Who is our Director of Investor Relations and Strategy. It is an absolute pleasure to be speaking with you this morning.

I am really excited to present our first half results. There is plenty to talk about, so let us just jump in.

We are going to cover an overview of the first half, the highlights. We are going to speak a lot about the growth platform that we are building and provide some sentiment outlook information for our investor community.

We will also conduct a Q&A at the end of this presentation. The first half has been an incredibly transformative time for the business.

We have both simultaneously improved our governance systems, uplifted the organization, invested in ERP systems, and provided a phenomenal new production facility for our expanded growth. Meanwhile, we have also achieved record revenues.

Simultaneously, the continued growth of the business in all aspects has been very strong. A number of our core objectives, both the overall revenue growth, but also the recurring nature of that revenue growth, has increased substantially.

We are now sitting at 9.2% recurring revenue for the first half, and that is almost 3x where we were last year. Again, it is important to understand that for every device that we sell, there is a hardware cost.

As that builds up, the software is of a recurring nature, and so that recurring revenue number will continue to build, as we have more devices in the field. We have over 4,000 devices now around the world.

What is really exciting, and what I am really proud of the team, particularly in the last couple of weeks, we have now achieved a committed revenue number of AUD 240 million. That is up substantially on the trading update we released to the market only a couple of weeks ago, which was only at AUD 206 million.

So it has been a great couple of weeks for DroneShield, and we will look to continue that momentum well into the second half. I think what is also a great achievement for this organization, we had a record year last year of AUD 216 million.

We now well surpassed that number for committed revenue for 2026. Overall, I am very pleased with both the continued revenue growth, but also the growth of the organization and building our platform as we move forward into this really significant market opportunity.

One thing I would like to touch on is our gross margin. It was slightly down on where we would like it to be, which has been widely reported at 65%.

We feel strongly that we can return to that 65% number through the remainder of the year and moving forward. What that depression in that margin was around the product sales mix.

As many of you know, we sell both our products as well as interoperable third-party solutions, which have a lower margin, which we sold a significant amount of in the first half. Also, due to our ERP implementation and our significant warehouse move, we had a product impairment that we took in the first half, which lowered the overall number in the first half.

Again, we feel confident that we can have that number rise in the second half closer to where we want it to be in the mid-60s. The balance sheet remains strong.

AUD 180 million cash and term deposits, no debt, and we have invested heavily in long lead items, including things like CPO and chips that we need for our next generation AI edge deployed sensors. The revenue outlook, I was very pleased to be able to provide a revenue guidance for the first time in the company's history only a couple of weeks ago at AUD 250 million-AUD 270 million.

This represents 15%-25% increase on that record year last year, and we have now reaffirmed that number. We will continue to provide updates to the market when we need to should that change.

But right now, we are comfortable with that range. A few comments from myself.

This was certainly an investment-heavy period for us, bringing online our next generation platforms, improving the governance controls and systems across the organization. We decided to spend these six months, four and a half of which I was the CEO, to uplift for the ongoing growth of the business.

We have done that now, and we will now look to continue to optimize the business and drive the growth platform forward. The foundations are very much set, not only the systems and processes we have spoken about, but the leadership team and everything that we are doing to make sure that globally, we are scaling the organization.

I feel strongly that we have laid a lot of the great foundations in this first half, and we will continue to execute in the second half of 2026 and well into 2027. We are doing all of this because of the opportunity we see in front of this.

The doctrine has very much shifted. Counter-UAS or Counter-UxS solutions are now front and center in the media every day.

Drone technology is fundamentally reshaping defense and security as we know it. The doctrine has completely shifted.

The world understands now that there is no silver bullet to this, and only the most competitive solutions will win. Our intention is to make sure DroneShield will always have the most competitive solutions.

What has been really interesting is we have thought about and spoke about the idea that eventually there will be a market outside of the military. Over the last 10 years, primarily the only major customer base for us has been defense.

That changed in this half. We have now seen huge demand and lots of engagement well outside the defense industry, from everything from government to security teams, data centers, critical infrastructure providers, correctional facilities, and even some use cases that surprise to us where drones are causing real issues in the day-to-day industry and people's lives.

The threat continues to evolve and continues to expand in the market need, and that is a really exciting thing, specifically for DroneShield, which is one of the only Counter-UAS companies that has a true dual-use strategy. What I mean by that is our technology is as applicable to the military domain as it is to this emerging non-military market, which is really exciting.

One thing that we have struggled with over the last 10 years is the budgets that were assigned to solve the Counter-UAS problem. It has been a very nascent industry for a long time.

As many of you know, DroneShield was really early, one of the original pioneers of this industry. What is exciting to see now is budgets are becoming structural.

We can now have line of sight to where world governments and world militaries, as well as large organizations, are budgeting for Counter-UAS solutions over the next five years. That is giving us greater insight into the pipeline, greater insight into the size and shape of the market moving forward.

This has only, again, happened in the first half of this year. Let's move through some of the highlights.

Revenue up really significantly, 74% on the first half of 2025, which was that record outstanding year for us. We have again beaten those numbers quite convincingly.

Really proud of the whole team working together to achieve that recurring revenue, which provides the sustainability for the business, up significantly. Certainly coming from a low base, but again, something we will continue to drive forward with a number of devices, but also some product mix changes that we will make throughout the second half of this year and well into 2027.

Gross margin, I believe we have touched on. Again, our strategy is set, and we believe that we can return to closer to a 65% gross margin moving forward.

Absolutely, this was a period of significant investment, and that is what has contributed to the underlying EBITDA stats you see there. But we feel strongly in the future of this business, and it is up to us to make sure that our solutions are world leading and absolutely the most competitive they can be.

The committed revenue number is really exciting. To be sitting here at the end of August with already AUD 240 million, just slightly over that, committed in the books is really, really encouraging.

One thing I would comment here is the market and many of our investors are used to seeing lots of individual contract updates from us that previously were over AUD 5 million. What we are seeing now is a change in the market.

I think this is really important to understand. You are going to probably hear from us less as our announcement threshold is now AUD 20 million.

But as you can see with the committed revenue numbers later in this presentation, the consistency, the repeated nature of the orders that we are receiving from repeat customers as well as new customers just continues to roll in the door week after week. It is really great to see.

For me, that is a much more sustainable long-term high-growth business. Cash.

