Fleetcor Technologies Q1 2026 Earnings Report

Fleetcor Technologies EPS Results

• Actual EPS: -C$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Fleetcor Technologies Revenue Results

• Actual Revenue: $5.63 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Fleetcor Technologies Announcement Details

• Quarter: Q1 2026
• Date: 5/14/2026
• Time: After Market Closes
• Conference Call Date: Thursday, May 14, 2026
• Conference Call Time: 6:00PM ET

Volatus is a leader in innovative global aerial solutions for intelligence and cargo. With over 100 years of combined institutional knowledge in aviation, Volatus provides comprehensive solutions using both piloted and remotely piloted aircraft systems for a wide array of industries, including oil and gas, energy utilities, healthcare, public safety, and infrastructure. The Company is committed to enhancing operational efficiency, safety, and sustainability through cutting-edge aerial technologies.

Fleetcor Technologies Q1 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Q1 revenue was CAD 5.6 million, roughly flat year over year, but management said the quarter was hurt by temporary delivery timing and supply chain disruptions on defense programs rather than weaker demand.
• Positive Sentiment: Gross margin improved to 35%, the strongest first-quarter gross margin in the company’s history as a consolidated entity, helped by better mix, efficiency, and direct cost control.
• Positive Sentiment: Management said delayed defense deliveries have already begun shifting into Q2, including the CAD 4.5 million NATO ISR tranche, and expects stronger revenue growth through the rest of fiscal 2026.
• Positive Sentiment: The company highlighted major strategic progress at Mirabel, including first production of the Sentinel Dock system and the planned ramp-up of seven production lines, supporting scalable Canadian manufacturing.
• Neutral Sentiment: Volatus continued to push its autonomy and software strategy with the launch of SKYDRA, continued V-Cortex AI and CONDOR XL development, and a broader effort to position itself as a dual-use defense and commercial aerospace platform.

Presentation

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Volatus. During the quarter, we continued executing across several key priorities, including activation of our Mirabel manufacturing strategy, expansion of our proprietary autonomy and software platforms, the launch of our SKYDRA Counter UAS simulation and planning software, continued defence market positioning, advancement of multiple NATO and sovereign capability initiatives, and the activation of our U.S. operating base in Tulsa, Oklahoma for the American oil and gas industry. While reported revenue for the quarter was broadly consistent year-over-year, we believe the quarter should be viewed in the context of temporary delivery timing impacts affecting certain defence-related programs rather than as a reflection of underlying demand. Importantly, those contracts remain active. Deliveries have now begun transitioning in Q2, and management continues to expect strong growth through the balance of fiscal 2026.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I'll now turn the call over to our CFO, Abhinav Singhvi, to review the quarter in more detail. Abhi?

[Abhinav Singhvi, CFO at Volatus Aerospace]

Thank you, Glen. For Q1 2026, Volatus reported revenue of approximately CAD 5.6 million, broadly consistent with the first quarter of the previous year. Gross margin improved to 35%, representing the strongest first quarter gross margin performance in the company's history as a consolidated entity. Working capital remained stable at approximately CAD 36 million. We also exited the quarter with approximately CAD 32 million in cash. Overall, the quarter reflected stable underlying demand, continued operational discipline, and deliberate investment supporting our defence, manufacturing, and autonomy growth strategy. Q1 revenue was impacted by temporary supply chain disruptions affecting the timing of deliveries associated with certain defence-related programs. This included portion of the previously disclosed NATO-aligned ISR planning systems contract. These timing impacts were primarily associated with evolving geopolitical conditions and cross-border supply chain availability earlier in the quarter.

[Abhinav Singhvi, CFO at Volatus Aerospace]

Importantly, the contracts remain active, customer relationships remain strong. We do not anticipate any reduction in contract value or the scope. Delivery activities associated with these programs have already begun and are transitioning into Q2 as supply chain conditions have normalized. We believe it is important to emphasize that this was fundamentally a timing issue affecting the revenue recognition, not a weakening of underlying demand or execution capability. Management therefore continues to expect meaningful revenue growth through the balance of fiscal year 2026. One of the most important operational highlight for the quarter was the continued margin expansion. Despite relatively flat revenue, gross margin improved from 32% to 35%. This reflected improved service mix, operational efficiency, and disciplined direct cost management. At the same time, Q1 represented a concentrated period of strategic investment.

[Abhinav Singhvi, CFO at Volatus Aerospace]

These investments included defence business development, engineering and technical hiring, both on the hardware and the software side, manufacturing activation, platform commercialization, and continued advancement of V-Cortex AI and Condor XL program. Management views these expenditures are deliberate growth stage investment designed to support the long-term scaling across defence, sovereign manufacturing, autonomy, and software commercialization initiatives. This slide highlights the EBITDA and the detailed understanding of our cost structure. I'll take a moment walking everyone through what is driving the cost structure in Q1 because the IFRS net loss figure viewed in isolation does not fully reflect how management is operating and scaling the business. Net loss for Q1 was CAD 6.6 million compared to CAD 4.3 million in same quarter last year. To better understand the operational performance, we adjusted several non-cash and non-operating items.

[Abhinav Singhvi, CFO at Volatus Aerospace]

This included depreciation and amortization, interest, share-based compensation, certain one-time expense, and R&D were also excluded. The R&D reflects the direct investment into V-Cortex AI, Condor XL, and also the software or layer. Initiative management views as long-term capability creation supporting the future revenue growth and expansion of its revenue pillars into the software segment. After these adjustments, adjusted EBITDA loss for Q1 was CAD 3.1 million compared to approximately CAD 2 million in 2025 of Q1. The year-over-year variance of approximately CAD 1.2 million was concentrated in four categories, each directly tied to our growth strategy. First was marketing and in branding investments of there was increase of approximately CAD 353,000 primarily associated with defence sector positioning, transitioning to a major exchange, and strategic market visibility initiative. Importantly, they were milestone-driven expenditure, not a new operating run rate.

[Abhinav Singhvi, CFO at Volatus Aerospace]

Second were travel and engagement costs increased by approximately CAD 200,000. These were reflection of direct engagement with NATO-aligned procurement official and stakeholders across the geographies. Last, thirdly, the external partner costs increased by almost CAD 500,000 included specialized legal, technical business development, and certification cost as we scale into the defence segment. Lastly, the personnel cost increased by approximately CAD 300,000, which was concentrated around technical and engineering hire and defence-related roles directly supporting the program execution and long-term capability expansion. More importantly, we believe that company's path towards adjusted EBITDA improvement right now is driven by primarily revenue growth. The CAD 4.5 million of NATO ISR tranche has transitioned from Q1 to Q2 into delivery, and the NATO RPAS training programs and contracts, including the multi-year contract announced in April, collectively provide revenue visibility that has not been reflected in Q1.

