ARB IOT Loss Widens to RM83.8 Million Despite 19% Revenue Growth

Key Facts

ARB IOT Group recorded a loss of 83.8 million Malaysian ringgit in the financial year ended June 30, 2026, compared with a loss of 71.4 million ringgit in the previous year, according to the annual report it filed with the U.S. Securities and Exchange Commission. The wider loss came as revenue rose 19% to 235.4 million ringgit, from 197.3 million ringgit in fiscal 2025. The company attributed the revenue growth mainly to sales of Internet of Things and AI servers, AI-powered energy chargers and drones. The financial year ended June 30, 2026, defining the period covered by the reported figures. The results show that sales growth was accompanied by higher total expenses, weighing on the annual result.

Revenue from the IoT and AI infrastructure category reached 232.4 million ringgit in fiscal 2026, mainly from server and energy charger sales, according to the report. Cost of revenue rose 19% to 244.8 million ringgit, from 205.5 million ringgit in the previous year, alongside revenue growth. Total expenses also increased 26% to 81.7 million ringgit, compared with 65.1 million ringgit in 2025. The company said higher impairment losses were the main reason for the increase in total expenses, partly offset by lower depreciation. These items place the revenue increase alongside the higher costs and expenses associated with the business during the year.

Impairment losses recorded in fiscal 2026 totaled 47.835 million ringgit. The amount included 22.150 million ringgit for impairment of goodwill associated with the energy charger unit, and 10.018 million ringgit for property and equipment in the control station unit. The company also recorded a 15.667 million ringgit impairment of intangible assets in the drone unit. These items spread the impact across goodwill and tangible and intangible assets in three business units. The company linked the increase in total expenses mainly to higher impairment losses, while lower depreciation partly limited the increase.

On liquidity, cash and bank balances stood at 31.2 million ringgit on June 30, 2026, against total current liabilities of 9.2 million ringgit, according to the annual report. The company said cash exceeded current liabilities at year-end. In the prior financial year, revenue had surged 239% in the year ended June 30, 2025, to 197.3 million ringgit from 58.2 million ringgit in 2024. The company attributed that earlier growth mainly to sales of vending machines and IoT networking devices. Revenue growth in 2026 therefore followed an exceptional annual increase in the comparison period, with the growth rate slowing to 19%.

The report said two customers together accounted for 85.6% of fiscal 2026 revenue. AT3 Technologies accounted for 55.7% of total revenue, while Gajah Kapitalan's share was 29.9%. These percentages show that a large portion of sales during the period reported by the company was concentrated among two customers. In a separate disclosure, Alfred Tan took up the roles of chief executive officer, chairman and board member on October 23, 2026, after Leo Kok Leong resigned from the same positions. The management change came after the fiscal year ended in June and before the stock closed at $3.71 on October 30, according to EL7 data.