We absolutely utilized our cash position this half to invest in that working capital, R&D, and our team. It is really important we do remain debt-free.

We have no debt currently on the books. I am going to hand to Josh now, who is going to talk about some of the exciting numbers when it comes to our revenue contribution.

Thanks, Angus. The first half revenue segments really demonstrate that DroneShield is continuing to be more diversified across region, type, and segment.

Starting with the regions, the call-outs here are that Europe and the U.K. continues to be our strongest region, with 52% of revenue.

This reflects that strong reorder activity and the scope expansions which have come from existing and new end users. In the half, we opened our regional headquarters in Amsterdam as well as in-region production, showing our commitment to that important core market.

We were also very pleased with the growth coming out of the United States, where this time for 2025, that was 14%, that is now at 17%, and we can firmly see a track for that to being stronger with the committed revenue we have. Some of that growth out of the U.S.

is coming from the multi-agency procurement mechanisms, such as JIATF-401, where they recently launched an online ordering portal, and we were one of the first providers in that portal. The diversification sees the balance of our business coming from LATAM, Middle East, North Africa, and Asia Pacific.

We have really good engagement and promising opportunities across all of these markets, and continue to build, particularly with the next-generation product discussions. Importantly, demand is increasingly global, and we are now operating in well over 40.

We have products in well over 40 countries, on the edge of 50, as well as representation in 70+ countries. By revenue type, we are heavily still anchored towards the hardware.

But with subscriptions representing 9% of revenue up from 5% across all of last year, that is a dramatic shift because it shows that hardware wins the deal, but software provides the long-term value to the end user, as they rely on the software upgrades, the AI-enabled part of the product to keep them up to date with the latest in drone threats. Counter-drone is not a static solution.

We currently have 4,100 software-enabled units. That will be an important metric to track over time, as it has a direct impact on our broader aspirations for recurring revenue to be a major feature in our future revenue.

Alongside our existing hardware lineup, the next generation products will help compound the value as there are more devices in the field. By segment, military is still the largest contributor.

However, to be able to report that the non-military segment, which includes commercial activities, is already at 15%, and this is from a negligible amount about a year ago. It is a very positive outcome.

We are the only scaled operator who can provide product from the battlefield through to the suburbs. While the headlines and awareness is there in Ukraine and Middle East conflict zones, every day we are hearing about drone-related issues at airports, critical infrastructure, prisons, public safety venues, and other major events, such as our work at the Kansas City Police Department and the FIFA World Cup sites around Kansas City.

I would encourage everyone to look at the case study of this on page 28 of the pack, as this is just one situation where airspace awareness is critical in non-military settings. Turning now to our revenue outlook.

As Angus noted, committed revenue is at AUD 240 million, and this includes AUD 126 million, of which was delivered in the first half. This slide provides clear evidence behind our outlook for the AUD 250 million-AUD 270 million of revenue for the year and our ability to reaffirm this guidance.

The growth in committed revenue through the year reflects a solid run rate through repeat reorder and expansion orders from existing end users. This is an important point.

DroneShield is not only winning new opportunities, it is seeing customers expand scope as operational needs evolve. We are sometimes asked what proportion of our orders come from existing end users, and that can be a tricky question to answer.

For example, if we are working with a national defense force, is each area of that defense force considered part of the same or a unique end user? In our case, we would say that it is an existing end user.

While we also know that big headline material contracts get a lot of attention, there is a very clear pattern of healthy and regular reorders that flow through without fanfare, and this is plotted out in this chart here. With more than four months of the year still to run, AUD 240 million is 36% above the prior corresponding period and represents 111% of the total revenue of last year.

As we have previously said in notes to the market, some of the orders that continue to build through the balance of this year, particularly some of the more complicated orders which have interoperable systems with third parties, will take slightly longer to deliver, and will more likely start building into committed revenue for 2027. What we have provided as a guidance is based on what we can see, based on the conversations we are up to, and where new conversations commence.

It does not mean that we will not necessarily secure those in the next few months, but it is possible that those may fill into next year. On that basis, we are already at committed revenue for 2027 and beyond of AUD 43 million.

Again, this is consistent with the move from urgent purchases to more programmatic and budgeted counter-drone procurement. On the revenue growth more generally.

Over the last five years, DroneShield has delivered a cumulative average growth rate of 113% between 2021 and 2025. This is clearly from a very low starting base and over a period where awareness and funding for counter-drone capability has accelerated profoundly.

However, the observation we would make is that DroneShield has historically invested ahead of this demand, and there are signs of that in the company's history when there have been more modest periods of growth. Periods of meaningful R&D investment precede revenue step changes.

This is a pattern we see as continuing, especially as we bring on board our next generation products to the market. That is where we are today.

Starting with RfAI-3 and RfRecon, there is a major rollout of our next generation solutions from now till the end of 2027. I know Angus will delve into that more shortly.

Finally, the recurring revenue line shows DroneShield's growth is not simply a function of one-off hardware demand. It is being driven by structural market adoption, product evolution, software-enabled AI intelligent devices, and an expanding installed base that supports future recurring revenue opportunities.

We also recognize that there has been an increase in the cost base. H1 2026 was a deliberate investment period as we continue to build the operating platform required to run this business now and well into the future.

For context, on this slide, we have shown four major expense categories from within our P&L. With each, the black bar represents the six months to June 2025.

The orange is the growth to the current period, with a slightly lighter orange, what we consider to be individually significant items as discussed in the appendix. This leads us to the gray bars, which show the six months to June 2026, the period we have just reported.

Within that, the dotted lighter gray section is the comparison to the six months to December 2025. The reason is that in some cases, those costs which we have reported for this half are actually more in line with where they were for the December half that has just been completed prior to this one.

In the case of employee benefits, this is a material increase reflecting the growth in the headcount to 537 employees as at 30 June, compared with 332 last June and 482 at the end of last year. This increase reflects sales, technology, operations, and corporate support capability, as well as recruitment costs and very senior hires.

There is no doubt that we have to put more people in this business ahead of this next stage of growth, and particularly at more experienced levels. This organizational maturity is both necessary and deliberate.

While we are likely to see selected headcount growth in some areas of the business, we are being far more considered in how and where we add people. For example, we know that additions in our sales functions will be a priority in the near term.

At the end of last year, in the current period, we saw an increase in our sales and marketing costs ahead of our next generation product releases. The emphasis in the second half shifts toward more targeted customer acquisition and the channel activation, so we should see a moderation in these costs.

