Vection Technologies Posts $17.5m Cash Receipts and $7.8m Defence Order in Q2 FY26

Strong Financial Momentum

Vection Technologies Ltd (ASX, VR1) has delivered a standout performance in the second quarter of fiscal 2026, posting customer cash receipts of $17.5 million, a staggering 250% increase from the previous quarter. This surge reflects the successful conversion of contracted revenues and improved collections, marking a clear turnaround from earlier periods.

Net operating cash flow swung positively to $1.8 million, reversing a $1.7 million outflow in the prior quarter and underscoring disciplined cost management alongside revenue growth. The company’s cash reserves ballooned to $14 million by the end of December 2025, buoyed by a $21 million capital raise in October and a $4.8 million reduction in debt.

Defence Contract Fuels Multi-Year Growth

A pivotal highlight was Vection’s receipt of its first $7.8 million order under a $22.3 million NATO-aligned Defence framework. This contract transitions the company from pilot projects to a structured, multi-year delivery phase extending through to 2030. To date, Vection has recognised $12.3 million in revenue from this Defence customer, demonstrating its execution capability and solidifying its role within the European defence ecosystem.

The Defence contract not only provides revenue visibility but also positions Vection as a trusted partner in a strategically important sector, potentially opening doors to further industrial alliances and expanded market share.

Expanding AI and XR Ecosystem

Vection’s AI segment also showed robust growth, securing $1.5 million in new purchase orders across diverse industries such as agritech, cybersecurity, healthcare, and public administration. Nearly half of these orders stemmed from renewals and upselling, highlighting a growing base of recurring revenue.

Investments of approximately $3 million have been channelled into integrating and scaling the company’s AI and Extended Reality (XR) platforms into a unified technological ecosystem. This strategic move aims to enhance product offerings and support future growth across healthcare, retail, and defence sectors.

Strategic Acquisitions and Market Expansion

Vection is nearing completion of acquisitions in Australia (DX LAB) and Hong Kong (Monogic), which are expected to accelerate international sales and broaden its geographic footprint. The company is also expanding its sales force and strengthening partnerships with major distributors, including notable collaborations with Xerox, Accenture, and Dell Technologies.

These efforts are complemented by a refreshed brand identity and new marketing tools designed to position Vection for sustained international growth.

Outlook and Strategic Focus

Looking ahead, Vection enters the second half of FY26 with a strengthened balance sheet, positive cash flow momentum, and a robust pipeline valued at nearly $60 million over three years. The company remains focused on converting contracted work into delivered revenue, increasing recurring income, and maintaining disciplined execution as it scales.

CEO Gianmarco Biagi emphasised the company’s solid footing and strategic direction, noting that the Defence framework and AI+XR ecosystem investments are key drivers for future growth and earnings predictability.