Hydrix Secures $6.5M Contracts and Launches Defence Subsidiary

• Secured $6.5 million in new MedTech and DefenceTech contracts
• Raised $5.2 million plus $5.1 million in debt conversion commitments
• Established Hydrix Defence as a wholly owned subsidiary
• Group revenue of $2.2 million with a $0.9 million operating loss
• Cash on hand at $3.0 million with retail shortfall bookbuild ongoing

Robust Contract Wins Drive FY27 Revenue Confidence

Hydrix Limited (ASX:HYD) closed the June quarter with a significant $6.5 million haul in new contracts across its MedTech and DefenceTech divisions. These wins underpin the company’s revenue outlook for the first half of FY27, lifting its active client programs beyond 15 with an aggregate estimated value exceeding $37 million.

Notable contracts include a $3.4 million stage supporting Remedy Robotics’ AI-enabled N1 cardiovascular robotic platform, a contract advancing Quantanosis AI’s next-gen robotic stroke treatment, and a $1.2 million contract with NIOA Group for telemetry payloads in counter-uncrewed aerial system (C-UAS) applications. Hydrix also commenced initial work on Phasor Innovation’s quantum sensing technologies designed for GPS-denied environments, spanning maritime to airborne use cases.

New Defence Subsidiary to Capitalise on Sovereign Tech Demand

In a strategic move, Hydrix established Hydrix Defence as a wholly owned subsidiary during the quarter. This entity will focus on developing and owning proprietary technologies aligned with Australia’s National Defence Strategy and the A$425 billion Integrated Investment Program, which earmarks up to A$7 billion for counter-drone and counter-UAS capabilities.

Hydrix Defence aims to leverage the Group’s embedded systems engineering expertise to address capability gaps in sensing, autonomy, and counter-UAS technologies. The company is actively evaluating licensing and acquisition opportunities to diversify and extend its DefenceTech footprint, supported by existing industry relationships and security clearances.

Balance Sheet Strengthened Through Capital Raise and Debt Conversion

Hydrix raised $5.2 million via an accelerated renounceable entitlement offer (AREO) and secured $5.1 million in debt conversion commitments, materially bolstering its balance sheet and operational flexibility. The retail shortfall bookbuild remains open until early September to complete the $8.18 million target.

Despite a cash operating loss of $0.9 million for the quarter, revenue held at $2.2 million. The operating loss was influenced by a temporary pause in the SynCardia Emperor total artificial heart program, triggered by client funding changes. Hydrix is managing working capital carefully while supporting the client’s efforts to resume funding and progress the program.

Cash Position and Funding Outlook

Cash on hand stood at $3.0 million at quarter end, with no unused financing facilities reported. The company estimates funding availability for approximately 1.8 quarters based on current operating cash flows but expects an improvement as delayed client payments are settled and new contract revenues are realised.

Hydrix’s board remains confident in its ability to continue operations and meet business objectives, contingent on completing the entitlement offer and executing on recent contract wins. The company’s focus on safety-critical embedded systems in both MedTech and DefenceTech sectors positions it well amid growing demand for sovereign and interoperable defence technologies.

Bottom Line?

Hydrix’s contract momentum and strategic DefenceTech expansion hinge on completing its capital raise and navigating near-term client funding uncertainties.

Questions in the middle?

• Will Hydrix successfully close the retail shortfall bookbuild to fully fund its growth plans?
• How quickly can the SynCardia Emperor program resume and contribute to revenue?
• What impact will Hydrix Defence’s proprietary technology development have on long-term shareholder value?