Orbital Reports $4.2M Revenue, $0.7M Operating Cash Flow in Q1 2025
Orbital Corporation Ltd reports a robust Q1 2025 with increased revenues, successful prototype completion of a new 350cc heavy fuel engine, and strategic partnerships positioning it for growth in the evolving UAV market.
- Customer receipts rise to $4.2 million, reversing prior cash outflows
- Completion and testing of new 350cc heavy fuel engine prototype
- Secured MOUs with key UAV manufacturers Praetorian Aeronautics and Carbonix
- Raised $3 million capital and holds $3.7 million cash with $2 million undrawn loan
- US Army procurement changes create both challenges and opportunities
Strong Financial Momentum
Orbital Corporation Ltd, a specialist in integrated propulsion systems for tactical unmanned aerial vehicles (UAVs), has reported a notably improved financial quarter ending September 2025. Customer receipts surged to $4.2 million, up from $2.6 million a year earlier, and the company generated a positive net cash flow of $0.7 million from operations, reversing a previous outflow. This financial strength was bolstered by a $3 million capital raising and a closing cash balance of $3.7 million, alongside an undrawn $2 million loan facility, providing a solid runway for ongoing development and market expansion.
Innovation with the 350cc Heavy Fuel Engine
Highlighting the quarter was the completion of prototypes for Orbital’s new 350cc heavy fuel engine (HFE), designed to meet the growing payload demands of Group 2 and 3 tactical UAVs. This engine exceeded performance expectations in power output and fuel efficiency, marking a significant milestone after a year-long development and testing program. The initial delivery of two engines in August 2025 has enabled flight trials on UAV platforms, a critical step toward potential partnership programs. The company plans to manufacture 10 engines next quarter to meet anticipated demand from both defense and commercial sectors.
Strategic Partnerships and Market Positioning
Orbital’s strategy to deepen relationships with Tier 1 defense original equipment manufacturers (OEMs) and expand sales of standardized propulsion systems to Tier 2 military and Tier 1 commercial UAV manufacturers is gaining traction. During the quarter, the company signed memorandums of understanding with Australian UAV manufacturers Praetorian Aeronautics and Carbonix, aiming to integrate Orbital’s engines into their platforms. Additionally, the appointment of seasoned aerospace executives Stephen Pearce as CEO and Steve Osborne as Head of Business Development for the US and Europe signals a strengthened leadership team focused on global growth.
Navigating US Defense Procurement Changes
The US Department of War’s overhaul of its procurement process, transitioning from the FTUAS framework to the Army Transformation Initiative (ATI), has temporarily paused some programs. However, this restructuring aims to accelerate acquisition cycles and modernize UAV fleets across all Army divisions by 2026. Orbital’s role as the sole engine supplier for the Textron Aerosonde HQ 4.8 UAV positions it well to benefit from this modernization push, particularly as the ATI emphasizes modular payload adaptability for intelligence, surveillance, and reconnaissance missions.
Outlook and Industry Context
With easing regulations around Beyond Visual Line of Sight (BVLOS) operations in key markets like the US and Australia, Orbital’s heavy fuel engines are poised to become a competitive differentiator for commercial UAV operations. The company’s comprehensive engine range now covers payloads up to 250kg, aligning with growing global defense and commercial UAV demand driven by complex mission profiles and longer flight endurance requirements. Continued R&D investment and strategic collaborations suggest Orbital is well positioned to capitalize on these trends.
Bottom Line?
Orbital UAV’s latest engine innovation and strategic moves set the stage for accelerated growth amid evolving defense and commercial UAV landscapes.
Questions in the middle?
- How will Orbital’s 350cc engine perform in upcoming UAV flight trials and customer evaluations?
- What impact will the US Army’s ATI procurement changes have on Orbital’s contract pipeline and revenue timing?
- Can Orbital expand its commercial UAV market share as BVLOS regulations continue to relax globally?
