Checkit has delivered a very robust H1, with ARR up 48% to £10.2m, driven by several very encouraging wins, which continue to highlight the company’s compelling value proposition and large market opportunity. Despite these long-term drivers, progress has moderated in recent months (H1 sales bookings are flat y/y) as CKT has started to see macro impacts on its business, including longer sales cycles. To capture this short-term caution, we update our forecasts – trimming FY23 & 24 sales 6% and 12% respectively. Responding to this changing macro environment, CKT has decided to defer certain investment decisions whilst also has identified cost saving, meaning that (notwithstanding our lower revenue estimates) we now expect narrower losses, FY23 AOP: £-7.6m (prev: £-8.8m) and FY24: £-5.2m (prev: £-6.4m). Logically cash burn should fall too, indeed based on updated forecasts, we expect by FY24 y/e cash should still be strong at c.£9.5m and sufficient in our view to fund CKT through to b/e -this being c.£18m sales, implying a potential c.1x sales/ARR multiple for the business.
