Draganfly (NasdaqCM:DPRO) Q4 2025 Earnings call March 24, 2026 05:30 PM ET Company ParticipantsCameron Chell - CEO and PresidentPaul Sun - CFORolly Bustos - Internal Investor Relations RepresentativeRolly BustosWelcome everybody to our call today. I'm just gonna give it a minute here while people start to file in, and then we'll get started. All right then. Just so make sure we keep on schedule. I think we will get started with today's call. As always, greetings and welcome to everybody, to the shareholders ...

Draganfly (NasdaqCM:DPRO) Q4 2025 Earnings call March 24, 2026 05:30 PM ET Company ParticipantsCameron Chell - CEO and PresidentPaul Sun - CFORolly Bustos - Internal Investor Relations RepresentativeRolly BustosWelcome everybody to our call today. I'm just gonna give it a minute here while people start to file in, and then we'll get started. All right then. Just so make sure we keep on schedule. I think we will get started with today's call. As always, greetings and welcome to everybody, to the shareholders ...

Draganfly (NasdaqCM:DPRO) Q4 2025 Earnings call March 24, 2026 05:30 PM ET Speaker2Welcome everybody to our call today. I'm just gonna give it a minute here while people start to file in, and then we'll get started. All right then. Just so make sure we keep on schedule. I think we will get started with today's call. As always, greetings and welcome to everybody, to the shareholders and stakeholders to today's Draganfly 2025 Q4 and full year earnings call. My name is Rolly Bustos, and I am the Internal Inves ...

Industry Overview - The global drone industry is experiencing significant growth, with a projected CAGR of 9.3% from 2026 to 2031, driven by adoption in commercial, government, and military sectors [1] - The integration of drones with AI, cloud computing, and edge processing is enhancing their adoption across various verticals [1] Ondas Inc. (ONDS) - Ondas's Ondas Autonomous Systems (OAS) is becoming a primary growth engine, benefiting from increased deployments of autonomous platforms and initial revenue from acquired businesses [3] - The company is focusing on strategic partnerships and compliance with U.S. production standards, which supports long-term growth, particularly in the C-UAS segment and ground robotics [4] - Ondas is actively pursuing M&A to enhance its portfolio, having acquired several companies, including Roboteam and Rotron Aero, to expand its capabilities [5] - Preliminary financial results for 2025 indicate expected revenues of $27 million to $29 million for Q4, a 51% increase from prior targets, with a backlog of $65.3 million, up 180% from previous estimates [6][10] - For 2026, Ondas raised its revenue outlook to $170-$180 million, a 25% increase from earlier projections, which includes contributions from recent acquisitions [7] - The company is investing heavily in infrastructure and team expansion, which may create short-term financial pressures despite strengthening its competitive position [9] Draganfly, Inc. (DPRO) - Draganfly is a Canadian drone solutions developer with a diverse product lineup, including military and public safety drones, and is expanding its U.S. capacity [11][12] - Recent contracts with the U.S. military, including a significant order for FPV drones, are key growth drivers for the company [12][13] - Draganfly's compliance with NDAA regulations provides a competitive advantage as the U.S. and NATO phase out non-compliant systems [14] - The company is collaborating with Drone Nerds to expand its customer reach and is in the process of establishing multiple manufacturing plants in the U.S. to significantly increase production capacity [15] - Draganfly achieved a 14.4% year-over-year revenue growth, supported by rising product sales, and has a strong cash position of $69.9 million with minimal debt [16][17] Financial Performance & Valuation - Over the past six months, ONDS and DPRO have seen stock gains of 110.1% and 84.8%, respectively [18] - ONDS has a forward price/sales ratio of 21.27X, significantly higher than DPRO's 2.44X, indicating a higher valuation relative to sales [20] - Analysts have revised earnings estimates down for ONDS by 3.6% over the past 60 days, while estimates for DPRO have been revised upwards [19][22] Investment Outlook - ONDS holds a Zacks Rank of 3 (Hold), while DPRO has a Zacks Rank of 2 (Buy), suggesting that DPRO is currently the more favorable investment option [23][24]

