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archTIS scores strong quarterly sales and big contracts; product innovation momentum

Published 31/10/2024, 10:45 am
© Reuters.  archTIS scores strong quarterly sales and big contracts; product innovation momentum
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archTIS Ltd has delivered a robust first quarter of the 2025 financial year, reporting notable sales growth, steady gross margins and disciplined cost management.

Defence agreement

At the close of the September quarter, the data-centric security company announced sales of A$3.8 million, with a chunk of that due to a A$2.3 million licensing agreement with the Australian Department of Defence’s Command and Control division, focused on expanding NC Protect licensing for enhanced data security.

The company recorded revenue of A$1.45 million, comprising A$950,000 from licensing and A$500,000 from services.

Gross profit reached A$1.1 million, representing a 75% gross margin, which the company attributed to lower services revenue this quarter that nevertheless indicated stronger long-term licensing potential.

Annual recurring revenue (ARR) grew by 16% year-over-year, reaching A$3.96 million.

“Sales, including new licences, services and renewals, were strong for the first quarter,” said managing director and CEO Daniel Lai.

“Our new archTIS Trusted Data Integration solution has already attracted interest from government and defence sectors, addressing critical structured data security needs.”

Cost reductions and cash flow

Operational expenditure (OpEx) saw a 5% reduction, totalling around A$650,000 per month.

Cash flow was further bolstered in October with A$3 million in collections and an expansion of non-dilutive funding from the Commonwealth Bank of Australia, raising available loan facilities to A$3.5 million.

The company also expects a tax refund of A$1.9 million, pending processing.

Among recent contracts, the Australian Department of Defence renewed its Kojensi Enterprise licensing for another year, while BGW Germany doubled its NC Protect subscription.

Product advancements

Additionally, an Australian university and a European bank expanded their use of archTIS products for secure data sharing, underscoring the company’s growing global presence.

In product advancements, archTIS introduced Trusted Data Integration (TDI) to target the burgeoning big data market.

TDI is designed for large-scale, rapid integration and security of classified structured data, complementing the existing unstructured data solutions, NC Protect and Kojensi.

Following the quarter, non-executive director Leanne Graham announced she will not seek re-election at the upcoming AGM.

The company is actively searching for a replacement to join its leadership team as it continues to expand its market reach and data security solutions.

Read more on Proactive Investors AU

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