By 2030, the global cybersecurity market is expected to be valued at over $800 billion. Plus, global defence agencies are prioritising upping their cybersecurity in light of growing global tensions. At this time, information security services provider archTIS (ASX: AR9) has seen its revenue surge.
During Q3 FY24, archTIS’s total revenue was $2.6 million, an increase of 47% from the PCP. Revenue was split between licensing, $1.5 million, and services, $1.1 million. The jump in licensing and services revenue can mostly be attributed to completing the Proof of Concept (POC) awarded by the Australian Department of Defence to modernise their workplace environment.
Annual recurring revenue (ARR) was $3.7 million, an increase of 11% from the PCP as the Australian Department of Defence and key global defence industrials continue to invest in the expansion and enhancement of Kojensi and NC Protect. There was no existing customer churn during the quarter.
Managing Director and CEO, Daniel Lai, stated, “This is another positive quarter for archTIS. The lift in revenue growth, increasing gross margins driven by licencing, zero churn, and focus on operational costs evidence a strong performance. Whilst we navigate the outcomes of a number of POCs, we are in a strong position to take advantage of emerging opportunities. Defence organisations around the world continue to increase budgets to address rising security threats and unstable geopolitical circumstances. Throughout the quarter, we continued to build strong alliances with strategic partners to expand our Kojensi and NC Protect footprint in key markets.”
Established in 2006, archTIS provides information security solutions to protect sensitive content in government, defence, supply chain, enterprises and regulated industries. Its products include Kojensi, a multi-government-certified platform for the secure access, sharing and collaboration of sensitive and classified information, and NC Protect, which improves information protection for file access and sharing, messaging and emailing of sensitive and classified content.
During the quarter, the Company saw new and expanded contracts. KPMG Australian Technologies Solutions (KTech) provided additional work orders of approximately $0.6m for data-related architecture consulting services, including data taxonomy, modelling, and security for a Defence Data Program.
A command and control department within the Australian Department of Defence expanded its use of NC Protect to communicate across the mission edge with additional license purchases. Moreover, one of the largest law firms in the US purchased NC Protect to provide dynamic read-only access and watermarking requirements for the collaboration of sensitive court documents.
A new archTIS partner, Secure State, sold Kojensi SaaS to a French aerospace company for the secure collaboration of sensitive information across industry and government.
The Company ended the quarter with $4.5 million of total available funding. Its YTD revenue is up 101%, and gross margin is up 93%, reflecting the slight increase in services revenue for the year. archTIS remains actively engaged in a number of POCs across Australia and the US.
Following the end of the quarter, the Company announced a $467k deal with cyber tech business Penten to implement Kojensi as part of a solution for an Australian national security agency. It also announced the appointment of Andrew Burns as Chief Financial Officer (CFO).
Alinda is a Business Reporter for The Sentiment
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