Volatus Aerospace CEO on $50M Growth Plan, Drone Delivery Canada Merger & Defense Expansion

Hi Lindsay, good to see you as well. Thank you for having me.

Certainly. So the company was founded about six years ago with the belief that drones would replace piloted aircraft for specifically logistics and aerial survey intelligence type works. And then eventually it would actually start to replace human beings in jobs that were dull, dirty or dangerous which is really the theme of autonomous or automated systems. So now the company has become an innovator in aerial intelligence and logistics. We grew fairly quickly, 50% from organic growth and 50% through acquisition. So we are an acquisitive company and last August with the completion of Drone Delivery Canada that was our 18th acquisition. So now we have a service that basically delivers intelligence and cargo services globally. We've got a strong presence in public safety, infrastructure, oil and gas and energy. We've pioneered off-grid nested drone solutions. So basically autonomous drone in a box that are dropped off at mining and industrial sites and operated remotely and really become known for our regulatory strengths that have allowed us to operate beyond the confines of typical regulations through waivers and special applied operating certificates.

Well, funny enough, well, R&D is part of our DNA and we have a portfolio of technologies. What really sets us apart from many is that we're truly a technology agnostic company. We've developed more of an integrated ecosystem of aerial solutions that include much of our own technologies, but also other people's technologies. The concept is to leverage our remote operations capabilities from our OC in the Toronto area for the remote operation of air vehicles beyond visual line of sight of the pilot. So a lot of the IP for remote operations came from Drone Delivery Canada including our ground-based infrastructure, many of the cargo delivery drones and today we conduct nearly daily flights where the air vehicle is more than 3,000 kilometers away from the pilot operator in Toronto. On the inspection sides we've got AI-driven inspections. We do thermal leak detection, remote sensing activities. And then I should mention also our academy which I'm quite proud of. That's our training and education platform where we focus on platform agnostic training and STEM programs specifically our SEIR program which is our scientific experiential aerial research program that works with high school students to have them understand drone technologies, sensors and use data that they collect to populate algorithms that ultimately can contribute to things like the early detection of Dutch elm disease, projects like that. And then of course the last thing is focusing on our regulatory approvals that allow us to use all of this ecosystem or engage it in operations that are beyond what most companies can.

So the company has experienced some decent growth. We're still a small business by definition, but our revenues in 2021 were $660,000 and 2024, a few years later we're $27 million and we're targeting $50 million in 2025. We've pivoted a lot towards recurring revenue models where we're dealing with long-term contracts with oil and gas and power utilities versus the early days of individual one-off type contracts. Not to say that we don't still have a fair number of individual buildings or projects that we will inspect, but a lot of our focus now is on larger scale, bigger customers, bigger contracts. Basically on the equipment sales side, we have about $12 million in unfulfilled demand in Canada alone for solution sales. So big opportunities there. Our defense strategy focuses on ISR or intelligence, reconnaissance and surveillance type services with a focus in Canada, Europe and Southeast Asia. A lot of focus around NATO allies. Our revenue mix is about 60% on the service side which is basically our turnkey services, our training and our consulting services and 40% on solution sales. That's expected to shift more and more towards the service side of the business as we continue to grow. Margins have also grown. So from about 24% to about 35% we're targeting 40 to 45% in the near future. That's a year-over-year growth that will continue to improve as our business mix changes and as our business evolves. And one key thing I'm quite proud of our post-merger strategies are our synergies that we were able to realize with Drone Delivery Canada. We forecast $3 million in savings in the first 100 days. We actually achieved $3.8 million and near break-even in Q4 last year. So our adjusted EBITDA was just a little better than $200,000 loss, which is putting us kind of on track for our target to a positive EBITDA on a go-forward basis by the end of the year.