Corporate and professional costs are also increased with added governance, legal and finance, and specialist support functions needed for our scale. Again, this is by design and critical as we continue to grow.

Finally, business systems costs reflect the implementation of the new ERP and sales systems. These are the lighter orange box.

The AUD 3 million is the implementation costs of those. It is very clear that these systems are already providing operational benefits and process benefits across sales, procurement, productions, and finance.

On balance, the company has increased operating expenses to support the scale. Much of this is needed, and it is better to have this in place now rather than later.

However, equally, the focus has shifted on disciplined management of these costs. With a healthy delivery of revenue, the operating leverage of that largely relatively fixed cost base will bring profitability back to the bottom line.

To drive this point home, operating leverage means that, for example, another AUD 50 million of revenue at a 65% gross margin will bring a faster delivery of that AUD 32.5 million of gross profit to the bottom line quicker. Thanks, Angus.

Thank you, Josh. I think that's a great summary of some of the critical investments we made in the first half of this year.

Even with those, our cash and term deposits remain strong. We've increased our inventory.

As many of our investors would know, around the world, hardware, chips, memory, software-defined radios are critical line items for many industries and many sectors now. We've had to strategically invest in those with our supply chain partners.

One thing I'm incredibly proud of at DroneShield is that in the last 10 years, we have never missed a delivery. That's something we'll continue to strive towards and maintain, even as the numbers grow in terms of size and complexity.

The way we do this is investing ahead of time, making sure that we have the chips, the memory, the GPUs, and the software-defined radios ready to go, to put into production. We've also slightly increased our research and development team ahead of our next generation product releases.

As has been widely reported, we've also looked at our governance and the maturity of the business. We only have to go back a couple of years.

This business was not even inside the ASX 300, and was producing significantly less revenue than it is today. We have now focused fully on this in the first half, bringing on our new chair, Hamish McLennan, who we've been working with incredibly closely, and retired Rear Admiral Lee Goddard has joined the board recently.

This represents a major governance uplift, and we'll continue to do this in the second half of 2026. We continue to invest in our people and our systems.

As Josh mentioned, an ERP system, as well as a CRM, allow us to make better decisions when it comes to inventory planning and capital allocation. These things, due to the startup nature of the business for many years, were not fully in place, and I'm really pleased to say they are now.

We've also been looking at our governance policies and raising our standards across the board, in terms of our policies and procedures. While these are not as exciting as some of the revenue numbers we've spoken about earlier, I think it's just as critical that our investment community understand that this business is maturing at an incredibly rapid pace, again, ahead of this next stage of growth.

Let's talk about that growth platform. We've mentioned before that there's no silver bullet for counter-drone, and that is something that we realized many years ago and started building our DroneSentry-C2 ecosystem.

What remains still very much the case is that radio frequency detection and defeat technologies remain at the forefront and are often the first products that our end users look to acquire and deploy to counter the drone threats that they have. Why is that?

RF detection and defeat solutions are arguably the most capable solutions that provide coverage for the most amount of drones within a product format that is easily deployable, easily trained upon, and incredibly effective, as well as cost-effective. This is not changing.

We look at the next generation of drones and swarm technology, as well as man-to-machine teaming technologies that are being developed. All of these require radio links.

We only have to look at some of our great peers in the ASX, like Elsight and Codan, who create some of the radio links that are being used in these next generation of drones to see the significant increase in these radio links. The good news for DroneShield is that's exactly the type of things that we work on and we target.

As those radio links proliferate, our technology is even more in demand to make sure we can detect and track these types of communications. Our C2 remains a core part of our strategy as we integrate additional sensors and effectors in layers three, four and five.

This continues to be a really positive strategy, winning some significant contracts, such as the JIATF-401 contract we announced in the previous period. We'll continue to work with partners, and you'll see some additional exciting partnership announcements from us in the next several months when it comes to our partnership ecosystem.

As many of you know, I have devoted the better part of my working life to the counter-drone mission. Starting very early at this business, we have tracked this industry day in, day out, and it is really encouraging, as the organization matures, to see this industry becoming much more structural, less one-off, and more reliable.

The technology we deploy is now in high demand around the world. I'm looking forward to, in the second half of this year, completing trips to both Europe and the U.S., as well as core markets such as Asia Pacific, where we're seeing huge demand, and to engage with our channel partners as well as our end customers around the world.

There's a lot to do and many conversations to have in the second half of this year. It's really exciting to see that the Counter-UAS issue is now very much a standard issue for militaries as well as security and law enforcement agencies around the world, and DroneShield is incredibly well-positioned with both our technology, but as well as our partner network around the world to provide that capability.

I'm incredibly excited about our next-generation platforms. Some of these technologies and solutions, we started talking about over six years ago.

RfAI-3 was something that we started working on over 3.5 years ago and has culminated in the launch of RfRecon, which is the first of our true next-generation detection platforms. I still don't think it's fully understood the level of technology and complexity that we've built into this platform.

Most software-defined detection systems are banded, meaning they can scan individual portions of the radio frequency spectrum. The RfRecon can scan from 100 MHz all the way through to 7.125 GHz fully continuously.

This is a huge achievement and a core part of our ultra-wideband technology that we've built over the last 3.5 years. Not only that, with the launch of RfAI-3, which is our next-generation RfAI model, our solutions can detect drones they have never seen before.

That's really easy to say and almost impossible to do. Only this week, we saw the latest of that model, which has not been released to the market yet, doing some other incredible technology aspects, including detecting new emitters and promoting those, classifying those based on the behavior of the emitter, not just the underlying data that it was seeing.

This is incredible technology that I'm incredibly proud of DroneShield for pioneering. We continue to build on those platforms.

The second half of 2026 for us is about producing the production and scaling those solutions as well as generating revenue. We do look forward to announcing our first sale of the next-generation platforms shortly.

Again, really excited and lots of great customer conversations happening around those platforms every day. As Josh mentioned earlier, by the end of 2027, we expect to have our entire product suite fully refreshed with next-generation hardware built on our ultra-wideband technology, underpinned by RfAI-3 with some of the best hardware we've ever put together.

All of this is supported by our software and our recurring revenue streams. We get asked often about the competitive landscape and what are the moats around the business.

