Vection Secures $0.5m Defence Order, Boosting Program Value by 29%

Contract Expansion Signals Growing Confidence

Vection Technologies Ltd (ASX, VR1) has announced a $0.5 million expansion order under its longstanding defence tender, marking a significant step in the company’s multi-year engagement with a major defence client. This latest award increases the potential program value from around $21 million to $27 million, reflecting growing confidence in Vection’s delivery and technology.

The expansion follows the successful on-time and on-budget completion of a $4.4 million work package, which was part of the initial phase of the contract. With this milestone, Vection has now secured approximately $10 million in cumulative contracted value within an overall $37 million framework agreement. This progression underscores the company’s ability to meet demanding project requirements and deliver tangible performance gains.

Extending INTEGRATEDXR Into New Defence Domains

The new order is notable not just for its financial value but for its strategic implications. It extends Vection’s proprietary INTEGRATEDXR technology into additional defence domains, creating a new work-stream alongside the main program. This expansion highlights Vection’s role as a trusted partner in digital transformation initiatives, particularly in multi-domain defence operations where advanced extended reality (XR) and AI-driven workflows are increasingly critical.

Managing Director Gianmarco Biagi emphasized the importance of flawless delivery in securing further work, stating that the successful $4.4 million milestone gave the customer confidence to proceed with additional taskings. He also pointed to the global trend of defence organisations accelerating adoption of AI and XR technologies, positioning Vection well to meet this growing demand.

Looking Ahead to FY26 and Beyond

While the $0.5 million order is modest in nominal terms, it represents the first drawdown against the $27 million extension plan authorised after customer verification of performance improvements. Vection expects to recognise revenue from this order in the fiscal year 2026, providing a clear near-term revenue catalyst.

Importantly, the customer retains the right to contract for additional work under the broader $37 million framework, suggesting further upside potential if Vection continues to deliver on its promises. Investors and industry watchers will be keen to monitor how this multi-domain rollout progresses and whether Vection can convert the remaining optional work into firm orders.