DDG Outcome Weighs on Outlook

研报英文原文证据摘录

DDG Outcome Weighs on Outlook

Australia | Technology & Information Services

Objective Corp EquityJulyResearch1, 2026

TARGET | ESTIMATE CHANGEDDG Outcome Weighs on Outlook

Defence Digital Group (DDG) within the Australian Department of Defence RATING HOLD

(DoD) has elected not to renew the Objective ECM Upgrade and Support PRICE AUD6.75^

Program (USP) agreement after 25+ years. While there is no FY26 financial PRICE TARGET | % TO PT AUD7.00 (AUD14.00) |

impact, FY27 growth will be largely offset as the ARR reset (i.e., FY26 ARR +4%

52W HIGH-LOW AUD23.10 - AUD4.75

closing is back to FY25 level). We also expect near-term margin pressure

FLOAT (%) | ADV MM (USD) 33.4% | 0.92

given the loss of a high-margin subscription. Retain Hold with a lower PT

MARKET CAP AUD645.3M | AUD645.3M

of A$7/share (prev. A$14).

TICKER OCL AU

^Prior trading day's closing price unless otherwise

ARR Reset From DDG Loss: While there is no impact on FY26 revenue or earnings, the FY26 noted.

closing ARR will revert to FY25 levels, implying that the loss of this long-term customer offsets

underlying full-year ARR growth (vs. the previous guidance for ARR growth of 10-14%). Beyond

FY26, we expect near-term top-line pressure from customer churn and potential loss across FY (Mar) CHANGE TO JEFe JEF vs CONS

remaining DoD contracts, partly mitigated by new deal wins. The non-renewal affects 85k DDG 2026 2027 2026 2027

users, while 55k users across other DoD groups are expected to remain on OCL. However, REV NM -9% -3% -13%

there remains a risk that the company could lose this cohort, although neither the company EPS NA -28% NM -27%

nor the DoD is currently discussing it.

2026 (AUD) 1HalfA 2Half FY

Margin Pressure: The DDG USP agreement represented a high-margin, long-standing software EPS 0.20 0.20 0.39