Elsight Rockets 1H 2025 Revenue 340% Amid $60M Capital Raise

Record Growth and Contract Momentum

Elsight Limited (ASX – ELS), a specialist in AI-driven multi-link connectivity for unmanned systems, has unveiled a striking performance in the first half of 2025. The company reported revenue of US$4.8 million, a 340% increase compared to the prior corresponding period, driven by US$16.25 million in new contract wins. With a contract backlog of US$11.45 million set for delivery in the second half, Elsight is on track to sustain this growth trajectory.

Cash flow positivity in 1H 2025 and expectations of full profitability in the second half underscore the operational leverage of Elsight’s high-margin business model. The company’s flagship product, Halo, offers a unique multi-link bonding solution that integrates cellular, satellite, and radio communications to provide resilient, cyber-secure connectivity for drones and unmanned aerial vehicles (UAVs).

Strategic Capital Raise to Accelerate Expansion

To capitalize on burgeoning market opportunities, Elsight is raising approximately A$60 million (US$39 million) through an institutional placement. The proceeds will be allocated primarily to expanding sales and marketing teams across North America and Europe, accelerating product development; particularly the upcoming Halo V2.0 with AI-driven features; and maintaining balance sheet flexibility for potential acquisitions.

This capital injection positions Elsight with a pro forma cash balance of A$71.5 million, enabling the company to scale rapidly without the need for additional capital expenditure on manufacturing. The onboarding of a new European contract manufacturer will double production capacity to US$150 million annually, enhancing supply chain resilience and proximity to key defence customers.

Market Tailwinds and Customer Validation

Elsight is benefiting from strong structural tailwinds, including soaring global defence budgets, accelerated adoption of unmanned systems highlighted by recent conflicts, and regulatory support such as the U.S. FAA’s mandate to integrate drones into national airspace. The company’s Halo solution is battlefield-proven and integrated into platforms from leading defence OEMs like Lockheed Martin, reinforcing its credibility in mission-critical environments.

Beyond defence, Elsight is making inroads into commercial markets, exemplified by its partnership with Flock Safety, a US-based public safety technology firm deploying drones as first responders. The company’s design-win strategy has secured 114 customers across six jurisdictions, with 74 making purchases in the first half of 2025, indicating strong customer retention and growth potential.

Innovation and Future Outlook

Elsight’s roadmap includes the launch of Halo V2.0, which will embed enhanced onboard processing and AI capabilities, transforming the product from a connectivity solution into an intelligent platform for uncrewed operations. This evolution aims to unlock recurring software-as-a-service revenue streams and third-party integrations, further strengthening Elsight’s competitive moat.

While the company enjoys a robust pipeline valued at US$151 million, it remains mindful of risks including technology execution, customer concentration, supply chain dependencies, regulatory uncertainties, and intensifying competition. Nevertheless, Elsight’s strong cash position, expanding production capacity, and strategic investments in sales and R&D position it well to capture the accelerating demand for resilient drone connectivity worldwide.