Draganfly Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 11, 2025

Key Takeaways

  • Positive Sentiment: Dragonfly reported Q2 revenue of $2.16 million, up 37% quarter-over-quarter and 22% year-over-year, with gross profit of $504 000 and gross margin of 24%, and now holds approximately $68 million in cash following recent financings.
  • Positive Sentiment: The Commander 3 XL drone integrated with Drops’ smart payload achieved a 100% success rate at the US Army CEMEX 25 event, highlighting product reliability and DoD confidence.
  • Positive Sentiment: Dragonfly was selected for the US Southern border drone pilot in Cochise County, developing a hybrid UAV with up to seven hours of flight time and 100 lb payload capacity, targeting operational readiness (TRL 9) by November.
  • Positive Sentiment: The company announced a teaming agreement with Autonomy Labs and SafeLane for UAV-based demining mesh deployment, and completed demining missions in Ukraine to enhance its AI-driven clearance capabilities.
  • Positive Sentiment: Dragonfly delivered its flex FPV system to a major US prime defense contractor, bolstering traction with the DoD, Canadian DND, and other international ministries of defense.
AI Generated. May Contain Errors.
Earnings Conference Call
Draganfly Q2 2025
00:00 / 00:00

There are 2 speakers on the call.

Speaker 1

Sorry for that little bit of a late start. A little bit of a tech issue on our end, but it looks like it's all clear now. We're just going to get started immediately here. Right now you're joining us today for Draganfly's 2025 Q2 earnings call. My name is Rolly Bustos, and I'm the Internal Investor Relations Representative here at Draganfly. We appreciate you all joining us. As always, we'll start with our CEO and President, Cameron Chell, recapping the second quarter earnings headlines. Next, there will be a more detailed financial review with our CFO, Paul Sun. We will then conclude by addressing the pre-submitted questions that we received. As always, you're welcome to reach out to me directly at investor.relations@draganfly.com. I remind everyone that this presentation may include forward-looking information and statements.

Speaker 1

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 company's results and statements are accurate as of today, August 11, 2025. We're under no obligation to update or renew these statements outside of material press release disclosure going forward. The full forward-looking disclaimer can be found on page two of this presentation. Cam, if you're ready, please go ahead.

Operator

Great. Thanks, Rolly. Appreciate that, everybody. Terribly sorry for the delay and appreciate your patience and consideration. We're pleased to be hosting our 2025 Q2 earnings call. Just to start off with a couple of highlights. Our revenue for Q2 was $2,155,255. This represents a Q over Q, that is a bit of a typo there. It's a Q over Q 37% increase and a 22% year-over-year increase. Our product sales were $1.9 million last quarter, and our provision of services was $213,000. We had $504,000 of gross profit, which is a 9.3% increase year over year, and we had a gross margin of about 24%. Our current cash balance, as of the end of Q2, was just over $22 million. That's as of June 30th. Due to a subsequent financing, our cash balance currently is approximately $68 million.

Operator

It's been a busy Q for us, and there's been a lot of activity in the subsequent Q in the drone world. You can see probably by the level of activity leading into the current Q we're in, based on the last Q, the amount of work that we've done is reflective of what is actually unfolding in the drone industry. A couple of highlights or a number of highlights. First of all, our Commander 3XL plus Drops, which is a payload provider that we work with, which is a smart payload system, achieved a 100% success rate at the US Army CEMEX 25 event. This is an incredible achievement, both on the part of our partner Drops, the integration work that we've done, and the actual rigidity and ruggedness of the Commander 3XL to be able to provide this incredibly rigorous result from CEMEX 25.

Operator

Really, really proud of our product teams and our partnership teams, how they pulled this off and the coverage that we're getting within the DOD. Draganfly also announced in Q2 the closing of a $13.75 million public offering, which again has really bolstered that balance sheet for us. The market has responded relatively well. The Canadian, along with the Europeans, increased significant budgets for the modernization of their defense forces and increased spending for NATO. In particular for Draganfly, this is important because we do have such strong Canadian roots and are the only native drone manufacturer in Canada. What that enables us is that there's really only two manufacturers in Canada. One is actually owned by a US company, and then, of course, there's us. We've been around for 27 years now.

