Belgian Defense Contract Signals European Expansion for DroneShield

A significant order from Belgium is providing a substantial boost to Australian counter-drone specialist DroneShield. The nation’s military has placed a €2.8 million order for the company's portable jamming systems. This procurement forms part of a broader €50 million rapid-response initiative and represents the initial phase of a planned €500 million national investment in counter-unmanned aerial vehicle (C-UAV) technology. Industry observers see this deal as a potential strategic gateway for the Sydney-based firm into the European defense market.

The decision by Belgian authorities follows a dramatic increase in drone-related incidents. Official data for 2024 recorded approximately 30,000 such events, leading to temporary closures at major airports including those in Brussels, Liège, and Antwerp. Security services have reported unidentified drones over sensitive sites like the Kleine Brogel air base and the Doel nuclear power plant. In several instances, larger drones were observed flying in coordinated formations during night operations.

Belgian security analysts have pointed to potential links with Russian interests, noting that billions in frozen Russian assets are held by Euroclear in Brussels. In response, the government has launched the country's most extensive counter-drone program to date.

To address this threat, Belgium has selected DroneShield’s DroneGun product line, which offers immediate availability from stock—a key advantage over competitors relying on build-to-order manufacturing. The systems include:
- DroneGun Tactical: A 7.3 kg unit with an effective operational range extending to 2 kilometers.
- DroneGun MkIII: A pistol-form factor device weighing 2 kg, capable of engaging targets up to 500 meters away.
- DroneGun Mk4: A multi-frequency jammer designed to disrupt both GNSS (like GPS) and common radio control links.

These portable jammers specifically target communications on the 2.4 GHz and 5.8 GHz bands and can block navigation satellite signals.

Building a Foothold in Europe

The Belgian contract is viewed as more than an isolated sale. DroneShield is actively evaluating potential manufacturing sites in Belgium or the Netherlands under the European Union's "ReArm Europe" initiative. The company aims to finalize an agreement with a local European partner by early 2026. Establishing local production is intended to reduce logistics costs, increase regional value creation, and better position the firm for future EU tender processes.

Should investors sell immediately? Or is it worth buying DroneShield?

This growth is part of a larger corporate expansion. DroneShield’s workforce now stands at approximately 400 employees, doubling its headcount from two years ago. The company plans to scale its annual production capacity to $2.4 billion by the end of 2026 and is also developing a manufacturing facility in the United States, scheduled for mid-2026.

Financial Performance and Market Volatility

The company's recent financial results underscore its rapid growth. For the third quarter of 2025, DroneShield posted record revenue of $93 million, a figure eleven times higher than the same period the previous year. Operational cash flow showed a dramatic improvement, swinging from negative $19 million to a positive $20 million. The business maintains a robust gross margin between 65% and 75%.

Despite the positive Belgian news, the company's share price has exhibited volatility. On December 10, shares surged by 16%, though they experienced a slight pullback by the end of the week. Overall, the stock gained roughly 10% across the trading week but remains well below its October peak of over A$6. Recent pressure on the share price has been attributed to the departure of US CEO Matt McCrann and share sales by other company executives.

The global C-UAV market is projected to reach $4.5 billion in 2025, with forecasts suggesting it could expand to $14.5 billion by 2030—representing a compound annual growth rate exceeding 26%. DroneShield is notable as the only publicly listed company focusing exclusively on this sector. Other NATO members, including Finland, are also actively enhancing their counter-drone capabilities.

Looking ahead, DroneShield has set a target of $1 billion in revenue within the next five years. Market analysts, on average, estimate a fair value for the stock at A$5.15, which is significantly above its current trading level. The company's long-term valuation is seen as heavily dependent on its ability to convert contract wins, like the one in Belgium, into a consistent and recurring revenue stream.