archTIS Records 209% ARR Growth with Key US and Australian Defence Contracts

Record Growth Fueled by Defence Sector Momentum

archTIS Limited (ASX:AR9) closed FY2026 on a high note, with Annual Recurring Revenue (ARR) soaring 209% year-on-year to $14.8 million. This explosive growth was accompanied by record contracted sales of $14.1 million, a 65% increase over FY25, underscoring the company's successful expansion beyond its traditional Australian Defence stronghold.

The company’s revenue for Q4 FY26 jumped 92% to $3.5 million, maintaining a robust 74% gross margin. Meanwhile, operating expenses fell 11% quarter-on-quarter for the second straight quarter, reflecting management’s ongoing cost discipline following the Spirion acquisition integration. Cash, deposits, and receivables combined to $5.8 million, bolstered by significant late-quarter invoicing expected to convert to cash early in the next quarter.

U.S. Department of Defense Advances NC Protect Deployment

A critical milestone was reached when the U.S. Department of Defense (DoD) completed final production testing of archTIS's NC Protect software, passing all 60 test cases. This validation clears a major technical hurdle and has propelled enterprise licensing negotiations forward for a potentially substantial rollout across the U.S. defence user base. While the timing and scale of any contract remain uncertain pending government procurement processes, this progress signals growing confidence in archTIS’s data-centric security approach within high-assurance environments.

Australian Defence Boosts Kojensi Commitment

Shortly after quarter-end, archTIS secured a $3.2 million contract renewal with the Australian Department of Defence for its Kojensi Enterprise platform. The 12-month contract, which commenced 1 July 2026, includes $1 million in recurring software licenses and $2.2 million in application development and maintenance services. This deal not only reinforces archTIS’s foothold in Australia's sensitive information collaboration environment but also underpins recurring revenue streams into FY2027.

Diversifying Customer Base and New Partnerships

FY26 marked a transformation in archTIS’s customer profile. The base expanded from roughly 60 predominantly defence customers to 225 active clients across more than a dozen verticals. The top 10 customer revenue concentration halved to 32.3%, while Australian Defence’s revenue share dropped to 16.6%, highlighting successful diversification efforts.

The company also signed a Technical Partner Agreement with Mattermost, Inc., aiming to integrate Mattermost’s secure collaboration platform with archTIS’s attribute-based access control (ABAC) technology. This collaboration targets allied defence environments including NATO and coalition partners, aligning with archTIS’s strategy to scale data-centric security across allied defence and commercial markets.

Cash Flow and Funding Position

archTIS reported a negative operating cash flow of $3.8 million for the quarter, including one-off costs related to the Spirion acquisition and transition expenses. The company ended the quarter with $2.9 million in cash and equivalents, supplemented by $2.9 million in trade receivables and $504,000 in unused credit facilities, amounting to $3.4 million in total available funding. Management acknowledges the cash runway is under one quarter based strictly on operating cash flow but emphasizes that receivables conversion and contract payments, including $1 million received from Australian Defence in early July, support ongoing operations and business objectives.

archTIS is actively reviewing its working capital and cost structure to sustain growth and maintain alignment between operating expenses and revenue.