[Abhinav Singhvi, CFO at Volatus Aerospace]

We believe that expected EBITDA performance to improve progressively as the programs convert into recognizable revenue through the balance of 2026. This slide basically highlights the overall capital deployment strategy and the balance sheet strength of the organization. The cash deployment during the quarter was primarily associated with activation of a Mirabel facility, which Glen will highlight more deeply, engineering and platform development, production readiness, inventory preparedness, and also strategic growth initiative aligned with the defence and autonomy roadmap. Importantly, working capital remains stable, and the company remains in compliance with all applicable debt covenants. We also strengthen the company's institutional capital market profile during the quarter through graduation to TSX and continued simplification of our capital structure. Overall, we believe the company remains well-positioned from a liquidity and capital flexibility perspective. With that, I will turn the call back to Glen.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Thanks, Abhi. Strategically, Q1 represented a significant advancement period for the company. We continued expanding our position across defence. Obviously, that's highly topical and a huge focus for me personally at the moment. Infrastructure, manufacturing, another major area for us. Autonomy was a major investment area and a major area of progress, and mission systems integration. Key developments during the quarter included the launch of our SKYDRA Counter UAS simulation platform, continued NATO-aligned program execution, expansion of our multinational defence advisory board. We now have three generals on that board, one Canadian major general, one U.S., and one U.K., all with NATO and NORAD experience and chaired by General Leslie, the former head of the Canadian Army.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Activation of the Mirabel manufacturing strategy, which we'll talk about a little bit, and continued advancement of our proprietary autonomy portfolio, which is core to our go-forward technology strategy. At the same time, Canada's Defence Industrial Strategy created a major structural tailwind for all Canadian-controlled aerospace and autonomous systems providers. We believe that Volatus is increasingly positioned at the intersection of operations, manufacturing, software training, and autonomy infrastructure. One of the most important milestones during the quarter was the continued activation of the Mirabel and integration strategy at the Mirabel Airport in Quebec. The facility, which now just to put it in perspective, Monday was the 11th week that the facility has actually been in our full possession, and it's now supporting initial manufacturing systems integration, testing operational systems, that are aligned with our long-term sovereign strategy.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Importantly, only 10 weeks after taking possession of the facility, we completed the first production unit for our Sentinel Dock, our Sentinel Dock system, which will be delivered to a customer within the next two weeks. That's the first of seven planned lines that will ramp up over the next few weeks, and a major area of focus for the company. I guess I should say over the next few months for the ramp-up of those lines. That will bring our facility to approximately 40%-50% capacity in terms of space operating still at a single shift. A lot of capacity growth in the facility. That milestone represents an important operational proof point as we transition from manufacturing strategy into manufacturing execution.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The Mirabel strategy is intended to support scalable RPAS or drone production, Canadian sovereign capability, which is of course key for the Defence Industrial Strategy, allied export opportunities, and long-term autonomous systems development. During the quarter, we continued advancing our proprietary platform and software portfolio. As I mentioned, SKYDRA was officially launched as our first SaaS-based Counter UAS operational planning and simulation platform, establishing an important reoccurring software revenue opportunity. We also continued to advance our V100 ISR platform strategy. The tooling and initial parts for the airframe are in production now. The Condor XL heavy lift platform is moving along with the introduction of the new flight control system, and our V-Cortex AI autonomy architecture has made significant progress and will be showcased somewhat at our CANSEC defence event coming up in the next two weeks.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

V-Cortex is particularly important strategically because it represents underlying autonomy and mission systems framework that supports multiple platform families across our ecosystem and other ecosystems, because at the end of the day, this is a platform-agnostic, multi-domain autonomy operating system that will continue to grow and evolve progressively. To give you an idea, the development cycle right now on the new features for the autonomy architecture basically take between eight and 12 weeks to complete. The things that we're talking about are rolling out in almost near time. We're talking about developments in 2026. Collectively, these initiatives represent and reinforce our transition towards a more integrated aerospace and autonomy systems platform that combines all of our manufacturing, autonomous autonomy operations, software and mission systems integration.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The launch of Canada's Defence Industrial Strategy represents a significant long-term opportunity for Canadian-controlled aerospace and autonomous system providers. The framework provides sovereign capability, domestic manufacturing, allied interoperability, and deployment readiness. We believe that Volatus aligns strongly with that framework through Canadian manufacturing capability, that's what we're standing up in Mirabel, proprietary autonomy systems that are being stood up under the direction right now of our CTO, NATO-aligned operational experience, our advisory board, and our current training and equipment contracts, and our training infrastructure led by our own Danielle Gagne, and then our growing multinational advisory platform. We continue to position the company to participate in what we believe will become a multi-year defence and sovereign capability investment cycle that'll occur across not just Canada, but also other allied jurisdictions.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Looking ahead, management remains confident in the company's outlook for fiscal 2026. The key priorities through the balance of the year include execution of the existing defence and NATO-aligned programs, continued commercialization of SKYDRA and our V-Cortex autonomy operating system, scaling our manufacturing capability at Mirabel, advancing our proprietary platform development, and continued expansion across infrastructure, energy, and autonomous operation markets, particularly in that case being driven by our expansion into the U.S. market in oil and gas with our Tulsa, Oklahoma facility. Importantly, the Q2 defence-related deliveries, the CAD 4.5 million that we expected to deliver in Q1 that have shifted out of Q1, have already begun deliveries, and we're expecting those to be delivered fully in Q2.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Because of the nature of those deliveries, they have no impact on our capacity to deliver on the balance of our plans. We believe the investments and operational milestones achieved during the Q1 position Volatus for the next phase of growth, particularly as governments and commercial operations increasingly prioritize sovereign autonomous capabilities, operational readiness, scalable deployment infrastructure, and integrated aerospace systems. Before we move over to questions, I want to talk for a minute about our push towards autonomy and the introduction of our adaptable, scalable manufacturing system. These are our key developments for the company. I think we've under-communicated them in the past, and we've made some significant developments and progress over the course of Q1 and into Q2.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

