How to benefit from the defense boom: The strategies of Rheinmetall, Volatus Aerospace, and DroneShield

Rheinmetall – Setting the course for the next phase of growth

Rheinmetall's strategic orientation is continuing to take shape. A key element is the start of series production of loitering munitions. In Sardinia, the group is producing these swarm-capable kamikaze drones, which have proven to be game changers on the modern battlefield, in a newly opened facility. Demand is enormous: the order backlog already amounts to over EUR 200 million for deliveries to various nations. This initiative underscores how Rheinmetall is sharpening its portfolio beyond traditional defense technology and positioning itself as a system provider in a high-growth segment.

At the operational level, the Company is demonstrating solid strength. The military business grew dynamically in the first half of the year, with an increase of 36%. The record order backlog of over EUR 60 billion sets the stage for the future. Recent major orders highlight this momentum. For instance, a Rheinmetall joint venture secured a deal worth billions for 222 "Schakal" wheeled armored personnel carriers for Germany and the Netherlands. At the same time, the delivery of highly mobile medical facilities to the German Armed Forces is underway, which represents further building blocks for stable revenue streams.

The strategic map is being further expanded internationally. There are plans to establish a joint venture with the Polish PGZ Group to create a European center for support vehicles. In Hungary, development and engineering capacities are also being expanded. At the same time, a partnership between the US subsidiary and chemical specialist Solugen is strengthening the supply chains for energy materials. These initiatives demonstrate how Rheinmetall is broadening its industrial base in order to benefit in the long term from the billion-dollar European and transatlantic defense programs. The share price is currently trading at EUR 1,778.50.

Volatus Aerospace – How a drone specialist is ramping up production

The drone industry is undergoing a historic transformation from a niche market to a key technology. Volatus Aerospace has positioned itself as a Canadian pioneer in this dynamic market and is now entering the next phase. The Company is not only expanding its technological leadership but also setting the course for scalable growth with a significant expansion of production. On October 21, the Company announced plans for an innovation center and drone manufacturing facility at Montréal-Mirabel Airport. This 200,000 sq m production facility will enable Volatus to enter into series production of its own drone platforms. This "Made in Canada" initiative not only strengthens national resilience but also positions the Company as a privileged partner for defense contracts within NATO.

Capacities are specifically designed to meet growing demand from the Canadian Armed Forces and allied nations. At the same time, Volatus is strategically driving forward its internationalization. The training cooperation in Nigeria announced in October shows how the Company is tapping into new markets. By training local drone teams to international standards, it is establishing a strategic position in emerging regions. These initiatives not only create immediate revenue streams through training services but also open the door to future large-scale infrastructure and security projects.

The financial performance underpins the expansion strategy. Revenue growth of 49% in the last quarter demonstrates strong market demand, driven by defense contracts and industrial projects. Together with strategic partnerships, for example in the field of innovative battery technology, this creates a coherent overall picture. Volatus Aerospace is systematically expanding its capabilities to capitalize on long-term trends in defense and industrial drone use. The expanded production capacity comes at just the right time to serve this growth. The stock is currently trading at CAD 0.68.

DroneShield – From niche provider to growth engine

Drone defense is rapidly becoming a crucial market, and DroneShield appears to have maneuvered itself into pole position. The figures for the first nine months of 2025 are impressive and show a company in absolute growth mode. What is really impressive here is not only the significant jump in sales, but also the strategic turnaround. The Company is now generating strong recurring revenue with software. This clearly demonstrates to investors that the leap from hardware supplier to full-service provider has indeed been successful.

The financial performance is hard to overlook. By the end of September, the Company had already recorded binding revenue of over AUD 193 million, a huge jump compared to the full year 2024. The third quarter alone contributed AUD 93 million, representing growth of over 1,000% compared to the previous year. Even more significant is the change in cash flows. DroneShield generated a positive cash flow of AUD 15.7 million from operating activities in the first nine months, a significant turnaround from the losses of the previous period.

This development is driven by a clear product strategy. SaaS (Software-as-a-Service) revenues grew by 400% to AUD 3.5 million in the third quarter. New offerings such as the enterprise version of the "DroneSentry-C2" command software and the civilian solution "SentryCiv" aim to increase this share to 30-40% of total revenue in the medium term. At the same time, important certifications, such as the recent inclusion in the UK Government catalogue, strengthen credibility and open doors to further major customers. The expansion phase, therefore, appears to be based on solid operational foundations. The share is currently available for AUD 4.68.

The defense boom offers sustainable growth prospects at the interface of geopolitics and innovation. Rheinmetall dominates with a record order backlog and is skillfully diversifying as a system provider in growth segments such as loitering munitions. Volatus Aerospace is scaling its capacities with a new manufacturing facility in Canada, positioning itself as a privileged partner for NATO defense contracts. DroneShield is undergoing an explosive transformation into a profitable systems provider, driven by massive revenue jumps and a strategic shift toward recurring software revenue. These companies embody the new era of the defense industry.