How HighCom Slashed Losses 90% and Prepares to Launch Game-Changing XTclave Tech
HighCom Limited reports a sharp 90% reduction in net loss for FY25, turning EBITDA positive and advancing new product development with XTclave technology. Leadership changes and strategic focus set the stage for growth despite cautious US market conditions.
- Net loss narrowed 90% to $1.19 million in FY25
- Revenue rose 6% to $48.1 million
- EBITDA turned positive at $0.2 million from a $9.6 million loss
- XTclave technology commissioned to accelerate R&D and new product lines
- No dividends declared; company remains debt-free with $3.8 million credit facilities
Financial Turnaround Amid Leadership Changes
HighCom Limited (ASX – HCL) has delivered a markedly improved financial performance for the year ended 30 June 2025, reporting a net loss of $1.19 million, a 90% improvement from the prior year’s $12.02 million loss. This progress was underpinned by a 6% increase in revenue to $48.1 million and a positive EBITDA of $0.2 million, reversing a $9.6 million loss in FY24. The company credits a strategic focus on stabilizing operations and cost management for this turnaround.
Significant executive changes accompanied this shift, with Todd Ashurst appointed Group CEO in March 2024 and Martyn Dominy joining as CFO in May 2025. The leadership team has prioritized laying the groundwork for sustainable growth, signaling a new chapter for the defence technology group.
Operational Highlights and Technology Advancements
HighCom’s US-based HighCom Armor division, specializing in personal ballistic protection equipment for military and law enforcement, saw steady sales growth and improved EBITDA performance. A key milestone was the recommissioning of the XTclave technology in July 2025, a $4.1 million investment that fast-tracks research and development for new product lines expected to launch in FY26. This innovation aims to expand HighCom’s market share by entering previously untapped segments.
Meanwhile, the Australian HighCom Technology unit continues to support multi-year defence contracts involving unmanned aerial systems (UAS) and counter-UAS (CUAS) technologies. The successful bid for Project L156 marks a strategic expansion into CUAS, with trials planned for the first half of FY26. The conclusion of the L129 contract at June 30, 2025, has not slowed momentum, as the division actively pursues new sales opportunities within the ANZ region.
Financial Position and Outlook
Despite the improved earnings, gross margins declined to 23% from 30% in FY24, mainly due to discounted sales of excess inventory. Inventory levels were reduced from $17.8 million to $14.4 million, reflecting tighter inventory management. Cash reserves stood at $5.8 million, slightly down from $6.2 million, with no debt on the balance sheet and $3.8 million in available credit facilities.
Looking ahead, HighCom acknowledges a softer start to FY26 in the US market, attributed to a temporary slowdown in government spending on legacy programs. However, legislative funding expected from October 1 is anticipated to revive demand. The company’s outlook remains cautiously optimistic, with management focused on commercializing XTclave-enabled products and capitalizing on defence contracts to drive revenue and EBITDA growth.
Notably, HighCom declared no dividends for FY25, opting to reinvest capital into growth initiatives. The company’s strategic emphasis on innovation, operational efficiency, and market expansion positions it well to navigate evolving defence sector dynamics.
Bottom Line?
HighCom’s FY25 results mark a pivotal step from loss to growth, but FY26 will test its ability to convert innovation and contracts into sustained profitability.
Questions in the middle?
- How quickly will XTclave-enabled products contribute to revenue and margins?
- What impact will US government spending shifts have on HighCom Armor’s sales pipeline?
- Can HighCom Technology secure further CUAS contracts to diversify revenue streams?
