DroneShield (ASX:DRO) has opened its new headquarters, tripling its research and development (R&D) and manufacturing capacity to more than AU$400 million in hardware and software per year as the company works to convert a sales pipeline of over $500 million.

The new site is located in Pyrmont, NSW, where the company’s 120 local staff are based. The facility includes a dedicated floor for high-tech R&D, engineering and manufacturing to fulfil orders from government, defence and commercial customers in 70 countries.

Funded by DroneShield’s recent $115m capital raise ($30m of which is subject to shareholder approval), which positions DroneShield – with around $700m current market capitalisation – as the second largest publicly-listed defence company in Australia, the new headquarters enable the company to expedite the build-up of inventory to support strong demand from high-quality customer opportunities. This includes a pipeline of over $500m with more than 90 qualified projects at different stages and $27m in orders currently being fulfilled.

“The threats that drones can pose are finally being taken seriously,” said Oleg Vornik, CEO at DroneShield. “Whether it’s due to the turmoil they can cause on the battlefield, or the countless ways they can disrupt everyday life – at airports, prisons and public events, for example – drone deterrence is now a priority for government agencies and authorities, in Australia and abroad.

“We are seeing a major push for comprehensive counter-drone and counter-UAS capabilities – predominately from the US, but broadly across Five Eyes and allies, and slowly but surely in Australia. However, our equipment is sophisticated, AI based technology that can take up to four months to build, containing up to 200 components that must be manufactured, assembled and quality controlled. Supply chain and inventory certainty is critical, and we are leveraging funds from the $115m capital raise to enable us to create upwards of $400m in equipment per year – all within Australia, at the new facility, as a truly sovereign defence supplier – for global customers that expect high performance equipment to be available right away.”

The 2,000 square metre facility, with additional space available for expansion currently under discussion, is also equipped for further growth amid soaring demand across military and commercial applications, including airports, stadiums and events. This includes the scaling of DroneShield’s high-tech engineering and operations teams, with 40 employees to be added in the short term as the company accelerates development of fully sovereign, in-house artificial intelligence (AI) and machine learning (ML) engines and capabilities for enhanced detection and identification of and response to drone threats.

The opening of DroneShield’s new headquarters follows a significant period of growth, including the following milestones:

• Record $55.1m revenue for 2023 (up 226 per cent on the previous record year), alongside first time profitability, with profit after tax of $9.3m in 2023 (DroneShield operates on December year-end).
• Strong momentum into 2024, with first quarter recording 10x revenue growth on comparable first quarter of 2023.
• The signing of a procurement agreement with NATO.
• $4.3m million U.S. Government contract, paving expansion into much larger work.
• A collaboration to integrate DroneShield’s DroneCannon Mk2 into Lockheed Martin Australia’s Agile Shield Program.
• Additional shipments to Ukraine, in this instance via the Australian Government’s aid package.
• Launch of DroneSentry-X Mk2, a new generation of AI-enabled detection and defeat counterdrone system on fully software defined basis, with SaaS subscription element.
• Record $33 million U.S. Government contract in mid-2023.

In addition to its global headquarters in Australia, DroneShield operates an office in Warrenton, Virginia, as its U.S. headquarters.