DroneShield Ltd (ASX:DRO, OTC:DRSHF) has delivered a standout full-year performance, with revenue rocketing 276% to $216.5 million and net profit jumping 367% to $3.5 million, underscoring the accelerating global appetite for counter-drone technology.
Shares in the Sydney-based defence tech company edged up 1.3% following the results, which also showed underlying profit before tax surging to $33.3 million — a 1,686% lift on the prior year — as the business continues its transition toward sustainable profitability.
SaaS revenue was a particular bright spot, climbing 312% to $11.6 million as DroneShield advances its strategic ambition to have software-as-a-service account for 30% of total revenue within five years.
The balance sheet remains robust, with $210 million in cash and term deposits, no debt, and three consecutive quarters of positive operating cashflow as at 31 December 2025.
Pipeline swells, capacity scales
DroneShield's sales pipeline expanded 92% over the past 12 months to $2.3 billion across almost 300 opportunities (risk-unweighted), reflecting deepening engagement with government and commercial customers worldwide.
To meet that demand, the company is dramatically scaling its production capacity — from $500 million per annum in 2025 to $2.4 billion per annum by end of 2026 — through new facilities in Australia, the United States, and Europe. Its global headcount has also grown from 250 to over 450 staff, including more than 350 hardware and software engineers.
The period also saw DroneShield added to the S&P/ASX 200 index, as well as the Mirae Asset Global X Defence Tech Index, the Global X Defence Tech ETF, and the MSCI Global Small Cap Asia Pacific Australia Index.
Tailwinds gathering
Management pointed to a raft of structural drivers supporting continued growth. Defence budgets are expanding globally, with counter-drone solutions increasingly central to military procurement strategies. In the US, the JITAF401 framework and a dedicated US$1.5 billion DHS contract vehicle are streamlining how agencies source counter-drone capability.
Legislative reform is also opening new markets. The Safer Skies Act — which would allow US state and local law enforcement to jam drones — and Australia's Defence Amendment (Counter-UXS Measures) Regulations 2025, which broadens the ADF's authority to neutralise drone threats, are among the regulatory shifts expanding DroneShield's addressable market.
Commercial demand is also gathering pace, with critical infrastructure operators and civilian venue managers increasingly alert to the risks posed by uncrewed systems.