DroneShield's Record Backlog Meets a Market That Won't Budge

DroneShield sits atop ASX short-selling with 15.4% shorted, as H1 revenue rose 74% but a net loss and an ASIC probe weigh on shares.

DroneShield has spent the past week stacking up reasons for investors to feel good about the business — and the share price has done almost nothing in response. The Australian counter-drone specialist now sits at the top of the ASX short-selling table, with roughly 15.4% of its shares held short according to the latest ASIC data, even as its order book swells and a fresh product line notches its first sale.

That disconnect is the central puzzle for anyone holding the stock. The company's first-half revenue climbed 74% to AUD 125.8 million, yet the bottom line swung from a AUD 2.12 million profit a year earlier to a net loss of AUD 32.23 million. On an EBITDA basis, the shortfall came to AUD 12.4 million. Growth, in other words, is arriving well ahead of profitability — exactly the gap short sellers tend to exploit.

A Backlog That Argues the Other Way

Bears have to contend with what DroneShield has already locked in. The company puts committed revenue for the 2026 financial year at AUD 251 million, comfortably inside its own guidance range of AUD 250 million to AUD 270 million. A further AUD 46 million in secured orders is on the books for 2027 and beyond.

Recurring revenue is compounding faster still, up 229% to AUD 11.5 million, underpinned by some 4,100 software-capable devices now deployed in the field. The balance sheet adds another layer of insulation: AUD 180 million in cash as of the end of June and no debt, a cushion that would let the company absorb continued losses for several quarters without tapping outside financing.

RfRecon Lands Its First Customer

Product momentum is broadening as well. DroneShield confirmed the inaugural order for RfRecon, its AI-driven radio-frequency reconnaissance device, placed by an existing military end-customer in Western Europe. The order value is not material, the company said, but the sale validates the new platform with a buyer already familiar with its technology. RfRecon was unveiled in July alongside the RfAI-3 software engine; volume production is slated for the second half, with first deliveries targeted before year-end.

The company also announced partnerships with Terma, Parsons and Origin Robotics during the first half, opened a new 3,000-square-metre production facility, and manufactured hardware in Europe for the first time in June.

New CFO Brings Deal-Making Pedigree

Into this mix steps Rebecca Lowde, who takes over as chief financial officer on 2 November, succeeding Carla Balanco after more than eight years at the company. Lowde arrives with three decades of finance and leadership experience, including a stint at MYOB — owned by private equity firm KKR — and a role at Afterpay, where she helped steer a USD 1.5 billion capital raise and the company's USD 39 billion takeover by Block.

That capital-markets background matters for a business that, by its own account, will need to raise funds again to finance its expansion. Whether Lowde can accelerate the path to profitability that the current numbers still lack is the question that will define her tenure.

The Chart Tells a Different Story

Investors have so far refused to buy the narrative. The stock closed Thursday at EUR 1.05, down 1.6% on the day, and has shed 4.3% since the half-year results landed last Tuesday. Over the past month it has fallen 18%, and it has roughly halved since the start of the year. From its 52-week high of EUR 3.79 reached in early October, the shares are now 72% lower. The current price sits about 16% below its 50-day moving average of EUR 1.23, a sign the near-term trend still points down.

One unresolved overhang remains: an ASIC investigation into DroneShield's market disclosures and trading activity from November 2025. The company says it is open as to whether any consequences will follow.

With short interest this elevated, the standoff is straightforward. Either the widening losses eventually vindicate the bears, or the swelling backlog and fresh product wins force them to cover. For now, the market is siding with the former.