I've never been more comfortable with our competitive moats around the business and our position in the competitive landscape. We would arguably have more hardware devices in the field than almost any other provider in our category, with over 6,200 devices around the world.

That's a lot of experience building a lot of hardware at scale, and that really counts when it comes to reliability and performance over time. The hardware that we build is incredibly intricate and complex in nature, and there's a real competitive moat around just building the hardware part of our business.

Secondly, the second moat around our business is our AI-driven software. We have a unique environment of engineering here, where we have engineers capable of understanding the radio frequency spectrum, deep software experience, as well as some of the leading AI engineers from across Australia.

We also have 10 years of proprietary threat data that all this is built on. Again, this is not data that you can go online and scrape off the web.

This is data that is hard-fought and hard-earned that we've recorded from around the world over a decade. That's the second moat around the business.

The last moat that we have is the trust in our brand, the trust in our solutions that are deployed every day in safety and life-critical operations. We now sell to just under 50 countries, and we look forward to hitting that 50 mark hopefully soon.

But just under 50 countries, we're deploying our solutions every day around the world. Josh?

Thanks, Angus. We get a lot of questions around the broader thematics across funding and other aspects of the counter-drone industry.

It's clear that governments and alliances around the world are increasingly acknowledging the drone threat by unlocking funding procurement channels and the regulatory gates needed to implement counter-drone measures. In the U.S., which is the world's largest military-spending nation, the budgets are getting bigger and bigger.

The call-out here, as I mentioned earlier, is the JIATF-401 counter-drone marketplace platform, and already there's $900 million committed for 2026 to that platform in terms of their spending allocation. DroneShield was one of the first companies to have the products on the platform, which is an important validation point of the work we've been doing with them over some time.

We see procurement portals where end users can fill their cart with direct counter-drone solutions for quick delivery as more evidence of the reorder, uporder, and expansion order approaches that have been a feature of our committed revenue development over the year. Again, we would call out the implications of the SAFER SKIES Act, which opens up the counter-drone access for 17,500 local and state law enforcement agencies with FIFA World Cup 2026 providing a useful operational case study of this.

Europe and the U.K. remain highly significant, with NATO commitment referencing at $40 billion for counter-drone over the next five years, and the U.K.

putting GBP 790 million towards integrated air drone and missile defense systems. This region, obviously, is DroneShield's fastest-growing revenue contributor at the moment and remains an area of opportunity.

On that, we have previously made mention of a major European opportunity. Today, we are sharing a very disciplined message.

It remains the largest program in DroneShield's sales opportunity pipeline. We will refer to this as the COBBS-Anduril-Nokia consortium.

Down selection is expected in the second half of this year. To protect sovereign, commercial, and competitive sensitivities, we will be making a deliberate decision to reduce the commentary on this terminology, and we will provide the market with appropriate updates when appropriate.

In Asia-Pacific, counter-drone capability is increasingly discussed in the context of protecting crowded spaces, vulnerable targets, and critical infrastructure. In Australia, we have seen approximately AUD 1.5 billion earmarked for counter-drone, as well as clearly reported needs based on recent coverage.

On the commercial side of the market, and I just see questions come through on how big is the commercial side of the market, our total addressable market reports on that, which are available on our website, I think last put that number at $28 billion. As we have previously noted, counter-drone is no longer confined to the battlefield.

The numbers on this slide speak for themselves, and it is evident, scarily evident, that drone incidents are escalating across public safety and critical infrastructure and commercial settings. The threat is persistent, geographically widespread, and relevant to both government and commercial operators.

This dynamic creates a broadening set of use cases for DroneShield's detection and awareness solutions. Importantly, DroneShield, I would say, is arguably possibly the only operator in counter-drone space that can service both military and commercial markets.

As regulations funding and real-world case studies developed, our field systems and software-enabled devices provide a part of a multi-layered architecture as we participate in this market.

Thank you, Josh. What are we doing in the second half?

We will deliver on our FY 2026 guidance, which we have reaffirmed this morning. We will look to recover that gross margin trajectory through a combination of our new products being sold, as well as not needing that one-off stock impairment there.

We also look to sell and ship our first RfRecon devices. We are really excited about this as DroneShield's next-generation flagship product moving forward.

We will continue to build on the recurring revenue base. As Josh mentioned before, we are looking to expand our commercial team and really drive that growth engine well into 2026 and 2027.

Some notes again that underpin the thesis behind DroneShield and what we think about often. This is, and you have heard us from this morning, this problem is becoming structural.

We now have visibility into the budgets. Budgets are now being allocated.

Again, this has all happened in the first half of this year, giving us much more confidence that there are numbers behind the demand and where we need to focus our attention. The committed revenue number, I think, is outstanding for this part of the year to be in August with AUD 240 committed revenue, and we will look to continue to aggressively build on that in the second half.

We also move to our platform transition. Moving again to a full product refresh by the end of 2027, underpinned by our next-generation technology, some of which the market has seen, some of which we look forward to announcing through that period.

The balance sheet remains strong, and I am excited about the experienced leadership team that we have driving every day to continue to build this company around the world. With that, we will end the formal part of this presentation, and we look forward to running through some of the Q&A that we have from our investment community.

Thanks, Angus. I will moderate the Q&A, and in some cases, I will answer those and then throw some others to you as well.

We've also received questions in advance, so I appreciate those which have been sent, submitted in advance. Maybe starting at a more local level.

"Is the Australian Defense Establishment buying DroneShield products? Do you think the Australian Defense is paying enough attention to both defensive and offensive drone technology?

As an Australian business, we're incredibly proud, and I'm personally incredibly proud to be providing our capability into our ADF. This is through the LAND 156 program, of which we are part of Line of Effort Two and Line of Effort Three.

We are continuing that, and we've had a lot of engagement with the ADF again in the first half of this year. We've seen, as widely reported in the media, some of the challenges that exist to the ADF in terms of the RAAF Williamtown drone incursions.

I'm not going to speak too much about that as that is an ongoing operational situation. Certainly, DroneShield, I would say, obviously stands ready, and we will continue working with the ADF on this significant issue.

In terms of what Australia's doing in the drone and counter-drone space, there are significant investments upcoming in the Australian defense budget for both drone and counter-drone technology. All I would say there is we look forward to working with our partners in the ADF to provide them with technology, but as well as our information and support in any way.

