archTIS Limited

All right. Why don't we get going? So welcome, everybody. Welcome to the ARCBIS Q3 FY26 quarterly update for the period ending March 2026. I'm Kurt Muckelman, and I'm joined by our CEO, Daniel Lay. During today's session, we'll provide you an update on the quarterly performance, provide an in-depth financial review, update on the USDOD opportunity, Spirion integration, and further discuss the go-forward strategy on the market focus and growth. So first, let me kick it over to Dan, and he'll get things going today as I sit here in black with a broken camera.

Yes, so apologies, everyone, for the camera. You're going to have to stare at me and preferably the slides for most of the presentation, but welcome, everybody, to the quarterly update. So let's jump into the highlights. So accelerated experience sale. So the integration is going well. We talk a little bit about this sale further down the track. In the slide deck, essentially, we've closed the global IT provider sale. That was a 60-day sale cycle. It was for $150,000, but we're starting to see that cross-LSL engagement starting to come through that pipeline, which we've been working very hard over the last six months. USDAV, custom development, fully delivered. and production ready for the DoD 365. That is excellent news for that DoD opportunity. And as it says, it's been completely delivered, validated for integration into that environment and is production ready. ARR, $15.1 million, up $231 on the previous comparative period. Revenue of $3.5 million and revenue up 143%. Available funds released this morning at $8 million, 71% gross margins, still hovering around that 74% annually, and an allied defence win, which we announced earlier in the quarter, with a military alliance between Europe and the US. You can guess who that is. That is at $1.2 million with additional options on those years. So that's very exciting for us, and we're commencing that deployment shortly. So they're the big news points for the quarter.

Kurt? I guess so. I'll take us through the financials. So, again, apologies. I got in from Australia about 90 minutes ago from a 32-hour door-to-door, and unfortunately my laptop did not reset properly for the camera. So, again, apologies. So our Q3 FY26 financials, I think we reflected a continued step change in growth and scale of the business. You know, ARR grew 231% year-on-year to $15.1 million. And we sequentially strengthened that month over month. So we saw less churn at the beginning of the month than we did at the – we saw less churn at the end of the quarter than we did at the beginning, which is really strong because, again, when we acquired Spirion, we understood the churn coming, and we kind of forecasted it during the second half of FY26. So that's coming to fruition to where we thought it would come through. Quarterly revenue rose by 143% to $3.5 million, driven almost entirely, as you can see, by licensing revenue of $3.4 million. Gross margins remain really strong at 71%, and our year-to-date stays at 74%, so we're broadly in line with the prior periods. The area that we've been working pretty hard on is operating expenses. We were $4.9 million last quarter, excluding a million dollars of one-off costs associated with experience synergies and line of credit fees that we previously mentioned in prior quarters. This is a million-dollar improvement over the prior quarter, reflecting our commitment of capital efficiency while balancing investments to support our expanded pipeline. Operating cash flow is $3.7 million, and we closed the quarter with $8 million in cash and equivalents, a solid foundation for the phase of growth that we're looking at. I think one of the interesting things we saw, though, is the current market cap sits below 2X in recurring revenue. I was talking with Dan on the board last week. I mean, let's be honest. We're a bit impatiently bullish. And I think all shareholders are at this time around the financials that, you know, we're really waiting on where is the USDOD, and we understand that, you know, that share price is tied to it. And so what we want to do is really focus on that as we go through. So, Dan, why don't we take it through where we currently stand with the USDOD and some of the other momentum opportunities.