DroneShield Ltd. announced plans to invest AU$13 million over three years to establish a new research and development facility in Adelaide, South Aust

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DroneShield Ltd. (DRO:ASX; DRSHF:OTC) announced plans to invest AU$13 million over three years to establish a new research and development facility in Adelaide, South Australia. The expansion aims to strengthen the company’s counter-drone and electronic warfare capabilities, adding to its existing engineering operations in Sydney and its growing international presence across the United States and Europe.

According to DroneShield, the new facility will initially create about 20 highly skilled engineering roles focused on radio frequency electronics, electronic warfare, and systems integration. The site will be led by Jeff Wojtiuk, a veteran defence engineer and former Lockheed Martin Australia executive with more than two decades of experience in RF design and aerospace systems.

Chief Executive Officer Oleg Vornik said the new office marked an important strategic step for the company. “South Australia is recognised as a national leader in defence and space industries, with Adelaide home to a highly skilled and experienced workforce,” he said in a company release. “Establishing our first R&D office in Australia outside of our Sydney headquarters – in Adelaide – supports DroneShield’s mission to deliver world-leading counter-drone and EW solutions.”

The investment comes as DroneShield surpassed a milestone of more than 400 employees globally, nearly doubling its workforce in the past year. Approximately 300 of those employees are software and hardware engineers. Chief Product and Technology Officer Angus Bean said the Adelaide site would “accelerate the development of our next-generation counter-drone and EW technologies” and help meet demand from customers worldwide.

The South Australian government welcomed the announcement, citing its alignment with the state’s focus on defence and technology growth. Premier Peter Malinauskas said, “We welcome DroneShield making the choice to conduct research and development here in Adelaide, creating 20 highly skilled engineering roles. As a Government, we have a strong focus on growing our Research and Development ecosystem.”

DroneShield’s expansion follows a period of record growth. Its most recent half-year investor report showed revenue of AU$72.3 million, up 210% year over year, and profit before tax of AU$5.2 million. The company’s order pipeline reached AU$2.34 billion as of August 2025, while annual research and development spending exceeded AU$50 million, supported by a cash balance of AU$207.9 million. The new Adelaide facility is expected to be fully operational by March 2026.

Counter-Drone Innovation Reshapes the Defense Landscape

According to a September 24 report by Philip Butterworth-Hayes for Counter-UAS Systems and Policies, the global counter-uncrewed aerial systems (C-UAS) industry had been shaped by lessons from recent conflicts, particularly in Eastern Europe. The report noted that “the drone war in Ukraine is defining the size, shape and technical priorities for the global counter-UAS industry.” As new drone technologies appeared on the battlefield at an accelerating rate, governments and defense organizations around the world had sought systems that were technically capable, affordable, and scalable enough to meet these evolving challenges.

Butterworth-Hayes wrote that the industry’s direction had become clearer in 2025, as layered defense systems integrating radar, acoustic, optical, and electronic countermeasures were increasingly seen as essential for protecting both military and civilian targets. However, he added that these systems were “expensive, static and very hard to fully integrate,” leading to an industry shift toward more agile, affordable, and modular solutions. Smaller and mid-sized defense technology developers, capable of responding quickly to urgent operational requirements, had emerged as key players. The report stated that these companies were “leading the industry not just in pioneering new technologies but also in offering more flexible, future-proof acquisition models for end-users.”

On September 25, Kelley Stewart reported for the U.S. Air Force that counter-drone innovation had become a central priority for homeland and base protection. The Falcon Peak 25.2 experiment, hosted by North American Aerospace Defense Command (NORAD) and U.S. Northern Command (USNORTHCOM), focused on “detecting, identifying, tracking, and mitigating UAS incursions at military installations.” The exercise featured testing of sensors, software, and low-collateral defeat options designed to intercept small drones safely over domestic airspace. According to Gen. Gregory Guillot, commander of NORAD and USNORTHCOM, “NORTHCOM will play a critical role in an enduring whole-of-government effort to protect people, infrastructure, aircraft, and facilities from malign small UAS incursions.” He said that effort required ongoing collaboration between the Department of Defense, industry, and interagency partners to align new technologies with evolving defense needs.