A key part here is that being able to meet the demands of Canada's Arctic certainly requires airframes, and everybody gets excited about the airframes. We're quite excited to have our official opening we're expecting in June, at the facility where we will be showcasing some of those larger systems. For those that are attending CANSEC, several of our larger drone systems will be on display. The key point is, it's actually the autonomy system, which is, for all intents and purposes, the brain and nervous system for the, for the robots, which are the drones, that actually make the difference.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We believe as we prepare particularly for the Arctic, the Arctic is about not just the technology of the airframe itself and being able to deal with the cold and environmental conditions, but some of the unique challenges in the Arctic that lead us to believe that we go from a possibility, a remote possibility of losing command and control link in southern airspace to an environment where more frequent loss of command and control link caused by, you know, communication issues and Arctic-related things are gonna rely more heavily on the air vehicle's ability not just to operate itself, but to autonomously complete missions in circumstances like that. It's a very, you know, the North is a very unsettled area. I mean, the communities are far apart and small communities at large.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

It's an area we have a lot of capability to actually provide services, but that assumes that the drones are able to operate or at least be capable of operating entirely with a human outside of the loop. What's even more significant is this is being designed as I mentioned earlier, as a multi-domain, meaning air, land, and sea, multi-domain autonomy system that's platform-agnostic, which means it can operate on a ground vehicle, on a subsea remotely operated vehicle, an air vehicle, including different types, helicopters, you know, multi-rotor systems, and fixed-wing airplanes. We believe it's gonna be a core part of our technology moving forward and, in fact, will be central to all of our drone systems.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

This technology will be deployed on all of the Volatus platforms and then over time be made available as a autonomy-as-a-service type of activity. The second thing that I wanna talk about is our manufacturing strategy, and I'm sure that in the questions, we're gonna have questions about when we expect defence orders to happen and so on, and I want to address some of that right up front. The thing to understand that we've learned from Ukraine is drone technologies, drones, drone technologies, all of the autonomous technologies, they evolve an extraordinary rate. No longer are we caught into the aerospace days of multi-year programs and platforms that are frozen in design for 10 years at a time. Now we have technology that iterates at the rate of 30-90 days. I want you to think about that for a minute.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

That means that if a government was to stockpile these vehicles, that it's very possible that if they were stockpiled for any length of time, that their effectiveness could be somewhat compromised. That creates a really unique demand on manufacturing. The way we look at it, manufacturing has to be able to accomplish three things. To meet the stated interests of the commander of the army, they need to flood the army with drones so that our soldiers can actually perfect their operating techniques. In Ukraine, for example, we talk about the technologies, but the truth of the matter is one of the things that makes Ukraine unique is not so much the technologies, which certainly iterate at an incredible rate with extraordinarily resourceful people, but the operators. Think of the drone like the hammer, and they've got extraordinary carpenters.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We need to get drones into the hands of our soldiers so that they can perfect their concept of operations and their doctrine. Ultimately, the period where we hopefully have minimal conflict, you've got somewhat of a low rate production. The army commander's statement to me was very clear. The idea, his perfect world is to be able to, I'm going to use make up numbers here just for illustration only. We need to be able to order 10,000 drones to be able to equip our forces. Then at the push of a button, we have to be able to create 10,000 a month. Really, that's in a scalable, adaptable framework because presumably there's multiple types of drones that have to be produced and the quantities of a type would be dependent on the environment that they're required.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

That means that manufacturing itself has to become a strategic capability. It's a huge reason that Volatus is really leaning hard into this activity because under the leadership of our Executive Vice President, Luc Massé, who's got extensive manufacturing experience and the team that he's developing there, we're actually preparing for just that. Low volume production on our larger systems, which are, let's call them semi-attritable or somewhat long-term platforms, and then rapid manufacturing and rapid scalability for our smaller attritable systems or the consumable items that oftentimes get abandoned on the battlefield. Even the soldiers, right? They use them to take a peek and then sometimes they're busy and those drones are no longer there. Those are some key considerations, but there's one more. Iteration has to be almost real time.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Those that follow us on social media will find that we're posting a fair number of job applications these days. We're looking for people that want to get involved in a very exciting environment to continuously iterate. The concept is that we don't want to respond to change from threat actors. We want to be in a position to actually be the change makers. Realistically, by the way, that was a quote from our Chief Technology Officer. That's what drives him every single day.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The next part of that, though, is as you integrate changes in times of conflict, we need to be able to iterate in near real time, which means feedback from the field or from the operations or commercial operations for that matter has to feed into engineering and changes have to be incorporated into production in almost near real time, which actually means training has to adapt at the same pace. It might be as simple as notices that go out to the operators or changes in our training system, depending on what the change is, which is largely why our moderator today, who heads up our global training strategy, Danielle, is actually relocating from Portland, Maine up to the facility in Mirabel so that she can be closer to where those change happen.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We consider this initiative to be very, very key in terms of creating this advanced scalable or adaptable scalable manufacturing system. As many of you that are familiar with our efforts and our lobby activities recently know, we're spending an awful lot of time advocating at federal levels on multiple areas of the government, not just the military, but the strategic funding organizations and the bureaucracy and the ministries themselves. The concept, which is really a shared risk concept with the government, is being well received. When will we see orders from that? I think we're back to many of the dollar values you'll see invested in the Canadian industry this year will be more not from the CAD 80 billion demand signal for procurement, but more from the CAD 6 billion that are being allocated for investment into building defence capabilities.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I want to stress the point that Canada has underinvested in our military for three decades. That means because Canada bought 70% of our defence procurement from somewhere other than Canada. The reality is the investment in our defence industry is critically important for our sovereignty. It is also important for our economic independence. This is not as, you know, I was in the United States this week. Somebody asked me if I felt that the policy was anti-American. I do not believe that at all. As a matter of fact, I think this is exactly what the U.S. administration was looking for when it comes to the defence community. That is distributed capability where sovereign nations can share the burden of producing mass quantities during times of instability.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Basically, if you do the math, the investment in Canada in the past, we've bought 30% in Canada and 70% from somewhere else. They were about to flip that, the government has mandated 70% in Canada, which means 30% is somewhere else. If you look at the increase in defence spending, the amount we'll be spending with other nations, predominantly the United States expectedly, will be similar to what we've done in the past. The difference is the growth will occur in the Canadian market, which means we're employing Canadian workers, paying Canadian tax, buying Canadian homes, impacting our own GDP. Even from a defence standpoint, an increase in GDP because of how defence spending is committed for NATO means an increase in defence spending.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I know I've carried that a little bit long, but I'm gonna pass that back to Danielle now, and we'll open the line for questions.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Thank you, Glen. I think that sets the stage up nicely for several questions to follow on. In regards to how quickly the field of drones, counter-drone measures develop, in Ukraine we were seeing time of technical development being measured in weeks. What is your plan to scale your company to get ahead of the competition in regards to developing construction drones and counter-drone measures at scale, while also consistently updating and upgrading the software of your merchandise? How do you intend to develop and secure your business supply chain to maintain ability to meet customer demand?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

