Shares in Elsight Ltd (ASX: ELS) are edging higher on Tuesday after the company released its quarterly report for the three months ending 31 December 2025.
At the time of writing, the Elsight share price is up 1.78% to $4.58, extending what has already been a stellar run. The stock is now up almost 50% this year, as momentum continues to build around its defence and connectivity platform.
Let's unpack the latest numbers from the report.
Record revenue caps a breakout year
According to the release, Elsight delivered its fourth consecutive quarter of record revenue, reporting quarterly revenue of US$9.3 million for the December quarter.
That took full-year FY25 revenue to US$22.8 million, representing an 11-fold increase year-over-year. The company said the result was driven by expanding deliveries, strong order conversion, and growing demand across defence and commercial markets.
Elsight also reported software-like gross margins of around 77%, highlighting the scalability of its platform as volumes increase.
Management said the business remains focused on top-line growth while accelerating investment in sales, marketing, and customer engagement to support multi-year expansion.
Order backlog provides clear visibility
One of the most encouraging takeaways from the update was Elsight's growing order backlog.
During the quarter, the company confirmed an order backlog of US$22 million, providing strong revenue visibility into 2026. That includes a US$21.2 million contract secured in December, covering deliveries for the first four months of the calendar year.
After the quarter end, Elsight also announced its first commercial purchase order for CY26, securing a US$460,000 order from a US public safety customer. Management said this highlights accelerating commercial adoption alongside regulatory progress in the US.
Cash flow swings into positive territory
Elsight also delivered a major financial milestone, reporting positive operating cash flow of US$8.2 million for the quarter.
Cash receipts for FY25 reached US$32.8 million, while cash at bank stood at US$59.4 million at 31 December.
The company noted that recurring revenue from software licences, cloud services, and subscriptions reached US$2.6 million in FY25, up 253% year-over-year and now accounting for 12% of total revenue.
US defence exposure continues to expand
Elsight continues to deepen its presence in the US defence market.
During the quarter, the company was selected by the US Defence Innovation Unit to advance to Phase 3 of Project GI, with fielding expected to conclude in the first half of 2026. Management also confirmed progress toward production readiness and procurement cycles.
At the same time, Elsight expanded its US footprint with senior sales and business development hires, while strengthening engagement across Europe and the Middle East.
Foolish takeaway
After a 46% run in a year, expectations are rising. But this update shows Elsight is scaling revenue, generating cash, and improving visibility.
For investors, the focus now shifts to whether Elsight can sustain this momentum as it scales into 2026.
