Australia's DroneShield hits 8-month low after flagging margin contraction in first half

DroneShield

28/07/2026 06:41

July 28 (Reuters) - Australian counter-drone technology firm DroneShield DRO.AX warned on Tuesday of a gross margin contraction in the first half of fiscal 2026, driven by product mix shifts and higher costs, sending its shares to an eight-month low.
Here are some details:
The Sydney-headquartered firm said first-half gross margin was expected at 60%, down from 65% a year earlier, hurt by a shift in sales between proprietary solutions and third-party hardware, currency fluctuations, and higher raw material costs.
DroneShield expects margins to recover to around 65% in the second half, with the rollout of next-generation hardware and increased subscription revenue.
DroneShield shares slumped as much as 14.3% to A$1.783, their lowest level since November 24, 2025. The stock was the biggest laggard on the ASX 200 .AXJO, which was up 0.4%.
The company still projects fiscal 2026 revenue in the range of A$250 million to A$270 million ($174.22 million - $188.16 million), up 15% to 25% from last year, based on committed revenue and anticipated orders.
Separately, DroneShield confirmed receiving A$23.2 million in contracts from a reseller for vehicle-mountable counter-drone solutions destined for a European military client.
DroneShield shares have remained under pressure since a governance controversy triggered by executive share sales last year, and top leadership departures in April. 
The stock is down nearly 40% this year.
     
($1 = 1.4349 Australian dollars)

 (Reporting by Kumar Tanishk in Bengaluru; Editing by Subhranshu Sahu)
 ((tanishk.Kumar@thomsonreuters.com; X: @thatstanishk))