One thing that's not probably known to many of our investors, but we have a capability agreement with the DSTG, so the scientific arm of Defense, where DroneShield and DSTG have a monthly meeting to discuss the latest intelligence and requirements that we're seeing from around the world from a DroneShield perspective, but also from an Australian perspective through DSTG. So we have deep partnerships into both the commercial, the military, and as well as the scientific arms of the ADF.

Thanks. Moving on to the technology for a second.

There are a few questions around counter-drone more generally, as well as our solutions. So the questions I'll summarize as "Thoughts on drones controlled by fiber or AI-enabled drones or drones which don't see themselves controlled by radio frequency?

The use of sound detection for drones." Maybe that's the first part of it, and I'll wait for the second part.

But if you want to address those parts of it.

Look, certainly there is a lot of technologies when it comes to drones, and something that we talk about often is that you shouldn't think of the drone as the technology, right? The drone is a platform of many different technologies that can be configured and reconfigured.

Many of these technologies are on their own exponential development curves, creating additional challenges for drones. Clearly, DroneShield, we have world-leading RF detection technology and RF jamming technology, particularly with the release of our RfAI-3 engine, which, as I mentioned before, is able to detect drones that it's never seen before and promote those based on the behavior of those emitters into a threat profile for our operators, is technology that I believe that we are pioneering around the world.

Clearly that's a core part of our technology and our strategy. Similarly, we have developed and invested heavily in our DroneSentry-C2 platform, which is our sensor fusion system.

The reality is you need multiple different technologies to detect and deter all the different types of drones that we see now and well into the future. DroneShield, we want to be that integration layer or interoperability layer that allows all those technologies to work together and get the best out of those technologies.

So having one sensor offset the weaknesses and with the strengths of another. This is what our sensor fusion technology is designed to do, and I think we're getting more and more traction with that platform over time.

So look, there'll be different technologies and certainly, we've discussed previously the fiber optic drones we see primarily in the Ukrainian and Russian conflict as one area of technology innovation. Again, our radar technology, our sensor fusion, our interceptor drone platforms, and some of the interesting partnerships we'll announce shortly are designed to deal with those types of threats.

But realistically, what we're focused on is building solutions that are easily operated and deployable today around the world, and that's what we're focused on at scaling the business.

Thanks. I'll give you a bit of a reprieve and I'll—

Sure.

take a few questions. One of the questions which has come in is the current status of the ASIC investigations and when will this investigation be closed?

As we've identified to the market, we're cooperating fully with the investigation being conducted by ASIC, and it's not clear what action, if any, may result from these investigations. As it is an ongoing investigation, it will not be appropriate for us to comment further around their timelines.

We'll obviously update the market when there are developments that we can share. So that's as much as we can say on this today.

There are questions also regarding a note in the accounts regarding a payment as part of a settlement with a member of the key management personnel. This matter is a confidential matter.

It is a settlement which has been reached, where it does not relate to termination, misconduct, impropriety, or any other of those sort of nefarious matters. It is a private matter, which we are not able to explore further.

But we have acknowledged that in the accounts. It is not a matter of remuneration or employee benefit.

We'll close that matter with that context. The other questions which arose were a lot of commentary around, or questions around the share price.

Clearly, we do see the share price. We acknowledge that the share price moves.

Sometimes it can move on no information, and sometimes it can not move on a lot of information. Really what we're trying to do here, and show, is that we have had to make a number of important decisions over the last six months around how we invest in our business in order to support the business for the future of DroneShield.

The future requires us to have a more stabilized base to it across every aspect of it. Whether that's in the production through our new production facility, whether it's in our sales functions by having an Amsterdam office and building up our sales team around the world.

This business has run for over a decade, on a very lean structure. As we see the demand coming from our next generation products, as we see the demand coming from the threat of drones, this is a business that has a very promising future.

But sometimes we do need to reinvest in the base of it in order to support that growth. So we understand that the share price has caused frustration to people.

As a shareholder myself, causes a frustration to me. But we obviously are building a long-term story here.

This does sometimes require a little bit of investment in that period. One of the other conversations is around the impairments and around the We had previously talked about impairments around the inventory earlier in the year.

A large amount of that was in relation to a specific product, which we identified back in, I think it was February. This impairment that we've talked about for this half is more around, as we opened that new production facility, moved the ERP system, identified items that, frankly, when you move house sometimes, you sometimes realize that actually it's not worth moving some of the stuff.

It's raw materials. In this case here, for the six months we've just reported, it's raw materials, it's not finished product.

We really do hope that it's not a recurring feature, which is why we see the confidence in being able to rebuild the gross margin back towards that 65%. That covers that one.

Angus, I'm going to bring something to your attention regarding Ukraine. This does come up a lot.

One is, do we sell to Ukraine? How do we get product sold to Ukraine?

What evidence are we seeing out of that market?

Sure. Ukraine continues to be a core focus for us from an intelligence perspective on the nature of drone warfare.

I would argue that the best drone operators in the world are the Ukrainians, and secondly only by the Russians. Interestingly enough, I would say the third best in the world are some of the drug cartels that exist in South America.

They are utilizing drone technology and some of the tactics and operations that are being refined in the Ukrainian-Russian conflict. It definitely underpins that this is a global problem that is existing.

Ukraine represents, I would say, less than 10% of our revenue. But we do engage with that market specifically for the reason that it is the most real-world and probably most advanced drone warfare that exists.

We do have an in-country partner. We do not have people in the ground ourselves.

We do have a very close in-country partner who was with us recently when we opened up our Amsterdam office. They provide all the servicing of the thousands of devices over the years that we have across Ukraine.

Still very much engaged in that market. Probably less than 10% of our revenue at the moment.

But a critical area of focus from us from an intelligence and as well as just supporting the people of Ukraine.

While we're in sort of that broader part of the world, there's some questions received regarding the European opportunity, which we talked about. One was, what does down selection mean?

The timing beyond that. If we could talk a little bit more about that opportunity.

Sure. I think the color to that, at a macro level, Europe is going through a very significant rearmament phase.

Its industrial base as well as the organizations that are there, I would say, have been under-invested in for many decades. It's exciting to see the different various European nations rearming.

But for us as an Australian business, also outreaching to people like DroneShield to help them with that technological uplift and that rearmament of their protection and defensive technologies. This is the macro environment for Europe for us, and as Josh highlighted with our revenue contributions, continues to drive a lot of the growth that we see, and we're very grateful and thankful to the various European military as well as government agencies around the world who have chosen DroneShield to be their counter-drone partner.

