HighCom targets 100-150% revenue surge in second half after government funding clears
HighCom Limited has outlined a HighCom Defence Technology Growth Strategy after a challenging first half, with management forecasting revenue to double or potentially increase by 150% in H2 FY26 compared to H1 FY26. The Australian-based defence company reported $10.9 million in revenue and an EBITDA loss of $5.4 million for the six months ended December 2025, attributing the weaker result to procurement delays caused by the US Government shutdown and tariff-related uncertainty.
The company’s H1 FY26 EBITDA loss sat within the previously provided guidance range of ($5.0 million) to ($5.8 million), despite a currency headwind of $231,906 from the strengthening Australian dollar against the US dollar. A tax expense of $686,000 related to the 2022 and 2023 financial years for the US business further impacted net profit.
HighCom has confirmed that delayed funding has now been distributed to end purchasers in its core US armour market, with government and industry customers signalling a return to normal procurement conditions. Management expects H2 FY26 to return to breakeven or profitability, subject to the timing of a large technology order forecast for June 2026, order flow recovery from the shutdown, and an assumed USD/AUD exchange rate of 0.65.
| Metric | H1 FY26 Actual | H2 FY26 Expectation |
|---|---|---|
| Revenue | $10.9 million | $21.8m – $27.3m (100-150% uplift) |
| EBITDA | ($5.4 million) | Breakeven to profitability |
| Armour Revenue | $5.8 million | Material recovery expected |
| Technology Revenue | $5.0 million | Growth trajectory maintained |
The Technology division, which contributed 27% of FY25 revenue, performed in line with expectations at both the revenue and EBITDA levels. HighCom Technology has been appointed to the Counter-UAS panel for the Department of Defence and secured its first tethered drone order, supporting the division’s transition toward a solutions-driven integrator model.
Pricing momentum and sales activity increased through February 2026, with engagement levels at the annual Shot Show described as materially higher than January 2025. HighCom has expanded its direct sales footprint across five US geographies, increasing reach and margin capture potential.
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What is XTclave and why does it matter?
HighCom’s proprietary XTclave technology represents the company’s core manufacturing differentiation in the ballistic protection market. The ultra-high isostatic pressure consolidation process enables single-step production of composite armour components that combine ceramics with composites, producing lighter, thinner and stronger plates than traditional manufacturing methods.
The company currently employs three manufacturing approaches, each targeting different market segments:
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Oven method: High-volume production of ballistic plates at low cost, suited to bulk military orders. These plates are heavier and thicker than alternatives.
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Axial press: Mid-range cost production of lighter plates for law enforcement and first responders. Ceramic plates require a two-step process including autoclave treatment.
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XTclave: Single-step process producing next-generation armour with complex curvatures and geometries. Prime market includes special forces and specialised law enforcement agencies such as the FBI and Secret Service.
The first two XTclave products passed independent testing to the National Institute of Justice Level 7 standard, validating the technology for premium buyers. Additional products are expected to complete NIJ 7 framework testing throughout calendar year 2026, with early demand building.
XTclave’s competitive advantage lies in its ability to manufacture components that are simultaneously lighter, thinner, stronger and tougher than oven or press-manufactured plates. This positions HighCom to capture higher-margin sales within the Tier-1 military and specialised law enforcement segments, where performance specifications justify premium pricing.
The technology also provides operational flexibility, with capacity to support multi-shift operations and seven-day work weeks to meet future demand. Management has identified opportunities to outsource select secondary workstreams while vertically integrating core processes to drive production efficiency.
Technology division pivots to solutions-driven integrator model
HighCom Technology has transitioned from a product-centric approach to operating as a technology integrator, positioning the business to capture recurring revenue through managed services, sustainment and long-term support contracts. The strategic shift addresses defence and law enforcement customers’ preference for bundled support arrangements rather than standalone hardware purchases.
As a technology integrator, HighCom designs, procures, integrates and sustains systems that combine best-available global innovation with in-house technical expertise. The model creates technology independence, allowing the company to select optimal systems for each mission requirement rather than being constrained by single-vendor relationships.
Key benefits of the integrator approach include:
- Technology independence: Selection of best global systems for each operational requirement
- Predictable margins: Reduced exposure to lumpy procurement cycles through recurring service revenue
- Scalable model: Expansion into new markets and sectors without manufacturing capital requirements
- Long-term partnerships: Multi-year support contracts built around evolving customer needs
The division has established a high-value partnership with AeroVironment for small and medium UAS platforms, with proven delivery through Project L156. HighCom’s appointment to the Counter-UAS panel for the Department of Defence and receipt of its first tethered drone order demonstrate expanding capabilities in networked battlefield systems.
