DUG Technology delivers record half-year results as Malaysian contract hits full stride
DUG Technology has reported its strongest half-year performance to date in the DUG Technology FY26 H1 Results, with revenue climbing 40% to US$40.4m and normalised EBITDA surging 161% to US$13.6m. The Perth-based geoscience technology company’s result was underpinned by the full commissioning of its Malaysian SaaS and HPCaaS contract, achieved in mid-December 2025.
The EBITDA margin expanded by 16 percentage points to 34%, whilst the company swung from a net loss of US$3.9m in FY25 H1 to a net profit of US$1.0m. Cash and cash equivalents stood at US$20.7m as at 31 January 2026, representing a 26% increase on the 30 June 2025 position.
Record Performance
“DUG delivered its strongest half-year results to date, achieving record revenue and normalised EBITDA.”
The normalised EBITDA figure excludes a one-off contingent liability provision of US$2.1m relating to an MP2 legal matter. The company’s transformation from loss-making to profitable operations demonstrates operating leverage taking effect as revenue scales across its integrated ecosystem of seismic imaging services, geoscience software, and high-performance computing infrastructure.
Join thousands of readers who start here
Our best articles, sent straight to your inbox. You can unsubscribe anytime.
Revenue growth accelerates across all three business segments
DUG Technology (ASX: DUG) delivered broad-based revenue expansion across its Services, Software, and HPC segments during the half. The growth trajectory was not reliant on a single driver, with all three divisions contributing to the record result.
The Malaysian EPIC contract, carrying a total contract value of US$43.3m (net US$30.1m to DUG) over an initial three-year term, transformed the HPC segment’s performance whilst also boosting Software revenue through consumption-based billing arrangements. The contract reached full commissioning status in mid-December 2025, with first invoices issued that month and paid in January 2026.
Services business maintains momentum with 30% growth
Services revenue increased 30% to US$31.8m, representing 79% of total revenue for the half. Growth was driven by continued adoption of DUG’s Multi-Parameter Full Waveform Inversion (MP-FWI) imaging technology and strong performance across both established and emerging geographic markets, including the ramp-up of the Brazilian office.
The Services Order Book stood at US$43.5m as at 31 December 2025, down 16% from 30 June 2025. Management stated this order book is supported by a growing pipeline of opportunities that underpins confidence in continued momentum.
HPC segment delivers breakout growth of 313%
HPC revenue surged 313% from US$1.1m to US$4.5m, representing 11% of FY26 H1 revenue. This transformational growth was driven by the implementation and earlier-than-anticipated ramp-up of the EPIC contract in Malaysia. The segment provides on-demand or fully managed high-performance computing infrastructure to clients through DUG’s proprietary immersion-cooled data centres.
Software revenue climbs 29%
Software revenue increased 29% to US$4.1m from US$3.2m, representing 10% of total revenue. Growth was linked to the EPIC contract’s consumption-based billing arrangements alongside DUG’s annual licence fee model for its DUG Insight seismic interpretation and processing software. The Software business provides recurring revenue through annual licence fees paid in advance, with strong renewal rates year-on-year.
| Segment | FY26-H1 Revenue | FY25-H1 Revenue | Growth |
|---|---|---|---|
| Services | US$31.8m | US$24.4m | +30% |
| Software | US$4.1m | US$3.2m | +29% |
| HPC | US$4.5m | US$1.1m | +313% |
What is MP-FWI imaging and why does it matter for DUG’s growth?
Multi-Parameter Full Waveform Inversion (MP-FWI) imaging represents DUG’s proprietary seismic imaging technology that differentiates the company’s Services offering. Traditional seismic imaging provides a picture of underground geological structures. MP-FWI extends this capability by simultaneously delivering both seismic images and rock property information in a single workflow.
The technology simulates full-wave propagation through the Earth, capturing elastic properties that provide superior subsurface clarity compared to conventional methods. For oil and gas companies, accurate rock property information is critical, as it underpins decisions about exploration, appraisal, and subsurface characterisation. Better accuracy reduces drilling uncertainty, potentially saving clients hundreds of millions in well-placement errors.
