New Report Asks How Prepared We Are to Fend Off Unauthorized Drone Activity

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

New research released by DroneShield Ltd. (DRO:ASX; DRSHF:OTC) on June 29 notes that unauthorized drone activity poses a significant and practical threat, as reported by international airports, aviation authorities, correctional facilities, and port operators around the world.

The industry report, titled "Airspace Under Pressure: A Global Assessment of Counter-UAS Readiness Across Airports and Critical Infrastructure," is based on direct survey responses from over 20 operators of airports and critical infrastructure globally.

The findings of the report are alarming, revealing widespread systemic issues in drone detection capabilities, the release noted. A substantial 70% of surveyed entities acknowledged gaps in their detection capabilities, which they identified as a significant barrier to executing effective counter-UAS (unmanned aircraft system) measures. Additionally, 60% of respondents reported that regulatory and legal constraints limit their ability to take direct action against unauthorized drones, even when these drones pose a clear and immediate threat to safety.

Other challenges impeding effective counter-UAS operations include the complexity of integration, cited by 48% of respondents, and issues related to training and preparedness, noted by 35%.

The survey also explored the counter-UAS operational objectives of these organizations, revealing a concerning disconnect between their intentions and their actual preparedness. While 57% of respondents aim for a full combination of awareness, detection, tracking, and response capabilities, 13% are focused only on detection, another 13% on awareness alone, and a troubling 17% have no defined or formal plan in place for counter-UAS operations. This lack of preparedness indicates a critical structural problem, the report said, where a significant portion of these organizations might face managing a drone incident for the first time without established procedures, clear escalation pathways, or basic situational awareness.

"The primary Counter-UAS challenge in 2025 is not awareness of the threat," DroneShield Director of Public Safety Tom Adams said. "It is the capacity to convert awareness into authorized, coordinated, real-time action."

He continued, "Technology investment alone will not close this gap. Regulatory reform and operational integration must advance simultaneously."

Levels of Preparedness

The report introduces a readiness maturity framework to evaluate how various organizations manage unauthorized drone activities.It assesses respondents across two dimensions: objective maturity and operational capability, placing them into specific quadrants based on their preparedness and ability to handle drone-related incidents.

The majority of the surveyed operators fall into two main categories. In the "Prepared" quadrant, 13 organizations, typically larger airports and critical infrastructure operators, have defined operational objectives and moderate counter-UAS capabilities, according to the report. These organizations have made investments towards addressing drone threats and have structured frameworks in place. However, despite their relative preparedness, capability gaps still exist within this group, indicating that being in the Prepared quadrant signifies a relative position rather than a fully adequate one.

In the "Partial" quadrant, five organizations have established operational objectives but lack the capabilities to keep pace with the challenges they encounter. These operators are at a specific risk as they possess plans that they are currently unable to execute effectively due to limitations in their tools and authority.

A smaller group of three organizations is categorized in the "Exposed" quadrant. These organizations are characterized by undefined objectives, minimal capabilities, and the absence of a formalized framework, DroneShield said in the report. They are at the highest risk as they are likely to manage serious drone incidents reactively, without established procedures, leading to unpredictable and potentially uncontrollable outcomes.

"Overall, this report argues that the defining differentiator in the years ahead will be whether organizations address these gaps systematically, before an incident forces an unplanned response; or reactively, under pressure, with consequences that cannot be fully controlled," the message to shareholders read.

"Airspace Under Pressure" includes detailed operator survey data, thematic analysis across five key capability dimensions, and a readiness maturity framework for self-assessment. This comprehensive report aims to aid organizations in evaluating and enhancing their readiness to handle drone-related security challenges effectively.

The report argued that no single investment — technology, policy, or training — closes this gap alone; the three must move together, since (as the authors put it) "detection without authority produces situational awareness, but not security outcomes," while authority without detection "is irrelevant" if a threat is never identified in the first place.

Analyst: 2025 Was 'Breakout Year' for Company

Canaccord Genuity Capital Markets recently begun covering DroneShield Ltd, with Analyst Richard Harrisberg issuing a research note on June 16. Harrisberg gave the stock a Speculative Buy rating and set a target price of AU$3.75 per share.

He highlighted that FY25 was a significant year of growth for DroneShield, noting, "FY25 was a breakout year for the company." During this period, the company reported a substantial increase in revenue, reaching AU$217 million, which represents a 276% year-over-year growth. This surge was driven by the escalating global demand for counter-drone solutions, capturing a portion of the estimated US$4.5 billion global counter-UAS market.

Continuing this trajectory into the first quarter of 2026, DroneShield reported revenues of AU$74 million, marking a 121% increase from the same period the previous year. Additionally, as of May 2026, the company has announced committed revenues of AU$171 million for FY26e. DroneShield's competitive advantages include its proprietary drone signal database, strong software capabilities, vertically integrated manufacturing, and an established sales and distribution network. The company is targeting a revenue goal of US$1 billion by FY30e, with software subscriptions expected to contribute 30% towards this target.

Harrisberg also discussed the broader context of structural demand, which he described as the strongest in the history of the market. He pointed out the significant role drones play in modern conflicts, noting that drones are responsible for approximately 70-80% of battlefield casualties in the Ukraine-Russia conflict. Furthermore, the use of over 2,000 Shahed drones by Iran against US forces and allies underscores substantial gaps in Western counter-drone capabilities.

