Thought I would wait a few weeks after earnings season to publish a Straw on AR9. ArchTis is one of those companies that will be an overnight success that was many years in the making. I’ve attended a few earnings calls, the management team is strong and recently boosted by a very sensible sounding CFO.

They have a great suite of Information Security products, really decent revenue growth, strong cost management and cashflow has turn positive! When the quarterly 4C Cashflow report for a micro-cap turns to infinity because they aren’t burning cash anymore, that’s an exciting time to get on the next overnight success story.

https://www.archtis.com/archtis-asx-ar9-investor-relations/

Held IRL & SM... although for some reason my entire order didn’t get filled on SM. 

Altocrypt device is a USB hardware device that allows secure access to data remotely. A problem that has previously been hard to solve and they have partnered with archTIS via PENTEN.

https://www.penten.com/solutions/secure-mobility/altocrypt-stik/

Using Kojensi, could this be the link needed to secure the entire data of the Aus defence?

Potential:120,000 Aus DoD staff. Consider expansion into MOD UK and US DoD.

Kojensi $65/ user / month

nc protect $1-$5/ user / month

(pending scale discounts)

A 1000 user base for Kojensi could yield $780,000 per year in ARR for licenses once a proof of concept has been Serviced. That is what is happening under the hood now.

NC Protect for the entire Aus DoD (120,000) could yield anything from 1.5m to 4.5m ARR for licences.

That's one niche in one territory and includes nothing within the DIB (Defence industrial base). Map that against the potential of this company around the world and within ministries of defence, DIB, other verticals (finance, accounting, law, critical infrastructure) 

Product/geopolitical and need thesis:

This article outlines the challenge.

Will Regulatory Poison Pills Render AUKUS Dead on Arrival

https://thediplomat.com/2023/09/will-regulatory-poison-pills-render-aukus-dead-on-arrival/

This article outlines the solution.

Senators want a special government unit to help small businesses with cyberattacks

https://www.scmagazine.com/news/bipartisan-bill-would-create-special-government-unit-to-help-small-businesses-with-cyber-attacks

Archtis have a connection with KPMG, SAP, NETAPP, MICROSOFT, many of the Defence Industrial Base companies (leidos, BAE, Northrop Grumman) as well as branching into european demographic with bank of Finland and DHL.

The use case has been proven.

From my research, the only way small businesses can operate while protecting their data and sovereignty is through a govt funded marketplace. One that is destined for Australia's systems with archtis walking hand in hand through department of defence and govt who currently use their products and if you check austender, you will see many solutions outlining my thesis naming archtis as a provider supplier applying for the tender.

Dyor

SAP collaboration

https://www.archtis.com/sap-secures-sensitive-government-and-regulated-industry-data-with-kojensi/?utm_campaign=Blog%20Update&utm_content=231535253&utm_medium=social&utm_source=twitter&hss_channel=tw-1040120963520581633

SAP cloud secure space

https://itbrief.com.au/story/sap-s-sovereign-cloud-capabilities-available-in-anz

The work is done behind the scenes before securing critical infrastructure and SLACIP become a prerequisite to securing sovereign information. Australia is ahead of the world in this space and although technology is constantly adapting and changing, as it stands, archtis have world leading technologies that protect data and are certified to the highest level of protection. Every deal they have secured in the last 18 months have been sole sourced.

https://www.homeaffairs.gov.au/reports-and-publications/submissions-and-discussion-papers/slacip-bill-2022

The quarterly is today and although it may not have any surprises, the uptrend is continuing with 10m of revenue locked in for this coming year already 23-24 less than a month into the new FY.

A nice contract win for Archtis.

• is pleased to announce that the Company has received an award for up to $430k (including GST) from the Australian Department of Health to advise on architectural changes toward the creation of a data-centric organisation.

The contract is to be delivered this financial year.

There are a couple of important aspects to this contract.

1. It is for a more mainstream agency, outside of the national security agencies
2. They are being paid for their advice to design the future IT architecture, which will undoubtedly include installing their products. THere is a good chance that the agency understands this and is predisposed to doing so.

• archTIS Awarded $7M Contract with the Australian Department of Defence
• Largest sale in company history for Kojensi to secure information collaboration across the agency
• Total contract value is $7.03M (inc. GST) over two years which includes $3.44M in recurring revenue over a two-year period and $3.59M for services, support and hardware for the expanded growth and implementation of Kojensi (payable on delivery)
• Follows the recent OneDefence win with KPMG to deliver the overall data security strategy for Defence.

Obviously a nice win and they are clearly strong in AUS Defence. It's a bit of a stretch to include GST and the ARR is over 2 years - so the ARR kick is $1.56M - which is a really good boost.

I think the future of the company is with their NC Protect in the US. They have a partnership agreement with Microsoft for joint marketing and MS have introduced them to sales. That product now on a general purchase list for US Govt. No significant announcements for sales for a while though.

archTIS Continues to Expand Customer Base with Key Global Wins

Highlights

•  Key customer wins validate secure collaboration portfolio of products including:
•  Flinders University selects Kojensi SaaS
•  A Dubai based mobile communications provider selects NC Protect o Key renewals and license expansion of NC Protect in the US market, including a large Manufacturer, a Health Insurance provider and a Life Sciences company

archTIS Delivers Strong 1H FY2021 Results

1H FY2021 Financial Performance and Operating Highlights

•  Total revenues of $1,111,763 delivered vs $242,877 in comparative period, up 358%
•  Recurring revenues of $459,235 vs $100,843, up 355% on comparative period
•  Gross Margin of $809,946 vs $118,041, up 585% on comparative period
•  Strong financial position to support future growth initiatives with cash balance of $12,104,531 at 31 December 2020 following an $8.4 million capital raising during the period
•  Landmark Australian Department of Defence contract awarded with a value of $4.2 million 
• Transformational Nucleus Cyber merger completed in December 2020