Draganfly, Inc. Q3 FY2024 earnings call

• Cameron Chell noted the market is robust with business development around the APEX Drone launched last quarter. Operational highlights included Andy Card joining the advisory board, launching the APEX Drone (a Category 1 drone fitting in a backpack with 5 lbs payload capacity and NVIDIA chips for edge computing), and military orders from VRR (involving Commander 3 XL and Flex FPV drones) and TB2 (drone-in-a-box solution). - Paul Sun discussed financial results, year-over-year and quarter-over-quarter comparisons, and balance sheet details, including cash on hand of over $3.9 million.

In Q3 2024, Draganfly had revenue of $1.885 million. Product sales were $1.3 million and services were $0.5 million. Gross profit was $440,000 with a margin of 23%. Year-over-year, revenue decreased 11.8% from $2.1 million in Q3 2023, with gross profit affected by a one-time inventory write-down. Quarter-over-quarter, revenue increased by $152,000 to $1.9 million due to higher service sales. Gross margin percentage was 23.4% in Q3 vs 26.6% in Q2, with product mix influencing the difference.

Paul Sun mentioned the funnel continues to grow, and Draganfly is on track for its best Q4 ever with orders of magnitude larger than yearly, and there are exciting projects in the pipeline for Q4.

Supply chain concerns exist, including geographical dependence and security issues, but no immediate impact on Draganfly is expected in the next three to four quarters.

Q: Will the Trump election help win or delay new military contracts?

A: The percentage of penetration by Draganfly and other public drone companies into affected markets is small, so the Trump election is unlikely to have a significant impact. The Pacific Rim area may see bigger offsets, but overall, penetration is too small to be heavily affected.

Q: Traction of Australia distributor partnership?

A: The sales cycle in Australia is similar to that started with military clients a year and a half ago. It involves testing, pilot projects, and use case profiling. Response in Australia has been fantastic, and the Pac Rim area is expected to have large-scale opportunities.

Q: Supply chain issues?

A: Supply chain concerns exist due to geographical dependence and security, but there is no immediate effect on Draganfly in the next three to four quarters. Ancillary markets in North America are expected to grow over a few years as supply chains become more localized.

Q: Which drone is getting the most attention?

A: FPVs, the APEX Drone, and the Commander 3 XL are popular. FPVs are a loss leader but drive sales of other products like the HellHive and Commander 3 XL. The APEX Drone fits a niche in the market, and the Commander 3 XL has long been tested and has many payload partners