DroneShield (ASX: DRO) is focused on counter-drone systems and autonomous detection, tracking and response solutions. Its offerings include sensor and countermeasure products designed to detect, classify and defeat unmanned aerial systems, with applications spanning military, border security, critical infrastructure protection and high-profile public events.

In recent years, DroneShield has transitioned from early R&D and prototype deployments toward commercialisation and scaling contracts with defence and government agencies in Australia, the U.S., Europe and the Middle East. A notable achievement has been securing contracts or orders from major allied defence customers, including U.S. DoD components and foreign military units, to supply its DroneSentry product families and integrated counter-UAS solutions. These contracts reflect growing global concern over asymmetric threats posed by small drones in urban and battlefield environments.

The company copped a lot of flack in late 2025 after its directors sold tens of millions of dollars in shares. The share price fell over 70%. But its latest financial results, which saw revenue rise 276% to $216.5m and the company make its inaugural statutory NPAT, saw sentiment turn for the better.

From an investor perspective, that changes the story. This is no longer just a business funding growth in the hope of future scale. It is now generating enough from operations to support reinvestment internally, which is a much stronger position to be in.

Austal (ASX: ASB) is a naval shipbuilder. It builds high-performance aluminium vessels including littoral combat ships, patrol boats and expeditionary support vessels, as well as commercial ferries. Key clients include the U.S. Navy, Australian Defence Force, allied naval services and private commercial customers.

Austal’s defence pedigree was underscored by the multi-year U.S. Navy Littoral Combat Ship (LCS) and Expeditionary Fast Transport (EPF) programs, where Austal builds vessels in Alabama and Western Australia under major prime contracts. These programs have delivered strategic significance and long-term revenue streams, albeit with exposure to government project schedules and delivery milestones.

In FY25, Austal delivered a solid financial performance with strong revenue growth and a return to profitability after a period of margin pressure tied to defence contract ramp-ups. Revenue reached A$1bn, supported by deliveries across both defence and commercial segments, while EBIT improved significantly due to better cost control and operational efficiencies. The company also secured new contracts and options with the U.S. Navy for additional support work and future hulls, reinforcing its position as a key supplier to allied defence fleets.

Austal’s strategic focus remains on increasing its defence backlog and securing future government shipbuilding work, particularly as regional maritime security priorities grow in the Indo-Pacific. Sustainment, lifecycle support and digitised shipbuilding capabilities are also areas of expansion. While cyclical and dependent on defence procurement budgets, Austal’s diversified portfolio and industrial capability make it one of the more established ASX exposures to traditional defence manufacturing.

Electro Optic Systems (ASX:EOS) develops and supplies advanced space, defence and security systems, specialising in radars, electro-optical sensors, and integrated targeting and tracking solutions. EOS operates across multiple domains — air defence, land-based protection, missile warning, and space situational awareness — with a technology stack that spans hardware, software and systems integration.

EOS' key product lines include GENESIS family of medium-to-long range tracking radars, advanced imaging and laser systems, and integrated weapon and sensor suites that can be configured for military, civil and space applications. EOS has delivered systems to several allied defence organisations and continues to expand its footprint through strategic contracts and technology partnerships.

In FY25, it recorded ~$120m revenue with profitability underpinned by defence export contracts and ongoing deliveries across radar and sensor platforms, signaling a positive growth trajectory. The company’s balance sheet strengthened with increased cash flow from operations, enabling continued investment in R&D and new product development. EOS also highlighted progress on space-domain products, including programs related to space tracking and debris monitoring, tapping into the expanding global space security market.

Commercially, EOS has broadened its global reach with contracts in Europe, the Middle East and North America, reflecting international demand for integrated sensor systems and sovereign defence technologies. A standout achievement has been long-term strategic collaboration with key allied defence partners, which helps validate the company’s technology competitiveness and supports future order books.

EOS’s outlook is tied to continued government defence spending and the increasing prioritisation of sensor-based defence solutions in multi-domain operations. While smaller than some global peers, EOS leverages a differentiated technology base and export growth opportunities, positioning it as one of the more innovative ASX defence technology stocks.