Shares of AgEagle Aerial Systems Inc. UAVS have declined 5.4% since reporting 2024 results, underperforming the S&P 500 index’s 0.5% growth. Over the past month, UAVS shares have lost 8.3%, underperforming the broader market’s 2.7% decline. The stock’s relative underperformance suggests investor caution despite notable developments in the company’s annual update.

Revenue & Earnings Performance

For 2024, AgEagle reported total revenues of $13.4 million, a slight decline of 2.2% from $13.7 million in 2023. Despite the top-line softness, gross profit improved 14.5% year over year to $6.3 million from $5.5 million. The company’s total operating expenses were $18.9 million, marking a 57.6% year-over-year decrease from $44.6 million. The reduction was led by $6.8 million in lower operating expenses and the absence of $18.9 million in impairment charges booked in the prior year.

Loss from operations narrowed to $12.6 million in 2024 from $39.2 million in 2023. While the company remains unprofitable, this contraction in losses signals progress in cost containment and operational streamlining.

AGEAGLE AERIAL SYSTEMS, INC. Price, Consensus and EPS Surprise

AGEAGLE AERIAL SYSTEMS, INC. price-consensus-eps-surprise-chart | AGEAGLE AERIAL SYSTEMS, INC. Quote

Other Key Business Metrics

AgEagle ended 2024 with $3.6 million in cash on hand, upsurging 350% from $0.8 million in the prior year. This improvement was enabled by an aggregate capital raise of $15.3 million through a combination of public equity offerings and the sale of Series F Preferred Stock. These funds not only improved liquidity but also supported a reduction in outstanding debt.

The company secured three of the largest product orders in its history — a 49-unit eBee drone order from the French military, a 20-drone order from UAE security forces, and an order for 60 RedEdge-P multispectral sensors destined for East Asia. These deals affirm the growing demand for UAVS' products in the defense and international markets.

Management Commentary

Chief executive officer Bill Irby described 2024 as “a defining year” for AgEagle, highlighting the record-setting product orders and meaningful cost reductions. Irby credited an "exceptional leadership team" with expertise in scaling technology businesses and emphasized that the company is positioned for long-term, sustainable growth. He added that the leaner cost structure and expanded product demand would enable the company to pursue new partnerships and increase customer acquisition.

Looking ahead, Irby expressed confidence in continued growth through deeper market penetration, especially in commercial and defense verticals. He reaffirmed a commitment to innovation and financial discipline while maintaining partnerships and maximizing shareholder value.

Factors Influencing Results

While the annual revenue decline was relatively modest, the increase in UAVS’ gross profit suggests enhanced product margins or a shift toward a more favorable product mix. The sharp reduction in operating expenses, particularly the elimination of prior-year impairment charges, was a key contributor to the improved operating loss figure. Capital raised during the year enhanced liquidity and enabled the firm to better manage its liabilities.

While the gross margin improvement and expense discipline indicate financial progress, persistent losses suggest that scalability is challenging. The successful fulfillment and renewal of large contracts like those announced in 2024 will be critical to improving profitability going forward.

View

Management’s qualitative outlook remains optimistic. The company expects continued expansion across core markets, driven by the greater adoption of drone technologies for commercial and defense applications. UAVS aims to build on its 2024 momentum by maintaining a focus on operational efficiency, innovation and partnership growth.

Other Developments

AgEagle made several strategic and organizational changes in 2024. It appointed Grant Begley, a well-known expert in aerospace and unmanned systems, as the chairman of the board. Begley hails from a defense background, including service as a U.S. Navy Top Gun pilot and former Director of Tactical Aircraft, Missiles and UAS. Three additional board members with relevant expertise — L.B. Day, Brent Klavon and Kevin Lowdermilk — were also appointed in the year.

The company was awarded the Green UAS Certification by the Association for Uncrewed Vehicle Systems, affirming its cybersecurity and supply-chain standards in compliance with the National Defense Authorization Act.

UAVS also participated in multiple international exhibitions and was invited to the White House for discussions with the National Security and Economic Councils on the future of commercial drones, highlighting its elevated profile in government and industry circles.

In summation, AgEagle’s 2024 results show significant progress in strengthening its financial foundation and expanding its global reach, though the path to profitability remains a work in progress.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AGEAGLE AERIAL SYSTEMS, INC. (UAVS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research