EOS 1H 2025: Backlog Hits $307m, Revenue Falls 58% on Contract Timing
EOS has reported a 126% increase in its contract backlog to $307 million in 1H 2025, driven by strong demand for its defence and space technologies despite a revenue decline. The company secured a landmark €71.4 million high energy laser weapon export contract and continues to strengthen its balance sheet.
- Contract backlog rises 126% to $307 million
- Revenue declines 58% to $44.1 million due to contract timing
- Secured €71.4 million high energy laser weapon export contract
- Divested EM Solutions for $160 million and repaid all debt
- Strategic focus on counter-drone, laser weapons, and space control
EOS Delivers Strong Backlog Growth Despite Revenue Dip
Electro Optic Systems (EOS) has revealed a striking 126% increase in its contract backlog, reaching $307 million as of August 2025. This surge underscores the company’s success in securing new orders amid a robust defence market characterised by geopolitical tensions and rapid technological evolution. However, revenue for the first half of 2025 fell 58% to $44.1 million, reflecting the completion of several large contracts in 2024 and a revenue profile skewed towards the second half of the year.
CEO Dr. Andreas Schwer highlighted the company’s strategic progress, noting that EOS is capitalising on enduring demand for advanced defence technologies, particularly in Europe and the Middle East. The company’s ability to commercialise intellectual property in counter-drone systems, high energy laser weapons, and space control remains a key growth driver.
Landmark Contracts and Market Tailwinds
Among the standout achievements is a world-first €71.4 million (approximately A$125 million) export contract for a 100kW high energy laser weapon system with a European NATO member. This multi-year deal marks a significant milestone in EOS’s laser weapon commercialisation efforts. Additionally, EOS secured a €31 million Slinger counter-drone order from a Western European government, reinforcing its leadership in counter-drone defence technology, which has proven battle-effective in Ukraine.
The company also completed a key Middle East contract, receiving a final payment of US$40 million, and continues to pursue conditional contracts with Ukraine valued at $181 million, although these remain subject to funding constraints. EOS’s diversified order book and strong balance sheet, bolstered by the $160 million divestment of its EM Solutions business and full debt repayment, position it well for sustained growth.
Financial Discipline and Strategic Focus
Despite the revenue decline, EOS maintained a gross margin of 76%, temporarily boosted by benefits from contract finalisation. Underlying EBITDA was negative $13.3 million, reflecting the revenue drop and increased finance costs, including a $12.9 million make-whole payment on early debt repayment. The company ended the half with $130 million in cash and term deposits, underscoring its strong liquidity position.
EOS’s strategic priorities remain clear, advancing its Remote Weapon Systems (RWS) and counter-drone capabilities, accelerating development and market penetration of high energy laser weapons, and expanding its space control technologies. The company is investing in AI and software enhancements, product demonstrations, and customer partnerships to drive future contract wins.
Outlook, Growth Hinges on Order Book Expansion
Looking ahead, EOS expects 2025 revenue to be heavily weighted to the second half as new contracts ramp up. The company is actively engaged in multiple bids and negotiations across Europe, North America, the Middle East, and Asia, with opportunities ranging from counter-drone systems to advanced laser weapons and space domain awareness solutions.
While geopolitical uncertainties and funding dynamics, especially related to Ukraine, pose challenges, EOS’s disciplined capital management and expanding backlog provide a solid foundation for growth. Investors will be watching closely as EOS seeks to convert its substantial pipeline of opportunities into revenue and profitability.
Bottom Line?
EOS’s robust backlog growth and strategic contracts set the stage for a pivotal second half in 2025, but execution risks remain amid shifting geopolitical and funding landscapes.
Questions in the middle?
- How will EOS manage the timing gap between backlog growth and revenue recognition?
- What impact will geopolitical developments, particularly in Ukraine, have on conditional contracts?
- Can EOS sustain its capital discipline while accelerating investment in high energy laser and space control technologies?