Operator

We have strong roots into law enforcement and into the Defense Department up here and are very well positioned for that incredible increase in spending and budget and nationalization that's happening in Canada. We do think we're very uniquely positioned in that regard. Now, Draganfly was also selected for a U.S. Southern Border Drone Pilot Program. This is in Cochise County with the Cochise County Sheriff's Department, which is a renowned border sheriff's department, probably the pinnacle of sheriff's department as it relates to border management. It's been visited by both President Trump and Vice President Pence and the governor, et cetera, and really is a boots-up, groundbreaking organization in terms of how they man their border there. The biggest challenge that they've got actually is incorporating drones with their existing camera systems and AI.

Operator

Existing drone systems today just don't have the battery life in order to complete the mission that they need. They've got a couple of hours of border coverage, and most of the, at least the U.S. manufacturers for the types of drones that they were having only have about a 30-minute lifespan. That doesn't even get them to the border in some cases, much less be able to be in a situation where they're able to hover, provide surveillance, help with interdictions or apprehensions. We've designed with them an incredible border drone that has up to seven hours of flight time. It's a hybrid model. It has all the features of what a fixed-wing aircraft could do. Hours and hours of ISR surveillance type of capabilities, but also heavy payload capabilities.

Operator

It can carry over 100 pounds into an area that's required to either deliver medical equipment, provide supplies for the folks on the ground, help with interdictions, hover over suspects, trail suspects. It ties into the AI system that they've got designed in Cochise County, as well as it provides point-to-point communications. This drone can operate at well over 11,000 feet in various temperatures because of the extremes in the area. We're thrilled to have been selected for that. That'll be a TRL-9 or operationally ready by November and is really being now, has become what is unexpectedly, but very pleasantly surprised, a showcase for other border agencies out there. We're really excited about our capability there and getting to work with Cochise County.

Operator

I think the advantage that Draganfly and one of the reasons that we were selected there is we're willing to take the time and really understand the concept of operations that they were needing to address and to be able to take our existing platforms and adapt them into their particular concept of operations. Because Draganfly has got 25 years, 27 years of experience, and we've got a full range of drones, which is fairly unique within the North American environment, other than, say, maybe a DJI, we can take those drones and accommodate them into the specific or the particular concept of operations for each one of our customers, whether they be law enforcement, military, or commercial. Further to this, Draganfly, we showcased our tactical drone at the Innovation and Global Defense Summit in Latvia. That was an invite-only event.

Operator

We were invited there on behalf of the Canadian Department of National Defense. We were the only drone company there that had a full range of drones. Now, our primary drone that really garnered most of the attention there was our FPV drone. We did announce, as you can see on the next little block there, that Draganfly announced delivery of our Flex FPV system to a major U.S. Prime defense contractor. This is a household name that you see out there that was looking to take our drones, incorporate their technology into them, and then provide them as a prime into different departments of the defense. It's an incredibly unique design. It has some features that are proprietary to us, both in its capabilities, its payload capacity, its integration with AI and such. I can't say much more about it than that.

Operator

We are getting terrific traction with this particular FPV in DOD, DNDs, a couple of different MODs, Ministry of Defenses around the world. We're really thrilled. What makes this drone unique for us is that we've been in Ukraine since 2022. This particular drone was designed from actual experience in Ukraine as to what they're experiencing there, what are the aspects that needed to be incorporated or brought into that particular conflict theater. We're able to bring that experience back to our North American, European, and 5I partners and not just be able to provide a great product, but actually help design concepts of operation. You're going to see more and more of that with defense contractors over the coming years where they need to be integrated actually deeper into the process.

Operator

With Secretary Hesketh's announcement about moving the decision tree down to lower into the command level, this is exactly what they wanted to have accomplished, where they've got the boots on the ground that are dealing with the actual situations, helping design the product, not just from a product standpoint, but also from a supply chain standpoint and a training standpoint to be able to do modifications literally in hours now, as opposed to years. We also announced the establishment of our Public Safety Advisory Board. Paul Goldenberg is heading that up for us. Paul comes from an incredible career in law enforcement and Homeland Security, and he has, with his team, absolutely lit up the public safety market for us. We have participated in a half a dozen exclusive conferences throughout the United States and now in Europe as well, featuring our full lineup of drones.

