Orbital Corporation Continues to Expand Customer Base as Commercial Markets Open

Orbital Corporation (ASX: OEC) has expanded its customer base to 14 across international defence and commercial markets as it positions for a new growth phase in unmanned aerial vehicles (UAVs).

The Perth manufacturer expects to deliver $3.2 million of sales revenue in the first quarter of the 2027 financial year to customers in the US, Middle East, and India.

Its product portfolio now includes the 350HFE propulsion system and Generation 2 Power Management System alongside continued development of a hybrid propulsion solution designed to extend flight duration and range for battery-powered UAV platforms.

Orbital has also reduced headcount by more than 20%, from 54 to 42, while pursuing engineering and supply chain initiatives intended to lower product costs and shorten lead times.

Broader Global Customer Reach

During FY26, Orbital entered the commercial UAV sector through its commercial off-the-shelf propulsion systems while progressing customer programs across the US, South-East Asia, India and the Middle East.

Its growing portfolio now spans North America, Europe, the Middle East, India, Singapore, and Australia, and includes customers ST Engineering, AATI, MightyFly, Sky Front, Freespace Operations, IGG, and Callen-Lenz (BAE Systems).

Orbital sees opportunities in both commercial UAVs and the Attritable segment of US defence, which is characterised by lower unit costs, shorter development cycles, and substantially higher potential production volumes than traditional defence aviation programs.

A new Indian engineering, defence, and aerospace customer has ordered the 350HFE together with the Generation 2 Power Management System for integration into a new high-altitude tactical military application, with a further two propulsion systems and power management units expected to support integration and flight testing.

Increased payload requirements are driving demand for higher-capacity engines, while growing use of vertical take-off and landing configurations is increasing requirements for onboard electrical power generation and high-voltage battery charging.

Efficiency Program Conversion

Revenue from continuing operations was $6.2m for the year compared with $8.2m previously, with performance adversely affected by the cancellation of a US government program as Orbital continued investing in its expanded product range.

Other income totalled $3.3m compared with $4.5m a year earlier and the net loss after tax increased to $4.8m from $4.3m, while cash and receivables stood at $2.5m and net assets at $6.8m at 30 June.

“Orbital enters FY27 with a much broader customer base, an expanded product portfolio, and growing exposure to some of the fastest-evolving areas of the UAV market,” chief executive officer Stephen Pearce said.

“Our focus now is on converting these customer relationships and development programs into production orders.”

Defence programs typically take six to 18 months to progress through integration, ground testing, flight testing, and qualification, whereas commercial UAV programs generally move more quickly and can provide earlier production opportunities.