Undisclosed Partnership Helps Counter-Drone Co. Assist War-Torn Ukraine

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Leading counter-drone (CUAS) technology company DroneShield Ltd. (DRO:ASX; DRSHF:OTC) announced that it is enhancing its support for Ukrainian clients through a newly formed, undisclosed local partnership in the war-torn country.

Since the conflict began, DroneShield has been a reliable CUAS provider in Ukraine, with its proven systems protecting military, infrastructure, and civilian assets from evolving aerial threats.

Leveraging 11 years of expertise as a technology-focused company in the CUAS sector, DroneShield has utilized operational feedback from Ukraine to drive rapid advancements in artificial intelligence (AI) and machine learning (ML) within its detection and mitigation systems, the company said.

This real-world experience, under the most challenging conditions, has significantly enhanced DroneShield's AI, improving detection speed, accuracy, and adaptability against new drone tactics.

"The conflict in Ukraine has crystallized what forward-looking militaries already recognized: the need for advanced, adaptive counter-drone solutions is now a matter of national resilience, not optional investment," Chief Executive Officer Oleg Vornik said. "Our work in Ukraine, while only one element of our global operations, has proven pivotal in advancing the sophistication of our AI, with profound benefits for all our users worldwide."

This new partnership will ensure that DroneShield's Ukrainian clients receive strong local support, rapid technology updates, and ongoing intelligence sharing with headquarters, while maintaining operational security through strict confidentiality, DroneShield noted.

The company emphasized that Ukraine, while symbolically important and technologically crucial, represents a relatively small portion of a broad global market. Active in over 40 countries, including major deployments in Europe, the Americas, and Asia, DroneShield continues to meet the growing demand for its AI-powered counter-UAS solutions, driven by a rising global awareness that no allied nation can afford to wait for conflict before adopting resilient, next-generation drone defense.

Subscription-Based, AI-Powered Counter-Drone System for Civilian Applications

Earlier in August, the company unveiled SentryCiv, a subscription-based, AI-powered counter-drone system designed for civilian applications. The company described the technology as a passive, cost-effective layer of airspace security, aimed at safeguarding high-risk, non-military locations such as airports, utilities, data centers, event venues, government buildings, energy infrastructure, power grids, correctional facilities, and corporate campuses.

SentryCiv integrates with DroneShield's Sentry-C2 Civ command-and-control platform, providing operators with real-time alerts, threat prioritization, customizable zones, and compatibility with third-party systems, the company said. The solution utilizes the company's proprietary DroneLocator technology to track both drones and their operators, going beyond RemoteID requirements. It employs an encrypted radio-frequency threat detection engine, RFAI™, to identify a wide range of common drone models without interfering with other communication systems.

"As drone threats continue to proliferate worldwide, critical infrastructure is increasingly vulnerable to malicious and unauthorized drone activity," Vornik said at the time. "SentryCiv offers a comprehensive, scalable solution that provides real-time detection, and situational awareness. This next-gen technology is engineered to seamlessly integrate into existing security frameworks, enabling a rapid response to potential threats without disrupting operations."

Tom Adams, Director of Public Safety at DroneShield, noted that the product "represents our commitment to making advanced counter-drone solutions accessible and affordable for non-military sectors." SentryCiv operates on a software-as-a-service (SaaS) model with no upfront purchase cost. DroneShield plans to release quarterly software updates to enhance detection capabilities, boost performance, and introduce new features. While the company cannot yet quantify expected sales, it anticipates significant demand from the civilian sector, with further guidance to be provided when available.

Analyst: Co. Pivots to 'Cash Generative'

According to a July 30 research note by Abraham Akra from Shaw and Partners, DroneShield's Q2/25 results indicate that "revenue acceleration is now translating into free cash flow generation." The firm upgraded its recommendation from Hold to Buy and increased its target price by 80% to AU$3.60 per share. Akra emphasized that the company has "pivoted from capex and inventory buildout to cash generative," supported by operational scale, a capital-light balance sheet, and full-year 2025 revenue visibility of AU$176 million. He reported net operating cash of AU$13.4 million for the quarter, bringing total liquidity to about AU$204 million with no debt, and noted that strong gross margins have enabled the company to fund growth organically while maintaining flexibility for mergers and acquisitions. Akra also highlighted a sales pipeline of AU$2.33 billion with 284 active opportunities, including 13 deals valued at over AU$30 million, and pointed to the company's expanded manufacturing capacity and inventory position as factors supporting rapid order fulfillment.

