Elsight Secures US$9.63M Defence Deal, Eyes Profitability in 2025

Elsight’s Contract Expansion Signals Growth Momentum

Elsight Limited (ASX: ELS), a specialist in connectivity solutions for unmanned systems, has announced a significant expansion of its supply agreement with a European defence drone original equipment manufacturer (OEM). The new contract adds US$5.35 million to the previously secured US$4.28 million order, bringing the total commitment for 2025 to US$9.63 million (approximately A$15 million). This milestone underscores Elsight’s growing footprint in the defence sector and its ability to scale rapidly.

More than US$1 million of the initial April contract has already been delivered and recognised as revenue, demonstrating Elsight’s operational capability and robust supply chain. The company’s CEO, Yoav Amitai, highlighted that these strategic contracts not only validate Elsight’s technology but also provide a blueprint for scaling the business into a larger organisation within a short timeframe.

Technology at the Core of Modern Defence

Elsight’s flagship product, the Halo connectivity platform, integrates cellular, radio frequency, and satellite communications into a seamless, secure data link. This multi-link bonding technology is designed to ensure continuous command and control communications for unmanned defence systems, particularly in challenging and contested environments. The platform’s battlefield-proven reliability and compact form factor have made it indispensable for Beyond Visual Line of Sight (BVLOS) missions, where uninterrupted connectivity is critical.

The expanded contract reflects the strategic importance of Elsight’s technology amid shifting global defence priorities. Increasing geopolitical instability and a growing emphasis on unmanned systems have accelerated demand for scalable, reliable connectivity solutions. Elsight’s ability to deliver operational advantages such as rapid deployment and reduced total cost of ownership positions it well to capture further market share.

Financial and Operational Outlook

The combined April and May contracts are expected to propel Elsight to profitability and cash flow break-even during calendar year 2025. The company will receive a significant upfront payment to fund working capital requirements, with the balance payable upon delivery. Importantly, Elsight currently has production capacity to support approximately US$70 million in annual sales without any manufacturing expansion, indicating substantial headroom for growth.

Looking ahead, Elsight anticipates further expansion of its relationship with the European defence OEM as long-term quantity requirements are finalised and new programmes emerge. This contract should not be confused with a separate agreement announced in September 2024 to develop a new communications device, which is expected to begin delivering orders in the second half of 2025.

Overall, Elsight’s recent contract wins and operational progress mark 2025 as a transformational year, transitioning the company from niche innovation to a critical infrastructure provider within the defence sector.