WHK extends US client contract

Today, our US focussed cybersecurity Investment, Whitehawk (ASX: WHK) announced that a US Federal Government client had extended its contract with WHK for a 4th year.

As usual in cybersecurity, the exact organisation this contract is for is not disclosed due to the sensitive nature of the business.

The contract is worth a base amount of USD $672K and could extend out to an additional US$505K for a total of $1.1M in an upside case.

✅ Material sales contract #1

Even at the base level - this is a material announcement from WHK as the company’s revenues last year came in at US$3.2M.

We know that WHK’s client base is generally quite sticky and we see this extension as validation that WHK’s product is valuable to major US organisations.

The contract extension announced today is for WHK’s Cyber Risk Radar which is a subscription cybersecurity service - these products make up the bulk of WHK’s existing sales pipeline of US$22M (source, slide 14).

In our last note on WHK, we highlighted two key types of catalysts we were looking for with WHK - a sales catalyst and a regulatory catalyst.

While we wait on the US government to implement new compliance and maturity regulations - today’s extension is a step in the right direction on the sales catalyst front.

The key for WHK is now to start converting progressively larger chunks of its sales pipeline.

What’s next for WHK?

Here’s what we’re looking for from WHK:

🔲 30 June operating cashflow positive quarterly report

We’ll see if the company can achieve a cashflow positive quarterly imminently. Beyond that we want to see larger deals going forward:

🔲 Material sales contract #2

🔲 Material sales contract #3