How Vection Technologies Achieved Positive EBITDA and Targets $70m Revenue

Strong Financial Milestone

Vection Technologies Ltd (ASX, VR1) has announced a significant financial milestone, reporting its first positive underlying EBITDA for the fiscal year 2025. This marks a turning point for the company, which has steadily expanded its revenue base to approximately $38 million in FY25, reflecting a 60% increase year-on-year. The positive EBITDA, estimated at around $4 million, signals improved operational efficiency and margin expansion, with gross margins tracking between 35% and 40%.

Defence Sector as a Growth Engine

The company’s renewed focus on the Defence sector is a key driver behind this growth. Vection’s proprietary Spatial Computing and Artificial Intelligence technologies have found increasing adoption among defence contractors, particularly in Europe and NATO-related projects. With geopolitical tensions and defence spending on the rise, Vection’s immersive XR (extended reality) and AI-powered solutions are positioned to meet the demand for advanced training simulations, real-time operational decision-making, and cyber and data security enhancements.

Notably, Vection has secured cumulative contracts worth approximately A$36 million with top-tier defence clients, including a leading EU contractor and NATO Tempest vendor. These contracts encompass AI-capable edge datacenters, immersive training, and mission-critical ICT infrastructure upgrades, underscoring Vection’s growing reputation as a trusted technology partner in the sector.

Robust Sales Pipeline and Future Outlook

Looking ahead, Vection has set an aspirational revenue target of $70 million for FY2026, supported by a strong sales pipeline valued at around $50 million currently under negotiation. The company’s pipeline conversion rates have improved to between 50% and 65%, reflecting increased market traction and client confidence. Recurring revenue now represents 35% of total revenue, up more than 200% compared to the prior corresponding period, providing a more stable and predictable income base.

Vection’s strategy includes expanding its international footprint, particularly in the US market through partnerships with Dell Technologies and Xerox, and scaling its sales team to accelerate contract wins. The company also anticipates positive R&D outcomes that will enhance its AI monitoring solutions and support new product releases, further strengthening its competitive position.

Technology and Market Position

Vection’s integrated software platform, branded as INTEGRATEDXR®, combines spatial computing with AI to deliver immersive, data-driven experiences that improve collaboration, training, and operational efficiency. The company holds 29 global patents and multiple ISO certifications, reinforcing its technological leadership. Its modular software architecture allows rapid deployment and customization across defence, aerospace, law enforcement, and commercial sectors.

With a market capitalization around $70 million and a low-interest unsecured debt facility, Vection is financially positioned to capitalize on the forecasted US$1.8 trillion addressable market for spatial computing and AI by 2030. The company’s European manufacturing base also ensures compliance with defence regulations and supply chain security, a critical advantage in this sensitive sector.

Leadership and Governance

Vection’s experienced management team and board, including former executives from Apple and NYSE-listed companies, provide strategic oversight and operational expertise. Managing Director Gianmarco Biagi and COO Jacopo Merli bring deep industry knowledge, particularly in defence and new technologies, supporting Vection’s ambitious growth plans.