# Droneshield (DRO.AU)

Canonical: https://gigainvestors.com/s/DRO.AU

Analysis as of: 2026-10-16T07:44:21.958Z. Financial observations: FY2015–FY2025.

Listing currency: AUD. Reporting currency: AUD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: AUD 1.42 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 8

- Operating margin variation: 2.04×

Chart: Operating margin; fiscal year observations.

- FY2016: -56.59×

- FY2017: -14.88×

- FY2018: -5.56×

- FY2019: -2.32×

- FY2020: -1.50×

- FY2021: -0.64×

- FY2022: -0.20×

- FY2023: 0.05×

- FY2024: -0.30×

- FY2025: -0.02×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 10.6pp below the typical margin (limit 4pp)

- ROIC, median of available years: -120.6%

- ROIC, second-lowest year: -647.0%

- Typical minus recent gross margin: 10.6 pp

- Typical gross margin (annual median): 60.6%

- Recent gross margin (lower of latest and 3-year median): 50.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 13.2%

- ROIC including acquisitions, ten-year median: -117.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -4997.7%

- FY2017: -647.0%

- FY2018: -232.9%

- FY2019: -392.5%

- FY2020: -157.2%

- FY2021: -83.9%

- FY2022: -27.7%

- FY2023: 12.7%

- FY2024: -13.4%

- FY2025: -2.9%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: -0.39×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: AUD -2.1M

- Net income, five-year total: AUD 5.3M

- Return on incremental invested capital: -3.5%

- Working capital / revenue, annual change: -15.2 pp

- Working capital / revenue, change between three-year averages: -99.8 pp

- Working capital / revenue, final three-year average: 73.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.01×

- FY2023: 0.94×

- FY2024: 4.00×

- FY2025: 0.19×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: -647.0% vs -2.9%

- Per-share earnings: -0.04 to 0.00 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 14.7%

- Ordinary dilution, 5-year annual growth: 25.0%

- Market cap gain: AUD 3.2B

- Cumulative retained earnings: AUD 17M

- Diluted shares, 10-year annual growth: 14.7%

- Diluted shares, 5-year annual growth: 25.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: AUD 0.04

- Per-share value, starting three-year median: AUD -0.04

- Per-share value, ending three-year median: AUD 0.00

- Buybacks concentrated in cheaper years (correlation): 0.61

- Average buyback yield: 1.3%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: AUD 20M

- Cumulative net income, 10 years: AUD -25M

- ROIC, first three-year median: -647.0%

- ROIC, last three-year median: -2.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: AUD -0.04

- FY2017: AUD -0.04

- FY2018: AUD -0.04

- FY2019: AUD -0.03

- FY2020: AUD -0.02

- FY2021: AUD -0.01

- FY2022: AUD -0.00

- FY2023: AUD 0.02

- FY2024: AUD -0.00

- FY2025: AUD 0.00

### accounting: pass

- Sloan accruals: -5.0%

- Receivables to sales index (DSRI): 0.52×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 6.84×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.06×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -33.8%

- FY2017: -10.0%

- FY2018: -47.5%

- FY2019: -28.7%

- FY2020: -5.2%

- FY2021: 5.3%

- FY2022: 3.2%

- FY2023: -0.2%

- FY2024: 17.1%

- FY2025: -5.0%

## Holders

## Price story

Down 70% since Sep 2025 · "DroneShield shares surge 9% to 1-month high on $500 million U.S. deal" (finance.yahoo.com, Sep 2026) · sales +276.4%

Story as of 2026-10-16T10:00:13.013Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales +276.4%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: AUD 88K 

