• Revenue: $1.7 million in Q2 2024, down 8% from $1.8 million in Q2 2023.
• Product Sales: $1.4 million in Q2 2024.
• Gross Profit: $462,000 in Q2 2024, compared to $467,000 in Q2 2023.
• Gross Margin: 26.6% in Q2 2024; adjusted to 34.4% excluding a one-time inventory write-down.
• Total Comprehensive Loss: $7.1 million in Q2 2024, compared to $9 million in Q2 2023.
• Cash Balance: $5.3 million at the end of Q2 2024, up from $3.1 million at the end of 2023.
• Working Capital: Deficit of $3.7 million in Q2 2024; adjusted surplus of $5.7 million excluding non-cash items.
• Total Assets: Increased to $9.9 million from $8.3 million at the end of 2023.

• Warning! GuruFocus has detected 9 Warning Signs with DPRO.

Release Date: August 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Draganfly Inc (NASDAQ:DPRO) reported a 30% increase in revenue quarter over quarter, reaching $1.732 million in Q2 2024.
• The company has a strong cash balance of $5.2 million, indicating financial stability.
• Draganfly Inc (NASDAQ:DPRO) has secured significant contracts, such as with Mass General Brigham for drone delivery programs and First Atlantic Nickel for mining services.
• The company has expanded its Board with experienced members, including former military and industry leaders, enhancing strategic guidance.
• Draganfly Inc (NASDAQ:DPRO) is actively involved in military and public safety sectors, with contracts for wildfire services and search and rescue operations, indicating diversified revenue streams.

Negative Points

• Despite the revenue increase, Draganfly Inc (NASDAQ:DPRO) reported a comprehensive loss of $7.1 million for the quarter.
• The company experienced an 8% year-over-year decline in revenue, from $1.8 million in Q2 2023 to $1.7 million in Q2 2024.
• There was a one-time non-cash inventory write-down of $134,000, impacting gross profit margins.
• Draganfly Inc (NASDAQ:DPRO) faces competitive pressure from other drone companies with more focused product lines.
• The company is still in the process of scaling production capacity, which may delay the realization of large military contracts.

Q & A Highlights

Q: Are we at risk of bankruptcy? A: Cameron Chell, CEO, stated that while the company is a venture and inherently risky, he does not believe Draganfly is at risk of bankruptcy. He emphasized the experienced Board and management team, a clear strategy, and a strong pipeline indicating demand, which positions the company for future growth.

Q: What are competitors doing right that Draganfly isn't? A: Chell acknowledged that some competitors have focused on single products, allowing them to scale efficiently. Draganfly, however, has chosen to differentiate by offering integrated solutions across various product lines, which may take longer to scale but positions them uniquely in the market.

Q: When can we expect meaningful contracts? A: Chell expressed optimism about securing significant contracts within the year, noting that the company has been working on these for several years and is well-positioned among the remaining competitors.

Q: Have strategic alternatives like mergers been considered? A: While Draganfly has explored various strategic alternatives, including mergers, the current focus is on organic growth and securing large contracts. However, the company remains open to opportunities that would benefit shareholders.

Q: Are there any supply chain concerns, especially with Asian-made components? A: Chell acknowledged potential supply chain issues but noted that shifts in manufacturing locations within Southeast Asia could mitigate these concerns. He emphasized that while supply chain constraints exist, they are not currently a significant issue for Draganfly.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.