Draganfly Inc. (NASDAQ:DPRO) Q3 2023 Earnings Call Transcript November 10, 2023
Rolly Bustos: Greetings and welcome to all shareholders and stakeholders to today's Draganfly 2023 Q3 Earnings Call. My name is Rolly Bustos, and while I know most of you, I remind all others that I am the internal Investor Relations representative here at Dragonfly. We appreciate you joining us today. We will start as usual, with our with our CEO and President, Cameron Chell, discussing the third quarter operational highlights. From there, our CFO, Paul Sun, will discuss the financials and as always we'll conclude with our Lead Director, Scott Larson, facilitating the Q&A portion. You are welcome to reach out to me individually after the call at firstname.lastname@example.org. Once again, I remind everyone that this presentation may include forward-looking information and statements.
These statements are not guarantees of future performance or financial results and undue reliance should not be placed on them. Any future events or financial results may differ from what might be discussed here. The full forward-looking disclaimer can be found on Page 2 of this presentation and I'd be happy to send that to anybody upon request. So, Cam, please go ahead.
Cameron Chell: Thanks, Rolly. Thanks to other members of the management and executive for being here. I know we also have multiple customers, partners attending and most prominently, thanks to our shareholders for being here today. I'm pleased to announce that we have just had a record quarter in 2023 on revenues of $2.138 million with product sales of $1.6 million and provision of services of just under $0.5 million. Also exciting to report is our gross margin of just under 2%. So, we had a gross profit this last quarter of $894,000. Our cash balance at the end of the quarter was $2.4 million, and we did a subsequent financing of $4.5 million, which closed on October 30th. I think most notably, in this as it relates to the revenue is that our two plants are now up and operational.
We finished the second plant and just turned it on in Q3. And I think we've started to see that now production flow of off of the benches and off of the line and we feel really good about how we're now going to be able to satisfy the order book and start to see scale. I think it's really important to note the world and geopolitical situation and really what's happening in the drone space as it relates specifically to scale. So, we have, in the past, talked about the scaling of the commercial industry and how it's really starting to come into its own with first the advent of many regulations, but most prominently beyond visual line of sight. But a little around two years ago now as the Ukraine conflict broke out, the reality is that small UAVs have proven incredibly effective in the theater of conflict and defense, so much so that the entire strategy and tactics around air dominance has shifted.
So, previously, air dominance was all about large manned systems, integrated communications, AWAC, integrated data analysis, and real-time impact analysis. And today, from 5,000 feet down, air dominance is all about small UAVs. So, almost regardless of the mass and the size of demand and large infrastructure air dominance that we've known or come to know in the defense field, if in a given area, you're putting up multiples of small UAVs you will have a strategic advantage and tactical dominance on your area of operation. And that is a significant change. Now we've kind of been preaching that this would happen for years but it took the unfortunate conflict in Ukraine for this to become completely understood. So we're now seeing budgets, massive budgets from the NATO countries, those longer ones that we have visibility with NATO and friendly countries -- are now moving not just to autonomy, but certainly through autonomy, but predominantly within that autonomy, moving to air autonomy because again, that is where you can establish dominance for the most part.
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