DroneShield Secures $25M Defence Deal as Counter-Drone Market Surges

Sydney-based DroneShield (ASX: DRO) just won a US$25 million (≈ A$39 million) contract from a Latin American military customer, a deal that underscores a fundamental shift in global defence priorities. These are systems designed to detect and stop drones before they can cause damage, a clear sign of how defence budgets are evolving to meet modern threats.

DroneShield’s shares rose 8.6% on the news, but the bigger picture is clear: governments are ramping up defence spending to protect airports, battlefields, and critical infrastructure from drone attacks. The counter-drone market is booming, and DroneShield is positioned at the centre of it.

Why Counter-Drone Technology Matters Now

Think about the economics here. A $500 commercial drone can disable a $5 million piece of military equipment. That’s changing how countries think about defence. Governments are now investing heavily in counter-drone systems to protect against these low-cost threats.

• The global market for counter-drone tech is set to grow from US$4.5 billion today to US$14.5 billion by 2030.
• NATO plans to raise defence spending from 2% to 5% of GDP by 2035.
• Europe’s defence budget could nearly double, reaching US$2.8 trillion.
• The US has made counter-drone systems a top priority, with US$1.3 billion already allocated. Its 2026 budget proposes a 13% defence increase, including a new funding line just for unmanned systems.

This isn’t just paperwork; it’s a real response to modern warfare. Old defence tools are being replaced by faster, cheaper tech that can handle today’s threats.

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Beyond the Battlefield

What makes this market especially attractive is its dual-use potential. Airports face regular disruptions from unauthorised drones. Power stations, government buildings, and major events all require protection. Systems designed for military bases can be adapted for civilian use with minimal modification.

This expands the opportunity significantly. Instead of selling only to defence departments, companies like DroneShield can target commercial infrastructure operators, event organisers, and critical facility managers, unlocking multiple revenue streams from a single core technology.

Modern platforms use radio frequency detection combined with artificial intelligence to automatically identify threats. They can distinguish between a hobbyist’s drone and a potential attack. More importantly, these are software-first products that improve through updates, creating recurring revenue opportunities similar to software subscription services.

DroneShield: Riding the Counter-Drone Wave

DroneShield is growing fast in the booming counter-drone market. Its systems are used in over 70 countries by militaries and airports. The recent US$25 million Latin American deal followed a Q3 FY25 revenue surge to US$93 million (July–September 2025), up over 1,000% year-on-year.

The momentum continues. DroneShield has US$193 million in contracts for 2025 and a US$2.3 billion sales pipeline across Europe, the US, and Asia.

Software is becoming a bigger part of the business, with US$3.5 million in subscriptions in early 2025, up 177%. That kind of steady income often gets higher valuations.

The company builds everything in-house, owns its tech, and holds US$235 million in cash with no debt, giving it plenty of room to invest and grow.

What Investors Should Consider

Defence spending is usually steady, even during economic ups and downs, because governments commit to the long term. That makes the sector more stable than consumer markets.

Still, defence companies can face delays. Big contracts take time to sign and deliver. Export rules can limit sales, and currency shifts affect global revenue.

DroneShield is growing fast, but it competes with larger defence contractors like Lockheed Martin and Raytheon, which have deeper government ties and broader product portfolios. Even so, the counter-drone market is set to more than triple by 2030, and early movers with strong market share could benefit as governments continue to prioritise these technologies.

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