HUB Cyber Security Ltd. (NASDAQ: HUBC) reported first‑half 2025 revenue of $15.1 million, a 3.8% decline from $15.7 million in the same period last year. Gross margin rose sharply to 23% from 10% in H1 2024, driven by a higher mix of software‑centric contracts and disciplined cost management. Total assets increased to $73 million, with consolidated intellectual property and technology assets valued at approximately $40 million. Shareholders’ equity deficit narrowed from $(81 million) at the end of 2024 to $(59 million) at June 30 2025, and the company extinguished $22.85 million of legacy obligations year‑to‑date. Post‑period liquidity grew to $13.32 million in new cash proceeds.
The margin expansion reflects HUB’s strategic pivot away from legacy hardware‑centric services toward higher‑margin software and platform offerings. Management’s focus on operational discipline reduced variable costs, while the shift to subscription‑based licensing increased recurring revenue. The 13‑percentage‑point lift in gross margin is the largest in the company’s history and signals that the software‑centric model is delivering the expected profitability gains.
Revenue fell because the company’s legacy contract portfolio, which generated a larger share of revenue in H1 2024, contracted in the first half of 2025. The decline was partially offset by new contracts in the Secured Data Fabric and trust‑infrastructure segments, but the overall mix shift to higher‑margin, lower‑volume deals resulted in a modest revenue dip. The company’s CEO noted that the company is prioritizing profitability over short‑term revenue growth as it rebuilds its foundation.
On the balance‑sheet front, the $40 million in intellectual property and technology assets underpin the company’s Secured Data Fabric platform, positioning HUB to capture demand for secure data virtualization in regulated industries. The reduction in the equity deficit and the extinguishment of legacy obligations improve the company’s capital structure, but the current ratio remains low, indicating ongoing liquidity concerns. The $13.32 million of new cash proceeds post‑period provides a buffer for near‑term obligations.
CEO Noah Hershcoviz said the company has “re‑built the foundation—expanding margins, strengthening liquidity, and removing legacy constraints.” He added that HUB’s value is driven by its architecture rather than short‑term fluctuations, underscoring confidence in the long‑term strategy of building a global trust infrastructure for identity, secure data, and regulated AI.
The results highlight a clear trade‑off: while margins have improved dramatically, revenue growth has slowed, reflecting the company’s transition to a higher‑margin, software‑centric model. Headwinds include lingering liquidity concerns and the broader macro‑environment, but tailwinds remain in the form of growing demand for secure data virtualization in financial services, government, and critical infrastructure. The company’s focus on high‑margin software and platform offerings positions it well for long‑term growth, provided it can maintain liquidity and continue to win new contracts in its target markets.
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