Core Insights - Volatus Aerospace Inc. has expanded its tactical intelligence, surveillance, and reconnaissance (ISR) drone contract by an additional C$700,000, raising the total contract value to approximately C$1.7 million, with deliveries expected to be completed in September 2025 [1][3] Company Overview - Volatus Aerospace is a Canadian leader in aerial intelligence and cargo solutions, providing innovative global aerial solutions for various industries, including oil and gas, energy utilities, healthcare, public safety, and infrastructure [4] - The company has over 100 years of combined institutional knowledge in aviation and is committed to enhancing operational efficiency, safety, and sustainability through advanced aerial technologies [4] Product and Market Position - The ISR drone systems offered by Volatus are designed for rapid deployment, day-and-night operations, and robust data capture, which enhances tactical situational awareness [2] - The expansion of the contract reflects the customer's confidence in Volatus' ability to deliver mission-critical ISR solutions on time and at scale, indicating a growing demand for scalable and cost-effective ISR capabilities across NATO member states [2][3]

Core Insights - Volatus Aerospace Inc. has entered into a multi-year agreement with a major North American electricity utility to provide remotely piloted aircraft system (RPAS) inspection, mapping, and data services across approximately 100,000 miles of transmission and distribution lines, effective until August 2028 with a potential two-year extension [1][2] - The contract is expected to generate revenues of CAD $15 million over its duration, with margins consistent with the company's typical contracts [2] - The agreement highlights the growing importance of drones in utility asset management, providing Volatus with recurring opportunities to deliver scalable value [3] Company Overview - Volatus Aerospace is recognized as a leader in innovative aerial solutions for intelligence and cargo, leveraging over 100 years of combined aviation expertise to enhance operational efficiency, safety, and sustainability [5] - The company has a proven track record in delivering drone services for utilities and infrastructure clients across North America, supported by its remote Operations Center in Vaughan, Ontario [3] Industry Context - The global drone inspection and monitoring market is projected to grow from USD $11.6 billion in 2022 to USD $23.0 billion by 2027, reflecting a compound annual growth rate of 14.6%, driven by the demand for safer and more efficient inspection methods in utilities, energy, and infrastructure sectors [4] - Regulatory and reliability standards necessitate ongoing inspection of energy assets, creating a consistent demand for aerial inspection services [4]

Core Viewpoint - Volatus Aerospace has received a Special Flight Operations Certificate (SFOC) from Transport Canada, allowing the company to conduct more complex Beyond Visual Line of Sight (BVLOS) operations using advanced radar technology from MatrixSpace integrated with Kongsberg Geospatial's IRIS Terminal platform [1][2]. Company Developments - The SFOC enables Volatus to scale BVLOS operations into applications such as automated drone-in-a-box networks and autonomous services, which require reliable detect-and-avoid capabilities [2][4]. - Volatus already holds nationwide SFOCs for various BVLOS operations, including low-risk airspace and nighttime missions, which positions the company favorably in the regulatory landscape [4]. - The integration of MatrixSpace's compact radar technology with Kongsberg's airspace management software enhances Volatus' operational capabilities and competitive position in the market [6][10]. Market Insights - The global drone-in-a-box market was valued at over US$1 billion in 2024 and is projected to grow to between US$5 billion and US$9 billion by the early 2030s, indicating an annual growth rate of approximately 20-23% [3]. - This growth reflects the commercial potential for scalable, subscription-based drone services, which Volatus aims to capitalize on through its new BVLOS capabilities [3]. Strategic Partnerships - Volatus has formed strategic partnerships with Kongsberg Geospatial and MatrixSpace, combining their technologies to create a deployable ecosystem for safe and repeatable drone operations [6][10]. - Kongsberg's IRIS Terminal platform integrates various sensor feeds for real-time airspace awareness, while MatrixSpace's radar technology is designed for scalable autonomous deployments [7][9]. Corporate Update - Volatus has entered into a consulting agreement with Think Ink Marketing Data & Email Services to enhance investor relations and digital marketing efforts for a period of 12 months [11][12]. - The company will compensate Think Ink US$125,000 for their services, which include advertising and social media coverage to increase market awareness [13].

