Why FortifAI (ASX:FTI) is staking its future on Nol8 AI data plane technology as games income shrinks

Sonal Goyal

03 November 2026 09:09 PM AEDT

Why FortifAI (ASX:FTI) is staking its future on Nol8 AI data plane technology as games income shrinks

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Key Highlights

FY26 Revenue fell 56.5% to A$1.88 million as games studio income declined; the audited statutory loss reached A$28.95 million.
Most of the FY26 loss reflects non-cash items: A$19.84 million Acquisition expense related to Nol8 and A$5.37 million in share-based payments.
Nol8 reached version 2.0 in October 2026, combining neural-network algorithms with FPGA hardware acceleration; no revenue has been recognised yet.
Cash was A$17.25 million at 30 September 2026 with no borrowings, sufficient for a twelve-month Going Concern period.

FortifAI Limited (ASX:FTI) is staking its future on Nol8, an artificial intelligence data plane technology, because its original games Business is generating less income and Nol8 is the only part of the company with a commercial growth path. The product reached version 2.0 in October 2026, but the company is still waiting for its first revenue.

From games to AI infrastructure

The company was formerly Mighty Kingdom, and its MKL Studio unit still develops video games under work-for-hire and co-development contracts. In FY26 that business produced all of the group's reported revenue.

FortifAI describes Nol8 as technology that gives organisations visibility into how data moves through their AI systems. It combines neural-network algorithms with FPGA hardware acceleration. The ASX lists the company in Communication Services, and its about page shows inclusion in the S&P/ASX All Ordinaries.

What the accounts show

For the year ended 30 June 2026, revenue fell 56.5 per cent to A$1.88 million from A$4.33 million. The audited statutory loss after tax was A$28.95 million, against A$1.99 million a year earlier.

That figure is far larger than the A$8.83 million loss in the unaudited preliminary report released on 31 August 2026, and the Annual Report shows the final accounts differ. Most of the loss reflects two non-cash items: A$19.84 million of acquisition expense, being consideration above identifiable net Assets acquired in the Nol8 deal, and A$5.37 million of share-based payments.

Excluding those, the company puts the loss at A$3.74 million. Intangible assets rose to A$50.32 million, so the carrying value of the Nol8 licence and intellectual property now matters to the balance sheet.

Cash and burn

Cash was A$20.35 million at 30 June 2026, with no borrowings. At 30 September 2026 it was A$17.25 million, after operating outflows of A$2.95 million in the quarter.

Customer receipts were just A$275,000, and a further A$286,000 came from studio rebates relating to FY25. Directors concluded that the company can continue as a going concern over a twelve-month forecast, with extra funding speeding up Nol8 rather than being required for survival.

Product progress

Version 1.0 launched on 28 June 2026 and became available through the Megaport AI Exchange the following day. It reached Equinix Fabric on 28 September, and version 2.0 followed on 12 October 2026, generally available on AWS.

A review commissioned by the company, conducted by Professor Amit Klein of the Hebrew University of Jerusalem, reported that Nol8 processed up to 118 times more data per infrastructure dollar than Google's RE2 at 5,000 rules. The company itself notes that this is the highest rule count tested, and that it compares FPGA hardware with CPU software.

Enterprise customers can now commission paid proof-of-value projects.

Its Quarterly Report cites Megaport's more than 3,200 customers and Equinix's more than 10,500 as channel reach, not as Nol8 customers. FortifAI targets first customer contracts by the end of calendar 2026 and first revenue in the March 2027 quarter. The company has not disclosed a number of paying customers, and its market sizing, a US$120 billion data-in-flight market by 2030, is its own estimate.

Risks and watch points

The principal risk is commercial: benchmark claims may not translate into contracts, and larger cloud and security vendors compete. Studio revenue is also shrinking, as the Power Rangers development agreement with Eastside Games is ending, with handback services in the December 2026 quarter.

Cash is finite, and the quarterly burn would be difficult to sustain without revenue. Related party payments, including directors' fees, were A$263,000 in the September quarter. The Annual General Meeting notice was lodged on 18 October 2026.

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