After a brief pause this morning, the Electro Optic Systems Holdings Ltd (ASX: EOS) share price is back trading and racing higher on Tuesday.
At the time of writing, the ASX tech stock is up a sizeable 12% to 95 cents.
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Why is this ASX tech stock surging higher?
Investors have been buying this ASX tech stock today after the company announced that it has won a major new contract.
According to the release, Electro Optic Systems has secured a contract to supply Remote Weapon Systems (RWS) to an unnamed Western European government.
The company's RWS product portfolio is designed to provide the highest firepower for lowest weight, delivering superior accuracy and reliability compared to competitor systems. Over 2,500 units have been sold and are currently in use with several military services in Australia, North America, Europe, and South-East Asia.
The release reveals that the deal, which includes spares, training, and related services, is valued at approximately 32 million euros (approximately A$51 million).
Management expects the supply agreement to commence in 2023 in accordance with agreed milestones and other customary terms. The latter includes customer rights to terminate the contract for force majeure or non-performance. The contract is also subject to approval by the Australian government.
In performing this contract, Electro Optic Systems notes that it will draw upon a support network and supply chain consisting of over one hundred suppliers located across Australia, and others internationally.
Following today's strong gain, this ASX tech stock is now up over 90% since the start of 2023. Though, it is worth noting that it still remains down significantly on a 12-month basis.
