Objective Loses DoD Contract After 25 Years; ARR Growth Target Missed

Objective Corporation (ASX: OCL) lost a support agreement with the Australian Department of Defence that had been in place for more than 25 years. The Defence Digital Group declined to renew the Objective ECM Upgrade and Support Program, effective 1 July.

The company said FY26 revenue and earnings would not be affected. The non-renewal will reduce its annual recurring revenue balance instead. OCL had expected the agreement to support FY26 ARR growth of 10% to 14% on a constant currency basis. Now it expects closing ARR roughly in line with FY25 levels.

Negotiations had been underway since March. The two sides have not reached terms on ongoing licence entitlements for the roughly 140,000 Objective ECM users across DoD. The platform is the largest public sector document and records management solution in Australia, supporting deployed forces under federal directives. The expired program gave the DoD access to deep engineering support and software upgrades, including remediations for critical and high-security vulnerabilities.

Founder and chief executive officer Tony Walls said he was deeply disappointed by the short-notice decision after a quarter-century partnership. “Objective is proud to have built a strong sovereign tech capability, exporting to many trusted nations, and we will continue to work constructively with DoD and other Defence and National Security customers to provide access to our capability.”

Walls noted OCL reinvests 30% of its annual software revenues into research and development, which he said shows commitment to maintaining a base in Australia. The company will redirect resources previously tied to DoD-specific ECM support toward accelerating Objective Nexus innovation for broader defence and national security markets. OCL made roughly $150 million in sovereign R&D investment since releasing Objective ECM 11, including three generational releases of Nexus as the replacement solution.

DDG confirmed it remains committed to widescale use of Objective ECM across the DoD. OCL said the non-renewal does not restrict its ability to sell other solutions to the Department. The company retains specialist knowledge of the mission-critical systems and remains engaged with the DoD across numerous relationships. Walls added, “We are proud of the contribution we have made to DoD over our long relationship, and we look forward to finding new ways to leverage our capabilities to build on this contribution in the future.”