- FY2017: AUD 384K 

- FY2018: AUD 1.2M 

- FY2019: AUD 3.5M 

- FY2020: AUD 5.0M 

- FY2021: AUD 10M 

- FY2022: AUD 17M 

- FY2023: AUD 54M 

- FY2024: AUD 58M 

- FY2025: AUD 217M 

### Gross margin · FY2025

gross margin 50%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 23.9% 

- FY2017: 40.0% 

- FY2018: 57.6% 

- FY2019: 54.3% 

- FY2020: 63.7% 

- FY2021: 72.8% 

- FY2022: 70.4% 

- FY2023: 72.0% 

- FY2024: 71.7% 

- FY2025: 50.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are AUD 216.5 million.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2025: revenue 216547000; grossProfit 108330000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DRO.AU: DroneShield Limited engages in the development, commercialization, and sale of counter-drone hardware and software technology in Australia, the United States, Europe, Asia, the United Kingdon, and internationally. It provides DroneSentry-C2, a command-and-control platform; DroneSentry-C2 Enterprise, a browser-based monitoring platform; DroneSentry-C2 Tactical, a rugged command-and-control solution; RfPatrol-Plugin, a mobile-first ATAK-CIV plugin; Access Portal that provides centralized access to mission-critical support and resources. The company also offers RfPatrol Mk2, a wearable solution providing true airspace awareness for military, law enforcement, and executive security personnel; DroneGun Mk4, an ultra-portable handheld countermeasure; Immediate Response Kit, a rapidly deployable counter-drone solution; and DroneGun Tactical, a portable threat long range and highly effective countermeasure. In addition, it provides DroneSentry-X Mk2, a software-defined detection and adaptive disruption system; and Expeditionary Fixed Site (EFS) Kit that transforms the DroneSentry-X Mk2 into a sensor and effector solution for wide area operations. Further, the company offers DroneSentry, an autonomous interoperable detection and countermeasure; and SentryCiv, a drone detection system that delivers 360-degree radio frequency (RF) situational awareness using its RFAI engine. It serves defence and intelligence agencies; airports, ports, prisons, data centres, and other critical infrastructure; utilities, such as power plants, electricity grids, and gas pipelines; intelligence and national security agencies; stadiums and other public event venues and organizers; and assets owners. The company sells its products through third party distributors, as well as direct relationships with various customers. DroneShield Limited was founded in 2014 and is based in Sydney, Australia.

### Why customers stay

Margins ranged from 50% to 72% during 2023–25.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2023: grossProfit / revenue = 72%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2024: grossProfit / revenue = 71.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2025: grossProfit / revenue = 50%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); 10-year return on capital observations [[2016,-49.9774245097417],[2017,-6.469988621917659],[2018,-2.3287626373192043],[2019,-3.9246772167201884],[2020,-1.5722698806663624],[2021,-0.8393830791416037],[2022,-0.27722004654332966],[2023,0.1272287916864286],[2024,-0.1336298601847735],[2025,-0.028596487505393228]]; median -1.205826479903983. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 4 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2023: growth capex 210473; upkeep 1522845; owner earnings 8809306.2. Growth capex / owner earnings = 0.023892119903835336.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); FY2025: growth capex 4248000; upkeep 10579000; owner earnings 670000. Growth capex / owner earnings = 6.340298507462687.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); Dividend observations: [[2016,6706582],[2017,4384652],[2018,0],[2019,535702],[2020,750368],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 4.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DRO.AU SharesStats.PercentInsiders = 4.899 percentage points; cache date 2026-10-16.

### What the price says

The price is 6.9 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:44:21.958Z); Closing price 1.42 AUD; reporting-to-trading FX 1; FY2025 annual sales per share 0.2055500907024291; price multiple 6.908291770377793. FY2025 cash earnings/share 0.0006359753807285601. Closing-price date 2026-10-15.

