The DroneShield Ltd (ASX: DRO) share price is having a stunning start to the week.
In morning trade, the counter-drone technology company's shares are up over 13% to a record high of 97 cents.
Why is the DroneShield share price rocketing?
Investors have been scrambling to buy the company's shares again on Monday after it released an impressive quarterly update.
According to the release, DroneShield reported record first-quarter revenues of $16.4 million, which is up a staggering 10x from $1.6 million in the prior corresponding period.
Also breaking records were the company's cash receipts, which came in at $7.1 million.
While these are lower than its reported revenue, management notes that this was due to US Government orders where deliveries took place during the quarter but payments aren't due for 30 days past delivery. It advised that a substantial portion of these cash receipts has now been received in the second quarter.
DroneShield also reported a nice lift in its software-as-a-service (SaaS) revenue for the quarter. Its SaaS revenue more than doubled to $561,000 from $239,000 a year earlier. This was underpinned by customers requiring the latest artificial intelligence software engines, upgraded quarterly, in response to a rapidly evolving drone threat.
At the end of the period, DroneShield had a cash balance of $56.4 million and no debt.
Order backlog
Demand remains strong for DroneShield's products. So much so, it currently has a $27 million contracted backlog. It also has a sales pipeline of over $519 million, which bodes well for its future growth.
The company certainly is well-placed to deliver on the strong demand for counter-drone technology. Management advised that following an expansion of DroneShield's Sydney facility and its supply chain network, the current manufacturing capacity is $400 million per annum.
It also spoke positively about its strong position in the growing market. It said:
As a pioneer and global leader in the C-UAS sector, DroneShield has a number of technical and commercial differentiators compared to its competitors. These differentiators have been developed over years and are challenging to disrupt.
On the commercial side, this includes deep trusted relationships and being written into multi-year requirement plans with key customers across the US Department of Defense (DoD) and other organisations directly, and the defence prime contractors working with the DoD, to support current and coming priorities.
Global defence primes are often customers and partners, as opposed to competitors for DroneShield, as they prefer to leverage DroneShield's expertise and organisational structure to operate and deliver at the required speed of innovation for the C-UAS sector.
With current annual production capacity of $400 million in hardware value, the Company is well positioned for the quickly growing demand.
The DroneShield share price is now up 270% over the last six months.
