Vection Gears Up with Fresh $500k Defence Order, Eyes $27m Expansion

Vection Technologies (ASX:VR1) has again found favour with a key defence client, securing a new $500,000 order under its long-running military technology program. While modest in dollar terms, the award marks a significant turning point as the first slice of a potentially $27 million tranche of optional work expected to run through to FY30.

The deal follows Vection’s successful delivery of a $4.4 million project component last month, which landed on time and within budget. That milestone evidently impressed, as the client has now committed over $10 million in total under what is now a $37 million framework agreement.

Managing director Gianmarco Biagi summed it up bluntly: “A flawless delivery is the best possible sales pitch.” He added that completing the milestone project on time “gave our customer the confidence to award further works.” The new tasking, while relatively small, signals the start of a broader rollout and confirms Vection’s growing relevance in high-stakes defence digitisation.

The technology at the centre of it all is Vection’s INTEGRATEDXR platform, which aims to revolutionise defence workflows through extended reality and artificial intelligence. The latest order will see these tools deployed in a new operational domain, broadening the platform’s application beyond its existing scope.

For context, Vection has been progressively delivering under a standing defence tender first flagged back in March 2023. The program has steadily expanded, with this latest order bumping the potential upside from $21 million to $27 million, assuming all optional extensions are triggered.

What makes this announcement material is not the half-a-million dollar figure in isolation, but the gateway it represents. The company flagged that today’s order is effectively a pilot for the larger work program, which could deliver a step change in contracted revenue through FY26 and beyond.

As Biagi noted, defence organisations globally are accelerating their adoption of immersive digital tools. Vection is positioning INTEGRATEDXR to ride that wave, especially as governments seek more efficient and dynamic training, simulation and decision-making platforms.

The company expects to recognise revenue from the new order in FY26, giving investors some visibility into the medium-term pipeline. While the share market has yet to fully warm to XR tech in the enterprise space, Vection’s traction with defence clients offers a proof point that may appeal to those seeking exposure to real-world deployments.

With offices from Perth to Abu Dhabi, Vection is angling itself as a cross-continental tech player with a distinctly Australian core. Whether the rest of the optional defence work materialises remains to be seen, but the latest award suggests the wheels are in motion.

For now, a clean delivery, a happy client and a growing program. Sometimes half a million speaks volumes.