Release Date: March 27, 2025

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

Positive Points

• Draganfly Inc (NASDAQ:DPRO) reported a 76% increase in Q4 revenue year-over-year, indicating strong growth in the last quarter.
• The company has successfully completed phase one of a pilot program with Mass Brigham General for medical drone delivery, receiving FAA waivers to operate in Boston airspace.
• Draganfly Inc (NASDAQ:DPRO) unveiled its NDAA compliant Flexor FPV system, which is now operational and has been deployed in theater.
• The company has strengthened its leadership team with notable additions, including former White House Chief of Staff Andy Card and former acting Secretary of Defense Chris Miller.
• Draganfly Inc (NASDAQ:DPRO) has expanded its international presence by signing an Australian distributor and making inroads into the government and commercial markets there.

Negative Points

• Despite the Q4 revenue increase, the overall annual revenue remained flat due to capacity constraints earlier in the year.
• The company's gross profit decreased year-over-year, with adjusted gross margin dropping from 36.5% in 2023 to 30.9% in 2024.
• Draganfly Inc (NASDAQ:DPRO) reported a comprehensive loss of $14.06 million for the year, although this was an improvement from the previous year's loss.
• The company is still not profitable and does not expect to achieve profitability until at least 2026.
• There is ongoing uncertainty regarding the impact of tariffs and geopolitical tensions on the company's operations, although current effects have been minimal.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with DPRO.

Q: How will tariffs affect Draganfly's business, and does the feud between Canada and the US impact their ability to work in the US? A: Cameron Shell, CEO, explained that tariffs are currently benefiting Draganfly due to their US manufacturing capabilities. Most large orders are tariff-exempt, and adjustments in building materials have minimized tariff impacts. The company also benefits from Canadian mandates to deal with local companies, increasing demand in Canada.

Q: Are there any updates on potential meaningful contracts? A: Cameron Shell, CEO, mentioned that Draganfly is part of several programs of record and is starting to see orders come in. The company has built capacity to handle large orders and expects to announce sizable contracts in the next quarter or two.

Q: If the war in Ukraine ends, can Draganfly still benefit? A: Cameron Shell, CEO, noted that Draganfly has already benefited from its work in Ukraine, gaining valuable insights for product design. The demand for drones, particularly for landmine services, will continue to grow even if the war ends, as geopolitical instability persists globally.

Q: What is the current progress of getting Draganfly drones added to the green and blue UAS lists? A: Cameron Shell, CEO, stated that Draganfly is awaiting feedback on their 3 XL drone for the blue list, with expectations of successful trials. The Apex drone is undergoing green list testing, and the company has sold its FPV product to the DOD.

Q: Does the company see a pathway to profitability in 2025? A: Cameron Shell, CEO, indicated that while they do not provide forward guidance, they believe there is enough demand to potentially achieve profitability. However, visibility on profitability may extend into 2026.

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