Draganfly Announces Fourth Quarter and 2024 Financial Outcomes

Draganfly Inc. Reports Financial Results for 2024: A Year of Transition and Growth

Draganfly Inc., a prominent developer of advanced drone solutions and systems, recently announced its financial results for the fourth quarter and the fiscal year 2024. The company, which is listed on NASDAQ, CSE, and FSE, has illustrated a year of substantial growth in certain areas, alongside challenges that have impacted overall profitability. In this report, we delve into the financial performance, strategic initiatives, and future prospects of Draganfly, making it accessible for readers who may not be familiar with technical jargon.

Overview of Financial Performance

During the fourth quarter of 2024, Draganfly experienced a remarkable 76% increase in revenue compared to the same period last year. This surge is primarily attributed to increased product sales. However, the overall revenue for the year rose modestly due to the company only ramping up its capacity to meet demand in the Military and Public Safety sectors towards the end of the third quarter.

Key Financial Highlights for 2024

• Total Revenue: The company reported total annual revenue of $6,561,055 for the year ending December 31, 2024. This represents a slight increase of 0.1% from the previous year. While product sales grew by $81,383, service revenue saw a decline of $75,170. This indicates a strategic shift where Draganfly is focusing on expanding its public safety offerings and production capabilities.
• Gross Profit: Draganfly’s gross profit for the year was $1,398,204, marking a decrease of $665,910 or 32.3% from 2023. The gross margin as a percentage of sales fell from 31.5% in 2023 to 21.3% in 2024. This decline is partly due to a one-time non-cash inventory write-down of $627,105. Excluding such adjustments, the gross profit decreased by $370,476 year-over-year.
• Comprehensive Loss: The company recorded a comprehensive loss of $14,062,534, a significant improvement from the $23,709,851 loss in 2023. This figure includes non-cash changes such as a gain from derivative liabilities related to warrants and an inventory write-down. Excluding these non-cash items, the comprehensive loss would have been $15,318,067.
• Cash Flow and Balance: Operating activities used $6,939,383 less cash year-over-year, a 37% reduction. By the end of the year, Draganfly’s cash balance stood at $6,252,409.
  

  Fourth Quarter 2024 Financial Highlights
  

• Revenue: Fourth-quarter revenue reached $1,613,162, up from $916,299 in the same period the previous year. The increase is mainly due to higher product sales, slightly offset by a reduction in services sales.
• Gross Profit: For the fourth quarter, the gross profit was $215,740, down from $258,879 in Q4 2023. This decrease is primarily due to a non-cash inventory write-down. Adjusted for this write-down, the gross profit would have been $383,255.
• Comprehensive Loss: Draganfly reported a comprehensive loss of $4,715,931 for Q4, an increase from the $4,191,796 loss in Q4 2023. This increase is largely due to non-cash adjustments such as the fair value derivative liability loss.
  

  Strategic Initiatives and Operational Highlights
  

  Draganfly has been actively pursuing several strategic initiatives aimed at broadening its market reach and enhancing its technological capabilities:

  1. Drone Delivery Research Project: The company successfully completed its first proof-of-concept flights in a drone delivery research project for Mass General Brigham. This project aims to revolutionize home hospital care by using drones for medical deliveries, potentially improving service times and patient outcomes.
  2. Funding and Growth Initiatives: Draganfly closed a US$3.76 million registered direct offering. The proceeds are earmarked for general corporate purposes, including scaling production capabilities and advancing growth initiatives.
  3. Training and Skill Development: At the Elevate UAV event, Draganfly provided specialized training on advanced drone platforms. This underscores the company’s dedication to empowering operators with cutting-edge skills to further UAV applications in critical sectors.
  4. Drone Innovations Showcase: Draganfly showcased its latest drone technologies at several conferences and private demonstrations, including the Wings of Saskatchewan event, aiming to foster cross-industry collaboration.
  5. Leadership Enhancements: Updates to the company’s Board of Directors and Advisory Board were announced, including the appointment of former White House Chief of Staff Andy Card to the Advisory Board and Kim Moody as Audit Chair. These appointments reflect Draganfly’s commitment to strengthening its leadership.
     

     Future Prospects and Industry Context
     

     As Draganfly continues to innovate within the drone sector, the company is positioning itself to address critical needs in various industries, including public safety, agriculture, industrial inspections, security, mapping, and surveying. Its commitment to enhancing operational capabilities and expanding its product offerings is evident in its strategic initiatives and financial investments.

     The company’s focus on drone delivery for medical applications aligns with broader industry trends where technology is increasingly leveraged to improve healthcare outcomes and operational efficiencies. The successful proof-of-concept flights for Mass General Brigham highlight the potential for drones to play a significant role in the future of healthcare logistics.

     Furthermore, the company’s participation in training events and industry showcases demonstrates its proactive approach to skill development and technological advancement. By empowering operators with advanced knowledge and tools, Draganfly is not only enhancing its market position but also contributing to the broader adoption and integration of drone technology across sectors.

     Conclusion
     

     Draganfly Inc.’s financial results for 2024 highlight a year of transition, marked by strategic shifts and growth in specific areas. While the company faced challenges reflected in its gross profit and comprehensive loss figures, its proactive initiatives and strategic investments indicate a forward-looking approach to overcoming these hurdles.

     As the drone industry continues to evolve, Draganfly’s commitment to innovation, leadership enhancement, and strategic market positioning will likely play a crucial role in its future success. For stakeholders and potential investors, the company presents a blend of challenges and opportunities, underscored by its efforts to expand capabilities and explore new market applications.

     For more detailed financial information, stakeholders are encouraged to review Draganfly’s consolidated financial statements and associated management discussion, available on SEDAR+ and EDGAR.

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