archTIS Limited

Good morning and welcome everyone. My name is Jane Morgan and thank you for joining us today for this webinar with Arctis Limited, a global provider of data-centric security solutions for the secure collaboration of sensitive information. listed on the ASX under the ticket code AR9. Just this morning, the company has lodged their quarterly report for Q2 FY2026, and today I am joined by both Daniel Lai, who is Arctis' CEO and Managing Director, as well as Mr. Kirk Muffelman, who is Arctis' Chief Strategy Officer and the U.S. President. Both presenters will be covering off the quarter's activities, the ongoing strategy and developments in the US market, and they're here to guide us through what's ahead for the 2026 calendar year. Following the presentation, we will have time for questions, so please use the Q&A function, which can be found at the bottom of your screen. Kurt, I'll hand to you.

Yeah, great. Thank you, Jane, and good morning, everybody. We're really excited, and thank you for attending today's presentation. And during today's session, we'll update you on some great happenings around our quarterly performance, provide an in-depth financial review, update the U.S. DoD opportunity, obviously the Sperion integration and how that's really progressing in a wonderful manner, and further discuss the go-to-market strategy around how we're growing and where we see the markets going into the future. So what I'd like to do initially is send it over to Dan and start off with some of the Q2 FY26 quarterly highlights. Dan?

Thanks very much, Kurt. Welcome, everybody, and thanks for attending this webinar. So I'm going to start from the bottom and then work my way around. Obviously, the big elephant in the room is updating you on the USDOD deal. The first thing that we announced this week was the USDOD custom development milestone was achieved. Now, that was work that the US Department of Defence requested for us to make amendments to our software so that it could be more deeply integrated into their environments and expanded to a broader customer base. We finished that software custom development and we've provided that back on time to the USDOD for their acceptance and evaluation. So we're very happy about that. We have one component left to do, which is a piece of integration with the third-party software, which is more configuration work. So we expect that to go fine through with flying colours. And that's all on track to be delivered as well. So the next step there, which I think is a great milestone, is that NC Protect has been deployed into the USDOD 365 environment. That is a... production trial so that the system integrator can make sure that it can manage that software in multiple different locations across the USDOD environments, which are located around the world. We have expanded the client base there for more trials in that sense to be done. We expect that to be a 30-day deployment trial with real live data. And that's really important because this is the final milestone before that we would see a license for largest users to be issued. So that's critical. It's something that we've been expecting and it's something that we see as an extremely positive sign. That combined with the software development gives you a very clear indicator that we have great confidence in this deal. The ARR for the company, obviously with the integration of Spherion, we've increased that ARR. It's up 308%, 16.3 million, a strong performance. And what's really important about that now is that our gross margins are still above 75%, which gives us good cash back into the business. But licensing revenue sits at around 83% of total revenue, which is good as well. Total funds available, $7 million, and we also announced that we had agreed to terms with an $8 million debt facility to make sure that we've got that runway with any variants of expectations of the delivery of this USDOD licensing deal that we're expecting. 76% gross margins, as I said. And, of course, the main activity for the last quarter has not just been USDOD, but other deals as well, and working out how we're going to cross-sell to that 150 clients in the US that we have acquired with the Sphere and Acquisition, integration of their teams, standardisation of the software development life cycles, and working through how we integrate the products as well to take this forward in a very strategic manner to pivot into this US market, which is 40% of the data-centric security market globally, and really start to ramp the business up. And, of course, that's what we're trying to achieve strategically, and we're looking for those short, medium, and long-term results. Over to you, Kurt.