It's tough to not acknowledge supply chain. There's a lot to unpack in that question. I'm gonna start out with the last.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Perhaps so.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Easiest one to remember. If you look at it, we had CAD 4.5 million dollars of committed orders for Q1 of this year, and to be quite candid, the challenge was the delivery of batteries. We had a supply chain problem, which has now been resolved, but nonetheless, it's a supply chain problem that we had no capability to resolve in a rapid way. Fortunately, that's we're not the only people that have faced that challenge. It's been hugely disruptive, particularly in the United States. Companies like for example, Unusual Machines is stepping up to the plate and building as fast as they can to offset that in the United States.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We're working very hard with our partners in Canada and also investigating potential requirements to invest in supply chain ourselves, where we can't actually secure our relationship with a trusted partner, a supply chain partner in Canada, then we would look towards next potentially investing in that capability ourselves. Of course, the next part of that falls under the build partner buy framework, which is partnering with our allied partners. There's some things that we think will happen over the next little while that will actually give more clarity as to where those investments need to happen. I think a key part to identify here is there's a lot of moving pieces. We're attending, as a matter of fact, Abhi was a guest speaker today at Dentons, had a Defence finance event.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We were also at a policy insights forum event last week on defence finance. We're actively engaged with everybody from the Defence Investment Agency to the DSRB, the Defence, Security and Resilience Bank, with BDC, EDC and the various IRAP, ISED and all of the CED. Basically, all of the agencies which are now coming together to create the capital stack that's necessary to move forward. A lot of this is being driven by, you know, if you listen to, for example, BDC, they refer to their primary shareholder and the mandate of their primary shareholder, which is Canadian government, which is the investment in defence and defence capabilities. There's a lot of money being made available, some of it through interest-free loans, through non-dilutive financing grants and other programs.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

This is, you know, it's impossible to tell everybody exactly how this map fits together because it's evolving in real time. Last week, we learned that the Defence Investment Agency, there was a thought leadership piece that we put out that basically described the fact that the DIA is currently operating under PSPC, which is basically the federal government procurement. Legislation is now progressing through government, which will actually have that step out stand alone and some additional legislation that's going to allow them to eliminate a lot of the bureaucracy and move faster. The reality is that hasn't happened yet. They are managing programs as the DIA, but they're doing it within the PSPC framework in Ottawa. It's getting better because people are focused on it, and the government's drive is to get this done.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I think at this moment in time, most Canadians drive is to get this done because we're not just talking about our defence of the Arctic and our contributions to NATO, but our economic independence as well. That's actually how we're approaching it. In terms of the manufacturing, when we raised the capital before Christmas, this was actually part of our plan, right? We went out and we raised, I believe, CAD 26 million, thanks to Abhi's hard work. With that positioned us so that we could move forward and be ahead of the rest of the world on the manufacturing capabilities. We've been continuously I mean, we've had the government actually tour our facility several times in the last two months. As we've progressed, there's a lot of interest in what we're doing.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We're certainly feeling strong support, and I expect that that will continue. In terms of defence procurement, what you're going to see happen in the near term is investment in the defence industry, the industrial development in Canada for the defence industry. The second thing of that will be basically government procuring small quantity systems to try them. Remember, Canada's not in a situation where we have to deploy the equipment immediately. They go back through, they have to qualify the equipment to make sure that the investments are sound and doing what responsible governments need to do, or more responsible defence organizations. I think you're going to see that. You'll see progress this year for sure.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

A lot of the orders we expect to continue developing will likely still be for a product that's sold outside of Canada to other NATO nations while Canada continues to develop its capability and invest in our infrastructure here. I think you're gonna start seeing more orders possibly late this year, but likely the Canadian orders will start drifting into 2027. That would be my best guess, to be clear, because nobody knows for sure. There's a lot of moving pieces. Everybody's moving, you know, in a positive direction. There's an enormous amount of energy in the finance communities. If you look at the DSRB now being stationed in Canada, a notable point there, every Canadian major bank signed on. We have things happening in Canada. This is an incredible time, probably once in a generation. Did I answer that one?

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

You sure did. That was very well done. Moving out of the defence space, we have a question that said: "Have you started the execution on the multi-year agreement with one of the largest utility energy companies?" This is an announcement we had. Can you provide any additional information about size, scope of that particular opportunity?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Size and scope, we can't actually do that yet because it's progressively let with. Basically, as the work packages come out of the customer, we execute on those work packages. To be honest with you, it's, I'm gonna stick my neck out here and tell you that the work packages are being executed in the province of Ontario. There you go. Have we started? Yes, we have. Do we know what the total revenue will be this year? We do not.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The activities have actually begun, I think, within the last probably, I'm gonna say four or five weeks, which is not really all that surprising given that the snow just left the ground and many of these activities are, they require something less than frigid temperatures and 2 ft of snow.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Yeah, the winter won't quit. What can we expect for the next quarters? Abhi, I believe this one's for you. Do you expect to be adjusted EBITDA positive fiscal year 2026? If not, why?

[Abhinav Singhvi, CFO at Volatus Aerospace]

As we move through the balance of 2026, we expect the next few quarters to reflect a materially different operating profile than Q1. A number of defence ISR-related activities and deliveries that have shifted out of Q1 have already started to deliver in Q2. We expect the entire CAD 4.5 million to get delivered in Q2 right now. We have already started delivering since April. Of course, from the margin perspective, as the product portfolio changes, the margin profile will also change. On adjusted EBITDA basis, we generally don't formally guide to a specific timeline to full year adjusted EBITDA. What I would say is 2026 remains a year where we are scaling and investing heavily around R&D, manufacturing, and building the autonomy layer right now.