That specific opportunity is at one of the programs under the ReArm 2030 program that is ongoing with significant funding attached to it. A very large portion of that funding for that individual European nation.

The down selection process, as we've touched on, DroneShield has teamed up with Anduril, Cobham, and Nokia in a consortium to go after and bid for that significant opportunity. We feel that those two partners, both particularly, obviously our relationship with Cobham is incredibly strong.

But to be partnered there with Anduril and Nokia, two great technology companies with similar like-minded mindsets when it comes to these issues is a great opportunity. I was pleased to join Anduril and Nokia in the first half of this year to open up the COBBS Battle Lab facility in line with our tender process and our down selection opportunity for this opportunity.

Down selection for us would be essentially reaffirming that our consortium will be one of the smaller group that will pass through that gate, and then have the opportunity to fully engage with the Department of Defense of that country, and go on to tender for that opportunity. So it remains a very significant opportunity.

A lot of funding attached to it. But again, I would like to state that this business is very global, very diversified by product, region, and opportunity, and now by segment as well, with the non-military market very quickly creeping up in terms of the revenue contribution.

So it's not live or die on one opportunity, certainly not anymore. But there's no question that we are putting everything we can behind to be successful in this down-selection process.

Again, we are expecting that down-selection process to be published in the second half of this year, and we will update the market when we hear that.

Thanks. Couple of questions about RfRecon.

I am going to merge them together. One is talking about the actual technology, the hard-to-replicate aspects of it.

So what actually makes it special in the IP or the moat around that? I think more commercially moving to, we have given allusions to strong interest from end users around RfRecon.

That is off the back of some of our pre-launch work with those end users over a number of periods. What needs to happen for those to convert into meaningful orders and the timing around that?

One is the technology, and the next part is the commercialization of the tool.

Thanks, Josh. RfRecon is a platform that we are incredibly proud of.

What makes it hard to build? There is a number of factors.

One of them is we decided about three years ago that we were going to build the next generation platforms on a specific chipset that was not even released to the market yet. We essentially worked very closely with that chip designer, chip manufacturer to line up this next generation product, essentially as that chip was going to be made available to the global market.

DroneShield was one of the first to receive that specific software-defined radio. We were able to launch our platform essentially in line with those chips being available to the market, which puts us at a real competitive edge.

Again, took a lot of planning to execute on. The hardware itself is incredibly complex.

I have spoken before about our ultra-wideband technology that we have developed. This again represents years of research and development, being able to scan the multitudes of frequencies that we now are able to.

I believe will put us in a class of our own when it comes to these next generation solutions. In terms of converting those purchases, historically, we would often say we would release a product, and it would be somewhere between 12 and 18 months before we would see the first sales of that product due to things like the relatively slow nature of military procurement programs.

What we are seeing is as those structural changes flow through, and thankfully for our investment community, we are not anticipating having to wait 12-18 months for the first sales. We do anticipate to make our first sales in the second half of 2026 and build on those sales through 2027 as our new flagship product.

I think we'll continue to update the market as we progress with that product. I would say that it has been in the hands of some of our core end users, as you can imagine, across Europe and the U.S.

Some of those core end users who we have a very close relationship have had early access to the product, and it has already been deployed at a major international defense exercise. Again, there's a lot of secrecy around that, but certainly I can say it has been deployed by one of our customers who's been working with us actually on what their requirements were for that platform.

Really excited about that, and we'll continue to update the market as we need to.

Thanks. A couple of other questions moving to financial matters.

There's a question around further headcount increase in the second half of this year. As I said, as at 30 June, we're around 530 odd, 537 odd people.

We would see that there may be a modest growth in that. I think it's less around targeting what our headcount growth number is, but the composition of that growth.

I think what we've said, as part of our broader commentary, is that we will add people where we need to in certain aspects of the business, but we'll look very carefully about adding for the sake of it. There's always a natural attrition in the business.

Any business of this size, you can expect that there'll be a flow of arrivals and departures. I think our net headcount position, I can't see it growing significantly more than where we are.

Certainly that's not the plan. It's more where those bodies are and where those people are, and I think it's going to be sales and getting the commercial engine going, as Angus talked about, is a priority for this next period.

Also around the cost base. We've previously discussed on calls around our steady-state normalized cost base between gross profit and underlying EBITDA.

It's sitting at around AUD 170 million. I think we're very comfortable based on what we've seen to date, notwithstanding the numbers that we've got in the first half, to say that that number, we're not changing our view around that number.

A steady state, AUD 170 million of OpEx between gross margin and underlying EBITDA remains the number. I think the other question which we get, and this is asked a few different ways, so apologies if your specific question isn't answered directly, but it is around profitability, and obviously cash flow and then leading to dividends.

Our near-term priority is to invest in growth, production capacity, product development systems and people, so we can capture that rapidly growing global market opportunity. We do understand the desire for people for us to return to operating profitability, and that's certainly a near-term goal for us as well.

That being said, we do need to invest in product and tech R&D, and that means that profitability may not necessarily allow for cash flow to use for dividends. Our future dividend policy is obviously a matter for the board, and will depend on the sustainable profitability, but the cash requirements and the best use of cash in the immediate term is around growing the business, particularly in the areas of inventory, and research and development as we get these products to market.

So, at the moment, there is no foreseeable dividend plan based on the current results. The other part of it is around the working capital investment.

As we talked about, the ERP implementation has been a game changer internally. Anecdotally, the calls and the conversations that are going on in this business provide a level of maturity, that possibly it's never had the scale to warrant it, but it's actually never had the opportunity to need it.

That means that when there are calls between sales and procurement and production and financing and logistics, it means that everybody's on the same page. That ERP system is no longer just talking about what do we need to deliver next week or next month or next quarter.

It's actually what are we thinking about in 12 months' time. We've now got a product roadmap which shows us what products we're bringing to market over the next 12+ months.

Where the demand is coming from based on our sales pipeline, which again, we've had questions. Why aren't we talking sales pipeline?

Where's the big multibillion-dollar number? Big multibillion-dollar number still exists within the business, but it is an internal tool for us to manage that business with our team.

The final piece of it is, well, what products do we need? These are long lead time items.

