Draganfly (US:DPRO)2025-11-12 23:30Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $2,155,000, an increase of 14.4% year over year, comprising $1,600,000 from product sales and $530,000 from services [6][38] - Gross profit was $420,000, with a cash balance of just under $70,000,000 as of September 30, 2025 [6][38] - Total comprehensive loss for the quarter was $5,400,000 compared to a loss of $364,000 in the same quarter last year [39][40] - Gross margin for Q3 2025 was 19.5%, down from 23.9% in Q2 2025, primarily due to product mix [41] Business Line Data and Key Metrics Changes - The company unveiled the Outrider Southern Border drone, designed for specific mission sets along the Southern Border, which is expected to have a large addressable market globally [7][32] - Collaborations with Palatin AI to incorporate AI into the drone fleet, enhancing capabilities for military and defense applications [9][12] - The appointment of military advisors to bolster defense capabilities and support sales teams [8] Market Data and Key Metrics Changes - Canada announced a significant increase in defense spending, with a focus on drone technology, positioning the company favorably in that market [23][58] - The U.S. Army is expected to order millions of drones, with the company anticipating a meaningful share of that market [56][67] Company Strategy and Development Direction - The company aims to create blue ocean opportunities by focusing on specialized markets such as border security and military applications, rather than competing in saturated markets [71][75] - Plans to expand manufacturing capacity significantly, with seven new plants expected to quadruple production capacity by the end of next year [20][65] - The strategy includes integrating various payloads and AI systems into the drone fleet to meet diverse customer needs [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EBITDA positive and cash flow positive status in the near future, with strong visibility on growth [47] - The company is focused on building a strong team and culture through strategic acquisitions, emphasizing the importance of people over technology [48][50] - Management highlighted the unique position in the market due to Canadian manufacturing capabilities and the growing demand for defense-related products [24][58] Other Important Information - The company has been recognized as a leader in NDAA compliant drones, with a comprehensive lineup that includes multiple systems [13] - A significant order from a Fortune 50 telecom company for heavy lift drones was noted, indicating potential for future growth in commercial applications [25][26] Q&A Session Summary Question: What are the scenarios for any potential future raise? - The company has $70,000,000 cash on hand and is burning about $1,000,000 per month, indicating no acute need for cash raises but will consider opportunistic raises for strategic acquisitions focused on people [46][47] Question: Can you expand on the press release about manufacturing and overseas military facilities? - The manufacturing in overseas military facilities is primarily for assembly and modification, allowing for rapid adaptation to tactical needs [51][52] Question: Will the company be able to capture a meaningful piece of the U.S. Army's drone orders? - Management believes they can capture a meaningful share of the anticipated orders, emphasizing the importance of providing value to customers [56][57] Question: Is border security still the main focus for the company? - Yes, border security remains a significant focus, with specialized solutions being developed to address various challenges [59][60] Question: Do you see consolidation in the drone industry? - Yes, consolidation is expected as many small companies enter the market, but the company is well-positioned to leverage available talent [61][63] Question: What is the current production capacity and plans for 2026? - The company currently has a capacity of about $100,000,000 and plans to expand further in 2026 [65] Question: What percentage of revenues will be military versus commercial? - Military sales are expected to grow significantly, potentially making up 90% of revenues in the near future [67]