Draganfly Inc. (DPRO) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows mixed signals: strong revenue growth and improved financial health, but ongoing losses and competitive pressures. The Q&A reveals management's optimism but lacks concrete guidance or timelines, especially regarding profitability and UAS list inclusion. Despite revenue growth, the absence of a share buyback program and competitive/regulatory risks balance out potential positives. The stock price is likely to remain stable, as the financial improvements and optimistic outlook counterbalance the lack of guidance and ongoing challenges.
Key Financial Performance
Revenue $6.56 million for the year, with Q4 revenue up 76% year-over-year from $916,000 to $1.61 million. The increase in Q4 revenue was attributed to increased capacity from upgraded and new plants coming online.
Gross Profit $1.39 million for the year, down from $2.06 million last year. The decrease was due to a noncash write-down of inventory of $627,000 this year compared to $332,000 last year.
Gross Margin 21.3% for the year, adjusted gross margin at just under 31%. The adjusted gross margin decreased from 36.5% in 2023 to 30.9% in 2024 due to more sales coming from higher-margin products last year.
Comprehensive Loss $14.06 million for the year, improved from a loss of $23.7 million last year. The improvement was due to reductions in office and miscellaneous expenses, professional fees, and R&D.
Adjusted Comprehensive Loss per Share $4.85 for this year compared to $11.88 last year, indicating a significant reduction in losses.
Cash Balance $6.25 million at the end of the year, up from $3.1 million at the end of 2023, indicating improved liquidity.
Total Assets Increased from $8.3 million to $10.2 million year-over-year, largely due to the increase in cash.
Working Capital Surplus $3.8 million at the end of the year compared to a deficit of $717,000 in 2023, indicating improved financial health.
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Operating Highlights
NDAA-compliant FlexForce FPV system: Unveiled a new FPV drone system that is NDAA compliant, designed for military applications.
APX drone: Introduced a new ISR drone with a 6.6-pound payload capacity, designed for law enforcement and capable of carrying various sensors.
Heavy lift drone: Launched a 67-pound capacity drone for logistics and medical operations.
Mass General partnership: Selected by Mass Brigham General to implement a medical delivery program, now in Phase 2 with FAA waivers for drone operations.
Australian distributor: Signed a distributor in Australia to expand into government and commercial markets.
Increased capacity: Upgraded plant capacity came online, enabling a 76% increase in Q4 revenue.
Cash balance: Cash balance at year-end was $6.25 million, up from $3.1 million in 2023.
Board appointments: Former high-ranking officials joined the Board, enhancing governance and expertise in military and government sectors.
Modular product design: Developed a modular drone system that integrates with various payloads, enhancing operational flexibility.
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Risk or Challenges
Competitive Pressures: The company faces competitive pressures in securing contracts, as highlighted by the competitive situation with Mass Brigham General for their medical delivery program.
Regulatory Issues: Draganfly is engaged in multiple certification protocols, including NDA compliance and DoD airworthy registration, which are essential for operating in the government sector.
Supply Chain Challenges: The company has worked to secure its supply chain and components for its NDAA-compliant FlexForce FPV system, indicating potential risks in supply chain management.
Economic Factors: The company reported a comprehensive loss of $14.06 million for the year, which reflects broader economic challenges and operational costs.
Operational Capacity: The company experienced capacity constraints earlier in the year due to plant upgrades, which could impact their ability to meet demand.
Financial Losses: Despite a 76% increase in Q4 revenue, the company still reported significant losses, indicating ongoing financial challenges.
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Guidance & Outlook
Revenue Growth: Q4 revenue increased by 76% year-over-year, reaching $1.61 million.
Partnerships: Selected by Mass Brigham General to implement a medical delivery program, receiving FAA waivers for operations.
Product Launch: Unveiled NDAA-compliant FlexForce FPV system, now operational in military applications.
Capacity Expansion: Increased production capacity with upgraded and new plants coming online.
Leadership Enhancements: Added notable figures to the Advisory Board, including former government officials.
Modular Product Line: Developed a modular drone system that integrates with various payloads, enhancing market adaptability.
Future Revenue Expectations: Expectations of profitability or at least EBITDA positive within the next 18 to 24 months.
Cash Position: Cash balance at the end of the year was $6.25 million, indicating improved liquidity.
Market Demand: Anticipating increased demand in the UAV market, particularly in government and commercial sectors.
Wildfire Business Growth: Expecting wildfire-related business to potentially double this year.
