DroneShield’s Revenue Doubles as Shareholders Prepare to Vote on New CEO’s Pay Package

DroneShield posts record cash flow and A$2.2B pipeline, but shares fall 40% from highs as investors await May 29 shareholder meeting on board changes.

The counter-drone specialist DroneShield has posted a blockbuster first quarter, with revenue surging 121% to A$74.1 million, yet the stock has been drifting lower as investors lock in profits and await a pivotal shareholder meeting later this month.

Operating cash flow hit a record A$24.1 million in the three months ended March, marking the fourth consecutive quarter of positive cash generation. Customer inflows more than quadrupled to A$77.4 million, swelling the company’s cash pile to nearly A$223 million. That war chest gives management the firepower to fund its planned A$70 million research and development budget entirely from internal resources, with no need for external financing.

The strong operational performance is underpinned by a growing order book. Committed revenue for the current year stands at A$154.8 million, while the global sales pipeline has swelled to A$2.2 billion worth of potential projects. DroneShield is also making headway in its push to build a more predictable revenue base, with software-as-a-service income rising to A$5.1 million in the first quarter. The long-term target is for recurring software revenue to account for 30% of total sales by 2030, reducing the company’s reliance on lumpy hardware deals.

European Expansion Gains Traction

On the strategic front, DroneShield has signed a memorandum of understanding with Danish defence and aerospace group Terma. The partnership will combine the two companies’ counter-drone technologies, including AI-powered detection systems, electronic warfare capabilities and command-and-control software. The collaboration covers Denmark, the Middle East and the Asia-Pacific region, and aligns with DroneShield’s broader push into Europe. The company recently opened its European headquarters in Amsterdam and expects to start delivering counter-drone systems from a new EU-based manufacturing facility by mid-2026.

Leadership Vote Looms

On May 29, shareholders will gather in Sydney to vote on a series of boardroom changes. Hamish McLennan is set to take over as chairman following the meeting, bringing extensive corporate experience to the role. He will receive DroneShield shares worth around A$200,000, subject to a one-year lock-up period. Also up for approval is the compensation package for new chief executive Angus Bean, which includes performance-based options tied to ambitious revenue targets of up to A$500 million.

Analysts remain divided on the stock’s prospects. Bell Potter maintains a buy rating with a price target of A$4.80, citing the potential for near-term contract wins. Jefferies, however, has struck a more cautious tone, questioning whether the current growth trajectory can be sustained.

Stock Under Pressure

Despite the strong fundamentals, the share price has been under pressure. The stock closed at €2.18 in German trading on Friday, down 3.8% on the day and roughly 40% below its 12-month high. On a one-year view, however, the shares still show a gain of more than 210%. Technically, the stock is trading just below its 50-day moving average of €2.28, while the relative strength index sits at 41, indicating neutral territory. The €2.18 level coincides with the 100-day moving average, a critical support level that could determine the near-term direction.

Management remains focused on its long-term ambition of reaching A$1 billion in annual revenue by 2030. A clear vote of confidence from shareholders at the upcoming meeting could help stem the recent selling pressure and refocus attention on the company’s accelerating growth story.