DroneShield (ASX:DRO) $21.7m Europe Deal Lands One Day After Results

Earnings Beat, Then a $21.7m Contract, Momentum Stays Hot

DroneShield appears to have timed this very well, announcing a new major contract just one day after releasing its strong earnings result.

The company disclosed a A$21.7m European reseller deal, made up of six separate contracts with a combined value of A$21.7m. From a market messaging perspective, that is a smart move because it reinforces the strength of demand immediately after an already solid result.

The customer is purchasing soldier-carried counter-drone systems, which likely includes products such as the RfPatrol and DroneGun, along with SaaS subscriptions. That is important because it shows the deal is not just about hardware sales, but also includes a recurring software component, which adds more depth to the revenue mix.

When you look at the balance sheet, inventories are sitting at around A$78m. That is a meaningful point, because it suggests DroneShield already has a large amount of product ready to go.

That should put the company in a stronger position to fulfil contracts faster, which in turn could help improve the cash conversion cycle. Management has said this contract is expected to be delivered this quarter, with cash payment due in Q2, so investors should be watching closely for that inventory to start converting into revenue and then into cash.

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New Deal Could Lift Committed Revenue Toward $125m

This is where the timing becomes important.

DroneShield’s FY25 investor presentation, dated 25 February 2026, showed year-to-date committed revenue of A$104m. The new contract announcement came the very next day, on 26 February 2026.

Because the contract was announced after the presentation, it is reasonable to view it as incremental to that A$104m figure, unless DroneShield had already included it in its internal committed revenue tally before making the announcement public. If it is incremental, that would lift committed revenue to roughly A$125m.

Here’s what you need to know about todays invetsor call

We also attended DroneShield’s investor call today, and because this is a stock we follow closely, one of the key areas we wanted more clarity on was how the SaaS model is expected to evolve over the coming years. That matters, especially given management’s goal of lifting SaaS to 30% of total revenue over the next three years.

What stood out is that DroneShield’s model is not built around a single SaaS offering. It has multiple layers.

On the portable side, the company has products such as the handheld DroneGun, RfPatrol, and the Immediate Response Kit. On the fixed-site side, it has systems such as DroneSentry. As new devices are rolled out, DroneShield is embedding SaaS functionality alongside that hardware.

That is a key strategic point, because the software is closely tied to the hardware IP. In other words, the SaaS layer is supported by the company’s underlying hardware ecosystem, which makes it far more defensible. As more customers adopt the hardware, they are increasingly likely to require the software to fully operate, manage, and optimise those systems.

DroneShield also appears to have broader site-based SaaS applications, particularly for military bases and enterprise customers. So the bigger takeaway is that this is not just a hardware business with a small software add-on. It is building multiple SaaS pathways across both devices and customer platforms.

That is a large part of why the company continues to invest so heavily in engineering and product development, with around A$70m directed toward research, development, and engineering. The investment is helping build out a more integrated ecosystem, where the software becomes increasingly important to how customers use and scale the hardware over time.