[Abhinav Singhvi, CFO at Volatus Aerospace]

Some of those investments were visible in Q1. They will be visible in the upcoming quarter as well. As the revenue has started to scale starting Q2, I think the adjusted EBITDA profile will be much more different and improvised compared to what we have seen in Q1.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

If I can just introduce something, Danielle. One of the key things to think about right now, the Defence Industrial Strategy is quite new, obviously. We're into it for a few months, and things are moving very, very quickly. It's an environment that requires agility in terms of our investment, our product development, and so on. Volatus is positioning right now, I'm gonna be so bold as to tell you that our goal is to be named one of the Canadian champions, particularly in the area of autonomy and Remotely Piloted Aircraft Systems. We are working very hard to do that because we believe that this is a once-in-a-generation opportunity to dramatically improve the competitive position of the company and our scale, not just within the Canadian market.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

One of the things I wanna make clear is we don't view this as a solely Canadian initiative. The challenge with export to NATO nations is if the Canadian government doesn't buy from a Canadian company, why would Germany buy from a Canadian company? As Canada invests in the defence industry, makes investments in companies directly or indirectly, and moves forward with their plan, it becomes easier and easier to represent your technologies to foreign governments, which is in fact, or allied nations, I guess I should say, which is particularly important because that's also one of the goals of the Defence Industrial Strategy. We're following that multi-pronged approach. Quite frankly, our focus right now is on seizing the opportunity, and it's moving as fast as we can possibly do.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I also wanna tell you, I think we as a company need to do a better job communicating, particularly with a lot of the developments in our technology. We have to do a better job communicating with our, with our stakeholders, with our investors, with my partners, all of our shareholders. I'm a large shareholder, they're my partners, everybody listening here. Here's what I will say. We hired a new Vice President of Corporate Affairs and Strategic Positioning, Kristina Davis, who has an extensive background in the defence community, including with some major prime contractors. One of the things that she's driving us towards now is more efficient communications.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

For those that wanna be kept up to date regularly with our technology updates and, you know, a little bit more live from quarterly updates or you will notice that our press release volumes will start to decline a little bit because I think as we transition into a more mature company, we wanna make sure that our press releases are, you know, always meaningful. That doesn't mean that we wanna communicate less. What it means is we need to communicate differently. If you haven't signed up on our Investor Relations page, please go to our Investor Relations page on our website. Forgive us, some of you where we've integrated more than one of the companies we bought, you may be getting more than one email.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

All you need to do is respond to that, and we'll clean it up immediately. In the meantime, our goal over the next few months is to transition into a more proactive communication posture with our stakeholders that are interested in receiving it and make sure that our use of print media and digital media is other than LinkedIn, for example, and the other social media channels, is more tightly disciplined. The goal is to make sure that when we make an announcement, that it doesn't get lost in the noise. Again, not communicating less. As a matter of fact, it could quite very well be communicating more, but communicating differently. I encourage anyone that wants to get those updates to go to our website and sign up as well. Kristina is-- it's a major initiative for her and I fully support it.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Speaking of updates on all of the technologies that we are getting involved in, there are a number of questions revolving around our partnership with Sentinel. Where are we with the Mirabel facility, and will there be an opening? Where are we on our V-series and when is flight testing scheduled to start?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

All great questions. First, we'll start with the facility. Frankly, we had hoped to publish the date right now for the opening. To be honest with you, it has nothing to do with the facility. It has to do with the minister that we've invited to open the facility and coordinating around the parliament getting out for the summer, basically. It's probably going to be somewhere between the 19th and the 22nd of June. We will put that out in that newsletter. In the meantime, getting back to the first part of that activity, I wanna talk about the Sentinel R&D. Sentinel's a really interesting company. We're quite excited to work with them. They have the Interceptor platform is what we partnered on.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

It's a great technology. What they were lacking was the ability to scale manufacturing, and more importantly, immediately. I mean, ultimately, they'll build out their capability, but their long-term strategy is producing composite parts. That's their real claim to fame. As a matter of fact, they are producing the tooling for the V100 Series aircraft right now. They'll be producing the first parts for those aircraft. And we are expecting to have an aircraft, if not fully assembled, near assembled by the time we open the facility in June. We have a retail display unit right now, which was one of the original aircraft that we chose not to put back into a test program. Our goal is to introduce the test program on the V100. That'll happen kind of summertime.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

If I have my way, a little sooner. If the timing gods have their way, maybe it'll be a little later in the summer, but our goal is to be flying the aircraft this summer. The V200 will go right in, follow right behind that. The goal is to kind of introduce them, one platform at a time, kind of in three-month divisions between the three primary platforms as we ramp them up. We're hoping to showcase that at the facility opening and, frankly, we'll make sure that we communicate the progress on all of those platforms as we move forward with our new email distribution, our electronic updates. The other thing I do wanna mention is the Sentinel R&D.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We have, I believe, 10 airframes in our facility right now. The Sentinel Dock production line is now at a slow rate. We're stabilizing the rate on that production. The Recon platform, we're waiting for the initial parts order to arrive from the supply chain, we're expecting that that production line will be the second one that starts ramping up. It should be in early stage production by the time we open the facility. Those are happening pretty quickly.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Can you also speak to SKYDRA? A gentleman, Greg, has asked, "Appreciate it's too early to talk about commercial traction, but can you expand a little on the platform, how it's differentiated, and any client feedback that you've received so far?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I'm gonna make this one really good because the person that can probably answer that the best is our Head of Global Training Strategy. Danielle, do you wanna take that question?

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Sure. This platform is way to put me on the spot.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

There you go.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

This platform, it sits in a different space than some of the other Counter-UAS platforms where they're working on in-the-field interdiction or in-the-field detection of drones that are either clueless, careless, criminal, or combatant. Where we're focused on is actually setting up the skill set the knowledge base and the testing scenarios that individual groups need to be able to run in order to understand how when a real scenario comes along, how they're going to respond, how they're gonna enact their response, and how to develop real policy around what they're gonna respond. Not everyone can respond in the same way. Not everyone can. Not every scenario needs to be it has the same reaction.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

This helps to understand the sky where people are located, and to be able to table game that scenario multiple times over so that they can understand exactly how they're gonna respond in various situations. Hopefully that was a good answer, but I can certainly expand.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

You did well, but you missed the opportunity to plug your training program, which is.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Yes.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We have one of the things that's interesting in Canada is in Canada right now, we have a detect and report environment. It's actually not legal to interrupt or interfere with an aircraft in flight, and even small drones, they're considered aircraft. The only two bodies that can do that legally currently are the Royal Canadian Mounted Police and the Canadian Armed Forces. There's a regulatory shift that's happening that's going to create a different environment where trusted partners can actually introduce that service, and Volatus has a seminar series that's coming up, I believe in June, that you can probably access through our website that Danielle's team have been putting together. We're pretty excited about that. It'll help people understand what's happening there.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

That'll be on June 11th. It's Counter-UAS. I can share that link if you are interested. Please reach out to us, we can get you into that program.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Okay. Next question.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Yep. You hired the Germany-based investor relations and capital markets firm. Can you please provide some color around this contract?

