Electro Optic Systems (ASX:EOS) Soars 105% in a Month as Defence Contracts Fuel Major Rebound

EOS Rockets 105% as A$180M in New Defence Deals in December

Electro Optic Systems (ASX:EOS) has staged a sharp rebound, reflecting the renewed strength we are seeing across defence stocks on the ASX as government spending and contract momentum accelerate. Investor interest has been underpinned by a rapidly expanding order book, with backlog now sitting at approximately A$450 million, providing improved revenue visibility.

The stock rose 10% today following the announcement of a A$32 million Remote Weapon Systems contract, marking the third defence contract win in December alone and bringing total new awards this month to around A$180 million.

That momentum has translated directly into share price performance, with EOS already up 105% over the month.

From our perspective, the speed and scale of recent contract wins reinforce the strength of demand for the company’s capability set, while also highlighting the importance of monitoring execution as expectations rise alongside the share price.

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Backlog Military Deals

Looking at the backlog of orders also demonstrates that demand is not being driven solely by the United States. EOS has seen its backlog revenue increase threefold over the past year, reaching approximately A$400 million.

This sharp increase highlights accelerating global investment in defence systems and provides EOS with materially improved revenue visibility over the medium term, supporting confidence in future delivery schedules and earnings conversion as contracts move into execution. Here are the backlog revenues:

A$53m Slinger counter-drone RWS (Western Europe)
A$125m High Energy Laser Weapon system (Western Europe)
A$108m R400 RWS for LAND 400-3 (Australia)
A$120m High Energy Laser Weapon conditional contract (South Korea)
A$32m R400 RWS order (North America)
A$32m R400 RWS order (This announcement)

The Investors Takeaway for EOS

What we believe will resonate most with investors is the clear improvement in diversification across both geographies and product verticals at Electro Optic Systems. At the same time, contract sizes are becoming meaningfully larger, which signals growing customer confidence in the company’s capabilities and long term relevance.

Based on current delivery timelines, it is reasonable to expect a stronger FY26 outcome, with a number of these contracts likely to begin contributing from mid 2026 and extending into early 2027.
Crucially, as backlog conversion improves, earnings visibility should continue to lift.
This greater predictability is a key ingredient for any sustained institutional rerating of EOS, particularly as the defence sector attracts more long term capital.