internet sources in order to be able to scrape and to collect this data in scale, they must use our kind of products behind the same regarding the AI tools. At the end of the day, everybody all these industries are based on data that they need to collect from the web. They need to get a transparent data. They need not to be blocked, they need to simulate themselves like they are coming from all over the world in order to get the relevant data in the relevant geographical zone. So without our products behind just for their domain or from their premise, they cannot do it. They must have an automatic tools behind and our IP proxy is mandatory for them to have and to get the data and to analyze it.
Brian Kinstlinger: Got it. So you're enabling AI to do their analytics algorithms? Yeah.
Shachar Daniel: The analytics is from their side.
Brian Kinstlinger: Yeah. Okay. I'm going to ask one more question, and then I'm going to get back in the queue if no one asks questions. I have a couple more. I'm just curious with the recent offering, what the fully diluted share count is today. Again, I'll get back in the queue and ask some more.
Shachar Daniel: Fully dilute, okay. So -- yes.
Shai Avnit: Yes. It's about 8.1 million ADSs.
Brian Kinstlinger: Great. I've got a few more. I get back in the queue and hit star one again.
Operator: Okay. Our next question comes from George Moore from Carter Terry. Please proceed.
George Moore: Hi, guys. Congratulations. What a very good quarter. My question is real quick. It goes two-fold. Is the impact of scaling down on this consumer segment, right? With that, are you still driving revenue from there? When will that ultimately end and then going along with Brian's question on the growth of the Alarum's vision for the next couple of years? How do you expand and grow off of that?
Shachar Daniel: Okay. So thanks for your questions. Thanks for the complement. I will merge your two questions to one answer from my side. So as I mentioned, yes, we took a decision to scale down the consumer business. When I'm saying scale down, we are not investing anymore not in R&D at this point of time and not in consumer acquisition. And we are just maintaining our current product and currently bearing fruit from our current customers that are paying on a monthly basis. And when we took this decision, we took into account that we are going to kind of losing maybe significant revenues. But for the future, it's the right strategy for the company. We are very happy that even from a revenue perspective, the impact is minimal, almost zero and from profitability and strategy and focus of the company, the impact is huge. So at this point of time, the revenues from our consumer business is not material comparing to the enterprise business and basically, it's going to stay like this for the coming future. Regarding the question for -- regarding your question, sorry, for the vision. So we have -- the vision is basically to expand our product penetration in current markets to continue to develop innovative products in additional segments of the data collection market and leverage them with our current customer base, meaning the data collection market and space like many other spaces are built from layers. Now we took a step in the leadership in our layer of the infrastructure, which is the IP proxy network. We have hundreds of satisfied customers. The next stage is to offer them also the product, the scraper, the data sets, the AI tools, the insights or the analytics of the data, in which direction that we will choose and to come and say them, okay, you are working with us anyway, you are very satisfied, you prefer to work with one vendor then to split your infrastructure and your solutions for few vendors and now let's cross-sell these customers with our new and innovative products. This is our strategy how to take the market. And we see that it currently works quite way. We released the first product just in the middle of 2023 and the future looks very bright from this perspective. I hope it answers your question.
George Moore: Yes. Thank you. I'll go back in the queue.
Shachar Daniel: Thank you.
Operator: Our next question comes from Emily Patterson from -- who is a Private Investor. Please proceed.
Unidentified Participant: Good morning. My question is pretty quick and simple. Does the path to profitability come at expense of growth?
Shachar Daniel: Sorry, but I didn't hear you well.
Unidentified Participant: Yes. Can you hear me now?
Shachar Daniel: Yeah. Now, it's better.
Unidentified Participant: Okay. My question is pretty quick and simple. Does the path to profitability come at expense of growth?
Shachar Daniel: Okay. So it's a very, very good question. So basically, our transition to profitability was made possible, thanks to a calculated balance that we made between growth and profit. It is our intention to continue keeping this balance that we will allow the company to continue growing alongside sustain itself. As we did it before, management will consider and we will consider the two aspects all the way. For example, if we will decide to invest in development of a new product or a new demand or new markets, investing more in marketing to enter new segments, all of these actions will be taken in order to save future growth and profitability, meaning we approved the word and more important to ourselves that our current business can be profitable and can fund itself. And our intention is to stay profitable and to stay efficient of course, of course, that you will see an amazing opportunity of expanding, developing, investing in R&D or in new markets maybe we will take a decision to change a little bit this balance, but the direction is this direction. I hope it answered your question.
Unidentified Participant: It does. Thank you so much.