Industry Overview - The global drone technology market is entering a new phase of expansion, driven by advancements in artificial intelligence (AI) and cloud computing [1] - The integration of AI has made modern drones faster and more versatile, enabling autonomous navigation based on real-time data [2] - Drones are gaining mainstream adoption across various sectors, including logistics, surveillance, and infrastructure monitoring, with significant use by companies like Walmart and Amazon [3] Defense Sector Growth - The defense segment remains a major growth engine, with increased drone adoption driven by geopolitical strains and defense upgrades [4] - Drones are widely deployed for border security, precision strikes, and intelligence, surveillance, and reconnaissance (ISR) operations, becoming indispensable in modern warfare [4] Technological Advancements - Drone swarm technology allows multiple autonomous drones to operate in tandem, enhancing capabilities in military operations and large-area surveillance [5] - The unmanned aerial vehicle (UAV) market is projected to witness a compound annual growth rate (CAGR) of 16.77% from 2026 to 2035 [6] Investment Opportunities - Companies like Ondas, Draganfly, and Red Cat Holdings are highlighted as high-potential stocks in the drone technology sector [7] - Ondas is focusing on autonomous systems and has raised its revenue outlook for 2026 to $170-$180 million, a 25% increase from previous targets [11] - Draganfly has secured significant contracts with the U.S. military and is expanding its product offerings, including NDAA-compliant drones [14][15] - Red Cat Holdings is experiencing strong demand from defense clients and has reported substantial revenue growth, with 2025 revenues projected to be between $38 million and $41 million, up about 153% from 2024 [19]

Core Insights - Ondas Holdings Inc. (ONDS) is focusing on the lucrative drone market through its Ondas Autonomous Systems (OAS) division, which has become the main growth driver for the company, with revenues increasing over sixfold year over year to $10.1 million, primarily from OAS [1][9] Group 1: Business Performance - OAS contributed $10 million in revenue compared to just $1 million a year earlier, indicating strong growth potential [1] - Ondas expects full-year revenues to be at least $36 million for 2025, with fourth-quarter revenues estimated to exceed $15 million, and anticipates revenues of at least $110 million in 2026 [5][9] Group 2: Strategic Developments - The company is expanding its capabilities through strategic partnerships and acquisitions, including areas such as unmanned ground systems, robotics, and fiber optic communications [2] - Ondas Networks is seen as a longer-term catalyst, with the adoption of the IEEE 802.16t upgrade expected to drive a multi-year upgrade cycle across AAR-owned frequencies [3][4] Group 3: Challenges and Outlook - While OAS is driving growth, the company faces challenges in scaling the business and managing integration risks amid ongoing acquisitions [6] - Management has indicated that current revenue expectations from Ondas Networks are modest compared to the OAS business, with significant adoption of dot16 expected by 2026 [4][6] Group 4: Market Position - ONDS shares have surged 38.9% in the past month, reflecting positive market sentiment [11] - The forward 12-month Price/Sales ratio for ONDS is 31.82, significantly higher than the industry average of 2.13, indicating a premium valuation [12]

Industry Overview - The global drone industry is transitioning from niche applications to mainstream adoption, impacting border defense, surveillance, logistics, and infrastructure monitoring [1] - Increased geopolitical tensions and defense upgrades are driving global drone adoption, with governments allocating more budget to unmanned aerial systems (UAS) [2] - Drones are becoming essential in various sectors, including mining, infrastructure monitoring, real estate, oil and gas exploration, logistics, and filmmaking [3] Technological Advancements - The integration of artificial intelligence (AI), cloud computing, and edge processing is enhancing drone capabilities, making them faster and more versatile [4] - AI is enabling autonomous navigation, allowing drones to plan flight paths based on real-time environmental data [4] - The incorporation of 5G and advanced Wi-Fi technology is improving real-time data transmission, broadening commercial applications [4] Market Growth - The global drone tech market is projected to grow at a CAGR of 14.3% from 2025 to 2030, indicating significant growth potential [5] - Companies with strong R&D pipelines, diversified market exposure, and strategic collaborations are well-positioned for success in the evolving drone landscape [5] Company Highlights AeroVironment, Inc. (AVAV) - AVAV is a key beneficiary of rising global demand for UAS, developing uncrewed aircraft and related technologies for defense and allied governments [7] - In Q2 fiscal 2026, AVAV's contract awards reached $3.5 billion, with bookings at $1.4 billion, driven by R&D and manufacturing investments [8] - The company expects revenues between $1.95 billion and $2 billion for fiscal 2026 [11] Kratos Defense & Security Solutions, Inc. (KTOS) - KTOS is positioned to benefit from increased defense budgets, with NATO and Pacific allies expected to spend 5% of GDP on defense [13] - The company reported Q3 revenues of $347.6 million, a 26% year-over-year increase, and projects Q4 revenues of $320-$330 million [15] - KTOS is expanding its capabilities through acquisitions and collaborations, including the acquisition of Orbit Technologies [14] Draganfly Inc. (DPRO) - DPRO develops various drone systems, including the Commander 3XL and medical response drones, with a focus on military and public safety applications [16] - The company secured a significant U.S. Army FPV drone order, which includes supply chain support and training [17] - DPRO achieved 14.4% year-over-year revenue growth, supported by rising product sales [18]

