DroneShield posts record revenue & positive cash flow on SaaS growth

DroneShield has reported its quarterly financial update, detailing record-setting growth in revenue and cash flow alongside expansion plans and new product releases.

The company posted quarterly revenue of AUD $92.9 million for the three months ending 30 September 2025, marking an increase of 1,091% compared to AUD $7.8 million in the corresponding quarter of the previous year. This performance set an all-time high for quarterly revenue, surpassing the second-highest quarter, which stood at AUD $38.8 million.

Year-to-date committed revenues for 2025 reached AUD $193.1 million, notably higher than the total of AUD $57 million reported for the entirety of 2024. Alongside revenue, cash receipts also saw a major rise to AUD $77.4 million, up 751% from AUD $9.1 million in the prior period, setting another company record.

SaaS (Software as a Service) revenue increased by 400% to AUD $3.5 million, up from AUD $0.7 million year-on-year. Management indicated that they expect SaaS revenues both in absolute terms and as a percentage of total revenue to continue growing. All new DroneShield products are now offered with one or more SaaS components.

The company said: "SaaS is critical due to the changes in drone technology. As the hardware becomes more open-ended, software is expected to play an increasing role. SentryCiv, a subscription-only product for the civilian sector, has been released. The price structure is cashflow positive from day 1. Expecting the civilian sector to reach up to 50% of revenue over next 5 years, and subscription products to be a central part."

Operating cash flow also turned positive, rising to AUD $20.1 million from a negative AUD $19.4 million in the corresponding period, representing a 204% improvement. The company stated it is aiming to be consistently operating cashflow positive and profitable going forward.

Expansion and product development

During and after the quarter, DroneShield undertook a number of significant activities, including the launch of the DroneSentry-C2 Enterprise SaaS and a major update to its artificial intelligence software. Other milestones included the opening of a South Australian research and development facility and the expansion of both US and overall R&D capabilities.

The period also saw the completion of delivery of a AUD $62 million European contract and the winning of an AUD $11.7 million research contract for the US Department of Defence. In addition, DroneShield announced integration of the Sentrycs platform and the launch of SentryCiv, its subscription-only product for the civilian sector.

The company passed a milestone of over 4,000 systems sold, including a recent AUD $7.9 million order, and was included in the S&P/ASX 200 Index. Other developments included presence expansion in Ukraine, participation in a US Department of Homeland Security demonstration, an initial LAND156 contract win, and the appointment of retired Lieutenant Colonel Michael J Twining as Sales Director for the US Air Force vertical.

Civilian market outlook

DroneShield indicated that the civilian market is a key focus and expects it could account for as much as 50% of revenue within five years, driven in part by subscription-based offerings.

According to the company, "All new products to carry one or multiple SaaS. SaaS is critical due to the changes in drone technology. As the hardware becomes more open-ended, software is expected to play an increasing role. SentryCiv, a subscription-only product for the civilian sector, has been released. The price structure is cashflow positive from day 1. Expecting the civilian sector to reach up to 50% of revenue over next 5 years, and subscription products to be a central part."

Payments to related parties during the quarter included board fees paid to Non-Executive Directors and a salary to the Chief Executive Officer amounting to AUD $383,625.

The company has provided a detailed summary of the various aspects of the business in its investor presentation published with the quarterly report and lodged with the ASX.