Draganfly (DPRO) Q3 2024 earnings summary

Executive summary

• Q3 revenue reached CAD 1.885 million (USD 1.89M), the best Q3 in company history, with product sales of CAD 1.3 million and services of CAD 500,000.

• Gross profit was CAD 440,000 (USD 440.8K) with a margin of 23%, and cash on hand was CAD 4 million at quarter-end.

• Comprehensive loss narrowed to CAD 365,000 (USD 364.5K) from over CAD 5.5 million last year, aided by a positive change in fair value derivative and lower operating expenses.

• Significant operational highlights included the launch of the APEX drone, new military orders, and a major Fortune 50 oil and gas client adopting the drone-in-a-box solution.

• Advisory board strengthened with the addition of former White House Chief of Staff Andy Card.

Financial highlights

• Q3 revenue was CAD 1.9 million (USD 1.89M), down 11.8% year-over-year from CAD 2.1 million (USD 2.14M), but up 8.9% sequentially.

• Gross profit was CAD 441,000 (USD 440.8K), impacted by a one-time non-cash inventory write-down of CAD 176,000 (USD 176.4K); adjusted gross margin would have been 32.7% versus 42.2% last year.

• Total comprehensive loss for Q3 was CAD 365,000 (USD 364.5K), compared to a loss of CAD 5.5 million (USD 5.53M) in Q3 last year; adjusted loss was CAD 3.8 million versus CAD 5.6 million last year.

• Cash balance at quarter-end was CAD 4 million (USD 4.0M), up from CAD 3.1 million at the end of December.

• Total assets stood at USD 8.53M and shareholders' equity at USD 4.36M as of September 30, 2024.

Outlook and guidance

• Expecting Q4 to be the best ever, with opportunities of much larger scale than previous years.

• Management expects the 1-for-25 share consolidation to enhance share value and market positioning, aiming to attract broader investor interest.

• Sales funnel continues to grow and is being refined for higher-margin, critical use cases.

• Anticipates significant growth in the Pacific Rim and Australian markets, with Australia serving as a key launching pad.

• Forward-looking statements highlight expectations for new product launches and partnerships to drive future growth, but caution is noted due to market uncertainties.