TZ Limited has landed a significant bulk order from Microsoft and completed the Keyvision acquisition, positioning itself for a strong FY26 despite recent US market challenges.
- Third Microsoft purchase order totals AUD 865,000 with 90-day payment terms
- Bulk production order for 900 kits valued at AUD 1.75 million underway
- Keyvision acquisition doubles contracted projects and expands software capabilities
- US market backlog of AUD 2.5 million due to tariff disruptions
- FY26 revenue forecast set at AUD 17 million with ARR exceeding AUD 5.2 million
Strong Microsoft Orders Signal Growth
In its latest quarterly update, TZ Limited (ASX – TZL) revealed it has secured a third purchase order from Microsoft, adding to previous orders across Asia, Europe, and North America. This latest tranche, valued at approximately AUD 865,000 including spare units, is scheduled for full installation by September. Beyond this, TZ has placed a bulk production order for 900 kits at Microsoft’s request, representing a short-term demand valued at AUD 1.75 million. These developments underscore TZ’s growing footprint with a global tech giant and highlight the company’s manufacturing capabilities despite a 90-day payment cycle.
Keyvision Acquisition Accelerates Project Pipeline
The quarter also marked the completion of TZ’s acquisition of Keyvision Holdings Pty Ltd, a move that has effectively doubled TZ’s contracted projects over the past six months. Keyvision’s integration into TZ’s operations includes a software team now under TZ’s guidance, with new product offerings targeted at US and Asian markets. The acquisition not only expands TZ’s service portfolio but also strengthens its position in electronic security and access control software, a critical complement to its hardware business.
US Market Challenges and Backlog
Despite global regions performing in line with budget, TZ’s US business experienced a 50% downturn in FY25, attributed to tariff-related disruptions and election uncertainties. This has resulted in a confirmed order backlog of approximately AUD 2.5 million as of June 30, 2025. While these projects were delayed rather than abandoned, the backlog provides strong visibility for revenue recovery in FY26. Management remains cautiously optimistic that the US market will rebound, supported by the backlog and new contracts.
Strategic Focus and Financial Position
TZ has initiated a major hardware refresh program in response to Microsoft’s end-of-support for Windows 10, expected to generate over AUD 1.2 million in revenue. The company also recently tendered for a significant data centre contract involving 7,500 racks for a major European bank, valued at approximately AUD 4.5 million. Financially, the company reported a net operating cash outflow of AUD 320,000 for the quarter, with total available funding standing at AUD 514,000 and fully drawn financing facilities. Management emphasizes disciplined execution, customer relationship deepening, and scaling delivery capacity in high-growth sectors such as AI infrastructure and smart buildings.
Looking Ahead
With a base-case revenue forecast of AUD 17 million for FY26 and annualised recurring revenue exceeding AUD 5.2 million, TZ is positioning itself for a rebound and growth phase. The company’s ability to navigate US market uncertainties and successfully integrate Keyvision will be critical to sustaining momentum. Investors will be watching closely as TZ leverages its Microsoft partnership and expands into new sectors.
Bottom Line?
TZ’s FY26 outlook hinges on US market recovery and Keyvision integration, setting the stage for a pivotal year.
Questions in the middle?
- How quickly will the US market backlog convert into revenue given tariff uncertainties?
- What impact will Keyvision’s software offerings have on TZ’s competitive positioning?
- Can TZ sustain positive cash flow amid ongoing investment and payment terms?