Drone tech developer DroneShield [ASX:DRO] released its September quarter results, ending the period with a bank balance of $7.5 million.
DroneShield said it reported a positive operating cashflow quarter, with customer receipts totalling $3.6 million.
DRO shares were up 6% in late afternoon trade but are down 20% over the past six months.
Source: tradingview.com
DroneShield’s September quarter
DroneShield reported a positive operating cashflow quarter in September, with multiple ‘larger sized contracts’ received, including a $2 million European DroneSentry order and a $1.8 million US Department of Defence DroneGun order.
DRO reported the second-highest cash receipt quarter of $5.6 million, up 103% on 2Q22.
However, that figure included government grants and tax incentives of $2 million.
Actual customer receipts for the quarter came in at $3.6 million.
If you remove the government grants, DRO ends the quarter with a negative operating cash flow of about $1 million.
Looking forward, DRO said it has a $50 million sales pipeline for the remainder of 2022.
A further $180 million is slated for ‘2023 onwards’.
DroneShield did caution that these sales pipeline figures are not definitive, ‘there is no assurance that any of the company’s sales opportunities will result in sales.’
DRO said it will steer its sales pipeline towards US and Australian government customers.
Right now, more than 75% of the firm’s revenues come from defence and 15% from the intelligence community.
But DRO said there is a ‘major opportunity for continued expansion into other markets including civilian airports, prisons, stadiums, and corporates’.
Source: DRO
Australian Highlights:
- Dro is on target with $3.8 million received from its two-year electronic warfare contract with the Australian Department of Defence (DoD) that ends mid-2023
- An $800,000 one-year contract for AI services ends in 2022
- Opportunities to extend DoD contracts arising across sub-sectors
- Launching a testing facility in NSW to drive further Australian sales
- Conversations in progress to adopt Counterdrones in Defence
US Highlights:
- $1.8 million US Defence order for its DroneGun MKIII units, the largest US sale to date
- Its US civilian airport drone deployment dispatched and opened for further sales of this nature
- Acquisition plans with varied US Governments
- Further demos and events planned for US Government
Europe Highlights:
- Drone highlighted that the situation in Ukraine suggests further dispatching of Counterdrone equipment to Ukraine since the start of the war
- $2 million European order for its DroneSentry systems as European Governments tighten their defence systems
- Working with Special Operation Forces in Budapest
In its investor presentation accompanying its September quarter results, DroneShield said many governments are looking to extend their budgets to include Counterdrone software and technology.
Even Australia’s own government is looking to increase its defence against drone attack.
From drone tech to fintech
Now, let’s switch from drone tech to fintech.
The fintech sector has been hit hard lately, as the market punished many fintech stocks for their growth at all costs strategy in a tightening macroeconomic environment.
In the current climate, investors are prioritising companies with profitability firmly in sight, if not there already.
Investors want their stocks to preserve and not incinerate capital.
That said, with the right choices, some fintechs can grow into very sturdy, lucrative businesses.
Our market expert Ryan Clarkson-Ledward has done the necessary research required for discerning these.
He’s discovered three profitable fintech stocks flying under the radar. One of them, he says, is a start-up ‘wrestling with the big banks — and winning’.
Download Ryan’s free research report on three exciting fintechs here.
Regards,
Kiryll Prakapenka,
For Money Morning
