DroneShield (ASX: DRO) has delivered a huge start to the year, reporting a record-breaking $33.5 million in revenue for Q1 FY2025—doubling last year’s Q1 result of $16.6 million. That makes it the strongest quarter in the company’s history, outpacing even the July 2023 quarter, which was buoyed by a $33 million contract.
What’s driving it? Global demand for drone defence is accelerating, and DroneShield is positioning itself as a dominant player. With $94.4 million in revenue either received or committed for FY2025 (and most of the year still ahead), the company is already miles ahead of its full-year FY2024 revenue of $57.5 million. Any new contracts from here will be pure upside.
SaaS and Software Taking Off
Recurring revenue is becoming a bigger part of the picture too. SaaS revenue hit $1.67 million in Q1—up 198% from a year ago. As more of DroneShield’s customers embrace AI-driven software upgrades for existing hardware, the subscription model is set to expand. The company’s Access Portal has been upgraded to enhance customer value, and more SaaS tools are on the way, including a new DroneSentry-C2 Enterprise Edition.
A Cash-Strong War Chest and Smart Scaling
With $197 million in cash and no debt, DroneShield has a rock-solid balance sheet. That’s giving it room to invest aggressively in next-gen technology, expand its team (now 306 strong), and prepare for major growth. It’s also got about $70 million in inventory ready to go—an important factor in a world where defence customers expect quick delivery.
Operating costs sit at around $6.5 million per month (excluding variable costs like inventory and sales commissions), though Q1 included a few one-offs like legal and setup fees for new international regions. On the R&D front, $3.2 million was capitalised this quarter, with more hardware and software upgrades expected ahead of major 2026 launches.
A Pipeline That Spans the Globe
Perhaps most impressive is the pipeline: $1.6 billion in visible opportunities for 2025 and 2026. The revenue split this year is more diversified than ever, with Europe, Asia, the US, Middle East, UK, and Latin America all contributing meaningful chunks of sales. Europe is leading the charge, driven by the EU’s EUR800bn “ReArm Europe” initiative and the continued drone warfare in Ukraine.
DroneShield is also gearing up for non-military growth—airports and first responder programs are starting to show strong interest, and the company is moving early to capture that demand.
The Bottom Line
DroneShield has transformed from a promising defence tech play into a full-fledged global operator. Record Q1 revenue, a $197 million cash buffer, a surging SaaS arm, and a pipeline stacked with billion-dollar opportunities suggest this company is just getting started.
