The DroneShield Ltd (ASX: DRO) share price is up 4% after announcing a sizeable new military contract.
DroneShield provides artificial intelligence (AI) based platforms for protection against advanced threats such as drones and autonomous systems. It offers solutions designed to suit a variety of land, sea and airborne platforms. Its customers include military, intelligence community, government, law enforcement, critical infrastructure and airports.
New military contract
DroneShield announced that it has received a contract for $8.2 million from an in-country reseller for delivery to a Western military end customer.
The reseller is owned by a multi-billion dollar, global, publicly-listed customer that is required to distribute the products to the Western military government in the country.
The ASX share said the contract is for handheld counter-drone systems, associated accessories, spare kits and software updates.
DroneShield said it has this inventory on the shelf and expects to complete the delivery either before the end of 2025 or in the early part of the first quarter of 2026.
Cash payments are expected to be fully received in the first quarter of 2026. No additional important conditions need to be satisfied.
DroneShield noted that over the past seven years before this contract, the company had agreed 38 contracts from this reseller totalling more than $9.6 million. There are no obligations for any additional contracts from this reseller or end-customer.
As usual, DroneShield didn’t think the identity of the customer is information that an investor would expect to change the value of DroneShield shares. The company has revealed all important information.
Is the DroneShield share price a buy?
The company noted that going into 2026, it has approximately $97.7 million in locked in revenue.
The company indicated today’s announced contract is a bonus on top of that figure, where the hardware revenue would fall into either 2025 or 2026, depending on the final delivery date.
With all of the contracts announced in the last few months, it’s unsurprising that the starting figure of $97.7 million is an all-time record for starting a new year.
DroneShield is clearly winning new contracts at an impressive rate, but time will tell how profitable these contracts are, whether it will maintain this level of demand and how much further it can grow.
It’s not one of the ASX growth shares I’m looking to buy, it’s challenging to identify what good value is with this business. There are other opportunities I’m looking at first.