Shachar Daniel: Thank you.
Operator: Our next question comes from Robert Smith from the Center Performance (ph) Investing. Please proceed.
Unidentified Participant: Thanks for taking my questions. Congratulations on steps to profitability. You mentioned that in a particular area that you've been addressing that you lead from eighth or ninth to about third. Can you give me some idea as to the first two companies that are basically ahead of you at this point and what kind of volume of business they do?
Shachar Daniel: Okay. So these are two companies. Again, it's not according -- there are private companies. So what I can mention is also only for my knowledge and understanding the business, not from any formal numbers or statistics or data that we have about these companies. And the leading company in this space, according to my knowledge, is an Israeli-based also company. The name is Bright Data. And the second company -- in the second place, again, according to our knowledge is a European company, the name is Oxylabs, which is basically a sister company of the biggest maybe consumer of VPN in the world which is not VPN. These two leaders are leading the market. They are more matured enough and they started few years before we started. Regarding the numbers I don’t want to mislead you, but I can tell you in a high level that as far as we know both of them are doing more than $100 million a year and they are profitable and they are growing.
Unidentified Participant: Thanks so much. I’m grateful. Good luck.
Shachar Daniel: Thank you.
Operator: Our next question comes from Brian Kinstlinger from Alliance Global Partners. Please proceed.
Brian Kinstlinger: Great. I want to follow up on one of the questions that was just asked. I'm curious, if the KPIs that you look at in order to give you confidence that you can continue this growth path for the next 12 months to 18 months. And is that growth path similar to the growth that you're seeing currently in the business? Is it a little bit slower? Is it a little bit faster just trying to understand that piece.
Shachar Daniel: Okay. First of all, it's not only in our company or space, the major KPI in order to maintain growth and sustainable business is the retention of the current customers. The purpose, of course, is to have a minimal amount of churn and, of course, the second target is to have new customers or assess that will be higher than the churn months after months, and by this, we can maintain the current customers, current stream of revenues and to grow. From this perspective, I can tell you that in the last let's say, 1.5, six, eight, seven quarters since we invested a lot, as I mentioned before, in our network and the stability of our products and the performance of our product, we see an amazing retention for most of our customers that are -- some of them are in an annual mode, some of them in has six months subscriptions, some -- basically, most of them are in monthly recurring revenue basis. This is our space and this is also the competition. So we are trusting the level of satisfaction of our customers and the professionalism of our business development and sales team that will maintain them in addition to bring new customers, app sales and gross sales of our new products. Regarding the growth, this year, we grew in amazing numbers, to be honest with you, even more than I expected, which was an amazing surprise hope it will be surprise all my life from this kind of growth. The target is to keep the growth all the time. We are a growth company by bringing new customers, by listing new product, by gross sales by access. Now to tell you if we will have the same rate of growth, the target is, yes, it's to grow. Of course, we have our target numbers. We have our budget and we know what we want, but I don't want at this point to talk about numbers, just to tell you that we are trusting our team, trusting the -- by the way, the industry, the market that is growing, the AI that came in, the data big decisions that many huge organizations are announced themselves the fact that everybody needs data and understand the data is the blood life of everything, also providing us level of trust that we will grow together with the market and the fact that we are one of the leading brands in this space.
Brian Kinstlinger: So just a follow-up, can you share what churn is today and maybe what it was three years ago? And then in addition, is there any pipeline metrics that measures your potential new customer wins over the next 12 months to 18 months? Is there any way to track that?
Shachar Daniel: Yes. The churn is very -- it's not a one number, okay? Because you can measure churn growing in many ways. And we have our formulas, but it's a very complicated explanation. I can tell you that the churn is around 2, 2.5 times better than the churn that we had two years ago. And we didn't -- we are planning, I guess, in the next quarter also to release KPIs for our retention, churn and lifetime value of our customers. And then, we will explain the need to be much easier for me also to elaborate about it in the investors call. So basically, at this point of time, I prefer not to mislead and starting to explain about our churn formulas, LTV formulas, et cetera.
Brian Kinstlinger: And can you discuss in any way pipeline to evaluate the new customer side of the equation?
Shachar Daniel: We have now basically a pipeline of millions of dollars that we are discussing, negotiating, we are in trial in proof of concept, we call it trial, but it's the same like proof of concept in our pipeline. Some of them, it's a very short sales process that can take one to two weeks. By the way, most of our customers are in a very short sales purses, and some of them, it will take time because there are big organizations, have the chain of approvals, you need to go through the diligence procurement, due diligence scores, et cetera., but we have pipe of -- from new money perspective of millions for 2024, that according to our formulas, and we have probability some of them running 70%, some of them were in 90%, some of them are in 50%. And we have our formula that we generate from this formula our projections for new customers/new apps courses for the next four quarters of 2024.
