DroneShield Ltd (ASX:DRO) (DroneShield or the Company) has been awarded a follow-on 2-year R&D contract with a total value of $9.9 million by a Five Eyes Department of Defense (DoD). Approximately $4.5 million is due in the September and December 2023 quarters. Five Eyes refer to the defense/intelligence alliance between the US, Canada, the UK, Australia, and NZ.
The award follows DroneShield materially completing the $3.8 million contract announced on 4 June 2021 with the DoD, with a final milestone payment expected this month.
Oleg Vornik, DroneShield’s CEO, commented, “Follow-on contracts are the ultimate customer measure of our performance. As an Australian sovereign industrial capability business, DroneShield is proud and pleased to continue undertaking multi-year contracts of increasing size with this customer.”
“This is the largest long-term contract received by DroneShield to date, significantly larger than the earlier $3.8 million contract. The 2-year term locks in cash receipts over a period of time. Further larger contracts are anticipated following completion of this phase.”
“In the current uncertain geopolitical environment, there is a significant focus by the Five Eyes Governments to procure from defense industrial capability champions within their network of countries. Having deep engineering and research capability, TRL9 products, and a track record of working with Defense places DroneShield in a favorable position for ongoing work.”
Following a strong $7 million cash receipts 1Q23 quarter, DroneShield is on track for an all-time record 2Q23 quarter and continuing on a trajectory for another record year for cash receipts in 2023. Further detail will be provided in the next 4C quarterly, due to be released later in July.
Significant progress on manufacturing, operations, and inventory scale-up to support additional anticipated orders for the remainder of 2023. DroneShield is currently finalizing the location for a larger industrial site to move its Sydney operations to enable growth.
With the $11 million contract announced in December now fully delivered and paid for, DroneShield is progressing the inventory build of the second $11 million order announced in January, expected to be delivered later this year.
The current order book (committed and binding customer purchase orders) of approximately $29 million, an all-time record.
Over $200 million qualified opportunities pipeline (in addition to the order book), across approximately 80 projects.
Ongoing record demand for counter-drone / C-UAS equipment, underscored by the events in Ukraine and increasing defense and security budgets globally.
In addition to military and intelligence communities, significant engagement with critical infrastructure plants, airports, and other civilian customers.
Stay on top of industry news, developments, resources, and articles- Sign up for a free C-UAS Hub Membership to bookmark your favorite content and receive the weekly newsletter and important industry updates!
Post Image- Operator with the tablet console of DroneShield DroneSentry-X vehicle counter-drone system (Image Credit: DroneShield)