Highlights

• FY2026 committed Revenue reached A$261 million, the midpoint of the company's A$250 million to A$270 million outlook.

• First-half 2026 revenue rose 74% to a record A$125.8 million, but the company recorded a statutory loss after tax of A$32.2 million.

• A US contract with JIATF-401 carries a ceiling of US$500 million, which sets a maximum value rather than guaranteed orders.

• An ASIC investigation into announcements and trading from late 2025 remains unresolved.

What does the latest revenue update from DroneShield (ASX:DRO) reveal about the counter-drone company's position heading into the end of 2026? In short, the Sydney-based Business has already secured contracts covering the midpoint of its full-year revenue outlook, but it is still loss-making, and investors continue to weigh rapid sales growth against higher spending and an unresolved regulatory investigation.

The central development: committed revenue reaches the midpoint

The company reports on a calendar-year basis, so FY2026 is the year ending 31 December 2026.

That figure sits at the midpoint of the A$250 million to A$270 million revenue outlook the company issued on 28 July 2026. It is about 35% higher than the A$193.1 million of committed revenue reported at a similar point in October 2025, and about 121% of total FY2025 revenue of A$216.5 million.

Committed revenue is a company-defined measure covering revenue received or backed by purchase orders, so it is not audited revenue. The full-year figure will only be confirmed with annual results.

DroneShield also disclosed A$29 million of committed revenue for FY2027 and A$17 million for FY2028 and beyond. It expects the FY2027 figure to rise in coming months, an expectation rather than a contracted outcome.

What DroneShield does

DroneShield designs and sells counter-drone technology. Its products detect, identify and, where legally permitted, disrupt unmanned aircraft. The range covers handheld and body-worn devices, vehicle-mounted systems and fixed-site installations.

Hardware sales still provide most revenue, but the company is trying to build a recurring base from software subscriptions, warranties and services. Recurring Revenue reached A$11.5 million in the first half of 2026, or about 9.2% of revenue.

On 1 October the company launched Mission Ready Services, a subscription covering software updates, Training and specialist support.

Military customers accounted for 85% of first-half revenue. By region, Europe and the UK contributed 52%, Latin America, the Middle East and other markets 22%, the United States 17% and Asia-Pacific 9%.

Half-year results show growth and wider losses

For the six months to 30 June 2026, DroneShield reported record revenue of A$125.8 million, up 74% on the prior corresponding period.

Profitability moved the other way. The company recorded an underlying EBITDA loss of A$12.4 million and a statutory loss after tax of A$32.2 million.

Management attributed the result to deliberate Investment in production capacity, product development, internal systems and leadership. This included a move into a 3,000 square metre production Facility in Australia and the introduction of new enterprise resource planning and customer relationship systems.

Cash and term deposits fell to A$180.0 million at 30 June 2026, from A$210.6 million six months earlier. The company has no debt. Inventory stood at A$85 million.

Headcount was 519 at 30 September 2026, down from 537 at 30 June, with about 40 open roles focused on sales, commercial support and operations.

Contract activity and the US opportunity

Recent announcements have centred on Europe and the United States. On 28 July 2026, DroneShield announced A$23.2 million of contracts with a European military end customer.

In June 2026, it disclosed a contract with the US Joint Interagency Task Force 401 (JIATF-401) worth A$24.9 million, made up of an initial A$19.3 million and A$5.6 million of options. The company expected at least A$10 million to count as FY2026 committed revenue.

More recently, DroneShield has referred to a three-year indefinite delivery, indefinite quantity contract with JIATF-401 carrying a ceiling of US$500 million. A ceiling of this type sets a maximum value but does not guarantee orders, so its eventual contribution is uncertain.

Sector conditions and competitive position

Demand for counter-drone systems has been supported by the widespread use of drones in recent conflicts and by rising defence budgets in Europe and elsewhere. DroneShield competes with large defence contractors as well as specialist counter-drone firms.

Its strengths include a broad portfolio and Manufacturing in Australia, with capability in Europe and the US aimed at sovereign supply. However, defence procurement is lumpy, and tenders can shift revenue between periods.

One decision to watch is a European consortium down-selection involving a COBBS-Anduril-Nokia grouping, which the company expects in the second half of 2026.

Governance and the ASIC investigation

Governance has been a significant theme this year. In April 2026, long-serving chief executive Oleg Vornik stepped down and chief product officer Angus Bean became CEO. Hamish McLennan was named chair.

On 12 May 2026, DroneShield disclosed that ASIC was investigating ASX announcements released between 1 and 20 November 2025 and trading in its shares between 6 and 12 November 2025.

DroneShield said it would cooperate fully and that it was not clear what action, if any, might result. It has since adopted a minimum shareholding policy for directors and senior management. Rebecca Lowde became CFO from 2 November 2026, and Lynne Saint is due to join the board on 24 November 2026.

Risks and what to monitor

The key risks include contract timing, conversion of the US$500 million ceiling into actual orders, Margin pressure while the company invests ahead of revenue, and continued cash use. The outcome of the ASIC investigation is also uncertain.

Investors will be watching full-year results for confirmation that revenue lands within guidance, progress on gross margin, which management has named as a second-half priority, growth in FY2027 committed revenue and the European consortium decision.