DEFSEC Technologies Inc. Announces Third Quarter Fiscal 2026 Results

• Revenue from digitization services on Government programs up 121% from Q3 Fiscal 2025, with total revenue up 92% over the same period;
• Gross margin $ increase of 126%, with improvement in gross margin to 33.1% from 28.2% in Q3 Fiscal 2025;
• Strong cash and AR position of +$5.8 million; and
• Test and Evaluation of BLISS™ completed with U.S. Army Vehicle Program and invitation to an additional invitation-only U.S. Army-Hosted Evaluation for a separate program.

OTTAWA, ON, Aug. 13, 2026 /CNW/ -- DEFSEC Technologies Inc. (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCW) ("DEFSEC" or the "Company") is pleased to announce the highlights of its Fiscal 2026 third quarter ("Q3 Fiscal 2026") results. This announcement is a summary only and should be read in conjunction with DEFSEC's unaudited condensed consolidated interim financial statements for the three and nine months ended June 30, 2026 and 2025 and related management's discussion and analysis for the three and nine months ended June 30, 2026, all of which have been filed on SEDAR+ and EDGAR. All figures are stated in Canadian Dollars unless otherwise noted.

Strong continued growth in defence software business

"The continued growth this quarter in our defence software business is further evidence of our commitment to growing a predictable, long-term stable base of revenue and margin from strategically important military programs," said Sean Homuth, President and CEO.

Additional launch milestones achieved

The Company has achieved significant milestones with its product roadmap during Q3. On May 6, 2026, the Company commercially released DEFSEC Lightning™ 2.0, its cloud-hosted, TAK-enabled real-time situational awareness SaaS platform for Critical Incident Management, with one Canadian police agency having subscribed ahead of full release. On May 13, 2026, the Company commercially released its ARWEN® 40mm baton ammunition, now in full-rate production, for use with third-party 40mm launchers.

"Achieving these product commercialization milestones marks an important step in catalyzing further revenue growth and diversification in the public safety market," said Mr. Homuth.

Q3 Fiscal 2026 Financial Highlights:

Three months ended June 30,

2026

2025

(in thousands of $,unless otherwise stated)

$

$

Revenue

2,722.2

1,417.5

Gross margin

901.7

399.5

Gross margin %1

33.1 %

28.2 %

Operating expenses

3,463.1

2,221.8

Adjusted EBITDA loss1

(1,942.7)

(1,491.5)

As at

June 30, 2026

September 30, 2025

(in thousands of $)

$

$

Cash and short-term investments

3,529.7

6,733.9

Trade and other receivables

2,309.1

1,494.2

Current assets

6,835.2

8,946.0

Total assets

10,451.7

12,921.5

Current liabilities

3,160.6

2,918.2

Total liabilities

5,341.3

5,119.8

Working capital

3,674.6

6,027.8

___________________________________ 1 Unaudited, non-IFRS measure. See "Non-IFRS Measures" in this news release.

U.S Army testing of BLISS™

The Company announces the completion of test and evaluation of its networked BLISS™ at a United States Army test center, where the systems were tested in support of a U.S. Army vehicle program. The completed testing follows the Company's shipment of two new networked BLISS™ systems to the US Army test center, announced on April 29, 2026.

Building on this milestone, the Company further announced that it has been invited by a U.S. Army program office to participate in a U.S. Army-hosted sensor test and evaluation scheduled to take place in late August 2026 at another U.S. Army test range. The invitation reflects the performance of BLISS™ in testing to date and provides DEFSEC with a significant opportunity to demonstrate the system's capabilities in an operationally relevant environment before U.S. Army program stakeholders.

The patent-pending BLISS™ system alerts operators to laser activity across the battlespace, providing critical early warning and valuable seconds to assess, evade, defend, and deploy countermeasures. Miniaturized BLISS™ sensors can be mounted on vehicles and fixed infrastructure, or worn on personnel, to affordably blanket a battlespace with sensors for enhanced survivability, situational awareness and battlespace intelligence in contested environments. Beyond real-time detection, BLISS™ incorporates enhanced laser pulse signature capture and analysis to help identify the source, intent, and affiliation of detected emissions, transforming laser warning into shared, actionable battlespace information.

"The completion of US Army testing and this latest invitation to demonstrate BLISS™ at an additional U.S. Army-hosted event is strong validation of our technology roadmap for battlespace laser detection and intelligence," said Mr. Homuth. "This event puts BLISS™ in front of the operators and decision-makers who will shape future requirements, and it is a meaningful step toward fielding this capability to protect soldiers and high-value assets in the battlespace. With multiple U.S. Army programs testing and evaluating the BLISS™, we see validation that this product solves a problem that matters to warfighters."

About DEFSEC

DEFSEC (TSXV: DFSC) (TSXV: DFSC.WT.U) (NASDAQ: DFSC) (NASDAQ: DFSCSW) (FSE: 62UA) develops and commercializes breakthrough next-generation tactical systems for military and security forces. The Company's current portfolio of offerings includes digitization of tactical forces for real-time shared situational awareness and targeting information from any source (including drones) streamed directly to users' smart devices and weapons. Other DEFSEC products include countermeasures against threats such as electronic detection, lasers and drones. These systems can operate stand-alone or integrate seamlessly with OEM products and battlefield management systems, and all come integrated with TAK. The Company also has a new proprietary less-lethal product line branded PARA SHOT™ with applications across all segments of the less-lethal market, including law enforcement. The Company is headquartered in Ottawa, Canada.

For more information, please visit https://www.defsectec.com