HUB Security (TASE: HUB) released its first full financial results in 2022 after completing a flurry of M&A activity the year prior with ALD (merger, Q1) and ComSec Global (acquisition, Q3 ‘22). This submission comes in the lead-up to its SPAC merger with the Mount Rainier Acquisition Corps (NASDAQ: RNER), which will result in a delisting from TASE and a same-day relisting on NASDAQ as a US listed equity. Before getting into some of the more interesting parts of the H1 ’22 financials, however, some background is in order.
HUB Security hails from the cyber security/confidential computing industry, which is booming worldwide despite the broader downturn in tech indices YTD. As the cyber offensive capabilities wielded by state and non-state actors alike increases in sophistication and the tempo of attacks surge, confidential computing is a good field to be in–CAGR through 2030 is pegged at robust double digit figures by numerous market analysts and commentators. For anyone interested in learning more about confidential computing, I would recommend consulting the Confidential Computing Consortium — its an excellent source for objective sectoral research. The bottom line is that a broad consensus has emerged around the hyper-growth potential the sector as promises through 2030, which is an encouraging sign for newer listees like HUB that lacks the name-recognition enjoyed by other computing giants such as MSFT, INTC, IBM, and others.
But back to HUB Security and its H1 fins. HUB hails from the tech/cyber security ecosystem in Israel, and will soon be trading on NASDAQ with a valuation of $1.28b and initial SP around $10 pending the successful completion of a SPAC merger with the Mount Rainer Acquisition Corps (RNER). In its MD&A, HUB forecasted a Q4 ’22 listing with a high degree of confidence, indicating that so far so good. The company recently sought court approval for a same-day TASE delisting and NASDAQ listing in order to ensure a smooth and equitable NASDAQ debut. Looking thereafter, some $50m in PIPE funding from institutional investors in both Israel and the US has been secured for after the listing, which should help ensure shareholder demand moving forward in the short term horizon.
Onto its H1 ’22 financial results, some of the abridged highlights they include:
- ±$40m in revenue
- >$500m in contracts secured, with $80m in place for phase-1 deployment (i.e. short-term windfall)
- Forecast of year-end profitability given H1 performance
Key operational achievements from the same period include:
- F-4 submission to the SEC as a crucial precursor to its NASDAQ listing
- Completion of nearly $20m in PIPE funding YTD closed in two separate rounds
- Purchase of a wholly owned European subsidiary that was established for the purpose of EMEA business development activities in the EU and beyond.
By the looks of it, HUB is aggressively positioned for a successful SPAC listing notwithstanding a challenging macroeconomic backdrop. A quick glance at the chart shows that they’re strongly outperforming sectoral peers and baseline indices alike despite the beating tech equities have taken YTD across the globe. I personally have been waiting a long time to see these full financial results, and must admit that I wasn’t disappointed. We’ll see if HUB manages to squeeze out profitability by the year’s end, but regardless their underlying fundamentals suggest a hyper-growth trajectory primed for continued growth on NASDAQ. Disclaimer: this is not financial advice nor am I a financial advisor.