Although FY26 revenue is 6% below forecast, CKT reached EBITDA breakeven and FCF generation faster than expected, reflecting higher-than-forecast cost savings and enabling a renewed focus on growth. While software valuations have broadly derated due AI-driven uncertainty, we believe CKT’s vertically integrated software and hardware model offers a more defensible moat. In fact, AI could potentially accelerate the realisation of its IoT proposition. Furthermore, we think Digi’s Aug ’25 acquisition of CKT’s peer, Jolt, at 7.3x EV/ARR indicates that strategic buyers recognise this and the value of the technology. Such acquirers could provide the scale required to accelerate profitable ARR growth, suggesting that CKT’s smaller scale is not an issue and that its shares are undervalued.