[Abhinav Singhvi, CFO at Volatus Aerospace]

Yeah, I can share. The engagement is part of our broader effort to continue the expanding Volatus institutional visibility and capital market presence following the graduation to TSX. Europe, particularly Germany, has historically been important market in terms of aerospace defence and advanced autonomous technology, including the existing shareholder base and a trading presence in Frankfurt listing. It's not just an IR strategy, but also an outreach strategy in terms of developing more business and finding, as Canada become part of the safe, working more closely with NATO and NATO allies. That's the reason we have partnered with the IR firm in Germany.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Great. Can you please provide an update on the Borealis project?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I actually can't, Danielle, 'cause unfortunately that's being managed under Rob Walker and, I probably should have got an update, prior to this call, but I did not. If the person that posed the question wants to bounce us an email on that, I'd be happy to make sure that we get a response for that quickly.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Sure. That can be at investorrelations@volatusaerospace.com or info@volatusaerospace.com. Cash declined by approximately CAD 9.4 million this quarter. What run rate of cash burn should we expect for Q2 through Q4 2026? Does Q1 reflect an one-time peak in investment, TSX graduation marketing, et cetera, or is this a new structural level?

[Abhinav Singhvi, CFO at Volatus Aerospace]

I would caution against simply analyzing the Q1 cash moment, as the quarter included a combination of working capital and timing impacts. For example, we made early investment in fulfilling the order for the CAD 4.5 million defence contract, but the contract has shifted to Q2, but the cash started getting consuming in Q1. There were several strategic investment initiative as well, which are not repeated in nature on a quarter on quarter basis that were made in Q1. TSX graduation happened. We started expand and work more closely with NATO officials and allies and into defence positioning. Those business development activity also happened in Q1, including the higher R&D spend across V-Cortex AI, Condor XL, and also the development of our Counter UAS software system.

[Abhinav Singhvi, CFO at Volatus Aerospace]

I would say it's a one-off quarter where we made CapEx investment in working capital, and R&D. From a forward-looking standpoint, we do expect operating cash utilization to improve relative to Q1. That said, we do expect 2026 to remain an active year of investment, particularly around defence infrastructure, because when we look at the defence contract, defence contracts generally follow infrastructure establishment, capability and capacity build-up, and not the other way around. We have to make those cautious investment now so that the procurement cycle aligns with those investment. We cannot make this investment after we get procurement cycle because it generally doesn't work that way. It's one-off quarter, and we do expect the position to change on quarter-on-quarter basis.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I'll add a couple of things to that, Danielle. One of the things that we've done, it ties in with our with the German firm that was questioned earlier. It ties in with the hiring of a new Vice President to look after communications, improve our communications and strategic positioning. It includes our, we've hired a position to deal with a non-dilutive financing and strategic partnering with government departments and so on. We've also engaged two different IR firms. One of them very much focused on government and or the political apparatus and the bureaucracy, and the other one focused specifically on defence. David Pratt & Associates is focused on defence. Barrack Hill is very much focused on the government connections.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Those investments right now are all associated with my original comment, where we are working hard to position the company as a Canadian industrial champion, and we are, you know, no holds barred, everything we can do to do that. The other thing I wanna say is the strategy, there's a number of things that have happened on our capital markets hygiene that, you know, we've touched on it. We didn't talk about it in our presentation, it was there. We filed a CAD 250 million base shelf, which allows us flexibility in the future. We did that after raising capital, we had capital on our balance sheet. We felt it was the most appropriate time to do it, positioning for requirements before we had them.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

As many of you know, we had working capital constraints previously. Realistically, defence spending could go much faster than most people expect. The graduation to the Toronto Stock Exchange, the introduction of the base shelf, the investor relations outreach, it's really an outreach campaign, as Abhi mentioned. I'll give you an example. We've been spending time continuously in institutional, non-deal related visits to promote the company, tell our story, so that institutions become more aware of the company. Of course, if they get interested in positioning in defence, which many institutions are doing right now, it's our hope that they'll buy in the market, and that'll help support it. A lot of this positioning is literally creating optionality for the company.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Can we expand a little bit more on the question, can we expect margins to continue this trend over the next few quarters? Or how can we think about the margin trajectory moving forward?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Do you want me to touch that, or are you gonna take it?

[Abhinav Singhvi, CFO at Volatus Aerospace]

Well, I can take it.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Okay.

[Abhinav Singhvi, CFO at Volatus Aerospace]

We were very encouraged with the Q1 margin performance of the company, given how it has expanded, given the soft quarter. However, the 35% margin, it's a continued progress towards improving the quality of services segment but also because of the mix of the business. Going forward, we do expect margin to fluctuate quarter-on-quarter basis, depending more on the revenue composition. Equipment sales versus higher margin services training, and as the software kicks in as well. Equipment-heavy quarters can naturally compress some part of the margin, which are also being compensated with add-on defence program sustainment revenue and software, as we are launching them, which by default have much, much higher margin profile compared to even services.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Okay. Are you active in any M&A opportunities that you can share?

[Abhinav Singhvi, CFO at Volatus Aerospace]

We have done 20 M&As in the past, least to say we would not do any more. We are active in M&A. There are different files we keep exploring. The key aspect is, be in commercial or in defence segment, we are looking at very strategic opportunities that not just bring us additional geographic access or access to better technology but also are accretive that comes with revenue, EBITDA profile, government contracts, and new relationship with the customers. Those are the typical criteria with which we are going after the M&A opportunities. As of this point, the opportunities are still at the nascent stage, and as we progress, we'll make necessary disclosures in the market.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

When is the stock consolidation expected to happen, and at what ratio?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I'll take that one. Danielle, I'm gonna ask, I know we're coming up on an hour.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Yeah.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We've got a lot of questions. I think they're meaningful. If people need to drop off, please send us your questions. Abhi, you have any objection if we extend for another 15 minutes?

