• Strong balance sheet with ~A$20.9m cash and ~A$19.5m Menlo Security investment
• Increasing demand for sovereign encryption capabilities and quantum-resistant security
• Expanding into new markets like Middle East, Asia and South America

Senetas Corporation Limited is providing a business update, highlighting its strong financial position with ~A$20.9 million in consolidated cash and a ~A$19.5 million investment in Menlo Security Inc. The company operates in an important and growing cybersecurity market, with increasing demand for sovereign encryption capabilities and quantum-resistant security solutions. Senetas has an established customer base across government and defence sectors, and is expanding into new markets like the Middle East, Asia, and South America. Recent contract completions and new sales, including a large order from a Middle Eastern customer and the company's first significant sale into South America, are expected to boost Senetas' profit before tax in FY2026. The company's CN7000 series encryption platform is gaining traction, and Senetas expects operating business revenue and profit to grow in FY2026, supported by stronger sales momentum and increased focus on key growth markets. The company's strong cash position, profitable and cash-generative outlook, and potential for further cash realisations from the Menlo investment are expected to provide the Senetas board with the capacity to consider ongoing capital management opportunities.

Senetas expects operating business revenue and profit to grow in FY2026, supported by stronger sales momentum and increased focus on key growth markets. The company's gross margins, which were temporarily lower in HY2026 due to timing of transaction completions, are expected to return to historic levels through the remainder of FY2026.

Senetas is seeing significant new opportunities arising in Asia and the Middle East, with particular focus on its CN7000 series encryption platform and sovereign encryption capabilities, which the company expects will deliver good growth for the business through the next 12-18 months. Some of these new opportunities, if realised, have the potential to be quite transformative for Senetas and be the core drivers of future growth.