## Monthly share-price history (AUD per share)

- 2016-10: AUD 0.20 per share

- 2016-11: AUD 0.24 per share

- 2016-12: AUD 0.28 per share

- 2017-01: AUD 0.43 per share

- 2017-02: AUD 0.45 per share

- 2017-03: AUD 0.38 per share

- 2017-04: AUD 0.38 per share

- 2017-05: AUD 0.33 per share

- 2017-06: AUD 0.25 per share

- 2017-07: AUD 0.26 per share

- 2017-08: AUD 0.22 per share

- 2017-09: AUD 0.21 per share

- 2017-10: AUD 0.21 per share

- 2017-11: AUD 0.19 per share

- 2017-12: AUD 0.19 per share

- 2018-01: AUD 0.23 per share

- 2018-02: AUD 0.26 per share

- 2018-03: AUD 0.23 per share

- 2018-04: AUD 0.21 per share

- 2018-05: AUD 0.20 per share

- 2018-06: AUD 0.22 per share

- 2018-07: AUD 0.17 per share

- 2018-08: AUD 0.17 per share

- 2018-09: AUD 0.17 per share

- 2018-10: AUD 0.16 per share

- 2018-11: AUD 0.13 per share

- 2018-12: AUD 0.19 per share

- 2019-01: AUD 0.15 per share

- 2019-02: AUD 0.11 per share

- 2019-03: AUD 0.11 per share

- 2019-04: AUD 0.13 per share

- 2019-05: AUD 0.15 per share

- 2019-06: AUD 0.14 per share

- 2019-07: AUD 0.30 per share

- 2019-08: AUD 0.28 per share

- 2019-09: AUD 0.37 per share

- 2019-10: AUD 0.38 per share

- 2019-11: AUD 0.30 per share

- 2019-12: AUD 0.28 per share

- 2020-01: AUD 0.23 per share

- 2020-02: AUD 0.15 per share

- 2020-03: AUD 0.10 per share

- 2020-04: AUD 0.11 per share

- 2020-05: AUD 0.14 per share

- 2020-06: AUD 0.12 per share

- 2020-07: AUD 0.15 per share

- 2020-08: AUD 0.15 per share

- 2020-09: AUD 0.20 per share

- 2020-10: AUD 0.18 per share

- 2020-11: AUD 0.19 per share

- 2020-12: AUD 0.17 per share

- 2021-01: AUD 0.18 per share

- 2021-02: AUD 0.17 per share

- 2021-03: AUD 0.16 per share

- 2021-04: AUD 0.18 per share

- 2021-05: AUD 0.17 per share

- 2021-06: AUD 0.15 per share

- 2021-07: AUD 0.18 per share

- 2021-08: AUD 0.21 per share

- 2021-09: AUD 0.18 per share

- 2021-10: AUD 0.17 per share

- 2021-11: AUD 0.18 per share

- 2021-12: AUD 0.18 per share

- 2022-01: AUD 0.17 per share

- 2022-02: AUD 0.17 per share

- 2022-03: AUD 0.20 per share

- 2022-04: AUD 0.26 per share

- 2022-05: AUD 0.22 per share

- 2022-06: AUD 0.20 per share

- 2022-07: AUD 0.19 per share

- 2022-08: AUD 0.17 per share

- 2022-09: AUD 0.17 per share

- 2022-10: AUD 0.20 per share

- 2022-11: AUD 0.20 per share

- 2022-12: AUD 0.22 per share

- 2023-01: AUD 0.36 per share

- 2023-02: AUD 0.36 per share

- 2023-03: AUD 0.31 per share

- 2023-04: AUD 0.30 per share

- 2023-05: AUD 0.27 per share

- 2023-06: AUD 0.23 per share

- 2023-07: AUD 0.31 per share

- 2023-08: AUD 0.30 per share

- 2023-09: AUD 0.28 per share

- 2023-10: AUD 0.27 per share

- 2023-11: AUD 0.31 per share

- 2023-12: AUD 0.37 per share

- 2024-01: AUD 0.49 per share

- 2024-02: AUD 0.69 per share

- 2024-03: AUD 0.74 per share

- 2024-04: AUD 0.83 per share

- 2024-05: AUD 1.13 per share

- 2024-06: AUD 1.72 per share

- 2024-07: AUD 1.39 per share

- 2024-08: AUD 1.33 per share

- 2024-09: AUD 1.37 per share

- 2024-10: AUD 0.96 per share

- 2024-11: AUD 0.78 per share

- 2024-12: AUD 0.77 per share

- 2025-01: AUD 0.67 per share

- 2025-02: AUD 0.77 per share

- 2025-03: AUD 0.91 per share

- 2025-04: AUD 1.34 per share

- 2025-05: AUD 1.32 per share

- 2025-06: AUD 2.28 per share

- 2025-07: AUD 3.75 per share

- 2025-08: AUD 3.30 per share

- 2025-09: AUD 4.66 per share

- 2025-10: AUD 3.83 per share

- 2025-11: AUD 1.98 per share

- 2025-12: AUD 3.08 per share

- 2026-01: AUD 3.32 per share

- 2026-02: AUD 3.62 per share

- 2026-03: AUD 3.81 per share

- 2026-04: AUD 3.54 per share

- 2026-05: AUD 3.39 per share

- 2026-06: AUD 2.42 per share

- 2026-07: AUD 1.70 per share

- 2026-08: AUD 1.77 per share

- 2026-09: AUD 1.70 per share

- 2026-10: AUD 1.53 per share

## Annual estimated value (AUD per share)

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.