Codan’s rise turns heads towards government tech deals

• Codan shows just how big government tech business can get
• Excite, archTIS and others land juicy Canberra deals
• Cybersecurity and defence tech keep government chequebooks busy

A government contract can be a golden ticket for a small ASX tech company.

Canberra has deep pockets, demanding standards and, if you’re lucky, a habit of coming back for more.

For investors, that’s a pretty attractive combination.

But winning government business isn’t just about the dollars.

It can give a relatively unknown company the credibility to chase bigger customers, secure longer term work and potentially turn a one-off deal into years of revenue.

And with government agencies needing better cybersecurity, digital investigations, secure communications and AI systems, there’s no shortage of technology on the shopping list.

If anyone needs convincing that government and defence customers can be serious business, have a look at Codan (ASX:CDA).

The Adelaide-based communications specialist briefly became the ASX’s biggest tech stock in September, knocking WiseTech Global (ASX:WTC) off its perch as its market value topped $11 billion.

Not bad for a company that also makes gold detectors.

Its technology helps soldiers communicate on the battlefield, keeps military drones connected to their operators and supports emergency services when reliable communications really matter.

Codan already supplies radio technology for Australian Army drones, while demand from overseas military customers has been soaring.

In FY26, its communications revenue jumped 22% to $506 million, with defence customers accounting for 58% of the division’s sales.

It’s a rather handy reminder that selling technology to governments can become a very big business indeed.

The government – a customer worth keeping

Another company getting a closer look is $5m-market capped Excite Technology Services (ASX:EXT).

In October, Excite landed a $2.9m, two-year contract with an unnamed federal regulator through its CBIT subsidiary.

The job involves digital forensics and investigative software. The technology helps investigators dig through electronic evidence and work out what’s going on.

And Canberra has already been back for more.

In September, Excite announced a separate $3.2m expansion of an existing federal government contract, also running for 24 months.

CEO Bryan Saba described the October award as “a powerful vote of confidence in our people and our technology”.

The financials are getting interesting too.

Excite reported September-quarter customer receipts of $7.2m, up 71% year on year, alongside $1.33m in positive operating cash flow.

Keeping Canberra’s secrets and systems running

Of course, catching cyber crooks is one thing. Keeping government secrets under lock and key is another.

That’s where archTIS (ASX:AR9) comes in.

Its software controls who gets to see and share sensitive information. Think of it as a digital bouncer with a very strict guest list.

In July, it landed a $3.2m Defence contract, including $1m in annual software licences and $2.2m in development and maintenance work, with options for another two years.

It’s also making moves in the US, where its NC Protect software passed all 60 production test cases for the Department of Defense.

Meanwhile, Etherstack (ASX:ESK) is making sure critical government communications don’t go belly-up.

In April, it won a Home Affairs contract to maintain and upgrade digital radio networks across Australia, including at major ports and airports.

The deal could bring in around $9m through 2028, potentially rising to $15m with an extension. Mind you, much of that depends on future work rather than guaranteed spending.

And then there’s Atturra (ASX:ATA) which handles the less glamorous but essential business of government IT.

Its Geoscience Australia data management contract grew from $13.78m to roughly $14.23m in October.

Not exactly James Bond stuff, but keeping Canberra’s data organised and systems humming can still pay rather nicely.

Buying a ticket into Canberra

Then there’s Infotrust (ASX:ITS), which has taken a slightly different approach.

Rather than waiting to win its way into government departments, it bought a business that already knows its way around Canberra.

In April, Infotrust completed its acquisition of Catalyst Cyber, a specialist cybersecurity consultancy with established federal government relationships and security-cleared personnel.

The acquisition is already contributing financially. Catalyst generated $2.135m in revenue and $480,000 in pre-tax profit between April 17 and June 30.

Stakk (ASX:SKK), meanwhile, is getting some love from Uncle Sam.

In September, its signature-verification technology was selected for use by the FBI, with the initial agreement running until December 2027.

And WhiteHawk (ASX:WHK) is also knocking on Washington’s door.

It has teamed up with Bell Federal Systems to chase US government cybersecurity and AI contracts through NASA’s SEWP VI program.

The opportunity is potentially sizeable, but WhiteHawk still needs to turn those introductions into actual orders.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

At Stockhead we tell it like it is. While Excite Technology Services and Stakk are Stockhead advertisers, they did not sponsor this article.

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