Ava Risk Group Revises FY2026 Revenue Forecast to $29 Million Amid Delays in Middle East and North American Orders

Reasons Behind FY2026 Revenue Falling Short of $34
37 Million Guidance

Ava Risk Group’s Q4 FY2026 update clarifies that the revenue shortfall relative to the $34 million to $37 million guidance was due to timing delays affecting a limited number of high-value orders rather than lost contracts or weakened competitive positioning. Approximately $6.0 million in orders expected to contribute to FY2026 revenue were delayed and not delivered by 30 June 2026. This amount represents about 18% of the anticipated $29.0 million revenue, highlighting the significant impact a few large project delays can have on the overall results for a company of this size and order profile.

The company had previously flagged timing uncertainties in its Q3 FY2026 Trading Update on 1 May 2026, particularly concerning Middle East orders affected by regional conflicts and customer project scheduling. The Q4 update confirms these risks materialized, resulting in revenue below guidance. FY2026 financial results are pending finalization and audit, with current figures reflecting management’s expectations rather than audited data.

$2.8 Million Middle East Border Protection Project Delayed Due to Regional Conflict

The largest factor in the FY2026 revenue shortfall was a $2.8 million sovereign border protection project in the Middle East, delayed by ongoing regional conflict impacting procurement, site access, and logistics. Ava Risk Group confirmed the project remains active and is expected to proceed, though timing depends on the customer’s final procurement and operational decisions, with no firm revenue recognition date established.

The Middle East remains strategically important for Ava Risk Group given the region’s investment in border protection and critical infrastructure security. Despite this project’s delay, other regional orders progressed, demonstrating an active Middle East pipeline aligned with the company’s growth goals. The conversion of this $2.8 million opportunity in FY2027 will be a key indicator of the company’s recovery progress.

$1.9 Million in North American Energy and Government Orders Deferred to FY2027

In addition to Middle East delays, approximately $1.9 million in North American orders, including system upgrades for an oil and gas client and planned U.S. government site orders, were postponed beyond FY2026. These are expected to close in H1 FY2027, potentially providing early revenue momentum. FY2026 full-year order intake in the Americas reached $6.2 million, underscoring ongoing commercial activity despite timing setbacks.

North America is a key focus for FY2027, with recent hires of experienced U.S.-based sales executives bringing industry expertise and customer relationships. The company secured $1.1 million in U.S. government site orders during Q4, covering corrections and security sectors, evidencing a robust pipeline despite delayed major opportunities.

Sales Order Intake of $29.4 Million Surpasses Revenue, Setting Stage for FY2027 Growth

A positive highlight from the Q4 update is sales order intake of approximately $29.4 million, exceeding FY2026 revenue of $29.0 million. This indicates the company secured more new orders than revenue recognized, a favorable sign for upcoming revenue generation. The order backlog at FY2026’s end is $6.8 million, including $2.6 million in contracted annual recurring revenue from multi-year service and equipment contracts, adding predictability to FY2027 revenue.

About $4.2 million of the backlog is expected to convert to revenue in H1 FY2027, offering investors a clear baseline. Combined with delayed orders and an active pipeline across geographies, management expressed confidence in stronger performance ahead. Acting CEO Neville Joyce highlighted that sales intake exceeding revenue, strong gross margins, positive EBITDA, and a solid cash position reflect improving business fundamentals.

Maintained Gross Margins of 6064% and Modestly Positive EBITDA Despite Revenue Shortfall

Despite missing revenue guidance, Ava Risk Group sustained strong gross margins estimated between 60% and 64%, reflecting its software- and technology-intensive fibre optic sensing and intrusion detection products. High gross margins provide operational leverage, allowing modest sales increases to significantly boost earnings. The company’s disciplined cost structure supports this leverage.

Underlying EBITDA is expected to be modestly positive for FY2026, notable given the revenue shortfall. This indicates a lean cost base capable of generating earnings at $29.0 million revenue. The projected cash balance of $6.7 million as of 30 June 2026 suggests no immediate financial strain, providing a runway to pursue FY2027 growth without near-term capital raising. FY2026 results remain subject to audit.