We compete in the global world for some of these items. As Angus talked about, some of the memory and chip and the componentry that we need for the next generation of products, we're buying today, not based on what we need for next month, but really what we need well into the next year.

We often hear other companies in our broader industry talk about these issues, and they're on exactly the same page as what we're doing. We're very comfortable with what we're doing there.

I know you get excited. There's a really broad question, but what do you see as the trends in counter-drone over the next five years?

I've got to be careful here I don't speak for too long. Look, counter-drone and drone technology has, yes, very much become my life and my focus.

The trends, one thing I'm incredibly proud of for DroneShield is we have accurately predicted, I would say, two or three of the major pivots in the technology. We've accurately predicted a lot of where this market would go, and we did that many years before essentially the industry existed.

The predictions I would give to this audience for the next few years will be an increase in software-defined technologies. Again, this is being pioneered by some of our colleagues on the ASX, like Codan with their DTC department.

So software-defined radio technology, being able to change and manipulate those signals essentially live on the fly. That's why we're building the RfAI-3 technology to make sure that we can detect and capture those signals even as they are being manipulated and changed.

Also, an increase in autonomy. We are starting to see that across the board.

A lot of the time you will still require a radio link or some back haul for things like surveillance as well as intelligence capture and delivery. So autonomy is certainly coming into the space, and you will see us continue to pivot our technologies towards being able to deal with those threats.

Again, really challenging technological threats, but we feel very uniquely equipped to go after some of these new challenges in the future. Look, lastly, I would say just increased proliferation.

Essentially, if we wanted to get really macro, the drone technology, uncrewed systems, is essentially eating away almost all parts of the traditional defense and security ecosystems. It is far more capable, drones are far more capable, far more cost-effective, and as well as scalable than deploying many of the traditional military platforms we see around the world today.

One of the things I do feel that is concerning around this is it is becoming significantly cheaper to wage conflict due to these technological change. Not only wage conflict, but certainly disrupt major parts of a country's economic platform, disrupt critical infrastructure, disrupt the economic nature.

This is something we've talking about, for those of you who've seen my seminar on the weapons of mass disruption technology. So yes, this trend is going to increase.

As the world becomes, unfortunately, most likely more geopolitically unstable and drones more than likely will be the core platform that that instability will be proliferated through. Again, while that's a fairly dark outlook on the nature of the world, that is exactly why we come in here every day and we work as hard as we do to build the next generation technologies to make sure that Australia, the U.S., Europe and its allies have the greatest technology to defend ourselves from this increasing threat.

Great. There was a question regarding director ownership.

The directors, while they are not on this line, will be aware of the contents of it. It is a matter which is under discussion by the directors.

They are aware that they are subject to a minimum sharing policy. That policy is on our website available for everyone to see.

There is also a matter that they are from time to time subject to blackout periods. Also certain restrictions which may arise where they are not able to trade as readily.

It is a matter which we are on notice about and the directors are on notice about. They are aware of that.

Sorry, just let me quickly run through a few more there. There is a question regarding the efficacy and the feedback from FIFA World Cup and how that performed.

We have provided good detail around that in the presentation. I think more generally, the FIFA World Cup opportunity is a test case, actually, not just of the use at live events, but it is actually a broader test case.

We referred to SAFER SKIES Act. The Kansas City opportunity and as other World Cup sites through the U.S.

demonstrated, that was only available because of SAFER SKIES Act, which put the power more into the hands of the local and state law enforcement. That means that those 17,500 state and local law enforcement agencies need to be trained by the FBI on counter-drone measures, and they need to go through an accreditation process around that.

There is a facility where our products are there for people to learn on. That is a very important part of this.

The headlines of FIFA obviously are very exciting for multiple reasons. It is not like the equipment gets packed up and goes away into a cupboard and does not get used again.

That is an ongoing contract with Kansas City Police Department, where they will continue to have those solutions available to them in the field. Really the case study is as much obviously for this community, but it is also actually for our end users in that market to understand what can be done.

Often it is not actually necessarily about bringing the drone down. That may be a requirement, but it is actually the situational awareness that it brings.

Taking that situation aside, we are hearing of situations, for example, in bushfire zones where innocent drones are up there just to see what is going on and for locals to see what is going on with a bushfire. Unfortunately, those drones can actually get in the way of the first responders and the fire services who are trying to conduct operations in that field.

I think what we are trying to explain is that there are a multitude of case studies, which is part of why that commercial part of the market is really going to be a very important part of that future revenue. There is a question regarding impediments to being an Australian HQ company.

I think we have managed to do pretty well growing to where we are today from our Sydney base. Importantly, using our partner network and using our reseller network around the world to a very good effect.

We have got a great team of tech, and R&D, and engineers in this office. It is really useful to have them centralized in one place.

I think from a customer perspective, this is a global business. Like many businesses which emanate from Australia, if they were to rely on the Australian market alone, they will be very strong businesses, but not necessarily reach the potential scale.

With the benefit of being Australian-based, we can sell our product to pretty much any Western Allied or Western-aligned country. That provides us representation in over 70 countries, products in almost 50 countries very soon.

At the moment, we're not seeing that as a drag in our business. I do not know, Angus, if you want to talk about that?

Yeah. Look, I think there is also some real competitive advantages as well.

As Josh mentioned, Australia is a very stable, well-regulated country that provides a great opportunity for engineering, development, production, and has got enough high-skilled labor to do what we need to do. Also on the export side, probably 96%, I would say, by the end of the year, export business, as Josh mentioned, very much global business.

We have some advantages. In the U.S., for example, many people do not know this, but Australia is actually exempt from the Buy American Act because of our involvement in the Middle East during the 2000s.

As an Australian business, we're actually exempt from the Buy American Act, and therefore, DroneShield has a much easier pathway to provide those technology and those products into our U.S. allies.

When we move across to Europe, Australia is incredibly well-liked and well-respected on the global stage, and we're seeing that with close partnerships with Belgium, Dutch governments now really supporting the collaboration particularly. We continue to expand our European footprint across through to Poland as well as up into Scandinavia, where Australia is very well respected.

I think Australia is a phenomenal place to build a business. I think we're really proud.

We had a conversation only yesterday, which made me reflect that there is a number of businesses, I would say even potentially dozens of businesses, who are now attempting to build defense technology or deep tech companies in this country because they saw that DroneShield did it over the last decade. That is something that I'm really proud of and we'll look to continue to work with our different companies across Australia.

