Ottawa-headquartered DEFSEC Technologies reported an 81% increase in revenue from Canadian defence subcontract task orders in its fiscal second quarter, alongside expanded staffing on two military software programs.

In a May 13 news release, DEFSEC said the increase was measured against the same quarter a year earlier. The update covers the three months ended March 31, 2026, and describes growth in software services supplied to the Department of National Defence.

The company had 43 personnel assigned to the two programs at quarter-end, compared with 19 a year earlier. An expansion of its work on one program added 14 roles at the beginning of February, contributing two months of activity to the latest quarter.

Two more personnel were added after March 31. DEFSEC said that brought its annualized program billing rate to approximately $9.41 million. That figure describes a projected billing pace, rather than revenue already earned over a full year.

Contracts depend on requested work

The work falls under the Directorate Land Command Systems Program Management Software Engineering Facility, known as DSEF, and the Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance program, or Land C4ISR.

Both support the Canadian Forces’ digital modernization. DEFSEC said its share of the two subcontracts could generate up to $75 million combined over their initial terms, excluding renewal options.

However, neither agreement guarantees a minimum amount of work. Tasks are assigned as requested, with the initial DSEF term running through 2028 and the Land C4ISR term through 2029.

Products reach sales and testing milestones

DEFSEC also reported its first sale of PARA SHOT ammunition, delivery of its BLISS prototype to customers for qualification and trials, and the commercial release of DEFSEC Lightning, its software-as-a-service product for critical incident management.

The company develops tactical technology for military and security users, including systems for sharing situational information and countermeasures against electronic detection, lasers and drones.

In its less-lethal product business, DEFSEC said a new law enforcement customer in the western United States adopted the ARWEN 37 platform for its tactical team. The unnamed customer also ordered recently released ARWEN 40 mm baton ammunition for existing third-party launchers.

The company said the 40 mm ammunition is now in full-rate production. It did not disclose the value of that customer’s orders.

The release also announced 151,552 stock options for directors, officers, certain senior managers and consultants. The options have a $6.75 exercise price and a three-year term, with half vesting immediately and half after one year. Their terms remain subject to TSX Venture Exchange approval.