Volatus Aerospace (FLT) Q3 2024 earnings summary

Executive summary

• Completed a transformational merger with Drone Delivery Canada, now operating under the Volatus Aerospace name, driving operational integration and cost synergies.

• Closed $15M institutional financing and $2.7M equity financing, supporting business expansion and equipment sales recovery.

• Expanded operations in Europe, Norway, the UK, and the US, with new partnerships, technology initiatives, and projects in the oil and gas sector.

• Achieved key regulatory milestones, including Transport Canada approval for BVLOS flights and integration of drone operations at Edmonton International Airport.

• Ranked as the second fastest growing company in Canada by The Globe and Mail.

Financial highlights

• Q3 2024 revenue was $6.62M (CAD 6.6M), down 20% year-over-year due to a 67% drop in equipment sales, but service revenue increased by 14%.

• For the nine months ended September 2024, revenue was $20.36M (down 16% year-over-year), with service revenue up 17%.

• Gross profit for Q3 2024 was $2.25M, with a gross margin of 34%.

• Loss from operations in Q3 2024 was $(4.19)M, with a net loss of $(5.49)M, impacted by one-time M&A costs.

• Achieved first-ever quarter with positive cash flow from operating activities, generating $79.63K.

Outlook and guidance

• Q4 2024 expected to be strong, with a rebound in equipment sales, improved gross margin, and fulfillment of larger contracts.

• Revenue guidance for FY 2024 not disclosed, but visibility to $50–55M; target of $70M in revenue and $7–10M in Adjusted EBITDA.

• Profitability and positive EBITDA remain top priorities, with break-even targeted by year-end.

• Well-positioned to capitalize on growing demand in drone services and technology through 2025.

• Long-line inspection revenues expected to grow 40% by end of 2025, driven by U.S. expansion and recurring contracts.