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Elsight reports revenue surge due to Halo demand boost
Fri, 2nd Feb 2024

Elsight, the industry leader in drone connectivity systems, has reported a robust 256% increase in revenue in Q4/2023, in comparison to the same period last year, thanks to the surge in demand for its flagship Halo complete connectivity system. The orders in Q4/23 brought the revenue to USD 629,000 (AUD 954,000), matching almost the combined revenues of the previous two quarters. There was also a 38% Q3/23 to Q4/23 rise in the recurrent revenue, amounting to USD 142,000 (AUD 215,000).

The CEO of Elsight, Yoav Amitai, explained that the increase in revenue was significantly driven by repeat orders from design-win partners like Airobotics, a US data drone operator, and the delivery operator DroneUp, while there was also an uptick in demand from the military and defence sectors. The burgeoning drone industry will continue to propel demand for the Halo system and sustain the increase in the firm's recurrent revenues. Mr. Amitai ventured, "As the market continues to mature and the rate of adoption grows, the impact of the increasing recurring revenues will become more and more material."

Several business and regulatory successes achieved by the company's Design-Win partners in Q4/23 have also bolstered the demand for Halo units. A notable development was US drone operator Airobotics receiving Type Certificate approval from the US Federal Aviation Authority (FAA) in September 2023 to operate drones over urban areas. This translated into a substantial increase in orders for Elsight, surging to over USD 100,000 (AUD 150,000), marking a 215% growth in total orders from Airobotics since the beginning of 2023.

DroneUp, a US autonomous drone delivery firm servicing clients such as Walmart, had gained significant US FAA approval for Beyond Visual Line of Sight (BVLOS) operations, culminating in follow-on orders post-approval. Also worth noting is the Australian-based Sphere Drones which launched HubX, a novel product based on Elsight's Halo solution. HubX, unlike many wireless systems, remained operational during the publicised Optus outage, thanks to Elsight's robust connectivity.

Amongst other developments, Elsight has launched a worldwide version of its Halo drone communications system, enabling operators to conduct flights anywhere globally without needing to change equipment for different cellular systems and operators. To bolster security, the recent version of Elsight's AllSight cloud delivers more sturdy infrastructure to the firm's partners. Moreover, new academic research has validated Elsight's Halo solution's value for use in unmanned systems in rural areas beyond the visual line of sight, providing necessary redundancy, reliability, and connection confidence.

In summary, a host of factors comprising new use cases, increasing demand from the military and defence sectors, robust regulatory breakthroughs and a healthy pipeline of orders projected to be delivered in Q1/24, collaboratively contributed to a favourable revenue during Q4/23. The company also enjoyed consistent demand for reliable communication within the military and defence sectors. Looking ahead, Elsight aims to leverage its success in 2024 by globally applying a wide range of new use cases with other military forces.