Volatus Aerospace is a Canadian headquartered aerospace company operating at the intersection of commercial aviation, uncrewed systems, and defense capability. We operate both piloted and remotely piloted or uncrewed aircraft. We provide aerial intelligence, remote operations, and mission critical services across industries like energy, infrastructure, public safety, and government.
Well, we're headquartered in Canada where our operations are international with teams across Canada, North America in general, Canada, United States, UK, Europe, and South America. The customer base is particularly important because these are real operations with real customers generating real revenue. What's interesting today is that many of the capabilities that we've been building for years, including remote operations, autonomy, persistent sensing, and aerial logistics, are now becoming priorities for governments and allied defense organizations. And we didn't pivot into that environment; we were actually built for it. As we walk through this presentation today, I'd encourage you to think of Volatus not simply as a drone company or a collection of products and services. Think of it as an operating platform that's already proven commercially and increasingly aligned with how sovereign and defense customers want to deploy that capability going forward.
As usual, before we begin, I'll briefly talk about forward-looking statements. Some of the comments we'll make today may include forward-looking information, including our strategy, growth plans, and future opportunities. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ. You can find a full description of these factors in our public filings. With that said, I'll now walk you through the story and see how the company's evolving.
To put some substance behind that positioning, Volatus already operates at a commercial scale in complex regulated environments across multiple jurisdictions. What differentiates us though is not any single aircraft or technology, but the way we integrate platforms, autonomy, remote operations, and trained teams into one operating model. That model allows us to scale through automation and centralized operations rather than having to add people in a linear fashion as we grow. Importantly, by doing this commercially today, that creates a low-risk pathway for sovereign and defense customers to adopt the capability that we've already proven commercially.
Why now? What's changed is not a single event. I think we're all living it. It's a clear shift in global priorities. Sovereignty and operational resilience are now top of mind for governments and critical infrastructure alike. At the same time, there's a strong preference for dual-use capabilities that are already proven in commercial operations rather than bespoke or experimental systems. Autonomy and remote operations have also moved from optional to necessary in order to scale efficiently and operate persistently. And finally, customers are shifting away from buying point solutions towards long-term operating partners who can deploy, run, and sustain capability over time. That shift strongly favors platforms like ours. The market has defense tailwinds but no scaled player is building from a commercial first foundation and that gap creates real opportunity for us.
This slide explains how Volatus actually creates leverage. We start with commercial operations. That's where we generate scale operational data and regulatory credibility operating in complex real world environments. On top of that, we apply our autonomy and remote operations. This allows us to operate persistently and grow without increasing cost and headcount. Importantly, we don't deliver isolated services or products. We integrate platforms, infrastructure, autonomy, and trained teams to deliver outcomes that customers don't want to build or can't manage themselves. Because the model is proven commercially, it translates and transitions naturally into sovereign and defense applications. That's why we think of ourselves kind of less as a vendor and more as a long-term operating partner for capability.
This slide is the simplest way to understand. At the top are mission outcomes. That's the things customers really care about. Things like surveillance, logistics, infrastructure and security operations. To deliver those outcomes at scale, we rely on autonomy and centralized control. That's what allows us to manage missions remotely, operate persistently, and coordinate multiple missions operating simultaneously. Underneath that are the platforms and the infrastructure. These are the aircraft platforms and persistent deployment tools that allow us to operate across different missions without being tied to a single system or OEM. And critically, all of this rests on our people and trust: trained operators, red teaming, counter UAS experience, and regulatory credibility. That human and institutional layer is what allows the rest of the stack to be used responsibly, safely, and at scale. Taken together, this is why we describe Volatus as a platform and a long-term capabilities partner rather than a product company or a collection of services.
This is important. This is how the company actually scales. We operate through a centralized operations control. That's the picture you can see in the middle. That's our centralized operations control center that allows us to execute the missions across wide geographies without having to have people physically present. Autonomy and mission orchestration lets us manage multiple air vehicles and missions simultaneously which is critical for persistence and most importantly cost efficiency. And the result is that growth doesn't require linear increases in personnel or infrastructure. In fact, as volume increases, operating leverage improves rather than compressing our margins. So, this model is also more resilient because it's less dependent on individual sites, people, or assets being deployed in various locations.
