EOS Secures $13.5m in New Orders, Boosts Cash to $103m After EM Solutions Sale

Strong Order Intake Amid Geopolitical Demand

Electro Optic Systems Holdings Limited (ASX: EOS) has delivered a solid quarterly performance for the period ended 31 March 2025, underpinned by a series of new defence contracts and strategic partnerships. The company secured a US$5.3 million (approximately A$8.5 million) order for its VAMPIRE counter-drone gimbal system, a technology proven effective in Ukraine’s ongoing conflict, where EOS products have been deployed to neutralise hostile drones and cruise missiles.

In addition, EOS received a US$5.0 million (circa A$7.9 million) order for integration of its R150 Remote Weapon System (RWS) into a US government platform, further cementing its footprint in the lucrative remote weapons market. Manufacturing activities progressed with deliveries of RWS spares to longstanding European and Singaporean customers, alongside the setup of a new production line in Huntsville, Alabama, for the heavy-calibre R800 RWS.

Balance Sheet Strengthened by EM Solutions Divestment

EOS completed the divestment of its non-core EM Solutions satellite communications subsidiary in January 2025, generating net proceeds of $158.6 million after customary adjustments. This transaction enabled the company to repay all outstanding borrowings, including a $61.1 million early repayment to Washington H. Soul Pattinson’s WHSP lender, which included a make-whole penalty. As a result, EOS ended the quarter with a robust cash balance of $103.1 million, nearly doubling from $52.3 million at the end of December 2024.

Operating cash flows reflected a net outflow of $26.8 million, primarily due to lower customer receipts following contract completions in the Middle East and a reduced order book at December 2024. However, the strong investing cash inflow from the EM Solutions sale more than offset this, supporting the company’s liquidity and financial flexibility.

Strategic Collaborations and Market Development

EOS continued to expand its market presence and technological capabilities through strategic collaborations. Notably, it signed a cooperation agreement with Milrem Robotics, a leader in robotics and autonomous systems, to advance unmanned ground systems solutions. Additionally, EOS entered a manufacturing collaboration with Calidus to explore joint production of its next-generation R500 remote weapon system, which was formally launched at the IDEX defence exhibition in Abu Dhabi in February 2025.

The company also showcased its flagship R400 and new heavy-calibre R800 RWS at Northrop Grumman’s Bushmaster User Conference in Nevada, highlighting its growing relevance in the US defence market. EOS’s Space Systems division hosted successful demonstrations of high-energy laser capabilities and engaged with international partners at the Australian International Airshow Avalon, underscoring its dual focus on defence and space domains.

Order Pipeline and Future Outlook

EOS’s order book remains healthy, with ongoing negotiations for heavy-calibre RWS contracts valued up to A$90 million, targeting deliveries between 2025 and 2027. The company is also advancing discussions for high-energy laser weapon opportunities worth between A$50 million and A$100 million, with potential contract signings anticipated in 2025 and 2026.

While EOS’s pipeline is promising, the company cautions that conversion of these opportunities into binding contracts and revenue is subject to timing and other risks. EOS remains compliant with all financial covenants and offset obligations, with no material impact expected from recent tariff changes announced by the US government.

Management continues to focus on scaling manufacturing capabilities, expanding strategic partnerships, and leveraging its strong balance sheet to capture emerging defence and space market opportunities.