DroneShield revenue surges 74% to A$125.8 million as European contracts lift outlook

DroneShield Ltd reported preliminary first-half revenue of A$125.8 million, up 74% from a year earlier, and secured A$23.2 million in European military contracts.

"The first half of 2026 has been an important period for DroneShield," Chief Executive Angus Bean said. "We have converted global customer demand into revenue, deepened engagement with defence and government customers, and continued to scale the business at pace."

The counter-drone technology company expects full-year 2026 revenue of A$250 million to A$270 million, representing growth of 15% to 25% on the record A$217 million generated in 2025. Committed revenue for 2026 stands at A$206 million, equivalent to 95% of last year's total. First-half gross margin came in at about 60%, down from 65% a year earlier, which the company attributed to sales mix, currency movements and raw material impairments. It is targeting a blended full-year margin of about 65%.

The contracts with a Benelux reseller for vehicle-mounted counter-drone systems highlight Europe's importance as a growth market for DroneShield. The company also unveiled RfAI-3, its third-generation radio frequency detection engine designed to identify previously unknown drone threats, with initial hardware releases expected in the second half of 2026.

The two European contracts cover the supply of DroneShield hardware, software subscriptions, warranties, services and third-party equipment to an undisclosed European military customer, with deliveries scheduled progressively through 2026. About A$21 million of the contract value will be recognised as committed revenue in the current financial year, with the balance comprising subscription revenue in future periods.

Recurring revenue from software, subscriptions and long-term services reached an estimated A$14.2 million in the first half, accounting for 11.3% of total revenue. A further A$26 million has been committed for 2027 and later periods across hardware, software, warranties and services.

DroneShield shares fell 8.1% on Tuesday to A$1.90, extending their year-to-date decline to 43%. The stock has lost 34% over the past 12 months, trailing the S&P/ASX 200 Index, which rose 2% over the same period.

The guidance raise signals management expects defence demand to sustain its momentum. Investors will watch the full first-half results on Aug. 26 for updated margin trajectories and further detail on the RfAI-3 product rollout.

This article is for informational purposes only and does not constitute investment advice.