HUB Achieves Record Revenues for Fiscal First Half of 2022

Company reports revenue growth to NIS 122.5 million and projects continuous growth and moving into profitability this year

HUB Cyber Security (Israel) Limited (TASE: HUB), a developer of Confidential Computing cybersecurity solutions and services (“HUB” or the “Company“), published today its H1 2022 financial results.

NOTE: The reports and all financial references are on a proforma basis as in this report the company presents for the first time the consolidated results of HUB,  ALD and Comsec with the relevant proforma comparison data of the same period last year.

Summary of reports and business update:

1. Revenues and Revenue Forecast
   a. Revenues for H1 2022 were NIS 122.5 million
   b. Approximately NIS 120 million were attributed to the professional services arm with significant technology products and services revenues anticipated in H2 2022 including:
   i. $20.5 million purchase order for HUB’s Confidential Computing cyber solutions for this year.
   ii. Contracts of over USD 500 million for the provisioning of HUB’s Confidential Computing solutions over the following years where phase one of contracts’ execution is expected to amount to USD 80 million for start of deployment till the beginning of calendar 2023 (as was reported June 15, 2022 TASE Ref: 2022-01-074374).
   c. Therefore, the Company expects to meet its annual revenues forecast for YE2022 of USD 115 million, of which USD 38 million will be attributed to HUB’s Confidential Computing core solutions. The Confidential Computing sector is the most innovative aspect of cybersecurity and expected to grow at 100% CAGR as reported by Everest Group Research of Confidential Computing in 2021. HUB is a member of the Confidential Computing Consortium group with other members being Google, Accenture, Cisco, Intel and others.
2. Profits and Profits Forecast
   a. The company estimates that based on the abovementioned contracts and deal flow, that it will move into a positive Adjusted EBITDA already in 2022 and USD 20.6 million in YE 2023.
   b. The Company expects to move into profitability this year despite the NIS 65 million loss it posted in H1 reports.
   c. Most of the reported loss (NIS 37 million) is attributed to expenses related to the anticipated SPAC merger and NASDAQ listing, and expenses related to the mergers of ALD and Comsec, severance expenses for termination of redundant executive managers post mergers, depreciation and amortization costs and share based compensation costs.
   d. Additional NIS 12 million have been invested in R&D and sales and marketing that support the expected revenues for H2 2022 and the next three years.
3. The Company also reports a total Equity of  NIS 195 million.
4. Equity to balance sheet ratio is 59% out of a total of NIS 330 million.

Important achievements post H1-reports date 

1. A submission of an F-4 prospectus to the SEC for the expected SPAC merger and NASDAQ listing at USD 1.28 billion market capitalization that is expected to close in Q4 2022. 
2. Completion of assets purchase of a wholly owned European subsidiary that was established for the purpose of EMEA business development activities .for the sale of HUB’s cybersecurity solutions for datacenters (as reported on June 15, 2022, TASE Ref: 2022-01-074374).
3. Completion of an NIS 46.6 million public PIPE round as reported on February 23^rd, 2022.
4. Completion of an NIS 17 million public PIPE round from foreign and domestic investors to increase Company’s financial flexibility as reported on May 15^th and 18^th 2022, TASE Ref: 2022-01-057991 and 2022-01-060649.

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