Operator

Our drones are multi-use and multi-mission. That is really the capability that we're highlighting within public safety, as often you may have one drone that I'll say our competitors are selling out there, which is a very good product, but it does one mission, or it has, you know, and that's generally an ISR or a surveillance mission. Where you bring in something like the Apex, it is a little bit bigger. The advantage, however, is that now you have a multi-mission drone that can do everything from ISR to search and rescue missions. Really great for those small and rural or campus or tribal situations or larger departments that have missions that are beyond just surveillance type missions. We did close as well an additional $3.6 million of capital.

Operator

It also should be noted that we had about $8 million worth of warrants that were exercised in this current quarter. That is why you get such a strong balance sheet that we've now accomplished in this last two quarters. As noted previously in years that have passed, we are very active in the mining space. The mining space to us is a strategic imperative. It demonstrates our public safety and our military capabilities. We announced that Draganfly and Autonome Labs signed and are working on a teaming agreement to take their UAV-based, excuse me, de-mining mesh deployment solution. What Autonome Labs has is a mesh net that fits over a contaminated area, whether that's in an active theater or whether it's in a benign theater, but it needs to be cleared. It actually explodes everything that's underneath that mesh net.

Operator

What they've exclusively signed with us is the ability to deliver that net using our Commander 3XL and heavy-lift drones over a particular area. What's interesting about that is that actually allows for a much more rapid deployment of this. It moves it from not just a humanitarian, but also into an active theater scenario as well. We're thrilled about what's happening in the de-mining space, the leadership that we're taking there, and the work that we have done. We were active and did complete some de-mining missions in Ukraine in the last quarter as well, which again informed our AI databases. I would say that we are participating in probably, or most likely, the most advanced AI system for de-mining.

Operator

Right now, de-mining is really still centered around mapping anomalies that are on the ground, primarily using hyperspectral, but there are many other sensors that are involved as well, everything from ground penetrating radar to magnetometers to RGB. The multispectral, along with those other sensors, is providing great AI data that we're hopeful eventually will allow for very accurate and rapid de-mining operations. Peter Lambrinakos, sorry, Peter, if I butchered that a little bit, has also joined our Advisory Board. Peter's public safety record is second to none. He is a former member of the Montreal Police Department, where he held several very senior positions. He was also the founding Chief of the Via Rail Policing System, along with many other attributes. He also is on the Faculty of Public Safety at the University of Ottawa. In addition to that, he sits on the Military Police Board Commission.

Operator

Draganfly was selected by SafeLane for a multi-year landmine detection partnership that was in Ukraine, and we're working on several other initiatives with them as well. SafeLane is the largest de-mining and ordnance unexploded IED organization corporation in the world, and we're thrilled to have a partnership with them. We were also selected by Balko as their UAS provider, and they have placed multiple orders with us. Balko is the manufacturer of an incredible LIDAR system, and we've been able to work a fantastic partnership with them, whereby they have moved some of their systems that before had to be used on helicopters to now be used on our drones. They're meeting with great success because of the fantastic work that our team and they have done together in terms of being able to provide a fast, rapid, and inexpensive, comparatively, solution to what was available before.

Operator

This payload partnership strategy that we have is really important to us. Our systems are designed to take multiple payloads. We do not put proprietary payloads. We do have some proprietary technology in terms of some of our integration and certainly in terms of some of our AI, but we are payload agnostic. The reason that we want to do that is we want as many of those payloads out there incorporated with our drones so that they're actually a channel partner selling our drones along with their payloads. What we'll find across commercial, military, and law enforcement is the fact that quite often what they fall in love with is a particular software or payload or sensor that meets their specific need. When it meets their specific need, the next big question is, okay, what drone can carry that specific need?

Operator

At this point, I would hazard to say, but I will say that we are likely certainly a leader and maybe the best, certainly North American company out there that can provide multiple payloads, including old DJI payloads that are not Chinese made, but that can incorporate payloads that were used on DJI drones. Why is that important? It's because the investment that's made by organizations in their payloads or in their sensors can now be transferred onto Draganfly drones without having to necessarily repurchase those particular sensors while still removing the Chinese drone, which is now becoming a mandate, not just in military and law enforcement, but now across many commercial organizations as well. We did secure a strategic military order for the Commander 3XL UAV systems. This order was an initial order of many further systems to come behind it.