Financial Data and Key Metrics Changes - Overall Total Payment Volume (TPV) grew by 3%, but growth was inconsistent across brands and regions [3][4] - Underlying Profit Before Tax (PBT) fell to just under $290 million, with significant impacts in Q1 and Q4 due to macro conditions [3][4] - The company aims to hold underlying costs flat compared to FY 2025, despite a 3% increase in costs over the last twelve months [5][6] Business Line Data and Key Metrics Changes - Corporate division saw top line growth to $12.3 billion, with a 6% PBT growth excluding Asia [7][8] - Leisure division experienced TPV growth year on year, primarily from lower margin brands, with profit falling due to soft trading conditions [8][9] - Other segments remained flat year on year, with increased profit contributions from operating businesses [9] Market Data and Key Metrics Changes - ANZ and The Americas reported solid profit growth, while EMEA and Asia experienced reductions [3][4] - The UK corporate travel brand underperformed, and Asia faced operational challenges leading to additional provisions [4][5] - The company expects EMEA and Asia to return to more appropriate levels by 2026 [4] Company Strategy and Development Direction - The company is focusing on productivity gains, cost reduction, and targeted investments in technology and AI [5][6][20] - A new Global Business Services division aims to support frontline teams and improve operational efficiency [5][6] - The company is exploring M&A opportunities to expedite growth in specialist businesses [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging operating environment due to geopolitical tensions and macroeconomic conditions but remains optimistic about medium to long-term growth [2][3] - There are promising signs emerging in key markets, and the company is prepared for a market rebound [23][24] - Management expects a challenging first half of FY 2026 but anticipates a stronger second half [43][44] Other Important Information - The company has undertaken $450 million in capital management initiatives, including debt repayment and share buybacks [9] - Investment in TP Connect increased by $7 million to enhance airline content and new revenue streams [8] - The company is launching a travel retail loyalty program to enhance customer engagement and drive growth [35][36] Q&A Session Summary Question: Can you provide details on the impact of lower overrides in FY 2025 and potential upside for 2026? - Management indicated that lower overrides significantly impacted the leisure business, particularly in the last quarter, and emphasized the importance of growth to achieve higher override tiers [48][52] Question: What are the potential impacts of changes to payment surcharges in Australia? - Management has evaluated the potential impacts and is prepared with various options to mitigate any negative effects [54][57] Question: Can you clarify the outlook for the first half of FY 2026? - Management expects a like-for-like comparison to be relatively flat year on year, with improvements anticipated in Asia [60][62] Question: What should be expected for the other segment's loss in FY 2026? - Management expects the loss to decrease to around $70 million, with improvements anticipated from operating businesses [68][70] Question: How is Corporate Traveler positioned in the UK and Europe? - Management expressed confidence in the UK market, highlighting recent management changes and improvements to the product offering [90][92]

Financial Data and Key Metrics Changes - The overall Total Payment Volume (TPV) grew by 3%, but this growth was inconsistent across brands and regions [3] - Underlying Profit Before Tax (PBT) fell to just under $290 million, with significant impacts noted in the first and fourth quarters due to macro conditions [3][4] - The company aims to hold underlying costs flat compared to FY 2025, despite a 3% increase in costs over the last twelve months [5] Business Line Data and Key Metrics Changes - The Corporate division saw top line growth to $12.3 billion, with a 6% PBT growth excluding Asia [7] - The Leisure division experienced year-on-year TTV growth, primarily from lower margin brands, with profit falling due to soft trading conditions [8] - The introduction of the Global Business Services division is yielding early success in non-travel procurement and BPO models [5] Market Data and Key Metrics Changes - ANZ and The Americas reported solid profit growth, while EMEA and Asia experienced reductions [3][4] - The UK corporate travel brand underperformed, impacted by geopolitical tensions and a downturn in travel on key routes [4] - The company expects EMEA and Asia to return to more appropriate performance levels in 2026 [4] Company Strategy and Development Direction - The company is focusing on productivity gains, cost reduction, and targeted investments in technology and AI to enhance business strategies [5][6] - There is a strong emphasis on diversifying customer service channels and enhancing digital capabilities, particularly through the Mellon platform [12][15] - The company plans to expand its addressable markets through new products and services, including consulting and specialist travel [16][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging operating environment due to geopolitical tensions and macroeconomic conditions but remains optimistic about medium to long-term growth [2][3] - There are promising signs emerging in key markets, and management expects a rebound in the second half of FY 2026 [45][46] - The company is confident in its diversified customer offerings and geographic presence, which positions it well for future growth [23][41] Other Important Information - The balance sheet remains strong, supported by healthy cash generation and proactive capital management initiatives totaling around $450 million [9] - The company is targeting a 15% to 20% reduction in capital expenditures for the current year [5] Q&A Session Summary Question: Impact of lower overrides in FY 2025 - Management acknowledged that lower overrides significantly impacted the leisure business, particularly in the last quarter, and emphasized the importance of volume growth to achieve override tiers [49][54] Question: Potential changes to payment surcharges in Australia - Management has evaluated the potential impact of payment surcharge changes and is prepared with various options to mitigate any negative effects [56][59] Question: Clarification on profit outlook for H1 FY 2026 - Management expects a like-for-like comparison to be relatively flat year-on-year, excluding any adjustments from underlying operations [62] Question: Expectations for Asia's performance - Management anticipates improvement in Asia's performance in FY 2026, with expectations for moderate profit growth [64] Question: Outlook for the corporate segment in the U.S. - The U.S. remains the number one growth market, with expectations for good growth in both FCM and Corporate Traveler brands [78][81] Question: Online strategy for leisure market - The company is focusing on increasing online sales, which have grown over 10% year-on-year, and is investing in digital capabilities to attract price-sensitive customers [84][86]