We're very deliberate about where we operate. Our core markets today, as our CFO would say, dull, boring revenue is generated in markets like energy and critical infrastructure, public sector and safety missions, and sovereign and defense applications. These markets all share pretty much similar requirements. They're all regulated environments. They require persistence, reliability, and most importantly, trust. Importantly, we focus on serviceable near-term opportunities where we already operate today. So, we're not relying on speculative markets or unproven demands to justify our business. Again, an important thing to understand with Volatus is we were built commercially. So, we've got significant commercial operations as we scale into the defense sector. So this focus allows us to build scale, reuse our capability across sectors and expand selectively as the demand increases.
So this is why our position is durable. First, we're operating in regulated safety critical markets and environments that require approvals, processes, and most importantly regulatory trust that takes years to build. That alone creates a meaningful barrier to entry. Second, with centralized operations and autonomy that allows us to scale in ways that traditional service providers simply can't. Third, we're platform agnostic. We integrate across multiple aircraft, RPAS systems, or drone systems, which gives customers flexibility and it reduces dependency on any single OEM. And finally, our relationships are long-term and outcome focused. Customers rely on us to operate and sustain capability, not just deliver a transaction. And that combination makes us pretty difficult to compete with. Example for that would be in power utilities and in the energy sector at large where the majority of our business is multi-year long-term contracts.
Obviously, we've had some pretty significant changes recently. With the release of Canada's defense industrial strategy, it has caused a real change in Canada, which is our headquarters and our original market. As Canada increases defense allocation and prioritizes Canadian content, particularly where scalable autonomous platforms have been made a domestic priority, Volatus represents a distributed sovereign aerospace platform that's aligned with the long-term structural and defense investment trends. So a couple of key things: Canada has basically issued this defense industrial strategy. It's about a week old right now. In that, they've pledged $84 billion in defense and most importantly is not only the presentation of the investment but also the allocation of those funds where they've prioritized autonomous systems for one thing as an example. Now, this creates a really interesting investment opportunity because as governments issue long-term demand signals, that reduces the risk ultimately for people investing in the sector and Canada's defense sector has traditionally traded at a discount to our international peers. That's largely because there wasn't a demand signal from the Canadian government. The demand signal reduces risk. Reduced risk reduces the cost of capital and reduced cost of capital increases and accelerates execution. So it's a very very interesting time. We believe it's an opportunity for investors to evaluate what's going on and potentially reset valuations across the defense sector in general.
This slide really talks about our IP and R&D and our tech strategy. So a lot of our technology strategy, people think about aircraft and RPAS and drones. What they don't think about is what's really behind them. Because if you think about it, a large aircraft being operated with a pilot and a remote control operation, that's really a remote controlled aircraft. It's when we introduce autonomy into the system that these become powerful tools. So, Volatus is developing a suite of products around something we call Vortex AI. And Vortex is the brain around which we build our autonomy stack. So, Vortex is a think of it more as a suite of products, the intelligent systems, the brain that goes inside of drones. Now, it's platform agnostic, which means it supports interoperability. It has the ability to be installed on all kinds of different platforms. As you can see, the airframes are basically an airframe agnostic platform. Think of that as a brain. A brain needs eyes, ears, nose, and mouth. Those are sensors, right? Those are the things that provide the data to the drone or to the brain. The brain talks to the flight control system. The flight control system instructs the body or the airframe to do the job. That's probably the most important element in any RPAS operation. And as you can see at the bottom, this is a scalable activity. I like to liken this to a Tesla full self drive where it learns and continues to evolve and adds features as is required for individual operations. And when you start getting into, for example, autonomous navigation, that's particularly critical in areas like operating in the Arctic environment, which is a primary focus for us right now is developing technologies in that space.
