Electro Optic Systems (EOS) H2 2025 earnings summary

Executive summary

• Revenue for 2025 was AUD 128.5 million, down 27% from 2024 due to divestments and lower Defence activity.

• Gross margin improved to 63%, reflecting contract mix, operational improvements, and contract finalisation.

• Underlying EBITDA was a loss of AUD 24.4 million, mainly due to lower revenue and higher operating expenses.

• Order intake surged to AUD 420 million (18 contracts), boosting the unconditional order book to AUD 459 million, up 238%.

• Strategic focus on counter-drone and space control/warfare, with significant investments in sales, technology, and geographic expansion, including the acquisition of MARSS.

Financial highlights

• Revenue: AUD 128.5 million, down year-over-year due to divestments and delayed orders.

• Gross margin: 63%, up from prior years, driven by contract mix and operational improvements.

• Underlying EBITDA: -AUD 24.4 million; EBIT impacted by higher depreciation/amortization and AUD 9 million in non-recurring items.

• Net profit after tax was AUD 17.5 million, including a AUD 91 million gain from the sale of EM Solutions.

• Cash at year-end: AUD 107 million; all debt repaid in January 2025; $100m term loan facility undrawn and being finalised.

Outlook and guidance

• Targeting realization of 40%-50% of the AUD 459 million order book as revenue in 2026 (AUD 180–230 million).

• Additional revenue expected from new orders, with revenue likely weighted to the second half of 2026.

• No formal revenue or CapEx guidance issued; CapEx historically under AUD 20 million, mostly customer-funded.

• Continued investment in product development and geographic expansion, especially in Europe, Middle East, and the US.

• Ongoing discussions for additional HELW contracts in multiple countries.