DPRO · Draganfly Inc.

Draganfly Inc. delivered record Q1 2026 revenue of $2,312,353, a 49.4% increase year-over-year, driven primarily by product sales of $2,232,132, up 44.8%. This growth reflects strengthening demand for the company's drone solutions in public safety, defense, and other sectors. However, gross profit rose only 12.1% to $347,761, with margins contracting to 15.0% from 20.0%, attributed to product sales mix and a one-time non-cash inventory write-down of $105,840. Excluding the write-down, gross profit would have been $453,601 with a 19.6% margin, indicating underlying operational resilience. Operating expenses escalated to $7,963,223 from $3,911,035, fueled by higher office, employee, management, and travel costs, contributing to an operating loss of $7,615,462. The comprehensive loss widened to $5,711,284 from $3,433,712, but management highlights that excluding non-cash items like a $1,047,731 positive derivative fair value change, $105,840 inventory write-down, and $2,412,431 share issuance cost, the adjusted loss was $4,240,744 versus $3,656,159 last year. Balance sheet strength improved markedly with cash at $147.3 million, up from $90.2 million at year-end, total assets at $161.1 million, and shareholders' equity at $155.8 million, supported by financing activities. Operationally, highlights include drone deployments with Search and Rescue Sweden, U.S. Air Force awards, Canadian Army participation, and key appointments like Lt. Gen. (Ret’d) Michel Gauthier to the Military Advisory Board, positioning Draganfly for defense market expansion amid Canada's Defence Industrial Strategy. A shareholder update call is scheduled for May 11, 2026.