Operator

It took us literally a couple of years to get these orders between capacity testing, product testing, concept of operations understanding, and then integration of those particular payloads that are being used onto the Commander 3XL. This particular order was a direct order. It wasn't necessarily through a prime. We're thrilled at the implications of what this means and the likely programs of record that follow very quickly behind this particular and other orders that we're working on right now. We did announce recently here as a subsequent event the closing of a $25 million registered direct offering with existing shareholders that were in the company. We're thrilled to put that together, and we thank them for their ongoing support. The Commander 3XL on a separate contract was selected directly by the U.S. Department of Defense for very specific missions that the 3XL was designed to carry out.

Operator

I think overall within that military command, we are developing a reputation for being able to understand concepts of operation, taking our full product suite, and being able to adapt the dual use, which is a big mandate within the military, for very rigorous but specific military operations. Every time one of these happens, it gives us further exposure to additional military units and additional arms within the DOD. Each one of these things, the implication of a win is much bigger than necessarily just the sizes of those wins, which are still material. We'll start to continue to see those results pay out over the following quarters. As mentioned a bit earlier, we are, at least to my knowledge, probably as a North American manufacturer, have the most extensive line of drones. This isn't something that you just can put together and, hey, let's build more drones.

Operator

At times, we've been criticized for not being focused on one particular type of drone. It is important to keep in mind that we have 27 years of history. You've got platforms that have been developed over a much longer period of time with much more airtime and testing than, say, many of the even longer or longstanding drone companies in North America that are maybe seven or eight years old. A function of that legacy is really important to us, and it's something that I continue to highlight. You can see that we range everywhere from a very small FPV drone that's as small as the five-inch arms and blades all the way up to our heavy-lift drone, which is about nine feet across.

Operator

What isn't on here is actually some additional product that's bigger and the Cochise County Border Patrol drone, which is a version of that heavy-lift drone on the first one there on the far left, but is a hybrid with a combination of engines on it. These all work on similar flight systems. They have similar flight characteristics. Everybody's only training on them once. For the most part, if you can fly an Apex, you can fly a heavy-lift. From a training perspective, all of that is incredibly, incredibly important for our customers. All of them have the same universal mounts, which are universal to the industry. We're payload agnostic, and we really focus on integrating our payload partners for optimal performance into this product line, thus creating a bigger channel and more versatility for the Draganfly line.

Operator

I do think it's important, again, to highlight the military impact and what's happening throughout the entire world and how fast it's growing and the final adoption now that is starting to happen within militaries. That universality amongst our drones is really playing a big part in the success that we are seeing in this particular area. Along this line, I think it is important to note that we do manufacture both in Canada and the United States, and we have very strong representation throughout the entire world. A bit because of our legacy, but also because we have a footprint in Canada and in the United States, which is unique amongst drone manufacturers. At this point, I'm going to throw it over to Paul Mullen, who will run through the details of the financials. I believe Rolly's got some questions that have come in. Paul?

Speaker 1

Yeah, thanks, Cam. Thanks, everyone, for joining. As Cam mentioned at the outset, revenue for the second quarter was $2.1 million, up 22% from $1.7 million in the second quarter of 2024. Second quarter revenue comprised $1.9 million in product sales, with the balance coming from drone services. Gross profit was $505,000 this quarter compared to $462,000 in Q2 of last year. This quarter had a one-time non-cash write-down of inventory of $10,000 and otherwise would have been a gross profit of $515,000. Gross profit for Q2 of last year, same period, would have been $596,000 if we took away the one-time inventory write-down that that period had of $134,000. Taking these non-cash items into account, gross margin would have been 24.4% for this quarter compared to 34.4% year over year.

Speaker 1

Total comprehensive loss for the quarter was $4.7 million compared to a loss of $7.1 million in the same quarter last year. This quarter included that non-cash write-down of inventory of $10,000. It also included a derivative liability loss of $180,000 and a gain on a note receivable of $8,000 and otherwise would have been a comprehensive loss of $4.6 million. Same period last year had a one-time change in non-cash derivative liability of $2.6 million, $134,000 inventory write-down, and a gain on impairment of notes receivable of $4,000 and otherwise would have been a comprehensive loss of $4.4 million. The slight increase in loss is due to higher office and miscellaneous costs, wage costs, and share-based payments offset by professional fees. Cam, if you can just go to the next slide there on the quarterly side, we just went through the year-over-year changes.