In a separate July 30 research note, Daniel Laing from Bell Potter Securities also upgraded DroneShield's rating from Hold to Buy following the release of its Q2/25 and H1/25 results. Laing noted that "DRO's strong H1/25 results (unaudited), high level of contracted revenue (AU$176.3M) and recent share price pullback provide us with increased confidence in its near-term outlook."

Bell Potter maintained its 12-month price target of AU$3.80 per share, representing a 20% implied return from the trading price at the time of the report. Laing reported that Q2/25 revenue was AU$38.8 million, up 480% year over year, and that H1/25 revenue reached AU$72.3 million, surpassing forecasts. He also noted that the company ended Q2/25 with AU$192 million in cash and a robust AU$2.3 billion sales pipeline, with significant opportunities in Europe and the U.S. Laing concluded that DroneShield is "well-positioned to continue its strong performance," supported by scaled operations, healthy inventory, and demand driven by structural growth in the counter-drone market.

Expanding Its Presence in Civilian Security Market

The launch of SentryCiv aligns with DroneShield's strategic objective of expanding its presence in the civilian security market.

As outlined in its July 2025 investor presentation, the company has been increasing its focus on non-military sectors as part of a broader diversification strategy, driven by rising demand for counter-uncrewed aerial system (C-UxS) technology in both defense and civilian markets. DroneShield reported HY2025 revenue of AU$72.3 million, up 210% compared to the previous year, with SaaS revenue increasing by 177% over the same period.

The company's sales pipeline as of July 2025 stood at AU$2.33 billion, representing a 112% increase from the previous year, with projects spanning multiple geographies and sectors. Management has indicated that the expansion into the civilian market, supported by products like SentryCiv, is part of its plan to grow SaaS revenues, increase gross margins, and establish regional manufacturing hubs to serve global customers.

The Catalyst: AI Increasingly Crucial for Private Drones

Artificial intelligence is increasingly crucial in enhancing private drone capabilities. According to a report by Stratview Research on June 24, the AI in drones market was valued at US$12.8 billion in 2024 and is projected to grow to US$55 billion by 2032, with a compound annual growth rate of 19.4%. Key applications in the private sector include delivery and logistics, as well as surveillance and monitoring, where AI facilitates real-time analytics, route optimization, and automated operations. Cloud-based drones are expected to see the highest growth potential in commercial use due to their scalability and ability to process data instantly for tasks such as infrastructure inspection, environmental monitoring, and smart city management.

Advancements in hardware, such as lighter airframes, AI-enabled chips, and improved obstacle avoidance, have expanded drone adoption in sectors like agriculture, where they are used for precision spraying and crop health assessments, and in construction, where they assist with surveying and progress tracking.

According to the Global Drone Market Outlook from Grand View Research on July 21, the consumer segment, which includes hobbyist and recreational drones, was valued at approximately US$4.8 billion in 2023 and is expected to reach US$11.6 billion by 2030, reflecting a compound annual growth rate of about 13.3%. Commercial drones, used across industries such as construction, agriculture, energy, real estate, and media, accounted for an estimated US$30 billion in 2024, with forecasts suggesting growth to around US$55 billion by 2030 at a rate of approximately 10.6% annually.

While consumer drones have a smaller market value, commercial applications dominate private sector revenue and continue to expand as businesses adopt drones for efficiency, safety, and data collection.

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 5.62%.

Management and insiders hold 1.34%, 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$3.1 billion, and its sales pipeline has grown to AU$2.33 billion. The company's 52-week share price range is AU$0.59 to AU$4.39.