Excite Technology Services lifted revenue by 74% to $21.3 million in FY26 but still recorded a $5.4 million loss, with auditors flagging material uncertainty over its ability to continue as a going concern.
- Revenue surged 74% to $21.3 million
- Net loss narrowed 16% to $5.39 million
- Cash reserves just under $1 million at year-end
- Material uncertainty flagged on going concern
- CBIT acquisition drives significant revenue and goodwill
Revenue Growth Masks Persistent Losses
Excite Technology Services Limited (ASX:EXT) reported a striking 74% jump in revenue to $21.3 million for the year ended 31 March 2026, powered largely by its cybersecurity services and the acquisition of digital forensics specialist CBIT Pty Ltd. However, this top-line surge failed to translate into profitability, with the company posting a net loss after tax of $5.39 million, a modest 16% improvement from the prior year’s $6.43 million deficit.
The revenue increase reflects a combination of stronger sales across its five operating segments, most notably CBIT, which contributed $15.8 million, and robust contract wins in key regions such as New South Wales and Tasmania. Despite this growth, the company remains unprofitable, continuing a trend of losses that have cast a shadow over its financial stability.
Cash Position and Capital Raises Support Operations
Excite’s cash and cash equivalents dipped slightly to just under $1 million at year-end, down from $1.14 million the previous year. Operating cash outflows widened to $4.53 million, reflecting ongoing investment in scaling its cybersecurity services and integration costs related to CBIT.
To bolster its balance sheet, the company raised $2.8 million through equity placements and $3.15 million via convertible notes during the year. These capital injections are critical as Excite navigates the challenges of growing its recurring revenue streams while managing costs. The convertible notes, which carry significant interest and conversion features, echo previous fundraising rounds including a $1.05 million convertible note raise earlier in 2026 that aimed to capitalise on the company’s strongest operational cash flow quarter $1.05 million convertible notes.
Going Concern Uncertainty Casts a Long Shadow
The financial report, still subject to audit, is expected to include an unmodified opinion but with a material uncertainty relating to going concern. This warning highlights the risk that Excite may struggle to continue as a going concern if it fails to meet key assumptions underpinning its cash flow forecasts. These assumptions include winning new contracts at historical rates, renewing existing service agreements, reducing costs in line with available resources, and successfully raising further capital.
Failure to achieve these could force the company to realise assets or settle liabilities at amounts different from those recorded, potentially impacting shareholders and creditors. The directors remain cautiously optimistic but acknowledge the risk, underscoring the precarious balance between growth ambitions and financial sustainability.
Acquisition of CBIT Drives Goodwill and Revenue Expansion
The acquisition of CBIT Pty Ltd, completed in October 2024, has been a major contributor to Excite’s revenue growth and goodwill on the balance sheet. CBIT generated $15.8 million in sales for FY26 and brought with it a goodwill asset valued at $2.7 million after impairment adjustments. The company’s impairment testing uses a conservative 16% pre-tax discount rate and projects modest revenue growth beyond the initial two-year forecast period.
CBIT’s focus on digital forensics hardware, software, and training complements Excite’s cybersecurity offerings and provides a diversified revenue base. However, the integration costs and ongoing investments have weighed on profitability, as reflected in segment EBITDA losses.
Operational Cost Management and Segment Performance
Excite’s total employee benefit expense fell sharply to $5.5 million from $9.2 million the prior year, indicating significant cost control efforts. Depreciation and amortisation more than doubled to $1 million, driven by right-of-use assets and intangible impairments.
Segment results were mixed: Excite IT recorded a positive EBITDA of $1.42 million, while the corporate segment and CBIT posted losses of $1.7 million and $193,000 respectively. The cybersecurity arms in New South Wales and Tasmania continued to operate at a loss, reflecting the investment phase of the business.
Excite’s revenue momentum was evident earlier in the year, with a record $9.2 million quarter in customer receipts reported in January 2026, supported by strong contract wins and renewals record $9.2 million quarter. This underscores the company’s ability to grow its top line despite ongoing profitability challenges.
Bottom Line?
Excite’s robust revenue growth contrasts with persistent losses and a flagged going concern risk, making its next capital and contract wins pivotal.
Questions in the middle?
- Will Excite secure enough new contracts to sustain growth and improve cash flow?
- How will the company manage the balance between investment in growth and cost containment?
- What impact will the final audit opinion have on investor confidence and share price?