The analyst also referenced substantial budget allocations for drones and counter-drone systems, with the US Department of Defense's 2027 budget earmarking US$75 billion for these technologies. Additionally, the US Army's specific counter-UAS budget request for 2027 is double that of 2026. Europe is also seeing a rapid acceleration in defense procurement, the fastest since the Cold War, with NATO's combined defense expenditure expected to reach US$1.6 trillion in 2025.

DroneShield's rapid growth trajectory positions it well to benefit from these increases in defense spending and investment in drone and counter-drone technologies. Harrisberg noted that DroneShield is among the fastest-growing stocks on the ASX, with a pipeline valued at AU$2.3 billion in 1Q26, suggesting a potential doubling of revenue by FY28e. The company's current FY27e EV/revenue multiple of 6x aligns with similarly growing businesses, while Elsight trades at a FY27e EV/revenue multiple of 13x, commanding a premium due to its higher gross margin, capital-light model, and strong free cash flow.

A 'Market-Leading' Offering

In a recent analysis by Bell Potter Analyst Baxter Kirk, he praised DroneShield's market position, noting, "We believe DRO has a market-leading RF detect/defeat C-UAS offering and a strengthening competitive advantage owing to its years of battlefield experience and large and focused R&D team."

He anticipates that 2026 will mark a pivotal year for the global C-UAS industry, as countries are expected to significantly increase spending on RF detect and defeat solutions. Kirk predicts that DroneShield will secure substantial contracts from its US$2.3 billion potential sales pipeline in the next three to six months as defense budgets are allocated for FY26e.

Despite trading at 43x CY26e EV/EBITDA, which is a discount compared to the global drone peer group, Kirk sees potential for upward revisions in revenue forecasts for CY26/27e, given the burgeoning opportunities in the C-UAS industry. Consequently, he recommends buying the stock with a target price of AU$4.80 per share, which represents a 25.3% return at the time of writing.

The Catalyst: Drone Surge Underscores Need for Security

The global anti-drone market is poised for significant expansion, projected to reach US$19,844.5 million by 2033, with a compound annual growth rate (CAGR) of 25.2% from 2026 to 2033, according to a recent study by Grand View Research. This growth is largely driven by the increasing use of drones across various sectors, necessitating enhanced measures to secure critical infrastructure, military assets, and public areas against potential drone-related threats.

As unmanned aerial vehicles (UAVs) become more prevalent for commercial and recreational purposes globally, there has been a corresponding rise in public safety concerns. This surge in drone activity has underscored the importance of effective security management systems capable of identifying and neutralizing unauthorized drones. Additionally, the growing use of aerial remote sensing technologies in fields such as agriculture, mining, and environmental monitoring has further spurred the demand for robust anti-drone systems to ensure operational safety.

One of the key trends in the anti-drone market is the development of advanced detection and mitigation technologies. These include radar systems, radio frequency (RF) detection, electro-optical (EO) and infrared (IR) sensors, and acoustic detection systems, all designed to accurately identify, track, and neutralize rogue drones. The integration of artificial intelligence (AI) and machine learning (ML) within these systems is enhancing their effectiveness, notably improving their ability to distinguish between drones and other objects, thereby reducing false alarms and increasing precision.

"The growing demand for enhanced security and protection of critical infrastructure and high-profile events is also driving the adoption of anti-drone solutions," the report said. "Governments and private entities are recognizing the importance of proactive measures to mitigate the risks posed by unauthorized drones, which can include corporate espionage, disruption of operations, and potential safety hazards. The integration of anti-drone systems with existing security infrastructure is enabling seamless protection against drone-related threats in both the public and private sectors."

Government investment in anti-drone research and development, as well as deployment, is accelerating market growth, Grand View said. Agencies are channeling substantial resources into the development and implementation of sophisticated anti-drone systems that incorporate high-energy lasers, high-power microwaves, and artificial intelligence, marking a significant transformation in the anti-drone landscape.

"The nature of aerial warfare is undergoing a profound transformation," Markets and Markets said in a separate report on June 15. "Once considered niche battlefield assets, unmanned aerial systems (UAS) have become central components of modern military operations. From reconnaissance and intelligence gathering to precision strikes and swarm attacks, drones are increasingly shaping the outcome of conflicts around the world. As their use expands, so does the urgency of developing effective defenses against them."

The introduction of Ukraine’s Sting interceptor drone and Russia’s Yolka system exemplifies two distinct strategies in kinetic drone interception. Both systems are crafted to tackle the escalating challenge of neutralizing increasingly sophisticated and cost-effective unmanned threats on a large scale.

The rising occurrence of drone swarms, loitering munitions, and mass aerial attacks is compelling military organizations to reconsider their traditional air defense strategies. Moving away from a sole reliance on conventional missile defense systems, there is a growing trend towards adopting layered counter-drone capabilities. These integrated systems combine various technologies including detection, tracking, electronic warfare, and hard-kill interception methods.

This paradigm shift is significantly energizing the C-UAS market, Markets and Markets noted. As the threat landscape evolves, governments, operators of critical infrastructure, and homeland security agencies worldwide are intensifying their search for effective counter-drone solutions to safeguard against these advanced aerial threats. The demand for these innovative counter-drone technologies is thus experiencing a rapid acceleration globally.

Ownership and Share Information¹

DroneShield Ltd. has a market cap of AU$2.24 billion, with 924.09 million shares outstanding. The company's 52-week range is AU$1.63-AU$6.71.

Institutions own about 40% of shares, while Strategic Investors own about 3% and Management and Insiders own about 2% of shares. The rest is retail.