Financial Performance - The company achieved a record Total Transaction Value (TTV) of $24.5 billion, a 3% increase year-over-year[13] - Underlying Profit Before Tax (UPBT) reached $289.1 million, a 9.8% decrease compared to the previous year[18] - The company declared a final dividend of $0.29 per share, fully franked, bringing the total dividends for the year to $0.40 per share, consistent with FY24[14, 18] - The company executed approximately $450 million in capital management initiatives during FY25[20] Segment Performance - The Corporate segment experienced a 2% TTV growth, reaching $12.3 billion, but UPBT decreased to $190 million (FY24: $211 million)[35, 36] - The Leisure segment saw a 6.7% TTV growth to $11.8 billion, with UPBT at $174.7 million, a 5.3% decrease compared to FY24[38, 39] - The "Other" segment reported a TTV of $337.4 million and revenue of $233.8 million, with an Underlying PBT loss of $75.3 million[41] Strategic Initiatives and Outlook - The company is implementing targeted strategies to reduce costs, enhance productivity, and boost margins in response to a challenging global trading environment[15, 23] - Ongoing investments are being made in future growth drivers, including loyalty programs, AI, and digital transformation[16, 33] - The company anticipates benefits from the Global Business Services (GBS) area, expecting improved operational efficiency and reduced costs[26, 32] - The company expects 8.1% growth in global business travel spending during 2026, with 6.1% Compound Annual Growth Rate (CAGR) from 2026-2029[89]

Core Insights - Volatus Aerospace has been selected to operate its Condor XL Remotely Piloted helicopter for Ki Reforestation's next-generation aerial seeding operations, marking a significant step in automating reforestation efforts in Canada [1][4] - The Condor XL is designed to address the challenges posed by the extensive forest fires in Canada, which have burned over 18 million hectares in 2023 and 2024, threatening biodiversity and climate resilience [2][3] - Aerial seeding with the Condor XL is expected to enable rapid and cost-effective reforestation, utilizing precision-dispersed seedpods that are engineered for post-burn soil conditions [3][4] Company Overview - Ki Reforestation is focused on large-scale ecosystem recovery through innovative seed technologies and aerial deployment methods [5] - Volatus Aerospace specializes in delivering innovative aerial solutions for various applications, including intelligence and cargo, utilizing both piloted and remotely piloted aircraft [6] Technological Advancements - The Condor XL can carry up to 180 kg over a distance of 200 km, making it suitable for large-scale reforestation efforts [2] - Volatus has received Special Flight Operating Approval to conduct flight tests for the Condor XL, which will validate the dispersal system in collaboration with Ki's biodegradable seedpods [3][4] Market Potential - The partnership supports Canada's 2 Billion Trees Program and aligns with international climate goals, including COP30, indicating a strong market demand for rapid reforestation solutions [4] - Reforested land is estimated to sequester 5–10 tonnes of CO₂ annually, with potential carbon credit values ranging from US$75 to US$200 per hectare per year [4]

