By Terell Wright

Alarum Technologies' shares fell Wednesday after the company said its investment plans were expected to put near-term pressure on gross margins and earnings before interest, tax, depreciation and amortization.

Shares were down 24% to $8.87 and are down 20% year-to-date.

The web data collection company's third-quarter margin fell to 55.6%, down from 71.8% a year earlier.

The company said it expanded capacity and built new pipelines ahead of expected revenue, causing a temporary drop in gross and operating margins. Alarum said it is intentionally frontloading infrastructure to support the fast-growing demand for AI training runs.

"We believe this is the right long-term strategy: sacrifice some near-term profitability and invest to lock in market share and multi-year relationships in a segment that is growing exponentially," said Alarum Chief Executive Shachar Daniel.

Third-quarter profit fell to $100,000, or a penny a basic American Depository Share, from $4.2 million, or 60 cents an ADS, in the same quarter a year earlier.

Revenue climbed 81% to $13 million, driven by a large-scale AI customer and an increase in new product sales.

The company expects fourth-quarter revenue of $11.2 million to $12.8 million.

Alarum forecasts its fourth-quarter adjusted Ebitda to be between $500,000 and $1.5 million.

Write to Terell Wright at terell.wright@wsj.com

(END) Dow Jones Newswires

November 26, 2025 15:14 ET (20:14 GMT)

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