Sydney, Feb 23, 2026, 17:53 AEDT — Market closed
Electro Optic Systems Holdings Ltd shares ended up 12.7% at A$8.25 on Monday, after swinging between A$6.70 and A$8.60 during the session. (Investing)
The move matters because EOS is trying to convince investors its swelling backlog will turn into shipped systems and cash receipts, not just headlines. The company’s revenue fell again in 2025 and losses from ongoing operations widened, so timing is everything.
EOS makes remote weapon stations, counter-drone systems and high-energy laser weapons, and also has space-related optical tracking work. Investors tend to key off its “order book” — essentially contracted work still to be delivered — because revenue is often booked when project milestones are met.
In its annual filing, EOS said revenue from continuing operations fell 27% in the year ended Dec. 31 to A$128.5 million, and it reported an operating loss after tax from continuing operations of A$73.5 million. It put its unconditional order book backlog at about A$459.1 million, up from A$135.6 million a year earlier, and said it expects most of that contract backlog to be converted into revenue during 2026 and 2027. (Company Announcements)
On the results call, CEO Andreas Schwer said the group’s break-even point was “around AUD 200 million” of revenue, while CFO Clive Cuthell said EOS was “aiming for 40% or 50% of that order book to roll into calendar 2026,” which he put at roughly A$180 million-A$230 million. Cuthell added EOS had not issued revenue guidance and said the company had a committed A$100 million term loan facility with documents being finalised; he also said a deposit for the South Korean high-energy laser contract had not yet been received. (Investing.com Nigeria)
But the conversion path is not clean. Defence contracts are typically milestone-based — revenue can slip if deliveries slip — and EOS is still talking about conditional deals that require things like deposits or letters of credit before they become binding work.
EOS’s net profit line also reflects the sale of its EM Solutions unit, which the company reports as a discontinued operation. Investors are watching the underlying picture: whether the higher backlog and improving gross margin translate into narrower losses and steadier cash flow from the continuing business.
The stock has also been volatile this month after U.S. short seller Grizzly Research questioned one EOS contract disclosure, prompting the company to say it was reviewing potential legal breaches and to hire lawyers. “Today’s reversal looks less like a classic short squeeze and more like the market giving management the benefit of the doubt,” Billy Leung, investment strategist at Global X ETFs Australia, said in a Reuters report at the time. (Reuters)
For Tuesday’s open, traders will be looking for follow-through after the sharp intraday swing, and for early broker reaction to the company’s order book rollout target for 2026. Over the week ahead, the pressure point is simple: signs that the backlog is turning into on-time deliveries — and that conditional contracts are turning unconditional.
