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Highlights

  • archTIS posts a 27% increase in annual recurring revenue (ARR) to AU$4.6 million year-on-year.

  • Strategic acquisition of Direktiv strengthens market position, with a successful sale to a Japanese partner.

  • Gross margin rises to 75% due to focus on high-margin proprietary licensing and cost-control measures.

archTIS Ltd (ASX:AR9), a leader in zero-trust, data-centric security solutions, reported a strong March 2025 quarter, with a record ARR of AU$4.6 million, up 27% compared to the previous year. The company's operational improvements, customer wins, and strategic focus on proprietary licensing contributed significantly to the positive results.

Despite seasonal challenges—including the Australian holiday period, election-related activity, and global economic uncertainty—archTIS delivered growth in ARR, a strong gross margin of 75%, and reduced operating expenses. The company ended the quarter with AU$2.6 million in cash and AU$4.4 million in total available funding.

“The March quarter performance reflects our disciplined approach to growth, focusing on high-margin revenue streams, cost efficiencies, and strong customer engagements across key sectors,” said Daniel Lai, archTIS Managing Director and CEO. “The completion of the Direktiv acquisition and the subsequent commercial validation in the Japanese market are key highlights that enhance our long-term growth prospects.”

Strategic Acquisition and Market Expansion

A major highlight was the completion of the Direktiv acquisition, which added a powerful attribute-based access control and orchestration platform to archTIS' Trusted Data Integration (TDI) solution. The integration was quickly validated through a AU$390,000 annual sale to a Japanese partner, facilitated by a partnership with Microsoft Defence and Intelligence.

The Direktiv acquisition also reinforced archTIS' global market reach, particularly in sectors like defence, aerospace, and legal, where secure data sharing is crucial.

Expanding Customer Base and Strategic Wins

archTIS continued to secure high-value contracts during the quarter, highlighting the growing demand for its Kojensi and NC Protect solutions. Notable customer wins included:

  • A $1.3 million contract renewal and expansion with the Australian Department of Defence for Kojensi.

  • A $410,000 services agreement with the Department of Defence.

  • A three-year agreement with a major South Korean defence firm for Kojensi SaaS.

  • An Australian university licensing Kojensi for secure defence-academic collaboration.

  • A prominent US law firm expanding NC Protect for document security and regulatory compliance.

These contract wins underscore archTIS' growing influence in defence, aerospace, legal, and research sectors, where data security is increasingly critical.

Outlook and Growth Plans

Looking forward, archTIS expects continued growth in ARR and further customer engagement, particularly in the global defence sector. Kurt A. Mueffelmann, archTIS’ Global Chief Operating Officer and US President, noted, “Despite global market challenges, we have laid a strong foundation for future growth, and our continued focus on defence and critical industries will drive momentum in the coming quarters.”