DroneShield Ltd (ASX: DRO) shares are down around 1% on Thursday.
The move comes despite a fresh trading update from the counter-drone technology company, although the broader market is also under pressure. The S&P/ASX 200 Index (ASX: XJO) is currently down around 1.3%.
So, has today's announcement changed my view on DroneShield shares?
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What did DroneShield announce?
DroneShield provided investors with a few updates this morning.
The company said FY26 committed revenue has now reached $251 million, up from $240 million reported on 21 August. This puts it inside management's existing FY26 revenue outlook of $250 million to $270 million. DroneShield also has $46 million of committed revenue for FY27 and beyond.
I think the important part is the continued conversion of demand into actual orders.
DroneShield has spoken for some time about the growing need for counter-drone technology. Seeing more of that demand turn into contracted revenue gives me greater confidence that the opportunity is translating into real sales.
The company also received the first order for its newly released artificial intelligence-enabled RfRecon product. The order is not material financially, but the hardware will be deployed to an existing Western European military customer before the end of 2026.
DroneShield also announced that Rebecca Lowde will become chief financial officer in November. She brings experience from MYOB, Afterpay, Salmat, and Bravura Solutions Ltd (ASX: BVS), which could be valuable as DroneShield becomes a much larger global business.
Why I still think DroneShield shares are a buy
I think today's announcement adds another piece of evidence that DroneShield is continuing to scale.
The company operates in a market where governments and military organisations are becoming increasingly concerned about the threat posed by drones. DroneShield develops technology to detect, track, identify, and defeat those threats across fixed locations and mobile operations.
What I like is the potential for that demand to continue growing across multiple countries.
DroneShield is also expanding its product range rather than relying on one piece of hardware. The first RfRecon order is a small example, but successful deployment could potentially lead to further orders from existing and new customers.
At $1.71, the shares are also far below the highs reached previously and much closer to their lows.
I think that gives patient investors a more reasonable entry point into a company that still has substantial growth potential.
There is still plenty of risk
DroneShield remains one of the higher-risk ASX shares I would consider buying.
Defence contracts can be large but irregular, and revenue can move around considerably depending on when orders arrive.
The company also needs to prove that rapidly increasing sales can translate into much larger and more consistent profits over time.
That means I would probably keep any investment relatively small rather than making DroneShield a major portfolio position.
Foolish takeaway
Today's trading update gives me another reason to remain positive on DroneShield.
Committed FY26 revenue has moved above $250 million, while the first RfRecon order shows customers are beginning to adopt another product from the company's expanding technology range.
At current prices, I still think DroneShield shares are a buy for investors comfortable with the higher level of risk.