[Abhinav Singhvi, CFO at Volatus Aerospace]

Nope. I'm good.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I think we should extend it, Danielle, and that way we can go through that. The question was about stock consolidation. The key word I'm gonna use there is optionality. Abhi has crafted a very careful capital market strategy. For those that don't know, when you look at our capital markets activities over the last two years, people have said, "Why did you do so many raises?" What I like to point out is we did small raises. The next raise was higher, the next raise was higher, the next raise was higher, and it actually contributed to improving the company's cash position. At the same time, it actually helped with our stock price.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

It's been very strategic leading right up to our last raise, which was at CAD 0.60 with no warrants, a very clean transaction. What we said we were going to do at that point was create optionality. Do we have a need to consolidate the stock tomorrow other than the very fact that it always comes up in discussions? Are we looking at it? I'd love to never answer that question again. No, we don't actually have to do that. On the TSX, the benefit of having a stock price up over, I believe the number is CAD 3, it means it opens the stock to index inclusion, ETF and also potentially margin accounts.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Again, we've got reasonable liquidity right now, and we can always be better, but at the end of the day it creates optionality. What we wanted to do was, again, do it while the market was not gonna respond badly. They know our cash reserves are adequate if, but it puts us in a position to do that. Do we have a target to do it right now? There's no set date. It'll be done if and when at a time our board of directors determines that it's in the best interest of the company to do it. One point that I wanna make for anybody that talks about this, Volatus has a unique cap table. We still have 21% of the company held by insiders.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I'm one of the bigger stock shareholders. Remember, anything that happens to the company affects me disproportionately. The thoughts when we make decisions on these things, they're very considered. We're doing our, you know, as a fiduciary, we make decisions that are in the best interest of the company. The best interest of the company in this particular case, you know, we're all shareholders. Every employee in Volatus Aerospace that's a full-time employee is in fact a shareholder in the company. These decisions will be taken at the right time. It's literally been considerate institutional hygiene.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

How likely is the implementation of the reverse split, assuming it is approved at the shareholder meeting?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

At some point we have a broad cap table. If you remember, our cap table was driven initially to a large level by the reverse merger we did with Drone Delivery Canada, where they had north of 250 million shares. Volatus was about 135 million, but it was a merger of equals, which resulted in, you know, a share count of well over half a million, I think 550 million shares after that. Arguably, if I had it to do all over again, maybe you'd sit back and look at it and say we should have done a consolidation at that point. We didn't.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

It's likely that we will do one day, but it will likely be centered around some kind of a catalyst that makes sense. You know, what you don't wanna do. You know, we are not bound on TSX for having a CAD 1 stock price. We would certainly strive to achieve our analysts' expectations, which would put the stock price at CAD 1 or north of CAD 1. At the end of the day, we're not forced into doing anything. Again, is it likely to happen? You know, I won't say no. I can tell you at this moment in time, there certainly isn't a date in the calendar to do that. Nor for that matter, you know, we need to get by our general meeting, our AGM, before the board even is granted that authority to be able to make that decision.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Can you walk us through the procurement sales cycle of government defence contracts, key phases, timelines from initial engagement to actual revenues? Are you seeing that these timelines compress given the urgency with government currently, or do you anticipate it compressing? Is there any differences between Europe versus Canada?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I can't comment as much on Europe. We're actually selling more product in other parts of the world than we are Canada right now. That has to do with the maturity of the procurement systems and, where we are. I don't think anybody can accurately lay out a timeline. I'm gonna give you our perspective on what we're seeing. The Defence Investment Agency is in fact, you know, I had an opportunity to speak directly with the CEO, Doug Guzman, and he made the point that, you know, Defence Investment Agency and Defence Procurement Agency are basically the same thing, right? They will be, once they're stood up on their own, the procurement agency for the Canadian military. How quickly will that happen?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I know that their stakeholder, the Canadian government, the prime minister and cabinet, have mandated this to happen as fast as possible. Given the current status of the government, it's reasonable to assume things will move quickly. They need some enabling legislation like reducing the CAD 100 million floor, also providing some reduction in the bureaucracy to allow ministerial approval when it's in the nation's best interest. My personal feeling, and this is based on an awful lot of meetings in Ottawa that are being generated by our government relations firms, is that they are moving quickly, and many of those changes are most definitely this year.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

My hope, and I say hope ’cause I can't tell you that this has credibility beyond my feeling from the feedback we're getting, is that many of these changes will happen in the next few months. It could be into the fall, I know that the government, the Prime Minister has put a huge urgency on it, and we need it as Canadians. I do think you're gonna start seeing. First of all, a lot more investment. We're seeing that now. There are actually challenges out. You have much more engagement with IRAP and CED and other government agencies that are there to execute on the Prime Minister's direction. We've had opportunity to speak to all of the major banks, and we're talking at the level of, you know, CEO for BDC.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

These people are becoming available sometimes in roundtables and more intimate settings where we get a chance to actually talk about it. Things are moving quickly, but in terms of when do we expect orders, back to the original point I mentioned earlier this year, I think we may see some traction in 2026, but I think you'll see more material traction in 2027. We are expecting that, you know, the DSRB will be online by then, which is also going to reinforce the available capital for a lot of these procurement activities.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Can you give us an update on the Condor XL's commercialization and launch for sale? And will that be manufactured in Canada?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The Condor. Remember, the Condor is a platform that was developed off of a piloted aircraft, and there's a few of those being done right now. Robinson Helicopters, we run a fleet of those. They're actually working on autonomy programs on helicopters like that. Those are much more expensive platforms. We're obviously monitoring those closely. I think there will likely be a variant of that platform that's manufactured in Canada. A lot of that will depend on the demand signals that we see out of CANSEC and through some of the facility tours that we have going right now. We expect that aircraft to fly sometime in the next few months. They're actually installing all of the flight control software and the autopilot systems in the first test article.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We have two aircraft, one that'll be on display in CANSEC, and one that'll be on display in our manufacturing facility as well. Ultimately, we do expect to have demand. It has a, it has a place. We've seen demand for the machine, but it will likely be an iteration of that one that has a higher level of Canadian content.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

