archTIS Ltd (ASX:AR9, OTCQB:ARHLF) has delivered a strong June 2025 quarter, marked by a 17% increase in annual recurring revenue (ARR) to A$4.8 million and a 24% year-on-year rise in total revenue to A$1.9 million.
The period also saw major contract wins in the United States, United Kingdom, Japan and Australia, further reinforcing archTIS’ presence in key defence markets. Gross margin lifted to 81%, and positive cash flow from operations reached A$1.4 million. The company ended the quarter with A$4.9 million in available funds, bolstered post-period by a A$7.5 million capital raise, bringing pro-forma cash to A$10.24 million.
“This quarter marked a pivotal turning point, highlighting a period of strong strategic progress and a fundamental shift in the company’s trajectory toward becoming a global leader in data-centric security,” archTIS managing director and CEO Daniel Lai said.
“Major milestones were achieved across three key coalition defence markets in the US, UK, and Japan, reinforcing the company’s growing international presence and trust among allied industries.
“These recent awards serve as validation of our product capabilities within highly sensitive global defence environments. This validation, combined with the resulting 'network selling effect,' is opening critical new pathways to expand our global footprint and become the most trusted global provider of data-centric security solutions to the defence sector.”
Financial performance strengthens across core metrics
Revenue growth was underpinned by strong licensing income of A$1.3 million and A$0.6 million from services and equipment.
The higher-margin licensing mix contributed to an improved gross margin of 81%, up from the previous period. Operating expenses rose 11% to A$1.9 million, largely reflecting international expansion efforts, including increased headcount and travel.
Nonetheless, the company delivered positive operating cash flow of A$1.4 million and ended the quarter with A$4.9 million in cash. Following the successful capital raise in July 2025, archTIS reported pro-forma cash reserves of A$10.24 million to support growth initiatives.
US Department of Defense contract signals major milestone
In June 2025, archTIS announced a breakthrough contract for its NC Protect software with a US Department of Defense (DoD) prime contractor.
The initial A$38,500 contract covers 1,000 user licences for deployment across the Microsoft DoD365 environment, with procurement handled by Copper River Technologies.
This agreement lays the groundwork for a potential roll-out across more than 150,000 users, positioning archTIS for significant growth in US defence IT networks.
UK aerospace contract expands NC Protect footprint
The company secured a three-year deal with the United Kingdom arm of a global aerospace and defence conglomerate.
The A$263,185 contract for 400 NC Protect user licences will support the client’s migration to a Microsoft 365 environment and may act as a model for broader deployment across the customer’s global workforce of more than 100,000.
First Japanese TDI sale underscores regional expansion
In April 2025, archTIS finalised its first commercial contract in Japan, valued at A$390,000 annually, for the Trusted Data Integration (TDI) platform.
The customer, a Japanese multinational IT and electronics firm, will assess TDI for secure data services supporting regulated industries, including the Japan Ministry of Defence.
This transaction also marks the first monetisation of Direktiv, acquired in March 2025, and was introduced through Microsoft’s Defense and Intelligence team.
Australian Department of Defence renews Kojensi licence
In April 2025, archTIS renewed a sole-source contract with the Australian Department of Defence for its Kojensi software, valued at A$1.3 million. The updated agreement includes a 75% increase in user licences, demonstrating continued government confidence in archTIS' secure collaboration platform for classified data environments.
Customer retention remains high with expanding revenue base
Net revenue retention exceeded 115% during the quarter, driven by low churn and successful cross-sell and upsell activities across the customer base. These metrics highlight the durability of archTIS’ business model and its focus on recurring revenue.
Capital raise supports strategic objectives
On July 1, 2025, archTIS completed a A$7.5 million capital raise to support international growth, product development and strategic partnerships. Participation came from institutional investors, executives and existing shareholders. The company was also named a finalist in the 2025 Australian Defence Industry Awards for Cyber Business of the Year.