Announcement

The Good

• Although cash receipts from sales were down compared to the previous quarter, this has been offset by the receipt of a $2.5m government grant and cash receipts of $17.3m in October which is setting up Q4 to be significant for the company. 

• Staff growth sounds like it is largely complete for now, given the move to the larger facility before the end of the year, other ongoing expenses are likely to rise.
• Reported pipeline has now increased to $400m which are double the previously reported figure of $200m. This indicates that the market tailwinds are continuing to improve

• Order backlog reduced to $51m.
• New products launched over the quarter. Hard to identify specific impacts, but new products are a sign that Droneshield are trying to stay up to date in a rapidly evolving segment. 

The Not So Good

• Blending of YTD and Q3 numbers in the quarterly update. The developments in October are worth mentioning but lack consistency.

• Operating cashflow continues to fall, however this is mostly due to costs from increasing inventory and order fulfilment. Other operating expenses are starting to level out.

Watch Status: 

What To Watch

• With a increase to the cash position of $12.8m since the end of Q3 and a current operating cash burn for the year of $11.4m and significant payments scheduled in November, Droneshield could be on track to be operating cash flow positive for the full year.
• Completion of move to new facility by end of the year and how this impacts the speed of order fulfilment.
• Planned US Federal roll-out of body worn devices
• Air Service Australia C-UAS rollout - 29 Airport contract to be awarded
• European framework agreement for 24/25 rollout ($30m+)
• Start of JCO US DoD rollout. Still no indication of when this will start. (Carried over from previous quarter)
• Revenue at the end of Q3 was $39.3m. Oleg has previously indicated that this could be in the range of $70m for the full year.