DUG’s elastic MP-FWI imaging delivers three key competitive advantages:
- Best and fastest seismic imaging through full-wave simulation that captures elastic properties for enhanced subsurface clarity
- Direct rock property information delivered simultaneously with seismic images, reducing time to decision whilst increasing accuracy
- Premium multi-client data products that enable one dataset to serve multiple customers, expanding DUG’s addressable market into the larger multi-client seismic sector
This proprietary technology functions as DUG’s competitive moat, driving Services revenue growth and customer adoption. It positions the company to capture market share in the multi-client seismic market, which represents a higher-margin, repeat licence business larger than proprietary seismic processing.
EPIC contract transforms the financial profile
The Malaysian SaaS and HPCaaS contract represents a strategic validation of DUG’s integrated ecosystem model. The contract carries a total value of US$43.3m, with US$30.1m net to DUG over the initial three-year term. Full commissioning was achieved in mid-December 2025, with the first invoices issued in December 2025 and paid in January 2026.
The FY26 H1 result reflects the implementation and ramp-up phase to full commissioning. This means the half captured only partial revenue recognition as the infrastructure was being deployed and tested. FY26 H2 will capture six full months of EPIC revenue at full run-rate, contrasting with the implementation phase in H1.
H2 Outlook
“FY26-H2 will have 6 months of full run rate EPIC revenue and margins.”
The revenue recognition timeline provides strong visibility for continued growth. The contract demonstrates DUG’s ability to deliver integrated solutions combining software licences, high-performance computing infrastructure, and technical support under a single commercial arrangement. This model generates recurring revenue through consumption-based billing whilst showcasing the value of DUG’s immersion-cooled data centre technology.
Balance sheet strengthens as cash generation improves
DUG’s cash position strengthened materially during the period, with cash and cash equivalents reaching US$14.3m at 31 December 2025. Strong customer receipts in January 2026 lifted the cash balance to US$20.7m by 31 January 2026, representing a 26% improvement on the 30 June 2025 position of US$16.4m.
The company reported net debt of US$0.3m as at 31 December 2025, with asset financing debt of US$14.6m. Operating cash flow swung from an outflow of US$2.2m in FY25 H1 to an inflow of US$7.4m in FY26 H1, marking a US$9.6m year-on-year improvement.
Key cash flow movements included:
- Receipts from customers increased to US$36.1m from US$28.0m in the prior corresponding period
- Net operating cash flow improved by US$9.6m year-on-year, driven by higher customer receipts
- Investing activities reduced to US$2.0m as EPIC-related hardware deployment completed
- Financing activities reflected scheduled debt repayments of US$7.5m, including early IT hardware lease buyouts to facilitate Malaysian contract mobilisation
The swing to positive operating cash flow demonstrates the business model is scaling sustainably without requiring external capital. Management stated the company has sufficient liquidity to continue funding its growth strategy.
Enjoyed this article?
We publish high-impact stories like this a few times a week. No spam.
Outlook points to continued momentum
DUG outlined three key themes underpinning its forward outlook. First, the EPIC contract will deliver its full run-rate contribution across FY26 H2, providing six months of revenue and margin impact compared to the implementation phase captured in H1. This contracted revenue provides earnings visibility for the remainder of the financial year.
Second, the company’s industry-leading acoustic and elastic MP-FWI imaging technology continues to drive global momentum. The proprietary technology is generating customer adoption across both established and emerging markets, supporting Services revenue growth whilst enabling expansion into the multi-client seismic data market.
Third, geographic diversification is enhancing revenue visibility whilst adding long-term upside potential. The outlook is supported by:
- Contracted EPIC revenue underpinning profitable growth with full H2 contribution at run-rate margins
- Technology leadership through MP-FWI imaging continuing to drive global Services momentum
- Geographic expansion in emerging markets (Brazil, Malaysia) complementing established region strength for enhanced revenue stability
The combination of contracted revenue from the EPIC arrangement, technology differentiation through MP-FWI imaging, and geographic diversification positions DUG for sustained growth beyond FY26. The Services Order Book of US$43.5m provides near-term revenue coverage, whilst management reported a growing pipeline of opportunities supporting confidence in continued momentum.
Want the Next Tech Breakout in Your Inbox?
Join 20,000+ investors receiving FREE breaking ASX tech news delivered within minutes of release, complete with in-depth analysis. Get market-moving announcements the moment they drop by clicking the “Free Alerts” button at StockWire X.
