Highlights

  • archTIS reported record September 2026 quarter customer receipts of $5.3 million, exceeding operating payments for the first time since Spirion.
  • Net operating cash outflow narrowed to $27,000 from $3.8 million in the June 2026 quarter.
  • The Commonwealth Bank of Australia extended archTIS's $4 million loan from 30 October 2026 to 30 April 2027.
  • A new $315,000 fixed-price US Department of Defense services contract for NC Protect was awarded after quarter end.

Can a cybersecurity software company pay its own way from customer cash? archTIS Limited (ASX:AR9) says the September 2026 quarter moved it closer, with receipts topping operating payments for the first time since it acquired Spirion in October 2025. A loan extension buys time on the balance sheet, and a run of defence contracts shapes what comes next.

Receipts and cash flow

The figures come from the company's Appendix 4C and quarterly activities report, lodged on 28 October 2026. Receipts from customers were $5.338 million against operating payments of about $5.2 million, which included staff costs of $3.084 million and administration and corporate costs of $1.165 million. Net operating cash outflow was $27,000, compared with $3.8 million in the June 2026 quarter.

The quarter included no research and development tax incentive or grant income, whereas the December 2025 quarter had $1.7 million. After $622,000 of investment in intellectual property, cash closed at $2.231 million, from $2.859 million at the start.

Other headline measures were revenue of $3.6 million, annual recurring revenue of $13.3 million and a gross margin of 79 per cent, up from 75 per cent. Operating expenses were $4.4 million, 17 per cent lower than the June 2026 quarter.

Debt facilities

The company said its Commonwealth Bank of Australia loan of $4 million, which was due to mature on 30 October 2026, has been extended to 30 April 2027. A fee of $2,000 applied. The facility is secured and priced at the bank bill swap rate plus a 4.11 per cent margin.

Two further $2 million loans mature on 29 and 31 January 2027. In total, $8.07 million of the company's $8.591 million of facilities was drawn at quarter end, with unused facilities of $521,000 and total available funding of about $2.8 million. The company reported no specific funding plan in the document beyond these arrangements, and the extension postpones rather than removes the repayment obligations.

Contracts and customers

After the quarter ended, archTIS said it was awarded a $315,000 fixed-price services contract with the US Department of Defense for NC Protect, via Copper River Technologies. It is the second such development contract, following a $235,000 contract completed in January 2026, and covers Azure performance at scale, policy administration and expanded reporting. Revenue is recognised in FY27 as work is delivered.

Negotiations on a wider NC Protect enterprise licence across classified and unclassified Microsoft 365 environments are continuing. The company said timing depends on Copper River and the prime systems integrator, and no licence has been signed.

The Australian Defence Kojensi renewal, announced on 1 July 2026, is worth $3.2 million including GST over 12 months. It comprises $1.0 million of recurring licence fees and $2.2 million of development and maintenance services, with two optional 12-month extensions. About $1.0 million was received in the quarter. A US and European military alliance contract for NC Protect is worth about $416,000 for calendar 2026, with two option years totalling about $805,000.

Product milestones and outlook

The company achieved NIST FIPS 140-3 validation for a cryptographic module on 9 September 2026. On 14 October 2026, it announced a partnership with Pexip under which its TDI product will enforce clearance and nationality checks in Pexip Secure Meetings. Proof-of-concept work is under way with several allied governments. archTIS also won the Cyber Business of the Year award at the 2026 Australian Defence Industry Awards.

It gave no numerical guidance. Management said its focus is returning annual recurring revenue to growth through US defence and federal licensing, the pending Department of Defense enterprise licence and cross-selling Spirion, while keeping costs under control. Related-party payments of $160,000 were all directors' fees. A virtual annual general meeting is scheduled for 13 November 2026.