Comprehensive Loss: Comprehensive loss for the year was $14.06 million, improved from $23.7 million last year.
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Shareholder Return Plan
Share Buyback Program: None
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Key Q&A
Q:How will tariffs affect our business?
A:The tariffs are benefiting us as we have U.S. manufacturing capabilities and large orders that are mostly tariff exempt. Only about 15% of our build is subject to tariffs, and we have adjusted our materials to reduce any tariff impact. Demand in the market is strong, and we have not seen a decrease in sales.
Q:Does the feud between Canada and the U.S. affect our ability to get work in the U.S.?
A:We have advantages as a U.S. and Canadian-based organization, and we are seeing increased demand in Canada due to a mandate to deal with Canadian companies. We are the only qualified provider of UAS systems in Canada, which has led to increased demand.
Q:Any updates on potential for meaningful contracts?
A:We are part of programs of record and starting to see orders come in. It has taken time for larger contracts to materialize, but we are working on large orders and expect announcements in the next quarter or two.
Q:If the war in Ukraine ends, do you think we can benefit?
A:We have gained valuable lessons from the Ukraine conflict, and our land mine services market is significant. Demand for drones will continue even if the war ends due to geopolitical instability.
Q:Would management be able to provide details regarding the current progress of getting Draganfly drones added to the green and blue UAS lists?
A:We are waiting for feedback on our 3XL for the blue list, and our FPV product has been sold into the DoD. There is some confusion in DIU regarding testing processes, but we are continuing to pursue certifications.
Q:Does the company currently see a pathway to profitability in 2025?
A:We don't provide forward guidance, but we believe that with enough orders, we could be profitable. Visibility on profitability will take us through 2026.
Q:Review of Unclear Management Responses
A:Management did not provide specific details on the progress of getting Draganfly drones added to the green and blue UAS lists, citing confusion in DIU and a lack of clarity on testing processes. Additionally, while they mentioned a pathway to profitability, they did not provide concrete figures or timelines.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Acting Secretary
Boston
FPV drone
Flex
General
ISR drone
Mass
Navy
Phase
United States
audit
camera
compliant
concept
control
delivery
expertise
hospital
integration
law enforcement
list
logistics
loss noncash
noncash item
noncash write
payload capacity
pilot
plant
product line
program
revenue
search rescue
share
software
vertical
DPRO Transcript
Draganfly Inc. (DPRO) Q3 2025 Earnings Call Transcript
Positive11-13
The earnings call reveals a strong financial position with a significant cash increase, strategic military partnerships, and expected revenue growth from military sales. Despite a decrease in gross margin due to a one-time inventory write-down, the company's focus on securing large military orders and strategic partnerships suggests positive future prospects. The Q&A session highlights management's confidence in capturing military orders and expanding production capacity. Overall, these factors indicate a positive sentiment towards future stock performance, likely resulting in a price increase.
Draganfly Inc. (DPRO) Q2 2025 Earnings Call Transcript
Positive8-11
The earnings call highlights a 22% YoY revenue increase and improved comprehensive loss figures, indicating strong financial performance. The Q&A session reveals confidence in handling large contracts and a focus on organic growth, with no significant negative impact from regulatory delays. Despite a decline in gross margin, the strong cash balance and revenue growth, coupled with strategic positioning in the drone market, support a positive sentiment. The market's reaction is likely to be positive, given the optimistic outlook and robust financials, despite some execution and technological risks.
Draganfly Inc. (DPRO) Q4 2024 Earnings Call Transcript
Unknown3-28
The earnings call summary shows mixed signals: strong revenue growth and improved financial health, but ongoing losses and competitive pressures. The Q&A reveals management's optimism but lacks concrete guidance or timelines, especially regarding profitability and UAS list inclusion. Despite revenue growth, the absence of a share buyback program and competitive/regulatory risks balance out potential positives. The stock price is likely to remain stable, as the financial improvements and optimistic outlook counterbalance the lack of guidance and ongoing challenges.
Draganfly Inc. (DPRO) Q4 2024 Earnings Call Transcript
Unknown3-28
The earnings call summary reveals mixed signals: significant revenue growth and improved liquidity are positives, yet ongoing comprehensive losses and competitive pressures present challenges. The Q&A section highlights management's cautious optimism, but lack of forward guidance and profitability uncertainty temper enthusiasm. Overall, the sentiment is neutral, with potential for positive movement if upcoming contracts materialize.
DPRO Report
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
