Orbital Corporation reported a modest revenue increase for H1 FY2026 but posted a net loss, while continuing to invest in next-generation UAV propulsion technologies backed by solid cash reserves.
- Revenue rose slightly to AUD 4.89 million in H1 FY2026
- Net loss after tax widened to AUD 1.5 million
- Debt-free with strong cash and receivables of AUD 4.6 million
- Raised AUD 3 million via equity placement and secured financing
- Ongoing development of larger UAV engines and hybrid power systems
Financial Performance and Position
Orbital Corporation Limited, a specialist in propulsion systems for unmanned aerial vehicles (UAVs), released its half-year results for the period ending 31 December 2025, showing a slight revenue increase to AUD 4.892 million from AUD 4.806 million in the prior corresponding period. Despite this top-line growth, the company recorded a net loss after tax of AUD 1.496 million, a reversal from a profit of AUD 314,000 in the previous year.
The loss reflects increased operating expenses, including research and development costs as Orbital continues to invest heavily in advancing its engine platforms. The company remains debt-free, with cash, term deposits, and receivables totaling AUD 4.585 million at the half-year mark, up from AUD 3.314 million six months earlier.
Operational Highlights and Strategic Focus
Operational revenue of AUD 4.861 million was primarily driven by sales of engine systems and ongoing in-service support, complemented by engineering services income of AUD 1.947 million from development programs. These programs support the design, integration, and testing of UAV propulsion systems, positioning Orbital as a leader in the tactical UAV market segment.
The company is actively progressing internally funded engineering studies and pre-production prototyping for a larger engine platform, designed to deliver increased power and payload capacity. Additionally, Orbital is advancing hybrid and power management system developments, aiming to broaden its product offering and meet evolving defence and commercial UAV requirements.
Capital Management and Funding Initiatives
In August 2025, Orbital completed an equity placement raising AUD 3 million, further strengthening its balance sheet. In January 2026, the company secured a financing arrangement with Radium Capital, receiving an advance of AUD 555,500 secured against anticipated R&D tax incentive refunds. This facility carries an interest rate of 1.33% per month and is repayable upon receipt of the refund, providing additional working capital to support ongoing R&D activities.
The company also received R&D rebates totalling approximately AUD 881,000 relating to prior financial years, bolstering liquidity. Despite these positive capital management moves, the auditor’s report highlighted a material uncertainty regarding the company’s ability to continue as a going concern, citing the ongoing losses and reliance on forecasted cash flows and funding.
Outlook and Market Positioning
Orbital’s management remains confident in the company’s strategic direction, focusing on expanding its customer base and leveraging proprietary technology in UAV propulsion. The development of larger engine platforms and hybrid systems is expected to open new market opportunities, particularly in defence applications requiring higher payload and endurance capabilities.
Cost-saving initiatives and operational efficiencies are also underway to improve profitability. However, the company has not declared any dividends for the period, reflecting its prioritisation of reinvestment and growth.
Bottom Line?
Orbital’s ongoing investment in UAV propulsion innovation is promising, but the path to profitability and sustained funding remains a critical watchpoint.
Questions in the middle?
- How will Orbital manage the material uncertainty around its going concern status?
- What are the timelines and commercial prospects for the new larger engine platforms?
- Will further capital raises be necessary to support continued R&D and expansion?