Speaker 1

Here we'll just go through the quarter-over-quarter changes between Q2 and Q1 of 2025. Q2 2025 increased by $567,000 to $2.1 million, up from the $1.5 million in revenue we saw in Q1 of this year, and the increase of 37% was due to higher product sales. Gross margin percentage for Q2 was 24% compared to 20% for Q1 of this year. If we back out that one-time inventory write-down that we mentioned before for Q2 and $39,000 that we had to back out for Q1, gross margin for Q2 would have been the 24% versus 17.5% in Q1 of this year, with the difference being products mixed during the various quarters. Comprehensive loss for Q2, as mentioned, was $4.7 million compared to $3.4 million for Q1. Again, remember we had a loss in fair value of derivative liability, a write-down of inventory, and a gain on notes receivable.

Speaker 1

That adjustment would have got us to $4.6 million. If we did the same for Q1, we would have got to a loss of $3.6 million. The increase in loss quarter over quarter was primarily due to higher office and admin and some wage costs. Moving on, I think to the last slide here, Cam, on the balance sheet, you can see our total assets increased from $10.2 million at the end of 2024 to $28.4 million, which is largely due to the increase in cash that Cam talked about earlier. Working capital at the end of June 30 was $22.4 million versus $3.8 million at the end of December.

Speaker 1

However, if we X'd out that fair value of derivative liability of $2.2 million that we have on our balance sheet, working capital would have been a surplus of $24.6 million this quarter and $6 million at the end of December of last year. Doing the same exercise for the shareholders' equity at the end of this quarter would have been $25 million versus the $22.9 million shown here and the $6.8 million at the end of December versus the $4.6 million shown here. As always, we continue to show here that we have minimal debt. I think Cam also mentioned cash at the end of the quarter was $22.6 million, but subsequent due to the warrant exercises and the July financing, we were approximately at $68 million in cash. With that, I'll pass it back to you, Cam.

Operator

Thanks, Paul. On that note, I think if you take the overall comprehensive loss inclusive of derivative liabilities, what we'll see is that our revenues continue to increase pragmatically at this point, where we continue to manage costs and, in fact, are dropping our overall operating expense as a %. I think it's also really important to note that none of these sales here represent the large outlier sales that we had been working on for a number of years and had built our capacity in order to facilitate. That's really the boom, I guess we can call it, that I think all the shareholders and management are working toward. I think it's really important to continue to note that I think we're very well positioned to participate in the drone future. On that note, why don't I throw it back to you, Rolly?

Operator

I think you had a bunch of questions. I think you sent some of them over to me this morning. I apologize, I haven't had a chance to look at them yet, but I look forward to answering them now.

Speaker 1

Okay, thanks, Cam. Honestly, you've actually answered a lot of them in the presentation. I'm going to kind of bounce around a little bit while we don't repeat ourselves. Can we just start with the first one here? A shareholder sent me in. He said he noticed that Draganfly had been on the AUVSI green list pending for a long time now. Can you comment on this? What, if anything, does the new drone memo by Secretary Hegseth mean for these classifications, for example, the green and blue list?

Operator

Yeah, that sounds great. I've said this before, and I'll say it again, and I've got to take the hit on it. When the blue list first came out, I was opposite from our management team. I was like, hey, this blue list thing's not that important. It's going to be a marketing thing. We're already selling into police. We're already selling into the military. We've done military contracting for years and years. Like, why do we need to be on the blue list? I don't get it. We were NDAA-compliant before there was such a thing as NDAA, and I've always been very conscientious of our supply chain. We didn't pursue it, and that was a mistake on my part. We have various units that are now in on blue list testing. We have also submitted to green list.

Operator

There was confusion for quite some time, or in clarity, excuse me, if green did equal blue or blue did equal green. Now we do have that clarity that it is. Right in the midst of that, now the Defense Innovation Unit has announced they're coming out with a number of other adjudicators that will also be able to provide the clearances or the testing for blue list. We're in the process of it. There's no abnormal delay around it, other than the clarity around all the regulations and what it means. It has not stopped us from selling into defense and into law enforcement. Most of the large defense decisions are still being based around capabilities, performance, capacity, and personnel. Those are really the four key factors.