Also on the manufacturing side, I think it is important to touch on. We're incredibly proud.

One of our products, the RfPatrol, for the production line we run here, has an 85% Australian industry content rating. That is an incredibly high amount for a defense manufactured good.

Just while you mentioned manufacturing, there's a question regarding, we've previously talked about we've now got European manufacturing capability. Question about the U.S.

market. At the moment, I think we're working on the basis that we can certainly procure more items and more componentry towards that.

That's right. We do have our European production line up and running now, and they've successfully produced their first several hundred units in this half.

Additionally, if we look across in the U.S., we've expanded our facility in the U.S., allowing us to do additional quality as well as some of the kitting and support functions that is required in the U.S. We'll continue to grow that part of the assembly and supply chain in the U.S.

to make our operations more efficient in the future. That's something we've talked about before and we'll look to continue to build on as our U.S.

team grow their revenues.

Okay. A couple of quick rapid-fire ones to me.

One is the ERP system live, or are there more investments needed to realize the go-live? It is live.

There are some minor improvements that we're making, but the substantial cost of those has been reported in the first half. Is there a share buyback from management proposed anytime soon?

Again, as commented, the near term is to use cash to help grow the business across the areas we've talked about. More a question around how is DroneShield actually averting the drone after detecting it?

It's more on the defeat capability. That might be for one of our shareholders who's newer to the register.

Maybe if you just want to talk through the two aspects of what we're doing with our product.

The product strategy has been something that we've refined over many years. Where we are now in terms of detection and defeat, I believe the question is.

Where we are now, as may be obvious to many of you, we have started with our next generation product launches. We have started with our next generation detection solution.

That solution, it has ultra-wideband technology, direction finding, and are underpinned by our RfAI-3 platform. That is a very strategic product.

You will see additional products from us in the future on the defeat side towards the end of this year and going into 2027. That is designed again to be an ecosystem play for us to work with the other solutions that we are bringing to market.

There is a lot of interoperability strategy behind our next generation platforms. There is a lot of what will become more obvious as we release those platforms, the sort of jigsaw puzzle that we are putting together over the next, let us say, 12+ months, will become more obvious.

Yes, we do expect to release new defeat platforms, as well as I mentioned, a new technology platform in the next 12+ months.

A question, actually. I will take the question as is, but I will also actually expand on it myself, which is, can DroneShield's technology be applied against ballistic missiles as well as drones?

Obviously, that is maybe a bit far-fetched for what we can do, but I think maybe if you want to talk about where we draw the line or where the line is at the moment.

Absolutely. DroneShield, we have, again, been very strategic in focusing on what we are good at, which is everything from the really small FPV drones.

These are the ultra-fast, 100 km-200 km an hour, first-person, small drones that, as been widely reported, are actually now the leading casualty causer across both the Russian and Ukrainian sides. These are the things that are doing a lot of damage to infantry on the ground.

We focus on those threats. We focus on some of the larger quadcopter and hexacopter platforms that exist out there that are increasing use across military and security operations.

Lastly, we focus on some of the smaller fixed-wing, sort of 1.25 m wingspan fixed-wing drones that exist. At some point, and I think we've discussed this before, at some point, the drone is moving so quickly and is at such a technology level, it is more like a missile than a drone.

We draw the line of the platforms that we detect. I would give the analogy of, there's a reason why you have a rifle and a pistol sidearm.

They are for two very different missions. The technology we're building for is less applicable for those larger jet-powered drones that we see emerging, but really focused on a lot of the use cases that we've talked about this morning.

Whereas the technologies that are being built for those larger jet-powered drones have no effect, and are completely ineffective on these more smaller, agile, and very concerning drones as well. Yes, we really focus on everything from the very small FPV drone through to about 1.25 m wingspan fixed-wing drone, and that's our area of expertise.

Often we see our technology being deployed alongside the larger, essentially what is anti-air technology.

Mm-hmm. Question about IP protection and what IP protection do we have and more generally, our security protocols maybe.

Certainly. On the IP protection side, we don't patent.

Fundamentally, in the defense and security industry, patenting how your technology works is not a good idea. We actively do not patent technology.

If you do see patents from us, almost guaranteed is not something that we value highly. That's how we think about that.

Everything is essentially a trade secret within the organization. From that perspective, it's a very large organization now, and only some individuals have access to certain amounts of IP, and we make sure that there's some walls between the organization when it comes to IP.

Additionally, I think the second half of the question was around—

Security.

Security. Yes.

We are a DISP-certified organization. In the first half of this year, we actually had our DISP security ratings raised and were accredited to a higher DISP security rating, which is phenomenally good.

We do have secure facilities in-house now, here at DroneShield. We have a great CISO and a great security team.

Again, we will look to continue to invest in these types of security systems and people and processes as we have done in the first half, in the future, but a lot of that now are very much in place.

Mm-hmm. We are getting to sort of the tail end of the questions and if your question has not been addressed directly, I think in some cases we have actually covered in other answers.

I am happy to receive some of those offline after the call as well. A couple of questions regarding the Middle East, and Latin America, about sort of the budgets and the spending which are coming from those nations.

As we have said, Latin America, Middle East, and others represented 22% of revenue for the first half, and that is up from about 15% in FY 2025. I think the other thing we would say is that there are sometimes orders that the Middle East is obviously We deliver product to an end user.

Under our sale requirements, we need to know who that end user is. But we do not know where that product may end up.

What do we mean by that? In the case of the United States, it may be that product, or other countries, they have bases in alternative locations.

We cannot talk more broadly, but in essence, our product is used on a global basis. I think that is probably the vast majority of the questions that we can address here.

There are a few other questions where people are asking about specific comments around other companies or around share price movements or on various other forums. Probably not the channel to talk about that here.

Angus, are there any other sort of closing remarks you want to talk about?

Oh, look, I would like to thank everyone for joining this morning. I am 4.5 months into my CEO tenure here at DroneShield.

It is such an honor to represent the close to 550 people that we have in the organization. It is a phenomenally great business, great team, and I am probably more excited now than I was 4.5 months ago based on some of the pipeline and also the delivery of our next generation platform, which is looking really good.

Really happy with where we are as a business. Plenty to do.

Plenty of hard work ahead of us, but we will continue to execute as we have been. I would like to thank everyone for their continued support, and we appreciate it very much, and we will talk to you soon.