Core Insights - The U.S. drone industry has received a significant boost as the FCC has banned foreign-made drones, particularly from China, enhancing domestic manufacturers' market position [1][2] Regulatory Impact - The FCC's decision to add foreign-made uncrewed aircraft systems (UAS) to its "Covered List" effectively prohibits Chinese companies like DJI and Autel from obtaining necessary authorizations for sales in the U.S. [2] - This ban creates a market vacuum where DJI previously held a dominant 70-80% market share, allowing domestic companies to capitalize on this opportunity [2] Market Response - Domestic drone stocks have surged, with notable increases in share prices for several companies: - Red Cat Holdings, Inc. (RCAT) shares rose over 25% in five days, positioning itself as a secure alternative to DJI [5] - AeroVironment, Inc. (AVAV) remains a leading choice for government-grade autonomous systems, benefiting from new contracts and increased military spending [5] - Ondas Holdings, Inc. (ONDS) shares gained over 23% as it leads in "drone-in-a-box" solutions essential for industrial monitoring [5] - Draganfly, Inc. (DPRO) saw a surge of over 20% as it positions itself as a primary "Blue UAS" alternative following the FCC ban [5] Industry Outlook - Analysts predict that the Space & Defense Technology sector could become one of the strongest growth areas within Aerospace & Defense over the next decade, driven by rising global defense budgets and advancements in drone and AI technologies [3] - The transition from foreign-controlled hardware to a secure, American-made ecosystem marks the beginning of what is being referred to as the "year of the drone" [4]

Core Insights - Critical Infrastructure Technologies Ltd. (CiTech) has signed a Mutual Non-Disclosure Agreement (NDA) with Babcock International Group PLC and Draganfly Inc. to enhance defense and security capabilities in the Asia-Pacific region [1][2] Group 1: Collaboration Overview - The collaboration aims to leverage the strengths of three companies in defense engineering, advanced technology integration, unmanned systems, and operational delivery [2][6] - The partnership will provide sophisticated, scalable solutions for governments, military forces, and national-security stakeholders [2][6] Group 2: Company Profiles - Babcock International Group is a leading UK defense contractor, providing mission-critical engineering and support services, with a strong presence in the Asia-Pacific defense markets [3][9] - CiTech specializes in advanced engineering capabilities and technology-driven solutions for defense and critical infrastructure, focusing on digital architectures and resilient mission environments [4][12] - Draganfly Inc. is recognized for its unmanned aerial systems and sensor-driven data solutions, with recent military sales validating its operational maturity [5][10] Group 3: Strategic Focus Areas - The collaboration will address key areas such as national defense modernization, border and maritime security, disaster response, and critical infrastructure protection [6][7] - The combined strengths of the three companies position them to meet the Asia-Pacific region's defense priorities, focusing on security resilience and rapid-response technologies [7]

Core Viewpoint - Draganfly Inc. has entered a collaborative framework with Babcock International Group PLC and Critical Infrastructure Technologies Corp. to enhance defense and security capabilities in the Asia-Pacific region [1][4]. Group 1: Collaboration Details - The partnership combines strengths in defense engineering, digital mission systems, and advanced unmanned aerial solutions [2]. - Babcock brings extensive experience in mission-critical engineering, fleet sustainment, and defense program delivery [2][6]. - Critical Infrastructure Technologies contributes high-assurance digital architectures and integrated sensor platforms for national security [2][8]. Group 2: Draganfly's Capabilities - Draganfly's NDAA-compliant unmanned aerial systems, such as the Commander 3XL, offer multi-mission ISR and rapid-response capabilities [3]. - The collaboration aims to address regional priorities including defense modernization, maritime security, disaster response, and critical infrastructure protection [3][4]. Group 3: Market Positioning - The partnership is seen as a significant step for Draganfly's expansion into the Asia-Pacific defense market [4]. - There is a growing demand for resilient, sovereign mission capabilities in the region, which the collaboration aims to fulfill with interoperable and scalable solutions [4].