DroneShield’s Record Orders and Revenue Surge Fail to Offset ASIC Probe Hangover

DroneShield's revenue surges 276% to A$216.55M with record backlog, but an ASIC investigation sends shares 60% below peak. SaaS revenue jumps 312% as European expansion accelerates.

The numbers coming out of DroneShield look like a growth investor’s dream — revenue up 276%, a backlog of A$2.2 billion in committed orders, and a European production push gaining real momentum. Yet the stock is trading at A$1.43, more than 60% below its October 2025 peak of A$3.65. The culprit? A regulatory investigation that is spooking the market despite the company not being accused of any wrongdoing.

Australia’s corporate watchdog ASIC is examining a company announcement from November 2025 and related share trading activity. While DroneShield itself faces no allegations, the uncertainty has clipped more than a quarter off the share price in the past month alone. Thursday’s session saw the stock slip another 4.14%, adding to a 30-day decline of 27.55%.

Operational turnaround looks solid

Ignore the stock chart and the business itself tells a different story. Revenue for the 2025 fiscal year hit a record A$216.55 million (primary article says 217 million — both close enough; I'll use secondary's exact figure: 216.55 million), turning a net profit of A$3.52 million — a genuine inflection point for the counter-drone specialist.

The software-as-a-service segment was the standout, surging 312% to A$11.6 million. Management intends to lift the share of recurring SaaS revenue to 30-40% over five years. For the current fiscal year, DroneShield already has A$171 million in locked-in revenue, giving unusual visibility in a defense tech sector where order cycles can be lumpy.

Europe takes centre stage

With demand especially hot along NATO’s eastern flank, the company is scaling up production on the continent. On June 23 it launched a Polish supply-chain initiative, scouting local partners for manufacturing, electronics and testing. Its first European-made counter-UAS system rolled off the line on June 15, and a newly established European headquarters in Amsterdam is now servicing the growing base of NATO and allied customers.

The broader market backdrop is supportive. Global military spending hit a record US$2.887 trillion in 2025. In February 2026 DroneShield locked in six contracts worth US$21.7 million for portable counter-drone systems. The US Department of Defense alone has pencilled in US$75 billion for drone and counter-drone technology in 2027.

Valuations stir caution

Not everyone is buying the bull case. Anduril’s chief recently warned that early-stage defense tech companies are trading at 17 to 50 times revenue, a signal that speculative froth may be building. The sector is consolidating fast: Motorola Solutions announced the same week it would buy Israeli rival D-Fend Solutions for US$1.5 billion, while German drone maker Quantum Systems raised US$1.2 billion from investors including Blackstone and Airbus at an US$8 billion valuation.

Analysts covering DroneShield see value in the beaten-down stock. Canaccord rates it “Speculative Buy” with a A$3.75 target; Bell Potter goes further at A$4.80. The global counter-drone market is projected to reach US$19.8 billion by 2033, growing at 25.2% annually — and a DroneShield-commissioned survey found 70% of airports and critical infrastructure operators still lack adequate detection for unauthorised drones.

Technical picture points to oversold

The RSI reads 36.2, deep in oversold territory. The stock is trading 22.78% below its 50-day moving average of A$1.87 and far from the 200-day line at A$2.04. On a seven-day view the shares actually edged up 2.38%, suggesting the bleed may be slowing.

Whether the operational momentum from Europe, the record order book and the SaaS growth story can outweigh the ASIC overhang remains the defining question for the months ahead. For now, the market is demanding a steep discount on a business that, by every operational metric, is firing on all cylinders.