Australian Airport Perimeter Security Trials Progressing at Melbourne and Perth Airports

Ava Risk Group is conducting paid trials of enhanced Perimeter Intrusion Detection Systems (PIDS) at Australian airports under the Department of Home Affairs’ perimeter security directive. Following successful trials at Canberra and Cairns airports in H2 FY2026, comprehensive trials began at Melbourne and Perth airports during Q4, expected to conclude in Q1 FY2027.

Successful trial completion paves the way for broader deployment of Ava Risk Group’s fibre optic sensing technology across Australian aviation, a significant growth opportunity. The company anticipates pipeline opportunities exceeding $2.0 million in this sector during FY2027. The government-mandated nature of this directive offers a stable demand driver less dependent on discretionary spending, making this segment important to watch.

Sydney Metro Fibre Sensing Deployment and Australian Rail Infrastructure Prospects

Ava Risk Group is advancing its fibre sensing deployment on the Sydney Metro project, expected to complete in Q1 FY2027 in partnership with UGL. During Q4 FY2026, the company successfully tested object detection technology on the rail corridor, a critical milestone enabling project finalization. Completion of this project is essential for pursuing additional Australian rail infrastructure opportunities in FY2027.

The transportation sector is a key vertical due to substantial rail and metro infrastructure development across Australian cities. Delivering Sydney Metro and demonstrating technology capabilities strengthens Ava Risk Group’s reference case for similar projects. The Q1 FY2027 completion timeline carries strategic importance beyond the immediate contract.

$2.7 Million India Energy Sector Contract Fulfilled; Defence Pipeline Identified for FY2027

In FY2026, Ava Risk Group successfully fulfilled a $2.7 million contract deploying fibre sensing technology on a critical Indian energy sector pipeline. Final commissioning by the end user is expected in H1 FY2027, consistent with typical infrastructure deployment timelines where commissioning follows physical delivery.

India is a growing market for Ava Risk Group’s technology, building on prior success in the Indian defence industry. The company identified significant FY2027 pipeline opportunities in both Indian energy and defence sectors, indicating the $2.7 million contract could mark the start of expanded commercial activity. India’s rapid economic growth and infrastructure investment support long-term demand for Ava Risk Group’s solutions.

Appointment to Department of Home Affairs Border Protection Technologies Panel for Five Years

Ava Risk Group was appointed as a prequalified supplier to the Australian Department of Home Affairs Border Protection Technologies Panel (BPTP) for an initial five-year term starting 1 July 2026. This recognizes the company’s fibre optic sensing solutions as suitable for government border security, enabling streamlined procurement and faster deployment across critical infrastructure.

Being on this panel reduces the need for full competitive tenders for government contracts, shortening time-to-contract and lowering administrative burdens. For Ava Risk Group, this access to recurring Commonwealth contracts enhances revenue visibility and diversification alongside international projects. The five-year term signals a medium-term government commitment to the company’s technology.

Acting CEO Remarks and Decision Against Providing FY2027 Formal Guidance

Acting CEO Neville Joyce addressed the FY2026 revenue shortfall, expressing disappointment over delayed major orders, especially in the Middle East, while emphasizing these delays were due to external factors beyond the company’s control. Planning and product build for these orders were completed to enable Q4 FY2026 shipment, confirming delays were customer-side and logistical rather than internal execution failures. He described the delayed orders as active opportunities forming a solid growth platform for FY2027.

Despite confidence in the company’s outlook, Ava Risk Group has opted not to issue formal FY2027 revenue guidance yet, citing timing sensitivities of key opportunities and the early fiscal year stage. Three senior sales leaders in the U.S., Asia-Pacific, and Europe each contributed annual sales order intake between $3.9 million and $5.0 million in FY2026, validating the strategy of investing in senior sales leadership. Additional experienced sales executives have recently joined in the U.S., Southeast Asia, and India, further expanding the commercial team. Investors should monitor quarterly updates closely as pipeline conversion progresses through H1 FY2027.