The DroneShield Ltd (ASX: DRO) share price is up 2% after providing its quarterly financial update.
DroneShield provides AI-based platforms for protection against advanced threats such as drones and autonomous systems. Its solutions are designed to suit a variety of ground, maritime or airborne platforms. Its customers include military, intelligence community, government, government, law enforcement, critical infrastructure and airports.
September quarterly update
The company told investors how it performed in the three months to 30 September 2025.
It boasted that it had an exceptionally strong quarter with all-time record metrics across the board.
DroneShield reported revenue of $92.9 million, representing an increase of 1,091% year on year. This was an all-time high revenue quarter, with the second-highest revenue quarter being $38.8 million in the June 2025 quarter.
It noted that it has committed revenue of $193.1 million for 2025 to date, compared to $57 million for the whole of 2024.
Cash receipts jumped 751% to $77.4 million, which was also an all-time high cash receipt quarter. The second-highest cash receipt was $47.9 million in the December quarter of 2023. Seeing the cash coming through is important for the DroneShield share price.
Software as a service (SaaS) revenue jumped by 400% to $3.5 million. This is expected to continue rising in dollar and percentage terms. All new products will carry one or multiple SaaS elements.
DroneShield said that SaaS is critical due to the changes in drone technology. The company said that as the hardware becomes more open-ended, software is expected to play an increasing role.
For example, SentryCiv, a subscription-only product for the civilian sector, has been released. The price structure is cashflow positive from the first day.
DroneShield expects the civilian sector to reach up to 50% of revenue over the next five years, with subscription products being a central part of that.
Pleasingly, the company reported operating cashflow of $20.1 million, up from a loss of $19.4 million in the September 2024 quarter. This represents a rise of 204%. The business is targeting to be consistently operating cashflow positive and profitable from here.
Final thoughts on the DroneShield share price
The DroneShield share price has risen by 500% this year, though it has dropped 30% from its peak earlier in October.
I think the business has a promising future, but it is challenging to pinpoint what a good price is for the business with how rapidly it’s growing. There are other ASX growth shares that are easier to value, in my mind.