Operator

If you can demonstrate those, and in our case, we clearly can demonstrate and have been through audits and such, that our supply chain, all four of those factors meet the criteria and such. As these large orders come through, there are plenty of waivers available to the different departments and commanders within the DOD in order to get the waivers because you do pass those tests. It's certainly not that it's a priority to us. It's just that it hasn't prevented us at this point from any significant order or held us up in any particular way. Secretary Hesketh's memo and the positioning of the Defense Department recently further does validate this, not suggesting that blue isn't important and not suggesting that we're not going to continue to pursue it.

Operator

If anything, all of those waivers that need to be done at a command level in order to accept something that's not on blue still have to be done. There are a number of other, you know, which there are lots of startups and, hey, let's build drones. You know, a lot of people think it's easy. It isn't. That process is not going to get easier. It's just that there's a mandate at a command level for people to go out and get what they need. It really plays well for somebody like Draganfly.

Speaker 1

Great. Thanks, Cam. I'm going to jump to the next one here. It seems that you now have a very healthy cash balance. What plans do you have for these funds?

Operator

We're still very focused on organic growth. Capacity building is in place, fortunately, and thanks to our shareholders. We're going to be very pragmatic with our cash. We are scaling, in particular, our ability to iterate even quicker. This is a key function within, in fact, not just military, but within police and commercial. Drones are a competitive advantage, but everybody's going to have them, which is great for Draganfly and the drone industry. A differentiator will be how quickly you can iterate. A lot of our focus is on that. That does bring up us taking a look at some M&A activity. We do have some of that going on. However, it's not our focus, though there are some pretty cool and exciting things that could unfold in that direction. We've managed to stay in business for 27 years because we don't make a lot of knee-jerk moves.

Operator

It's also why we don't provide guidance. Other comparable companies out there have provided some really robust guidance. From an order standpoint, I 100% believe their guidance. From an execution standpoint, it's very, very tough to scale in the way that they want with the types of products that the industry is demanding. Basically, what it means is that we're going to be able to do what we say and that our customers, which are very large customers, have a lot of confidence now in our balance sheet. If ever before that was a question, them saying, "Hey, you're a small company, you know, you're only like 60, 70 people, can you execute? You know, you've only got a few million dollars on your balance sheet. You know, do we really want to make a bet on you?" Right now, this is a big insurance policy for them.

Operator

That's the biggest impact. Not that we won't use it wisely, not that we won't use it to drive growth, but right now, proving that product up and ensuring that our customers have confidence in us, which is inclusive of a strong balance sheet, is really the most important thing.

Speaker 1

Great, thanks. That's very helpful. The next one is kind of just an extension to the capacity issue that you've been talking about. With hopeful meaningful contracts coming, can you comment on how you're positioned in terms of production capacity to fill them? Are we able to scale quickly if need be?

Operator

Yeah, there's a few aspects to this. First of all, we built up our production capacity over the last couple of years, which was actually a requirement to even get to the point of being able to get the orders that we have coming in now. Now that we have the confidence and we've demonstrated the capability to build capacity in short periods of time and iterate in short periods of time in very specific but widely needed and used concepts of operation, we're very well positioned. We are also continuing to pursue additional contract manufacturing capabilities so that we can scale even more. That is more than an announcement.

Operator

You just don't go, "Oh, yeah, we signed a contract." I'm not so sure how other folks out there, in a matter of months, I mean, we've spent 18 months evaluating the contract manufacturers that we were going to go with, designing tools that can fit into their operation, ensuring that they've got the right personnel, ensuring that we've got the personnel that can train the right personnel, ensuring that they can iterate just as fast, understanding their supply chain management, working with our customers to understand how their supply chain requirements fit in with our contract manufacturers. Candidly, I feel like some of the announcements that have been made out there have been like, "Hey, we got to get an announcement out there about scalability and contract manufacturing." I haven't evaluated their decisions. That's their, you know, it's not my job to do that.

Operator

I know from our process that you don't, that's just not something that you can take lightly. We're really, really thrilled about our direction there and our capabilities. It really comes down to when you sit in front of that customer and they ask really detailed questions. They don't ask the question, "Hey, can you contract manufacture?" No, they want to know the nuts and the bolts and the serial numbers and inventories on hand. It really gets in person and their personnel. It really gets into a detailed approach that you don't have a second to hesitate on those answers with those particular customers. I think we're positioned well. Probably not perfectly. We'll make some mistakes. I think we got this.