Core Insights - Volatus Aerospace Inc. reported strong financial growth in Q2 2025, with revenue increasing by 49% year-over-year to CAD 10,587,075, driven by robust demand in equipment and services [2][7][8] - The company achieved a significant improvement in adjusted EBITDA loss, narrowing it by 85% year-over-year to CAD 276,259, reflecting operational efficiency and cost discipline [2][8] - Liquidity strengthened with a current cash balance of approximately CAD 20 million following recent financing events, supporting ongoing operational and strategic initiatives [2][7][8] Financial Highlights - Revenue for Q2 2025 was CAD 10,587,075, up from CAD 7,121,993 in Q2 2024, with equipment sales growing 104% quarter-over-quarter and services up 71% [8] - Gross profit reached CAD 3,375,420, resulting in a gross margin of 32%, slightly down from 35% in Q2 2024 due to a higher proportion of equipment sales [8] - The adjusted EBITDA loss of CAD 276,259 marked an 85% improvement compared to CAD 1,852,178 in Q2 2024, indicating better scale and service growth [8] Operational Highlights - The company secured a one-year extension of a federal standing offer, ensuring continued access to federal contracts, and obtained clearances for pipeline surveillance from major oil and gas firms [8] - Volatus completed a defense demonstration for a G-20 client and entered collaborations for large-scale tree planting and multispectral crop surveys across multiple provinces [8] - The company advanced its commercialization efforts with BVLOS medical deliveries and secured a CAD 560,000 international training contract with a NATO member [8] Strategic Outlook - Volatus is positioning itself to capture growing domestic demand in defense, public safety, and Arctic surveillance, aligning with Canada's increased defense spending [7][8] - The company aims to enhance its operational capabilities and expand its market presence through disciplined execution and strategic partnerships [6][7]

Core Insights - Volatus Aerospace Inc. is positioned for growth with a strong financial position, an expanding international contract portfolio, and alignment with Canada's defense and industrial priorities [1][3][8] Financial Position - The company has approximately $20 million in cash and strong working capital, providing the necessary resources for execution [6] - Long-term institutional support has been secured from partners such as Investissement Québec and Export Development Canada [6] Contract Wins - Volatus has delivered around $5 million in intelligence, surveillance, and reconnaissance (ISR) and public safety contracts, including engagements with NATO partners and emergency response agencies [6] Regulatory Readiness - The company has obtained multiple regulatory approvals that enhance its ability to conduct expanded remote operations, significantly increasing its addressable market across various sectors [6][7] Strategic Partnerships - Collaborations with original equipment manufacturers (OEMs) in Canada, the US, and Europe are expanding Volatus' capabilities in surveillance, heavy-lift cargo, and geospatial markets [6] Execution Capacity - The Operations Control Centre (OCC) enables Volatus to respond effectively to Canadian and international requests for proposals (RFPs) [6] Alignment with National Priorities - Volatus' strengths in ISR, maritime surveillance, wildfire response, and reforestation align with Canada's defense commitments and industrial capacity [2][7] Building Sovereign Capacity - The company is investing in design, production, and secure supply chains to establish a Canadian hub for drone manufacturing and advanced aerial capabilities with export potential [7] Regulatory Tailwinds - Evolving regulatory frameworks and recent approvals are facilitating scalable remote operations and creating new channels for service expansion and long-term contracts [7] Global Expansion - Recent engagements in ISR, training, and heavy-lift operations with NATO-aligned partners demonstrate Volatus' credibility to pursue larger, multi-year contracts [7] Commercializing Innovation - The company is advancing AI-enabled software, counter-drone solutions, and RPAS platforms, including the Condor XL heavy-lift program, to address urgent defense and environmental needs [7] Disciplined Growth - With a robust cash position, Volatus is focusing on profitable growth through solution sales, aerial services, and training while investing in future-ready technologies and evaluating potential acquisition opportunities [8]

Core Viewpoint - Volatus Aerospace Inc. has successfully completed a bought deal private placement offering, raising gross proceeds of $4,830,000 through the sale of 9,288,462 units at a price of $0.52 per unit, indicating strong investor confidence in the company's growth strategy [1][2]. Group 1: Offering Details - The offering was led by institutional investors in Quebec, with significant participation from other Canadian institutional investors, highlighting broad confidence in Volatus' strategy and growth potential [2]. - Each unit consists of one common share and one-half of a common share purchase warrant, with each whole warrant allowing the purchase of one common share at an exercise price of $0.76, valid until August 14, 2028 [3]. - The net proceeds will be allocated towards expanding into the defense business segment, increasing inventory of drone systems to meet rising demand, and for general working capital [4]. Group 2: Regulatory and Financial Aspects - A total of 8,076,924 units were sold under the "Listed Issuer Financing Exemption," which allows for no statutory hold periods, while 1,211,538 units sold under the over-allotment option are subject to a four-month hold period [5]. - The company paid a cash commission of $289,800 to the underwriter and issued 557,308 non-transferable broker warrants, each allowing the purchase of one common share at $0.76, valid until August 14, 2026, also subject to a four-month hold period [6]. Group 3: Company Overview - Volatus Aerospace is recognized as a leader in innovative global aerial solutions, providing comprehensive services using both piloted and remotely piloted aircraft systems across various industries, including oil and gas, energy utilities, healthcare, public safety, and infrastructure [8].