The Australian counter-drone specialist DroneShield saw its equity surge on Monday, closing at AUD 3.15 for a gain of 8.62 percent. This advance extends a recovery phase that began after the stock came under pressure in late January. Notably, this recent period of weakness occurred despite the company having just reported record financial results for the 2025 fiscal year.
Scaling Production to Meet Demand
A key strategic focus for DroneShield is a significant expansion of its manufacturing capabilities. The company plans to increase its annual production capacity from approximately AUD 500 million currently to AUD 2.4 billion by the end of 2026. This ambitious scaling initiative is to be funded by the firm’s substantial cash reserves, which stood at AUD 201.1 million as of January 2026. The backdrop for this expansion is strong, with governments across the Asia-Pacific region boosting defense budgets and geopolitical tensions fueling interest in security technology. The coming quarters will reveal whether DroneShield can successfully convert this market potential into firm orders.
Record Results Contrast with Pipeline Adjustment
The company’s stellar financial performance for FY2025 included:
* Revenue of AUD 216.5 million, representing growth of 277%
* SaaS revenue of AUD 11.6 million, a 312% increase
* A current order pipeline valued at AUD 2.09 billion
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Despite these impressive growth metrics, the share price had declined roughly 27% from the end of January. This downturn was primarily triggered by management’s decision to revise its pipeline of potential contracts downward from AUD 2.55 billion to the current AUD 2.09 billion. Company leadership described the move as a strategic refinement, removing projects deemed to have a lower probability of conversion. The impact of a stronger Australian dollar on the valuation also contributed to the adjustment.
The firm’s confirmed order book for 2026 currently sits at AUD 95.6 million, leaving investors to watch closely for the pace of new major contract wins.
Monday’s broader market rally, which saw the ASX 200 index climb 1.85 percent to 8,870 points, provided additional support for the stock’s recovery.
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