EOS Forecasts 1H Revenue Between A$40m and A$45m Amid Contract Finalisation
Electro Optic Systems projects first-half 2025 revenue between A$40 million and A$45 million, underpinned by a major Middle East contract and a growing contract backlog now at A$170 million.
- 1H 2025 revenue forecast at A$40-$45 million
- Middle East contract finalised, worth approximately US$40 million
- Contract backlog increased to A$170 million as of May 31, 2025
- Full-year revenue expected to be weighted to second half
- Strong defence market demand driven by ongoing global conflicts
EOS Reports Solid First-Half Revenue Outlook
Electro Optic Systems (ASX, EOS) has provided a trading update for the first half of 2025, anticipating revenue in the range of A$40 million to A$45 million. This guidance reflects the finalisation of a longstanding contract with a Middle Eastern customer, valued at approximately US$40 million (around A$60 million). The company expects to receive the majority of this contract's cash in the near term, although precise timing remains to be confirmed.
Backlog Growth Signals Momentum
EOS’s contract backlog has expanded significantly, rising to A$170 million as of May 31, 2025, up from A$136 million at the end of 2024. This backlog primarily consists of work scheduled for delivery throughout 2025 and 2026, providing a solid foundation for future revenue streams. The company’s focus remains on securing additional contracts to further bolster this pipeline.
Market Conditions Support Defence Demand
Market conditions continue to favour EOS, with strong defence spending driven by ongoing conflicts in regions such as Ukraine and the Middle East. The heightened need for counter-drone technologies and advanced weapon systems aligns well with EOS’s product offerings, including remote weapon turrets, high-energy laser weapons, and integrated counter-UAS systems. The company’s advanced technology portfolio positions it to capitalize on these evolving defence requirements.
Revenue Outlook and Risks
While EOS expects full-year 2025 revenue to be heavily weighted toward the second half, this outlook carries inherent uncertainties. Factors such as the timing of contract awards, milestone achievements, and customer acceptance could influence actual results. The company acknowledges the potential for lumpiness in revenue recognition typical of the defence sector, underscoring the importance of monitoring contract progress closely.
Looking Ahead
EOS plans to update the market once cash receipts from the Middle East contract are confirmed. Meanwhile, the company’s strategic emphasis on expanding its contract backlog and leveraging strong market demand suggests a positive trajectory. Investors will be watching closely for new contract announcements and progress on existing agreements as indicators of sustained growth.
Bottom Line?
EOS’s growing backlog and key contract wins set the stage for a pivotal second half in 2025.
Questions in the middle?
- When will EOS receive the full cash payment from the Middle East contract?
- What new contracts might EOS secure to further expand its backlog?
- How will geopolitical tensions influence EOS’s defence market opportunities?
