How archTIS Is Winning Big Defence Contracts Across Four Nations
archTIS reports robust quarterly growth with a 17% rise in annual recurring revenue and key defence contracts secured across the US, UK, Japan, and Australia. A recent $7.5 million capital raise positions the company for further international expansion.
- Annual recurring revenue climbs 17% to $4.8 million
- Total quarterly revenue up 24% to $1.9 million
- Major contracts secured with US DoD, UK aerospace subsidiary, Japan IT giant, and Australian Defence
- Gross margin improves to 81%, operating expenses rise 11% amid global expansion
- Successful $7.5 million capital raise boosts cash reserves to $10.24 million
Strong Growth in Recurring Revenue
archTIS Limited has delivered a compelling quarterly performance, underscoring its growing stature in the global data-centric security market. The company’s annual recurring revenue (ARR) reached $4.8 million, marking a 17% increase year-over-year. This growth is driven by new customer acquisitions, expanded accounts, and notably low churn, reflecting strong customer retention and satisfaction.
Total revenue for the quarter rose 24% to $1.9 million, with licensing revenue leading the charge at $1.3 million. This shift towards higher-margin proprietary licensing solutions has lifted the gross margin to an impressive 81%, signaling a strategic pivot away from lower-margin services and equipment sales.
Key Defence Contracts Cement Global Presence
archTIS’s momentum is underpinned by significant contract wins across major defence markets. The company secured an initial contract with a prime contractor serving the U.S. Department of Defense for 1,000 user licenses of its NC Protect product, a data-centric security solution designed for sensitive collaboration within Microsoft 365 environments. This initial engagement could potentially scale to over 150,000 licenses, highlighting substantial future growth potential.
In the UK, archTIS inked a three-year deal with a subsidiary of a global aerospace and defence leader, valued initially at $263,185 for 400 user licenses. This contract supports the client’s cloud migration to Microsoft 365 and may serve as a blueprint for broader deployment across its global workforce.
Japan marked a strategic milestone with archTIS’s first sale of its Trusted Data Integration (TDI) platform to a major multinational IT and electronics corporation. The annual license, valued at $390,000, enables the customer to trial the platform for secure data services, including potential applications within the Japan Ministry of Defence.
Back home, archTIS renewed a $1.3 million subscription with the Australian Department of Defence for its Kojensi platform, which facilitates secure access and collaboration on classified information. This renewal included a 75% increase in user licenses, reflecting growing trust and reliance on archTIS’s solutions for national security.
Financial Strength and Strategic Investment
Operating expenses rose 11% to $1.9 million, primarily due to increased headcount and travel expenses supporting international expansion efforts. Despite this, the company generated positive operating cash flow of $1.4 million for the quarter and ended with $4.9 million in available funds.
Shortly after quarter-end, archTIS completed a well-supported capital raise of $7.5 million through the issuance of 50 million shares at $0.15 each. This infusion boosts pro-forma cash reserves to $10.24 million, providing a robust financial runway to accelerate product development, expand global operations, and deepen strategic partnerships.
Looking Ahead
archTIS’s leadership is optimistic about the company’s trajectory. CEO Daniel Lai highlighted the significance of recent contract wins across key allied defence markets, emphasizing the validation of archTIS’s technology in highly sensitive environments. The company’s strategy to leverage these wins to create a “network selling effect” could unlock further opportunities within coalition defence sectors worldwide.
With a strong balance sheet, expanding customer base, and innovative product suite, archTIS is well-positioned to capitalize on the increasing global demand for secure information sharing solutions in defence and regulated industries.
Bottom Line?
archTIS’s latest quarter sets the stage for accelerated global defence expansion, but scaling initial contracts to broader deployments will be critical to sustaining momentum.
Questions in the middle?
- Will archTIS secure the broader rollout of over 150,000 user licenses within the U.S. Department of Defense?
- How will operating expense growth impact margins if revenue growth slows amid international expansion?
- What new strategic partnerships or product innovations will archTIS pursue to maintain its competitive edge?
