Shares of Australian drone defense firm DroneShield fell 9.4% to A$1.768 on Wednesday, erasing gains from a record first-half revenue surge amid a steep deterioration in profitability.
The company reported A$125.8 million in revenue for the six months ended June 30, up 74% year-over-year and marking a record for the period. Recurring revenue also jumped 229% to A$11.5 million, reflecting expanding contract-based business. However, these gains were outweighed by a sharp decline in earnings metrics.
Underlying EBITDA swung to a loss of A$12.4 million from a profit of A$8.0 million in the prior-year period, while statutory net loss after tax widened to A$32.2 million from a A$2.1 million profit. The company attributed the decline to elevated operational costs and investment in growth initiatives, which pressured margins despite revenue growth.
Market reaction reflected concerns over profitability, with the stock facing additional pressure from a short interest of 15.7% at the start of the session—the highest among ASX-listed companies. The broader ASX 200 index posted modest gains, contrasting with DroneShield’s decline.
Analysts noted that while revenue growth was robust, the magnitude of the earnings miss exceeded expectations, compounding pre-existing bearish sentiment in the stock.
