DroneShield Ltd (ASX: DRO) shares were hit hard again on Wednesday after the counter-drone company released its half-year results.
The DroneShield share price finished the day down 11% to $1.74.
It continues what has been a pretty rough run for shareholders. The stock is now down around 17% over the past month and 48% since the start of 2026.
That's a big change from where DroneShield was trading last year, when the shares were attracting plenty of attention.
With the share price now back near its lowest levels of the year, investors may be wondering whether the worst of the sell-off is finally behind it.
So, have DroneShield shares finally found a bottom?
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Revenue growth continues as profits slip
Looking at the headline numbers, there was plenty to like on the revenue side.
DroneShield reported record first-half revenue of $125.8 million, up 74% from the same period last year.
Recurring revenue also rose 229% to $11.5 million, supported by a growing number of software-enabled devices in the field.
However, this came in below the $14.2 million estimate DroneShield provided in July.
Profitability also went backwards.
Underlying EBITDA came in at a $12.4 million loss, compared with an $8 million profit a year earlier.
DroneShield also reported a statutory net loss after tax of $32.2 million, while gross margin slipped to 60% from 65%.
The company said it has been investing heavily to support future growth, including in production, systems and staff.
There are still some good signs
Despite the first-half loss, there were still a few positives to take away from the result.
DroneShield had $240 million of committed FY26 revenue as at 21 August, up 36% from the same time last year.
That already covers between 89% and 96% of its full-year revenue guidance of $250 million to $270 million, giving the company a decent head start heading into the second-half.
There is also another $43 million of committed revenue for FY27 and beyond.
DroneShield is in a strong position financially as well, finishing June with $180 million in cash and term deposits and no debt.
This gives the company plenty of room to keep investing as it ramps up production and brings new products to market.
Have DroneShield shares bottomed out?
Calling the bottom isn't easy, as you're essentially trying to predict what every buyer and seller in the market is going to do.
Even the best investors in the world can't pick the exact bottom every time.
Nonetheless, there are a few reasons to think much of the bad news could already be reflected in the share price.
There is still plenty going right in the business. Revenue is growing quickly, committed revenue continues to build and the balance sheet remains strong.
But investors will also want to see more of that growth flow through to margins and earnings, particularly after the first-half loss.
If DroneShield delivers on guidance and improves profitability in the second-half, investors could take another look.