Brian Kinstlinger: Okay. The last question I have is, I believe from your -- when you preannounced the numbers, I think you said you generated operating cash flow. Can you share what your third quarter operating cash flow is and as we think about going forward, should adjusted EBITDA somewhat track cash flow or will it be lumpy?
Shachar Daniel: So as we announced Shai, correct me if I wrong, our operating cash flow is around $1.5 million for the quarter.
Shai Avnit: Yes, we said more than $1.5 million, more -- a bit more than this year.
Shachar Daniel: A bit more. The adjusted EBITDA is $1.9 million. Your question, Brian, is what is -- how do we see this gap in the next...
Brian Kinstlinger: There was a similar ratio we should think about going forward of cash flow to adjusted EBITDA.
Shachar Daniel: Shai, you want to explain?
Shai Avnit: As we see it, there shouldn't be any huge differentiation going forward, at least for the foreseen future between the EBITDA and the generation of cash from operating to operating activities.
Brian Kinstlinger: Right. All right. Thank you so much. Certainly, a 20% operating margin on a smaller business, although, it’s not even smaller, is much better than a breakeven operating results. So congratulations.
Shachar Daniel: Thank you very much, Brain. Appreciate it.
Brian Kinstlinger: Thank you.
Operator: Our next question comes from Robert Smith from the Center Performance Investing. Please proceed.
Unidentified Participant: Yes. Just a couple of more questions. First, do you feel that you have the financial resources to proceed without raising additional capital in the foreseeable future, say, in the next 12 months, 18 months?
Shachar Daniel: Yes.
Unidentified Participant: Okay. And secondly...
Shachar Daniel: Just to add more comments. Besides of maybe we will take a decision in the future to have a special events like M&A or something like this. But for our current operations, our current cash in the bank. And of course, the fact that we are not burning money, the opposite is correct. We are generating cash. So we don't need to waste money.
Unidentified Participant: Okay. And are you hiring people now?
Shachar Daniel: Of course. All the time.
Unidentified Participant: And what -- how would you characterize the availability of talent out there?
Shachar Daniel: In Israel?
Unidentified Participant: Well, whoever is possibly to help you in growing the business.
Shachar Daniel: No, you asked the availability of talent globally or specifically in our region, in our country is your question? [Multiple Speakers]
Unidentified Participant: Yes. Where are you...
Shachar Daniel: I'm saying it proudly Israel is full of talent, but full of great companies. But I can say -- by the way, I didn't discuss about it because it's not measurable, but I can say also proudly that due to the fact that -- due to these numbers and the success of the company, employees want to work in a place that is demonstrate success and like a winner place, okay? So we see a trend that a lot of CVs of employees are sending to us. A lot of employees want to work here. We can sometimes even do a hunting and we are doing it for talent from other companies. So at this point of time, with the help of god, it will say like this, we are an attractive place for employees. Of course, in Israel, the talent is a very expensive resource.
Unidentified Participant: Are you impacted by what's happening in geopolitical and everything that's happening in the Middle East there.
Shachar Daniel: Are you asking if we see any impact on our business?
Unidentified Participant: Well, I mean through personnel.
Shachar Daniel: From personal perspective?
Unidentified Participant: No, personnel.
Shachar Daniel: Yeah, personnel. Yeah, of course, we have some employees that are in the army now. By the way, most of them in the intelligence units, so they are sitting in front of computers, but they are still in the army. So first of all, our country is more important than everything, so we are supporting them. And second, our employees and myself knows that one of the targets of our enemies is to kill our economy. So even if someone is not in the army now, we feel that our donation and value to the country is to work harder to maintain the economics of this country and to show our enemies that nothing will break us. So we are starting -- succeeding to recover from this. And by the way, to do it even better because the motivation and the spirit of everybody now in Israel is something that is -- in regular days, is much higher.
Unidentified Participant: So best wishes for your future prosperity.
Shachar Daniel: Thank you very much.
Operator: This concludes our question-and-answer session. I would like to turn the floor back over to Shachar Daniel for closing comments.
Shachar Daniel: Thank you, operator. Thank you all of you for joining us today. Thank you for your continued support and we look forward to continue providing positive updates on our future (ph) progress.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
