DroneShield Ltd (ASX: DRO) shares have been in focus on Wednesday.
In afternoon trade, the counter drone technology company's shares are up over 3.5% to 63.7 cents.
Why are DroneShield shares pushing higher today?
There have been a couple of reasons for today's gain.
The first was the release of DroneShield's quarterly update this morning that went down well with investors.
As we covered here earlier, the company reported a 6.3% increase in revenue to $57.5 million for the three months ended 31 December.
While this was lower than management was expecting "due to a number of pipeline projects taking longer to complete than expected", it spoke positively on the future. It highlighted that it had $36 million of revenue already received or under committed purchase orders and a robust sales pipeline valued at $1.2 billion.
Well, it didn't take long for more sales to be secured. This afternoon, DroneShield has dropped another announcement.
What was announced?
DroneShield announced that it has received a set of three separate contracts totalling $11.8 million.
This is from an in-country reseller for delivery to a military end customer in an Asian Pacific country.
The release notes that the reseller is a wholly owned subsidiary of a multi-billion dollar, global, publicly listed customer that is contractually required to distribute the products to a major Asia Pacific military government department. The systems are for both vehicle-mounted and fixed Counter-UxS systems.
DroneShield expects to deliver all equipment and receive full payment in the first quarter of 2025. It notes that no additional material conditions need to be satisfied.
Management highlights that it has previously received four standalone contracts from this reseller for this customer between May 2024 and September 2024 totalling approximately $500,000. So, this contract is a major increase in value and demonstrates why smaller initial contracts have potential to grow materially in the future.
Commenting on the contract win, DroneShield's CEO, Oleg Vornik, said:
In close succession to the European repeat order announced on 5 December 2024 and the LATAM order announced on 6 January 2025, DroneShield products are again meeting the challenge set by a highly sophisticated military customer in the Asia Pacific region, and a close military ally of Australia.
The scale and frequency of orders has been increasing as leading military customers are moving from testing hardware to broader roll-outs. DroneShield is rapidly expanding all aspects of the business to meet this demand across multiple regions.
