Orbital secures $3.7M drone engine contract
- Orbital Corporation secured its first "Power by the Hour" service contract valued at $3.7 million with American Aerospace Technologies.
- The agreement establishes a recurring service revenue stream in the US commercial unmanned aerial vehicle market.
- Following the announcement, the Orbital Corporation share price was down at $0.12.
Orbital Corporation (ASX:OEC) secured its first Power by the Hour agreement valued at $3.7 million with American Aerospace Technologies.
The transaction converts an existing propulsion supply relationship into an ongoing service model to generate recurring revenue in the US commercial drone sector.
"Power by the Hour reduces the upfront cost for operators to deploy our engines while allowing us to earn greater revenue over their operating life," said Orbital Corporation CEO Stephen Pearce.
The initial contract supports a fleet of 10 unmanned aircraft through a take-or-pay commitment covering minimum monthly engine operating hours through Dec. 31, 2027.
Following the announcement, the Orbital Corporation share price was down at $0.12.
The company stated that the service model reduces upfront deployment costs for operators while capturing ongoing propulsion support revenue over the operating life of the engines.
Orbital stated that it aims to expand the agreement to larger fleets under a potential Phase 2 deal while offering similar service models to other drone operators.
