DroneShield Pushes into European Production and Recurring Revenue as Regulatory Probe Caps the Rally

Counter-drone specialist builds European footprint and wins US deals worth $25M, but ASIC investigation keeps shares near two-year lows.

DroneShield is quietly building a manufacturing footprint in Europe and cementing a new distribution channel through a partnership with Dutch defence firm Defenture, even as a regulatory investigation in its home market keeps the stock pinned near two-year lows. The counter-drone specialist has made no secret of its ambition to supply NATO customers and critical infrastructure operators from European soil, and the Defenture tie-up is designed to accelerate that push. Longer term, the company is targeting 30% of total revenue from recurring subscriptions by 2030 — a model that typically commands premium valuations in the defence technology space.

Yet for all the strategic moves, the share price remains stubbornly depressed. At around €1.70, the stock sits more than 53% below the October 2025 peak of €3.65 and has shed roughly 14% since the start of the year. Technical signals point to persistent selling pressure: the relative strength index hovers near 38, and the shares trade about 15% under their 50-day moving average and 18% below the 200-day line. The market is clearly looking past the operational progress and focusing on the cloud that has hung over the company since May.

That cloud is the Australian Securities and Investments Commission’s investigation, launched on 12 May 2026, into DroneShield’s market disclosures and share trading during November 2025. The probe was triggered by the full exit of founding chief executive Oleg Vornik and former chairman Peter James from their equity positions in that month. Vornik, who had led the company for more than a decade, stepped down in April and was succeeded by early employee and former chief technology officer Angus Bean. Peter James left the board after the annual general meeting in May, with media and technology veteran Hamish McLennan taking the chair. DroneShield has said it is fully cooperating with the regulator, but no conclusion has been announced, and the uncertainty continues to weigh on sentiment.

Operationally, the picture is far brighter. In early June, DroneShield landed two significant US contracts within days of each other. The first came on 2 June: a five-year deal with the Department of Defense’s Joint Interagency Task Force 401 valued at an initial $19.3 million, with a further $5.6 million in options. At least $10 million of that is expected to be recognised as revenue in the current financial year. Hot on its heels came a $13.8 million order from the US Border Patrol for mobile and stationary counter-drone systems to be deployed in Texas. Both contracts cover hardware, software subscriptions and support. The combined deal flow — worth close to $25 million in initial value — barely nudged the stock.

DroneShield’s forward visibility reinforces the disconnect. The company reports booked revenue of A$155 million for the current fiscal year, underpinned by a project pipeline that is nothing short of enormous. Europe leads with 66 projects worth A$1.3 billion, the US contributes 127 projects valued at A$303 million, and Asia adds 28 projects totalling A$272 million. To meet that demand, DroneShield is undertaking a massive capacity expansion: annual manufacturing output is set to climb from A$500 million to A$2.4 billion by the end of 2026. First-quarter revenue surged 121% year on year, and the full FY25 result showed growth of 269%.

Analysts at Ord Minnett, who have taken a cautious stance on the stock, expect the company to enter a consolidation phase after that explosive growth. Their model sees weaker order momentum persisting into FY27 before a re-acceleration from FY28, driven largely by a push into civilian markets. The Defenture partnership and European manufacturing buildout fit that narrative, but whether they can overcome the regulatory overhang in the near term remains to be seen.

The next major catalyst for DroneShield will be its half-year results, due in August 2026. Those numbers will test whether the expanded European capacity is translating into higher revenues. Until the ASIC probe reaches a conclusion, investors are likely to continue pricing the company’s contract wins at a significant discount.