Dear Shareholder,  

In 2025, Elsight delivered a transformational year marked by record contract wins and accelerated global adoption of our Halo multi-link connectivity platform,  expanding our footprint across defence and unmanned systems markets, and validating our technology through our selection to advance into Phase 3 of the U.S. Defense Innovation Unit’s Project G.I. Prize Challenge after strong performance in contested environment demonstrations.  Building on this momentum, the company has secured a significant US $21.2 million contract for delivery in early 2026, dramatically increasing forward revenue visibility and positioning 2026 to be the strongest year yet with a growing backlog and key defence engagements. Similarly, the Halo has been recognized for mission readiness and strategic validations setting the stage for further expansion into U.S. and allied defence procurement pipelines.

We wish you wonderful holidays and will continue to report on further growth and achievements. 

Best regards,

IR Team 
Elsight (ASX:ELS) 

Industry News:
US Army plans to buy 1M drones a year

The U.S. Army’s announcement that it plans to procure at least one million drones over the next two to three years, a roughly 20-fold increase from current annual drone purchases, signals a historic shift toward mass production and deployment of unmanned systems in U.S. defense operations. This creates a massive addressable market for companies such as Elsight, supplying core components, particularly in areas where our resilient, high-throughput communication solutions can be strategically positioned. This trend reflects accelerating defense spending, expanded market opportunities in military unmanned platforms, and potential for long-term contracts or integrations, aligning with global modernization of autonomous systems and battlefield connectivity needs.

Industry News: Defense stocks rally as Germany set to approve $60 billion defense splurge

European defense stocks rallied as German lawmakers moved to approve a historic defense procurement package worth over €50 billion, one of the largest military spending approvals in post-war German history. Investors drove up shares in major defense firms amid expectations the Bundestag’s Budget Committee would convert previously allocated defense funds into binding contracts for equipment such as infantry vehicles, air-defense systems, protective gear and missiles, reflecting growing market optimism about sustained government defense spending.

In related developments, Germany opened its first joint drone defence centre in Berlin, to strengthen coordinated detection and response against drone threats including espionage and sabotage. The centre brings federal and state authorities together on a 24-hour operating basis to enhance situational awareness and speed of response, addressing gaps in previously fragmented drone defence efforts. 

Spotlight on Elsight: How warfighters communicate when their missions are beyond visual line of sight

This article highlights the critical importance Elsight's Halo plays by providing of beyond-visual-line-of-sight (BVLOS) communications in modern military operations, where warfighters must remain connected over long ranges in contested environments without exposing personnel to danger. Traditional communication systems (e.g., point-to-point radios, mesh networks, SATCOM) each have limitations when used alone, particularly in the face of jamming, denial, or spectrum congestion, underscoring a growing defense demand for resilient, multi-link communication solutions that ensure persistent connectivity for unmanned aerial and ground systems operating at standoff ranges. 

This multi-link, spectrum-aware approach aligns with military priorities around contested spectrum resilience and real-time situational awareness, positioning Halo as a competitive and mission-ready technology in a growing defense segment where reliable BVLOS communication is increasingly mission-critical. 

In case you missed our latest announcement:
Elsight Secures Major US$21.2M (A$32.1M) Contract 

Here are the key highlights:
• Elsight has secured a new US$21.2M (A$32.1M) contract, scheduled for delivery across January-April 2026, reflecting strong beginning and forward demand for the Halo platform across multiple defence and uncrewed programs
• Elsight further accelerates its momentum after achieving a record YTD 1,000% YoY growth, CY2025 contract wins of US$24.0M (A$36.3M), and DIU Phase 3 selection.
• This order reinforces Elsight's solutions as the connectivity backbone for next-generation uncrewed platforms and accelerates the company’s move to sustained profitability.
• Contract structured with favourable upfront payment terms, consistent with previous agreements.
• Supports continued scale-up and positions CY2026 to be the strongest year yet, driven by the current largest backlog.

Elsight’s Halo Platform Advances in DIU Project G.I. Prize Challenge

In case you didn't 'get the email'... here's the announcement of our achievements with the U.S. DOW Defense Innovation Unit. And the best is yet to come as we're gearing up for Phase 3 in mid-January.
Elsight’s Halo connectivity platform advancing to Phase 3 of the U.S. Defense Innovation Unit’s Project G.I. Prize Challenge represents a strong third-party validation of the technology’s mission readiness and relevance to modern defense operations. Our team, led by CTO and co-founder, Roee Kashi, demonstrated secure, resilient beyond-visual-line-of-sight communications by bonding cellular, satellite, and RF links into a single adaptive connection that maintains command-and-control in contested or degraded environments. Progressing to the final phase, which includes additional funding and real-world demonstrations, highlights confidence in Halo’s scalability and performance, strengthening Elsight’s positioning within the U.S. defense ecosystem and reinforcing its long-term growth potential in mission-critical unmanned and autonomous systems.