Revenue on Government programs up 81% from Q2 Fiscal 2025, with total revenue up 68% over the period;
Gross margin % up 19% over Fiscal 2025;
Defense program billings on an annualized go-forward basis reach approximately $9.41 million;
Commercial launch of ARWEN® 40mm baton ammunition;
First shipment of PARA SHOTTM system to Public Safety customer; and
Strong cash and AR position of +$5 million.
OTTAWA, ON, May 13, 2026 /CNW/ - DEFSEC Technologies Inc. (TSXV:DFSC) and (TSXV:DFSC); (NASDAQ:DFSC) and (NASDAQ:DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its Fiscal 2026 second quarter ("Q2 Fiscal 2026") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three and six months ended March 31, 2026 and 2025 and related management's discussion and analysis for the three and six months ended March 31, 2026, all of which have been filed on SEDAR+ and EDGAR. All figures are stated in Canadian Dollars unless otherwise noted.
Growth in defence software business
In the second quarter of Fiscal 2026 revenue from subcontract task orders increased 81% as compared to the second quarter of Fiscal 2025. This revenue relates to the Company's software services for the Canadian Department of National Defence under two foundational long-term program subcontracts: (i) Directorate Land Command Systems Program Management Software Engineering Facility ("DSEF"); and (ii) Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance ("Land C4ISR") program, for the digital modernisation of the Canadian Forces. While these programs are "as and when requested" task-based contracts with no minimum guaranteed values, the Company's workshare for these multi-year contracts, excluding renewal options, would provide for up to $75 million in combined revenue through the initial contract periods that run through 2028 for DSEF and 2029 for Land C4ISR. Q2 Fiscal 2026 included the first two months of the previously announced work scope expansion on the DSEF program, which resulted in the addition of 14 new roles at the beginning of February.
At the end of Q2 Fiscal 2026, the Company had 43 resources working across the Land C4ISR and DSEF programs, an increase from 19 at the end of Q2 Fiscal 2025. Subsequent to the end of the quarter, two additional resources were added to the programs resulting in program billings on an annualized go-forward basis of approximately $9.41 million.
"We are pleased with the continued growth in program billings and the milestones achieved in Q2 in bringing our new products to market," said Mr. Homuth, President and CEO of DEFSEC. "We expect continued momentum in revenue growth as we ramp up further on these very strategic programs, consistent with Canada's renewed focus on sovereign defence spending and investment."
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1 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release.
Product launch milestones achieved
As of the date of this press release, the Company has achieved significant milestones with its product roadmap, which includes the Company's first sale of its PARA SHOTTM ammunition, the delivery of its BLISSTM prototype to customers for qualification and trials and the commercial release of its DEFSEC LightningTM SaaS product for Critical Incident Management Systems.
"Achieving these product commercialization milestones is a significant step towards further revenue growth and diversification," said Mr. Homuth.
Q2 Fiscal 2026 Financial Highlights:
Three months ended March 31,
(in thousands of $)
2026
2025
$
$
Revenue
2,119.7
1,264.2
Gross margin
626.0
314.0
Operating expenses