Technology revenue reached $5.0 million in H1 FY26, representing approximately 46% of total group revenue for the period. This compares to the division’s 27% contribution in FY25, indicating accelerating growth relative to the armour segment.
Global ballistic protection market positions HighCom for growth
HighCom operates within a global ballistic protection market characterised by concentrated regional demand and application-specific segments. Market structure analysis supports the company’s geographic and product positioning decisions.
| Market Segment | Category | Share (%) |
|---|---|---|
| By Region | North America | 67% |
| Europe | 12% | |
| Asia Pacific | 8% | |
| Middle East & Africa | 6% | |
| Latin America | 8% | |
| By Application | Defence | 61% |
| Law Enforcement | 30% | |
| Civil | 9% | |
| By Product Type | Body Armour | 59% |
| Helmets | 22% | |
| Shields | 22% |
North America represents over two-thirds of global ballistic protection spending, aligning with HighCom’s ISO-certified US manufacturing base and established distribution network. Defence applications dominate total demand at 61%, supported by steady growth in law enforcement (30%) and civil segments (9%).
Body armour accounts for approximately 60% of the product market, with helmets and shields providing consistent secondary demand across military and police customers. HighCom’s focused product suite addresses all three categories through its armour division.
The company’s strategic positioning within North America and concentration on defence and law enforcement applications places it in direct alignment with the largest and fastest-growing market segments. Rising defence modernisation spend and demand for advanced lightweight composites in ballistic protection support sustained market tailwinds.
Operational levers to drive margin expansion
HighCom has identified multiple pathways to margin improvement beyond revenue growth, with implementation commencing in FY27. Key operational initiatives include:
- Production streamlining: Significant cost reduction opportunities exist at the Columbus manufacturing facility, with implementation scheduled to commence in FY27
- Channel optimisation: Expanded direct sales footprint across five US geographies increases margin capture by reducing distributor dependencies
- Product differentiation: XTclave-manufactured products command premium pricing due to superior performance characteristics
- Capacity utilisation: XTclave technology supports multi-shift operations and seven-day work weeks without additional capital expenditure
- Workstream allocation: Outsourcing of select secondary processes combined with vertical integration of core manufacturing to improve efficiency
Management noted that higher volumes are expected to deliver additional fixed-cost leverage, supporting improved bottom-line performance. The technology division’s recurring revenue model provides more predictable margins and reduces exposure to procurement cycle volatility.
Gross margin percentage in H1 FY26 reflected the impact of lower production volumes due to the government shutdown. With procurement resuming and new products entering the market, margin expansion from both operational efficiency and product mix improvement is anticipated.
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What’s next for HighCom investors
The company expects H2 FY26 to deliver a 100% to 150% revenue uplift relative to H1 FY26, supporting a return to breakeven or profitability. This guidance depends on the timing of a large technology order internally forecast for June 2026, order recovery from the US Government shutdown, and an assumed USD/AUD exchange rate of 0.65.
Forward Guidance
“The Company expects a 100 to 150 percent uplift in H2 FY26 revenue relative to H1 FY26 while also expecting to return to breakeven or profitability.”
Strong customer engagement across new and existing products has continued following Shot Show 2026, with early demand building for the first two XTclave products that passed NIJ 7 testing. Additional products are scheduled to complete independent testing throughout calendar year 2026.
HighCom is increasingly recognised as a trusted provider of drone solutions and associated support services as a technology integrator. The company has improved leverage of existing technology partnerships and developed new partnerships to expand systems integration opportunities, with the appointment to the Counter-UAS panel for the Department of Defence representing a material validation.
The catalysts for H2 recovery are identifiable: government funding has been released to end purchasers, new differentiated products are entering the market, and direct sales channels have been expanded across key US geographies. Execution risk centres on the timing of the large technology order and the pace of procurement normalisation following the government shutdown.
With strong government and defence relationships, a diversified global presence spanning the US, Australia, Europe and targeted international markets, and proprietary manufacturing technology validated by independent testing, HighCom’s HighCom Defence Technology Growth Strategy positions the company to capitalise on rising defence modernisation spend and the growing counter-drone security market.
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