DroneShield’s Record Order Backlog Signals Strong Momentum for 2026

DroneShield Ltd has capped off a remarkably active December by securing another substantial military contract, reinforcing a significant uptick in new business as the year concludes. This latest agreement, valued at A$8.2 million, contributes to a record order backlog heading into 2026, providing fundamental support for a share price that has experienced considerable volatility throughout the year.

The company's most recent announcement marks the third major contract disclosed in December alone, highlighting a powerful finish to 2025. The month's activity includes:

• A European military order worth A$49.6 million, announced on December 16, representing the second-largest contract in DroneShield's history. It covers portable counter-drone systems and software updates, with delivery slated for Q1 2026.
• An Asia-Pacific contract valued at A$6.2 million, disclosed on December 24. This order was fulfilled through a subsidiary of a billion-dollar global client and represents the 15th individual purchase from this reseller within two years, cumulatively totaling A$48 million.
• The latest A$8.2 million agreement with a Western military end-user, announced today, December 30.

Collectively, these three contracts amount to approximately A$64 million in new orders secured in a single month.

Details of the Latest Agreement

The newly announced A$8.2 million contract was secured through a long-standing distribution partner. This domestic reseller is a wholly-owned subsidiary of a billion-dollar, globally operating, publicly listed corporation.

The order encompasses:
* Portable counter-unmanned aerial system (C-UAS) equipment
* Associated accessories and spare parts kits
* Software updates

DroneShield stated that the required hardware is already in inventory. Shipment is anticipated either before the end of 2025 or in the early part of the first quarter of 2026. Full payment is expected to be received in Q1 2026, with no other material conditions attached to the agreement.

Established Partnership Yields Recurring Business

This contract extends a commercial relationship with the reseller that has been developing for over seven years. Prior to today's announcement, DroneShield had already received 38 separate orders from this same partner, totaling more than A$9.6 million.

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

The company clarified that neither the reseller nor the end-customer is obligated to place future orders. However, the pattern of repeat business indicates sustained demand for DroneShield's counter-drone technology solutions.

Market Response and Share Price Context

Equity markets responded positively to the news this morning, with DroneShield shares advancing roughly 6% to A$3.32. This outperformed the broader ASX 200 index, which saw a more modest gain of about 0.2% over the same period.

The stock has exhibited pronounced volatility during 2025. Its trading range over the past twelve months spans from A$0.58 to A$6.70. Despite currently trading more than 50% below its 52-week high, the shares have still delivered a year-to-date performance of approximately +300%.

Record Backlog and Analyst Commentary

Looking ahead to the 2026 fiscal year, DroneShield highlights a secured revenue backlog of approximately A$97.7 million—a record level to begin a new financial period. This figure does not yet include the A$8.2 million from today's announcement, as revenue recognition will depend on the exact timing of delivery (late 2025 or early 2026).

Analysis from broker Bell Potter suggests that recent contract announcements now underpin roughly 26% of its A$297 million revenue forecast for 2026 through publicly disclosed ASX contracts. The broker notes a clear acceleration in order intake, with contracts totaling about A$86 million announced in just November and December combined.

Financial Foundation and Future Pipeline

DroneShield's operational and financial momentum was previously demonstrated in Q3 2025, when it posted record quarterly revenue of A$92.9 million—a staggering 1,091% increase year-over-year. The company ended the quarter with a strong cash position of A$212.8 million and no drawn debt facilities.

The next scheduled reporting event is the Q4 2025 update, expected on February 26, 2026. For the coming year, DroneShield points to a global sales pipeline valued at around A$2.55 billion, comprising more than 300 active opportunities. Market observers anticipate that the commencement of the 2026 budget cycle in various nations could lead to further significant defense-related contract awards.