What is the status on a potential Nasdaq IPO and estimated timeline?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Believe we get that Nasdaq question often. You know, the reality is, Nasdaq is a continuous point because of course there's increased U.S. liquidity. Access to capital is far greater there. There's a whole bunch of arguments for that. It's also, just to give you an idea, more than CAD 1 million a year in increase in our D&O insurance. Of course, if we don't handle it correctly, it's not necessarily a positive event. You can end up being orphaned and playing defence. The last thing, we have something going on in Canada that hasn't happened before.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

Canadian institutions that have traditionally pension funds and so on, that have invested heavily outside of Canada before are now taking a really serious look at Canada because we now have a long-term industrial strategy that's also got the priorities named, the funds allocated and approved through the budget, and a Buy Canadian priority. That's creating a lot of emphasis. You know, it's not one of those things. Going to Nasdaq is always one of those things, boy, that might be really good, but it could not be really good. Again, optionality. We get set so that we have the ability to move like that. We do keep ourselves in front of U.S. institutions, but there's an awful lot going on right here in Canada right now.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Great. We have a lot of the questions have been answered around a number of these. They often stick to very similar topics. Have you promoted your ISR service to any North American rail firms?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We continuously promote it. We have a very, very large sales team based in Canada, the United States, and the U.K. From an ISR standpoint, yes, we have. We have made unsolicited proposals right from the very beginning of some of the geopolitical tensions in North America for border surveillance activities. We're actively involved in training the Canadian Rangers. As a matter of fact, for those that follow us on LinkedIn, you probably saw Matt Johnson conducting a three-week training program with the University of the West Indies at Mona down in Jamaica. He got home for three days and headed for Yellowknife. A lot going on in that space right now. But again, a lot of what's going on is part of the government reconfiguring itself.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

The Canadian military is engaged through programs like MINERVA, where we have monthly meetings, on-site meetings, sometimes more frequently than that, where we have active engagement, where we're the defence community, the army is helping us understand their challenge, and in fact, helping them define their problem statement to some degree, and then also working towards helping them define the solutions that they think that they need. That's ongoing. It's moving very quickly. This is not a slow process. It's not a traditional made in Canada, you know, will it, won't it? I think people in general are now starting to have real faith that this is happening, including inside of the CAF. It's no longer just a process. Things are moving. Again, timing is tough 'cause everything's new. This has never happened before.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

This entire geopolitical shift has never happened. It's a once in a generation thing and, you know, we're living it in real time.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

When you look at your, the V-fleet drones that you're looking to manufacture, who what is the customer profile for that? Who will be your first customers?

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I think on the V100, we'll likely be our own first customer because we have opportunities to deploy that in long linear inspections, of which we do about 1.7 million km a year of just pipeline. On that one, you know, being able to put that technology into service and prove it out, makes that actually even easier to sell. The V200 and V300 platforms, we have an internal project called Polar Bear, which is our catchall for all things Arctic, dealing with all of the technical and operational challenges associated with the Arctic. Both of those aircraft are powered by heavy fuel engines, so they are Arctic, closest to being Arctic capable. Our objective right now is to position them for deployment in the Arctic.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

That said, we have got active interest from other allied governments that are closely monitoring what we're doing. I think we'll be able to start seeing more visibility as the flight test program launches, but there's a lot of interest in the platforms right now.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Don't think I've missed any of the other questions. If I've missed your question and you are looking to get an answer, please feel free to email us at investorrelations@volatusaerospace.com. I'm gonna wrap this call up with just a quick roundtable as I always do. Abhi and Glen can if we've talked a lot about different things, what are some last thoughts you'd like to leave everyone with?

[Abhinav Singhvi, CFO at Volatus Aerospace]

I'll start because that's what generally happens. The key point is from the strategic point of view, we believe that Volatus today is significantly more institutionally positioned than it was ever, and especially than it was six months ago. With sovereign manufacturing capabilities, proprietary platforms, being built around defence, recurring software opportunities, growing defence exposure and a capital structure, with the exchange profile aligned very well with the growth profile of the company. We remain focused on disciplined execution, improving and expanding the margins and converting our pipeline and backlog, that we have been building on a sustainable revenue growth basis throughout 2026.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

For me, I'm gonna hit two points, Danielle. One, all I talked about today was defence. It's important for people to remember that defence still represents about 25% of Volatus business. Our primary business remains in the industrial commercial space. Basically, if I had to sum it up on an elevator, pipeline, power line. Pipeline, power line, and defence would probably be the biggest drivers of our revenues. We're a company that operates on two parallel growth engines. Our foundational growth engine is commercial. That's power utilities infrastructure, public safety, for example. Our growth is layered on top of that in the defence area.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

A lot of the aircraft, if you imagine from a dual use standpoint, we talk about an aircraft that's capable of flying, you know, 10,000 km of border, it's capable of doing 10,000 km of pipeline. It's a matter, it's when we're dealing with them in an ISR environment particularly, it's collecting data. Data is, it's what we do with the data that's different, not necessarily the concept of operations.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

I think one thing is particularly focused around the fact, you know, we are a dual use company, and despite the fact we're talking about defence, understand that our focus, while my focus is very heavy on defence right now because it's the newest area, there's a lot of moving parts, our company continues to focus on growth in the civil industrial side. That's a key point. The second thing I'd like to say is this is a transformational moment for Canada. This is a time that the Canadians at large need to get behind this Defence Industrial Strategy. We are doing everything we possibly can to become the recognized or one of the recognized Canadian champions.

[Glen Lynch, Director, President, and CEO at Volatus Aerospace]

We think we're very well positioned for that, we're certainly working overtime to get recognition at the government and CAF level. I do wanna say that that doesn't diminish our significance in terms of our growth in international markets. Canada is our industrial anchor, the global markets are our scale. That's an important point, that's what I would leave with everybody. Thank you all for your ongoing support of Volatus Aerospace. I hope we've been able to answer questions. I'm very grateful for the, well, almost 100 people that remained online way past time, thanks for your ongoing support.

[Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace]

Thank you. Just a reminder that everything will be available online within 24 hours. If you missed any part of this, feel free to check back there to catch this recording. Thank you, everyone.

[Abhinav Singhvi, CFO at Volatus Aerospace]

Thanks all. Bye.

Participants

Analysts

• Abhinav Singhvi, CFO at Volatus Aerospace
• Danielle Gagne, Head of Global Training Strategy and Business Development at Volatus Aerospace
• Glen Lynch, Director, President, and CEO at Volatus Aerospace