Vection Technologies posts record FY26 profit on AI growth

Vection Technologies has reported FY26 revenue of $42 million and adjusted EBITDA of $3.8 million, alongside wider adoption of its artificial intelligence products.

The figures marked a sharp improvement on the previous year. Adjusted EBITDA rose 596 per cent, gross margin increased to 65.1 per cent from 46.8 per cent, and Vection recorded its first positive full-year operating cash flow. It also entered the new financial year with more than $10.6 million in new post-period contracted value.

The earnings update comes as the group repositions itself towards enterprise AI and digital transformation, moving beyond its earlier identity as an extended-reality supplier. Management pointed to growing use of its Algho AI platform across defence, data centres, government and corporate clients.

During FY26, the Algho AI platform secured about $5.5 million in contracts across more than 16 new enterprise verticals, including agritech, cybersecurity, automotive, healthcare, public administration, human resources, water utilities, rail transport, food and hospitality, and regional innovation.

A further $5.6 million in annual recurring revenue and project contracts was secured in June. That included a $3.3 million Accessibility Kiosk order, which will place Algho AI in public terminals at sites including airports and government offices.

New contracts

Momentum continued after year-end with a series of new agreements in Europe. In July, Vection secured an order worth about $3.2 million from Italian IT services group Retelit Digital Services after Algho AI was certified as Retelit's enterprise AI platform.

Vection has installed two Algho AI Appliances at Retelit's DC Avalon 3 data centre. The systems are being used for AI agent and model services for business and government customers, including the banking sector.

Vection also signed a three-year framework agreement worth $7.5 million with Swiss smart-city technology business URBANnext. The agreement includes a minimum annual commitment of $2.5 million and covers the use and commercialisation of Algho AI in smart cities, urban infrastructure and public services.

Alongside Algho AI, Vection has expanded its defence-related technology work. During FY26, the group secured a $22.3 million multi-year framework with a NATO-approved partner, scalable to $29.5 million and running through to the end of 2030.

In February, it received its first commercial order under that framework, valued at $2.2 million, for its Far Edge Data Retention Appliance, known as FEDRA. The order established another higher-margin product line within Vection's technology portfolio.

The business also renewed $1.64 million in annual recurring revenue with a classified national security and law-enforcement partner in conjunction with Dell Technologies.

Platform shift

Vection says its broader offer centres on what it calls the INTEGRATEDXR platform, which combines AI agents, extended-reality interfaces and its own software products, including Algho AI. The aim is to help organisations connect digital data with day-to-day physical operations.

The group has also expanded in Australia through the acquisition of Digital Experience Labs, known as DXLabs, a digital transformation and enterprise automation company serving government and insurance clients. Vection is looking to cross-sell DXLabs services through the wider platform across the region.

Additional public funding has supported that development work. In August, the company received AUD $1.2 million in non-dilutive government research and development funding for programmes in AI, XR, digital health and inclusive AI.

Gianmarco Biagi, Managing Director and Executive Chairman of Vection, said the latest financial year marked a shift in the maturity of the business.

"FY26 is the year we moved from building the platform to proving that it works at scale. Adjusted EBITDA increased nearly sevenfold, we generated our first positive operating cash flow, and we reduced debt while continuing to fund acquisitions and technology development. Our defence programme is progressing in line with the multi-year plan, Algho AI has established itself across more than ten verticals, and DXLabs is integrating well and on schedule. We enter FY27 with the strongest balance sheet in our history. The company has reached a level of organisation, product range and quality, and financial stability that lays the foundation for significant future growth. The question is no longer whether the model works, but how quickly we can scale it."