Draganfly (NASDAQ:DPRO) executives used the company’s 2025 fourth-quarter and full-year earnings call to highlight record annual revenue, a significantly larger cash position following recent financings, and a series of operational developments tied to border security, defense, and platform integrations.
Full-year 2025 results: revenue growth with lower adjusted margins
CEO Cameron Chell said 2025 was a “solid year” focused on building infrastructure in preparation for what he described as a “predetermined revenue ramp” expected through 2026. He noted the company posted record revenue in 2025, up 17.8% year over year, ending the year at $7.7 million, with gross profit of $1.3 million.
Total comprehensive loss for 2025 was $22.9 million, compared with a $14.06 million loss the prior year. Sun said the 2025 comprehensive loss included non-cash items, including a $2.64 million loss in fair value of derivative liability (which he described as related to a legacy financing in a different currency than the reporting currency), a $69,000 recovery of impairment of notes receivable, and the inventory write-down. Excluding non-cash items, he said comprehensive loss would have been $20.1 million versus $15.3 million in 2024, with the year-over-year increase primarily tied to higher office and miscellaneous wages and travel as the company scaled operations.
Q4 performance: higher revenue, wider loss, inventory impacts
For the fourth quarter, Sun said revenue increased 18.5% year over year to $1.91 million, including $1.8 million from product sales and $108,000 from drone services. Gross profit was $85,700 versus $215,700 in the prior-year quarter, reflecting a one-time non-cash inventory write-down of $244,000 in Q4 2025. On an adjusted basis (excluding inventory adjustments), Sun said Q4 adjusted gross profit was $329,700, compared with $383,200 a year earlier, and adjusted gross margin was 17.2% versus 23.7%, again reflecting product and services mix.
Total comprehensive loss in Q4 was $9.3 million, compared with a $4.7 million loss in Q4 2024. Sun said Q4 included non-cash changes including $788,000 related to fair value of derivative liability and the inventory write-down; excluding non-cash adjustments, comprehensive loss would have been $8.3 million, compared with an adjusted loss of $3.6 million in the prior-year quarter. The increase was attributed primarily to higher office and miscellaneous costs and wages.
On a quarter-over-quarter basis, Sun said Q4 revenue declined 11.3% from Q3 2025 due to lower product sales. Reported gross margin in Q4 was 4.5% versus 19.5% in Q3, but Sun said adjusted gross margin was 17.2% in Q4 versus 21.5% in Q3 when backing out the inventory write-down and non-cash items. Comprehensive loss widened in Q4 compared to Q3, which Sun again attributed mainly to scaling-related cost increases.
Balance sheet: cash and working capital surged
Management repeatedly emphasized the company’s liquidity. Chell said Draganfly ended 2025 with about $90 million in cash and characterized the balance sheet as “strong” for continued buildout into 2026 and 2027.
Sun said total assets increased to $101.3 million from $10.2 million year over year, largely due to the increase in cash. Working capital surplus at Dec. 31, 2025 was $95.2 million versus $3.8 million in 2024, with minimal debt. Sun also noted that, excluding the non-cash fair value of derivative liability of $492,000, working capital would have been $95.7 million and shareholders’ equity would have been $97.18 million.
Chell also referenced the company’s $50 million registered direct offering, which he described as a “no warrant straight common deal.” Sun added that the company’s current cash balance was higher after the $50 million raise.
Operational highlights: Outrider border program, integrations, and defense focus
Chell spent much of the call describing product and partnership activity. A key highlight was the introduction of the Outrider, a drone designed with southern U.S. border law enforcement use cases in mind. Chell said Draganfly worked closely with Cochise County, Arizona, embedding its Integrated Tactical Solutions team to understand operational requirements. He said the resulting Outrider platform can stay aloft for seven hours and carry up to 100 pounds, supporting roles such as ISR, communications hub, resupply, search and rescue, and interdiction.
Chell said the Cochise County project led to a broader “border solution” that is now being discussed for multiple jurisdictions globally, and that demonstrations on the border have generated interest from additional agencies.
He also highlighted a range of integrations and partnerships intended to position Draganfly as a multi-mission platform provider, including swarming and AI software integrations. Chell said Draganfly has been building FPV drones for more than 15 years and is partnering with multiple swarming technologies, specifically calling out Palladyne AI’s swarming system as a key integration. He framed swarming and AI software as a “payload” that can be integrated across a broader set of aircraft types, including FPVs, fixed-wing options, and heavier lift platforms.
Other operational items discussed included:
- Defense Prime Global Ordnance partnership: Chell described Global Ordnance as a major DLA prime and said Draganfly is integrating with the partner as it pushes further into drones.
- Autonome landmine-clearing integration: Chell said Draganfly integrated its heavy lift drone with Autonome’s landmine-clearing “carpet” system to deploy and recover the device, describing the integration as exclusive for the heavy lift platform.
- Commercial/telecom deployment: Chell said a Fortune 50 telecom company has purchased and standardized on Draganfly heavy lift drones for standing up cell towers post-disaster, with deployments using both heavy lift and Outrider systems (tethered and untethered).
- Military demand and international activity: Chell said the company has secured military orders, including an FPV drone order from the U.S. Army, and is seeing opportunities across multiple regions, including Asia-Pacific and the Middle East.
Q&A themes: Canada opportunities, competition, Gauntlet II, and M&A
In prepared questions, Chell addressed expectations for Canadian military procurement. He cited Canada’s Defence Industrial Strategy and said a sizable portion of planned spending is expected to go into Class I and Class II drones. He said Draganfly completed a “capabilities day” organized with the Canadian Armed Forces, successfully demonstrating five vignettes—even during an ice storm—and said the company is “well positioned,” while emphasizing it must still “earn the business.”
Chell also explained why Draganfly did not advance past “Gauntlet I” in the Drone Dominance program, saying the company received late notice and could not perform a live ordnance mission set within the available timeframe, which he believed impacted scoring. He said the company plans to participate aggressively in Gauntlet II and expects to perform well.
On competition, Chell argued that Draganfly’s differentiators include its 27-year operating history, integrated multi-mission product lineup, and the ability to scale manufacturing beyond small batches. On acquisitions, he said Draganfly is primarily organically focused but has “a number of acquisitions” in the pipeline that would be strategic and aligned with technologies that can be manufactured at scale.
About Draganfly (NASDAQ:DPRO)
Draganfly Inc (NASDAQ: DPRO) is a Canada-based developer and manufacturer of unmanned aerial systems (UAS) and related software solutions for commercial, government and academic applications. Headquartered in Saskatoon, Saskatchewan, the company specializes in designing lightweight, modular drones that integrate advanced sensor payloads—including high-resolution imaging, multispectral and thermal cameras—to gather aerial data across a range of industries.
The company’s core offerings include turnkey UAS platforms, data-capture payloads and proprietary analytics software that enable clients to perform precision agriculture monitoring, land surveying, infrastructure inspection and environmental assessment.
