DroneShield wins AUD $23.2m European defence contracts

DroneShield has signed European defence contracts worth AUD $23.2 million, covering two orders for vehicle-mounted counter-drone systems for a European military customer through a Benelux reseller.

The Australian company also disclosed preliminary first-half 2026 revenue of AUD $125.8 million and introduced a new version of its radio-frequency drone-detection technology, RfAI-3.

The contracts were placed by COBBS BELUX, a Benelux reseller that has previously worked with DroneShield. The package includes hardware, subscriptions, warranties and services, with deliveries scheduled across 2026.

About AUD $21 million of the total contract value is expected to count towards committed revenue for 2026, with the balance to come from subscription revenue in later periods. The agreement also requires DroneShield to procure and supply some third-party hardware alongside its own systems.

In a trading update, DroneShield said committed revenue for 2026 stood at AUD $206 million, equal to 95% of its full-year 2025 revenue after just six months of the current year.

Preliminary first-half revenue rose 74% from a year earlier. Recurring revenue from software, subscriptions and long-term services was estimated at AUD $14.2 million, or 11.3% of first-half revenue.

Gross margin for the half was estimated at 60%, down from 65% in the prior corresponding period. DroneShield attributed the decline to product mix, currency movements and raw material impairment identified during the move to a new production facility and the implementation of a new ERP system.

DroneShield now expects full-year 2026 revenue of between AUD $250 million and AUD $270 million. Orders secured later in the year are more likely to contribute to committed revenue in 2027 and beyond.

Technology update

Alongside the contract and trading update, DroneShield announced the release of RfAI-3, the third generation of its proprietary radio-frequency intelligence engine for counter-drone detection.

The system is designed to identify drone-related emissions beyond known and pre-classified emitters. Conventional radio-frequency detection depends on a classified emitter model, meaning an aircraft must already be catalogued before it can be identified.

RfAI-3 uses wideband detection to identify emissions across the spectrum, compare them with previously observed drone signatures, and generate new signatures for unknown emissions with a confidence assessment for operator review.

The new software has been built for DroneShield's next-generation hardware platforms. Existing products will continue to be supported through its subscription model, including expanded emitter coverage as its radio-frequency intelligence dataset grows.

Europe has become an increasingly important market for counter-drone suppliers as defence ministries seek systems that can be mounted on vehicles and deployed in mobile operations. DroneShield said the latest awards reflected continued demand from military and government customers.

Chief Executive Officer and Managing Director Angus Bean commented on the European orders.

"We are pleased to continue our engagement with leading partners and end-customers in Europe, which is a key growth market for DroneShield. These awards demonstrate the strength of our regional partnerships and the relevance of DroneShield's technology in complex military environments. It also validates our continued investment in personnel, manufacturing capability and partner relationships in the region," Bean said.

Bean also addressed the company's new detection engine.

"The threat that matters most is the one we have not yet encountered, and by the time we encounter it a second time, it will have changed again. The world is moving to software defined radio, where waveforms can be rewritten in software and the spectrum has become a genuinely dynamic battlespace. RfAI-3 is our answer to that. Its ultra-wideband nature means we are no longer limited to detecting only what we already know, which changes the calculus for our operators and for the adversaries trying to evade them. This is the start of the next generation of DroneShield's product roadmap," Bean said.

On trading, he said the company had translated demand into reported sales while reshaping the organisation after a management change earlier in the year.

"The first half of 2026 has been an important period for DroneShield. We have converted global customer demand into revenue, deepened engagement with defence and government customers, and continued to scale the business at pace while executing a structured leadership transition.

"As at 28 July 2026, committed revenue for this calendar year is $206m, which is already near the record revenue delivered across the whole of 2025, and there is still five months of the year to run. This is powerful validation of the relevance of our solutions, the quality of our people, and the strategy we are executing.

"Following the leadership transition in April, we completed a detailed assessment of the organisation, focused on sustaining high revenue growth alongside disciplined cost management and operational resilience. That work validated where we are already operating at scale, and equally importantly, gave us a clear view of the capabilities we need to build out to support the next phase of growth.

"We are investing from a position of strength. We continue to invest deliberately in R&D, sales capability, systems and operations, and to fund the working capital that growth at this pace requires. This plan underpins our growth trajectory and positions the business to deliver sustainable long-term returns.

"We have also commenced the rollout of our next-generation product roadmap, the most significant product cycle in our history, which we expect to begin contributing from 2027. Innovation remains core to our mission of leading the world in intelligent counter-drone technology, and we enter the second half with strong momentum and conviction in the opportunity ahead," Bean said.