Speaker 1

Great. Thank you. Just a couple more here. Given the recent surge in police departments adopting drones as first responders, can you comment on whether Draganfly has seen inbound interest or engagement from agencies considering this model?

Operator

Yeah, everybody is interested in it. What's interesting about that public safety market is that the very large departments have spent the last maybe 18 or 24 months, other than a few innovators who have even been at it longer than that, with DFR, Drone as a First Responder, which is going to be an absolute game changer for public safety. Most of the inquiries we see coming in today are still about regulation, about how do you train pilots. They're still trying to figure out budgets. There's still a lot of question, believe it or not, about whether it's going to be Chinese allowed or not, which it's not, in my opinion. Whether that's right, wrong, or indifferent doesn't matter. The point is, I believe it's not. The inquiry levels are still really there.

Operator

Some of the larger departments have adopted or are in the process of adopting, and some really innovative departments, maybe a dozen of them in the States, are real leaders in this regard. In terms of having multiple drones that can fit into a DFR response, not just with just an ISR drone or just a VTOL or whatever the case be, but drones that are actually multi-mission is weighing heavily into the decisions and the positioning that we've got. In terms of the boxes, the response, the automation, that type of stuff, it's all stuff that's well within our capabilities. We're very active in that space. Candidly, we're not focused on the really, really big departments. There are other competitors there that are in there with their small ISR drones. They make a great product. They are willing to spend heavily to earn that business.

Operator

We think long term that we'll be there. If we look at all the rest of the market out there, which is the majority of the market being small, rural, campus, tribal, private security, that's where we're just getting tremendous traction right now. Of course, they're dealing with much less different types of budget constraints. Sometimes the budgets are smaller, but they're quicker to move. Sometimes in the private security space, they're much larger and they're quicker to move. We like where we're at in that space, and we're going to continue to focus down that. We have such a strategic advantage with our Board of Advisors.

Operator

The other aspect of police enforcement that seems to be working really well for us is international, being up in Canada, over in Europe and the UK, parts of Eastern Europe, and some parts of Asia as well because of our NDAA compliance and our multi-mission drone platforms.

Speaker 1

Great. Okay, I'm just going to give you one more question here. I'll just remind everyone on the call that if your question did not get answered or if you have another one, please reach out to me, investor.relations@draganfly.com. As always, I'll try my very best to answer it for you. Cam, is it, it seems possible that an end to the Ukraine conflict might be coming. Does this negatively impact Draganfly or the drone industry as a whole?

Operator

I think if, you know, the cat's out of the bag and the unfortunate Ukraine conflict has absolutely revealed the imperative nature of drones. What we're seeing is now the rest of the world grasping and catching on to how and why they need to use drones. That conflict, I don't personally believe, even if it comes to an end tomorrow, drone use will likely continue to increase. The primary drone use right now is FPV over there. That drone use, if that conflict were to end tomorrow, will go to ISR, logistics, de-mining, reconstruction. I mean, the list just goes on and on and on. In fact, in many respects, different types of drones, I think again, that are reflected by a product line that we have will get used. There's not a lot of North American drones being sold in Ukraine. The Ukraine are incredible innovators.

Operator

They're incredible engineers. They're built, I mean, they are purpose-building their product and going hard. The internal industry over there would change greatly, but the posture of the external industry outside of Ukraine would not, other than the fact that it's an incredible teachings, learning, and training ground for us.

Speaker 1

Okay, great. I think that'll be it for the questions, Cam. To respect everyone's time, because I know we started a little bit late, if you can just give some final thoughts to everyone on the call.

Operator

First and foremost, I really want to thank our shareholders for their consideration. I know it's been a long haul for many of you, many of us as well. Whether you're new or old, we appreciate the trust and we take that very, very seriously. Our customers, thank you for your consideration and trust, and we're going to continue to work hard to make you uncompetitive, meaning that nobody can compete with you. Our internal goal is to give you a strategic advantage. Certainly to the team members at Draganfly, I know how hard you're working. Your commitment is inspiring to absolutely everybody, including our customers, in terms of what you show to them. We're just sitting here in a lot of gratitude right now. We know how much work we have to do, and we know we're going to just grind it out.

Operator

We'll be here for the long term and appreciate everybody's support.

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