Narf Industries Plc (LON:NARF), a specialist in cybersecurity research and incident response for US government agencies, has taken a significant step forward with its latest contract win. The company has announced its largest-ever deal with the Defense Advanced Research Projects Agency (DARPA), a $6.8 million, three-year project aimed at strengthening cybersecurity defences across interconnected US government platforms.
Strengthening Revenue Visibility
The past year has presented challenges for Narf Industries, with the loss of a major contract and a slowdown in US government awards ahead of the elections. However, the company has simultaneously expanded its focus beyond high-end threat intelligence research and development (R&D). By leveraging its expertise in open-source software security, Narf has been developing AI-driven automation tools for both government and industry clients.
This shift in strategy appears to be paying off. The new DARPA contract, part of the Intelligent Generation of Tools for Security (INGOTS) programme, will support the simulation and identification of sophisticated cyberattacks across government systems. Canaccord Genuity analysts view this contract as a strong validation of Narf’s capabilities.
“This win in our view is evidence that Narf remains a highly relevant R&D partner for DARPA,” said the Canaccord Genuity team.
Steve Bassi, President and CEO said: “We are delighted to be part of DARPA’s pioneering INGOTS programme, reaffirming Narf’s commitment to safeguarding critical systems against sophisticated and evolving cyber threats. This significant US$6.8 million multi-phase contract enables us to further develop our system that goes beyond merely identifying vulnerabilities but represents a fundamental shift in cybersecurity strategy. By simulating real-world attack tactics, our technology will empower organisations to anticipate and counter emerging threats, ensuring stronger protection for their assets and infrastructure.”
Improving Financial Outlook
Narf Industries expects to recognise $2.6 million in revenue from the DARPA contract in FY26. Combined with an existing contract with the US Air Force, the company is now better positioned to achieve its revenue targets—$5 million in sales for FY25 and $8 million for FY26. This would mark a significant improvement from the recently reported 1H25 sales of $1.2 million.
If these targets are met, Narf Industries will move closer to cash flow breakeven, a crucial milestone for long-term sustainability.
Analyst View – Key Catalysts Ahead
Despite these positive developments, Canaccord Genuity has kept its rating “Under Review.” The analysts highlight the need for additional contract wins in the next 3-6 months and further updates on funding to solidify the company’s financial position.
“We believe that further material contract wins over the next 3-6 months as well as updates on funding have the potential to enhance visibility and confidence in P&L metrics and the balance sheet,” stated the Canaccord team.
Narf Industries’ latest DARPA contract is a major vote of confidence in the company’s cybersecurity expertise. With growing revenue visibility and a strategic expansion into AI-driven security tools, the company is positioning itself for a more stable financial future. While challenges remain, continued contract wins could provide the necessary momentum for further growth.
