EOS +23.02%: Produced a dramatic operational turnaround in 1H26, with revenue almost quadrupling and underlying EBITDA swinging firmly into profit, but the numbers were uneven relative to expectations.
FY26 revenue guidance of A$360–400m, including MARSS, nevertheless points to another substantial step-up in scale.
Key results:
- Revenue from continuing operations of A$168.8m, versus A$44.1m a year ago and ~29% ahead of A$131m expected.
- Underlying EBITDA of A$21.6m, improving by A$36.5m from a A$14.9m loss in 1H25, but below the ~A$27.7m consensus shown in the attached estimates.
- FY26 revenue guidance of A$360–400m, including MARSS.
The revenue number demonstrates just how quickly EOS is scaling as defence spending increasingly shifts toward counter-drone and space-control capabilities. More importantly, underlying EBITDA has moved decisively into positive territory. However, the gap between EBITDA and EBIT/profit remains significant, and the earnings misses show why investors shouldn’t simply extrapolate the top-line growth straight through to the bottom line.
MM’s view: EOS is one of the more interesting defence growth stories on the ASX, but it’s also one where expectations can easily run ahead of the numbers. Revenue smashing expectations and EBITDA turning positive are meaningful milestones, particularly with defence budgets increasingly targeting exactly the counter-drone and space-control technologies EOS sells. However, the misses further down the P&L are a reminder that this is still an execution story rather than a clean earnings compounder. We like the direction of travel, but from here the next rerating needs to come from converting the rapidly growing order and revenue base into consistently stronger margins, cash flow and profits.
MM remains neutral toward EOS
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