So with the change in the Canadian industrial defense strategy, it has made a fairly substantial commitment now to build sovereign capabilities. So, what you're seeing here is our factory in Quebec where we're actually built this to scale our autonomy and meet the demands of both the Canadian market and international markets as we continue to scale. We believe that this is going to be one of the most important assets for over the next 12 to 36 months.
So key point here is not a conceptual story. We're a company that's already operating across multiple jurisdictions under complex regulatory frameworks. And we're delivering persistent operations at scale. We've executed across commercial, public sector, and sovereign environments, often under conditions where reliability, safety, and compliance are non-negotiable. What that creates over time is something that's hard to replicate: operational data, institutional experience, and repeatable processes that improve performance and risk as we grow. What I'd like to do is point out something here, particularly if you look at the on the left hand side of this picture, you can see a whole series of dots, different colored dots. That's where we've got ongoing operations. We've completed recently, they're ongoing currently, or they're about to be done. What I'd like you to look at as an example is that red. You can see some skinny tiny little red lines and a big cluster over western Canada. That's the pipeline and it's the pipeline that we fly. Most importantly, you can see the majority of our pipeline businesses in the Canadian market right now. In Canada, the total pipeline is about 840,000 kilometers of pipeline. In the United States, there's 4 million kilometers of pipeline right away. And you can see that we've recently started operating in the United States. We believe that that market will continue to translate with the penetration we've had into Canada into the United States markets to the extent that recently we opened a new operating base in Tulsa, Oklahoma to help us continue to expand. So substantial opportunity in that area just as one example.
So this slide highlights the company's quarter-over-quarter revenue growth. In Q3 2025, revenue increased by 60%, reaching 10.6 million Canadian dollars. Gross margins have remained consistent in the 32 to 34% range. Our revenue mix is also well balanced: 47% services, 53% equipment solution sales, which reflects the sale of hardware. We're also seeing steady improvement in profitability. Over the past year, we've reduced our quarterly EBITDA loss from approximately $3 million to less than $500,000. The company finished December 2025 with approximately $40 million Canadian dollars in cash on the balance sheet. And as we exited 2025, we had roughly $20 million in annual recurring revenue. That's contracted services along with about $10 million in backlog.
This slide shows a comparison of Volatus against a group of publicly traded companies in our sector. As you can see, there's currently a valuation gap between trading at less than 13 times last 12 months revenue and our peer group which is trading at 90. Many of these companies are earlier in their commercial journey while Volatus already operates a diversified commercial platform with service revenue, equipment sales, and intentional international operations. At the same time, capabilities we've been building are aligned with the priorities we're seeing from governments and defense organizations. So we believe as that environment evolves and our focus remains the same, we'll continue to build the business, execute on commercial opportunities that expand our capabilities, which means that over time that progress may give investors an opportunity to reconsider how they view our company relative to the broader sector. That's particularly a consideration. Same logic applies as I mentioned in the defense revaluation. We think there's an opportunity for investors to reconsider valuations of companies in our sector in general and in particular where Volatus sits relative to our peers.
Key point I'm going to make here is the level of insider holdings. So as you can see, Volatus has approximately 21% of the stock is held by insiders. That's particularly interesting because it aligns the interests of our staff with the interests of our external shareholders. What I also want to mention is two points. Not only has Volatus got an active ESOP program or stock option program where every full-time employee becomes a shareholder and has the opportunity to build a position in the company over time. But during the last year where the company performed in the top 50 issuers on the Toronto Venture Exchange, we were actually number 16 on that list out of just under 1,600 companies that traded. Not one insider sold a share. In actual fact, since the company went public, the insiders haven't sold a share. So, we have large holdings. Our interests are aligned with our investors and we have significant skin in the game and we're in it for the long haul.
So our strategic option value really has to do with the fact that our commercial business will already continue to scale on its own. But as governments increasingly prioritize resilience, autonomy, and sovereign capability, we're naturally aligned with those long-term needs. As we scale our operations, the opportunity is asymmetric. In actual fact, we'll have the opportunity of growing our business without changing our business model, which actually creates margin expansion opportunities as we grow. So, that brings us to the end of the organized presentation, and I'd be happy to take any questions.
