Disclosure: Cashu Research produced the video above for Boresight. This article is a general company explainer, not a recommendation to buy or sell BST shares.
Before a military can rely on a counter-drone system, it needs to know whether that system works. That means putting actual drones in the air, testing how the equipment responds and giving operators enough practice to use it under pressure.
Boresight Limited (ASX: BST) supplies those targets. Founded in Canberra in 2020, the company builds affordable drones that defence forces and equipment makers can use for training and testing. Some are designed to be shot down.
It is a different part of the defence market from the companies selling radars, jammers or weapons. Boresight provides the moving targets those systems, and the people operating them, need to train against.
Why target drones matter
Small, inexpensive drones have become a serious problem for armed forces. Detecting one is not the same as tracking several, and a successful demonstration does not necessarily tell an operator how a system will perform in a more demanding exercise.
Realistic training needs different flight paths, speeds and numbers of drones. It also needs targets cheap enough to use repeatedly, including in exercises where they may be destroyed. Using an expensive surveillance aircraft for that job makes little sense.
That is the need Boresight is trying to meet: practical, repeatable training against the kinds of drone threats customers expect to face.
More than the aircraft
Boresight combines its target drones with mission-planning software and a ground control system. The software lets operators set up flight profiles and run scenarios involving multiple aircraft from one station.
The company describes this as a “one-to-many” capability. In plain terms, it means a training team can put several targets in the air without needing a separate control station for each one. That matters when the exercise involves a swarm rather than a single approaching drone.
In its FY26 annual report, Boresight said it held CASA certification to fly up to 20 target drones simultaneously for operational purposes, and up to 100 for testing and development, from a single ground control station. The larger number should not be confused with the operational approval.
The product range includes the BQ-400 quadcopter and the larger BQ-750 Block 2 target drone, released in July 2026. Boresight also develops fixed-wing targets and the BS-350 surveillance platform. Target drones are the focus here, but they are not the company's only activity.
An operating business before the ASX listing
Boresight began trading on the ASX on 10 June 2026, raising A$8 million before costs at 20 cents a share. The money was earmarked for manufacturing, product development and international expansion. That issue price is historical, not a current share-price quote.
The company was already selling products before it listed. For the year ended 30 June 2026, it reported A$6.38 million in revenue, up approximately 46% from A$4.36 million in FY25, and A$3.15 million in gross profit.
Revenue growth has not yet translated into a net profit. The FY26 loss attributable to owners was A$6.66 million, including A$3.60 million in non-cash share-based payments. Excluding that expense, the company reported an underlying operational loss of about A$3.06 million. That adjusted measure is not operating cash flow.
Boresight ended June with A$7.88 million in cash and no debt, following the IPO. Those are balance-sheet figures at 30 June, not a statement of its cash position today.
Why the US matters
Boresight's customers include defence forces and counter-drone companies, with teams in Australia, the United States and Europe. Its FY26 report describes supply into the Australian Defence Force's LAND 156 counter-drone programme, as well as a separate 12-month agreement to supply BQ-400 targets to ADF units.
The US is an important part of the expansion. Reported US revenue increased from A$1.6 million in FY25 to A$2.2 million in FY26. Boresight began manufacturing in Huntsville, Alabama, in 2026 and signed a lease for a larger facility in July.
Management says the expanded facility could produce around 5,000 drones a year when fully operational. That is planned capacity, not a claim that it is already producing or selling that volume.
A 7 September 2026 announcement gives a useful example of the business. Boresight's US subsidiary received a repeat purchase order through reseller Mountain Horse Solutions worth US$383,275, approximately A$532,000. It covered more than 340 BQ-400 target drones, ground control stations and an operator training course for a North American military customer.
The company said the order was roughly three times the value of that customer's previous order. Delivery and payment were expected in Q2 FY27, the quarter ending December 2026. An order is not the same as completed delivery, recognised revenue or cash received.
What investors should watch
Boresight has a product in use and customers placing repeat orders. The next question is whether it can turn that demand into a larger, more profitable business.
- Repeat sales: whether existing customers keep buying, and whether new customers become regular users rather than one-off trial buyers.
- Manufacturing: whether the expanded US operation delivers on time and at a cost that supports margins.
- Cash use: how quickly manufacturing, engineering and international expansion draw on the funds raised at listing.
- Product development: whether new platforms and software capabilities win orders, rather than simply adding development costs.
Defence orders can take time, and their timing can make revenue uneven. Procurement rules, export approvals, competition and changes in training requirements also matter. Growing counter-drone budgets do not guarantee that a particular supplier will win work.
The Cashu view
Boresight's business is easy to understand once you look beyond the drone label. Military personnel need realistic targets to practise against. Equipment makers need them to test their systems. Boresight supplies the aircraft and controls that make those exercises possible.
The company has moved beyond a prototype: it has revenue, military customers and repeat orders. It is still loss-making and investing in expansion. For investors following BST, the useful evidence will be orders delivered, customers returning and cash use alongside sales growth.
Sources and publication notes
- Boresight FY26 Appendix 4E and Annual Report, released 28 August 2026: financial results, customer activity, manufacturing and regulatory approvals.
- Boresight Company Update, 4 September 2026: listing, product range and expansion plans.
- Boresight ASX announcement, 7 September 2026: repeat North American military order and expected delivery schedule.
- Boresight products and services.
Prepared 16 October 2026. Financial figures are in Australian dollars unless stated otherwise. Financial results cover the year ended 30 June 2026; operating plans and order expectations are attributed to the dated company sources above and are not confirmation of subsequent delivery. This article contains no price target or investment rating. General information only, not personal financial advice. Investments can lose value.