A subsequent October 7 report from Military Embedded Systems described how the U.S. defense establishment continued to emphasize emerging technologies, including counter-drone systems, as a core component of future capability development. The publication explained that at the Association of the U.S. Army’s Annual Meeting in Washington, D.C., the EarlyBirds Defense Innovation Platform was introduced to accelerate adoption of technologies in areas such as “artificial intelligence, cyber operations, counter-uncrewed aerial systems (C-UAS), quantum sensing, and hypersonics.” The platform was designed to connect innovators and defense customers to “address capability gaps through rapid prototyping, research partnerships, and technology deployments.”

Analyst Confidence Supported by Record Financial Performance

According to an August 28 research report from Shaw and Partners analyst Abraham Akra, DroneShield Ltd. achieved “a record-breaking first half of 2025,” with revenue rising 210% year over year to AU$72.3 million and a net profit after tax of AU$2.1 million. Akra described the results as “a significant turnaround” from the AU$4.8 million loss recorded in the first half of 2024 and noted that earnings before interest, tax, depreciation, and amortization improved to AU$5.2 million, up from a loss of AU$4.9 million in the prior corresponding period. Cash receipts climbed 185% to AU$60.7 million, reflecting sustained operational momentum.

Akra reported that DroneShield ended June with AU$204 million in cash and term deposits and no debt, emphasizing that its “strong gross profit margins of around 71%” and “approximately AU$270 million in saleable inventory” positioned the company to self-fund expansion plans. He also highlighted the company’s manufacturing strategy to scale annual capacity from AU$500 million to AU$2.4 billion by fiscal 2026 through a combination of contract manufacturing in the United States and Europe and the commissioning of a new 3,000-square-meter production line in Sydney.

The report cited headcount growth to 373 employees, including 285 engineers supporting quarterly artificial intelligence software upgrades and new product releases. “These systems underpin the delivery of next-gen hardware, increased SaaS attach rates, and repeat revenue across the product lifecycle,” Akra wrote. He maintained a Buy rating on DroneShield with a US$3.60 price target, stating, “We see DRO reaching an inflection point in sales and profitability with the NATO agreement supplementing the U.S. Dept of Defense recommendation and solidifying DRO as a market leader in jamming C-UAS.”

Akra further observed that DroneShield’s qualified pipeline had expanded to AU$2.34 billion across 310 active projects, with 13 opportunities exceeding AU$30 million each. He noted that Europe had become the company’s leading region for opportunity volume, supported by the €800 billion ReArm Europe defense spending plan. The report also pointed to strong progress in software-as-a-service (SaaS) revenue, which grew 177% year over year, supported by the introduction of new AI-based civilian offerings such as SentryCiv.

On October 2, The Motley Fool wrote that DroneShield’s shares had declined temporarily due to “profit taking” after substantial gains, rather than any negative change in company fundamentals. The publication reported that investors had been enthusiastic about the company’s potential following reports that the European Union was planning to construct a “drone wall” along its eastern border and stated that “the market seems to believe that DroneShield is well-positioned to benefit from this plan.”

Expanding Global Footprint to Meet Rising Counter-Drone Demand

DroneShield’s expansion in South Australia forms part of a broader global scale-up strategy. The company has been increasing production capacity from AU$500 million to AU$2.4 billion by the end of 2026 and is simultaneously establishing manufacturing hubs in Europe and the United States.

According to its August 2025 investor presentation, DroneShield had more than 310 projects in its pipeline for 2025–2026, including 13 valued at over AU$30 million each. The company also noted continued growth in defence spending on counter-drone technology, with governments worldwide prioritising electronic warfare and unmanned-air-system countermeasures as part of their modernisation programs.

DroneShield’s continued R&D investments, including the Adelaide facility, align with its strategy to enhance AI-powered software and develop modular detection platforms capable of countering next-generation drone threats. The company’s product suite integrates hardware, artificial intelligence, and software-as-a-service tools used in both defence and civilian applications.

With operations in more than 70 countries and a growing emphasis on sovereign defence capability, DroneShield’s South Australia facility positions the company to continue scaling its research, engineering, and production capabilities in response to the global demand for advanced counter-drone systems.

Ownership and Share Structure

Recent filings reveal that Vanguard Group has become a substantial shareholder in DroneShield, holding a 5.45% stake, Fidelity Management and Research holds approximately 9.59% and State Street Corporation holds approximately 5.20%.

Management and insiders hold 1.30%, according to the company.

DroneShield has 874.72 million outstanding shares and 863.3 million free float traded shares. Its market cap is approximately AU$3.2 billion, and its sales pipeline has grown to AU$2.34 billion. The company's 52-week share price range is AU$0.59 to AU$4.39.