I hope your estimates are right. (this one is my biggest ASX Small Cap investments IRL).

The core of my hypothesis actually rests on them growing a meaningful SaaS / subscription revenue over time. Which isn't quite there yet:

• Looking at some of the prior years reports, while the subscription growth looks really solid, as a percentage of the prior year’s HW revenue it looks to be in the single digits (eg. 4 to 5%). I took numbers from Note 3 of the financial statements and offset by a year to try and get a proxy for Annual Recurring Revenue to allow for some time for the HW to have shipped and hopefully a year worth of subscription revenue to be recognised … not perfect by a proxy).
• I recognise that some of the orders may have multi-year subscription arrangements so DRO can’t recognise this yet as revenue as it needs to be deferred (but I wasn't sure how to fully interpret the deferred revenue in the notes to their latest Half Yearly report) as while the recognised Subscription revenue grew substantially (140K -> 663K YoY), the amount of deferred subscription services didn't. That tells me they have probably been selling a lot of guns and not enough of the other things recently.

• A number of the DRO announcements (eg. Capital Raising Presentation, 11m order announcements) are all talking about increasing SaaS revenue and large subscription components and I think Oleg mentioned he sees this being half their revenue in 5 years time. 

• I appreciate that a number of the product lines may be more HW centric (eg. Drone Guns, RF Patrol, Drone sentry X and Drone Sentry) and that much of the subscription revenue might come from RF-AI and Drone Sentry C2 and OptID (which seem like they are a little bit more recent in the product lifecycle)

In correspondence with the company when I was deciding whether to participate in the SPP they indicated that the SaaS was only started as an offering in the previous two years and they felt "it was still too early to introduce a specific measure for it". I'm hoping that this changes soon given the statement is now out there that they see "50% of revenue coming from SaaS". I believe you get what you measure and note that the latest

DISC: Held IRL and Strawman