Finance: Revenue increased 26% to 34.2 million Canadian dollars (equipment sales +106%) with gross margin remaining at 32%, while operating losses widened to CAD 14.9 million due to anticipated scaling and R&D investments; cash improved dramatically until 41 million Canadian dollars and management cites a 20 million Canadian dollars annual run rate equivalent to recurring revenue.
Strategic shift towards defense: The defense now represents approximately 25% revenue (up from ~5% two years ago) and is described as the company’s primary growth driver, with a directional target of ~60%–65% of revenue over time along with new ISR platforms and capacity additions.
Operations and product launch: The Mirabel manufacturing facility (53,000 square feet, capacity ~250 million Canadian dollars) is scheduled to open in early to mid-June but won’t materially contribute to revenue until 2027, and counter-drone planning/simulation platform SKYDRA has launched with demos and a growing project pipeline, but no long-term contracts yet.
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Volatus Aerospace executives said fiscal 2025 marked a “transformational” year as the company worked to build what it described as an integrated aerospace and defense platform spanning drones, piloted aviation, manufacturing, software and training. During the company’s earnings conference call, CEO Glenn Lynch and CFO Abhinav Singhvi detailed a year of strong revenue growth, increased defense exposure, expanded capabilities and a significantly strengthened balance sheet following the 2024 merger with Drone Delivery Canada.
Lynch described Volatus’ operating model as three interrelated business areas: defense and security (including ISR drones, counter-UAS capabilities through SKYDRA, NATO training and “sovereign manufacturing”); aerial intelligence services (inspection, mapping and surveillance of public services, energy and infrastructure); and equipment, loading and training (sale of drones, loading platforms and training).
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“What really matters is that this is not a one-product company,” Lynch said. “It’s a platform with multiple revenue streams that reinforce each other.”
On the defense side, Lynch said the company delivered multiple ISR systems to NATO customers and received repeat orders, which he characterized as a key test point for operational performance. It also cited a C$9 million training contract with a NATO ally and said Volatus renewed its national master offering with the Government of Canada, maintaining eligibility in all categories of federal unmanned aerial vehicle services.
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Commercially, Lynch highlighted progress on contracted and program work, including signing a multi-year utility program, expanding beyond-line-of-sight medical delivery activity, supporting offshore wind logistics, and ongoing environmental work such as aerial reforestation.
From a product and technology standpoint, Lynch said Volatus added the V100, V200 and V300 ISR aircraft, described as medium-altitude, long-endurance platforms, advanced its Condor XL heavy transport program, launched SKYDRA and began establishing its manufacturing plant in Mirabel.
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Singhvi reported fiscal 2025 equipment and services revenue of C$34.2 million, up 26% from C$27.0 million in fiscal 2024. He attributed the increase primarily to equipment sales, which he said more than doubled, rising 106% and “largely linked to an improving defense sector.”
Service revenue “fell slightly,” Singhvi said, describing the decline as driven by the timing of contract awards and execution, rather than demand. It added that two major service contracts awarded to start in 2025 began at the end of the first quarter of 2026.
According to Singhvi, gross profit increased by CAD 11 million and gross margin remained at 32% despite a higher mix of defense and equipment sales. Operating losses rose to C$14.9 million, which it described as a planned and “upfront” investment linked to the development of defense and escalation technology. Singhvi said staff investment was up 45%, IT and integration costs were up 40% and the company “restarted and reframed research and development”, particularly around defense technology.
At an EBITDA level, Singhvi said the company posted a loss of about C$7.2 million, but on a pro forma basis that includes a full year of Drone Delivery Canada, that represented a 25% improvement.
Management emphasized a shift in revenue mix toward defense. Lynch said defense would account for about 25% of revenue in 2025, up from about 5% two years earlier. Singhvi called defense the company’s “main growth driver” and said management sees a structural path toward 60% to 65% of revenue coming from defense over time, although he did not provide a timeline beyond outlining the trend directionally.
Singhvi said equipment accounted for about 48% of revenue in 2025, up from 29% a year earlier, while services accounted for 52%. In Q&A, management declined to disclose a more detailed breakdown of defense versus commercial revenue by category, saying it was not provided to preserve competitive and margin visibility.
On geography, Singhvi reported:
Canada: CAD 19.3 million, an increase of 10%, which he described as stable and fundamental; He noted that this figure did not include defense activities.
Europe and the United Kingdom: CAD 10.0 million, an increase of 244%, driven primarily by defense.
US: CAD 4.9 million, a drop of 13%, which he said was a temporary weakening due to factors “outside our control.”
Singhvi also said that entering 2026, the company had set a run rate of “C$20 million of equivalent annual recurring revenue,” which he framed as evidence of movement from project-based transactional revenue toward more predictable contracted revenue streams.
Singhvi highlighted a significant improvement in liquidity and balance sheet strength in 2025. He said total assets increased to CAD 93 million from CAD 58 million, and current assets increased to CAD 48 million from CAD 11 million. Cash ended the year at CAD 41 million, up from CAD 2 million a year earlier, reflecting what it described as an increase of CAD 39 million driven primarily by financing activities.
Singhvi said operating cash flow “improved to approximately CAD 7.5 million” from CAD 12.4 million a year earlier, and reported investment activity of approximately CAD 71.7 million as the company built capabilities. Financing activity was approximately C$48.6 million, it said, which supported capital needs tied to defense programs, Mirabel manufacturing scale-up and expansion.
In a question-and-answer session, management said the year-end cash balance was after repayment of an EDC loan. Singhvi stated that the breach of the agreement “did not affect EDC at all,” describing it as a disclosure and a formality and noting that the payment schedule and relationship were not changed.
Lynch and Singhvi described Mirabel as critical to Volatus’ “sovereign manufacturing” goals. Lynch said the company was targeting an “early to mid-June” opening and planned to launch five programs over the course of the year, with manufacturing on the first program beginning “in the coming weeks” and initial deliveries planned for early summer. However, it said the facility was not expected to contribute “largely” to revenue until 2027, with “some revenue” anticipated in 2026 as programs mature and flight testing and demonstration aircraft are completed.
Singhvi said the facility is 53,000 square feet and “perimeter secured,” and described its full-scale capacity as “CAD 250 million.”
At SKYDRA, Lynch said the company’s anti-drone strategy has moved “upwards” toward policy, planning and operational readiness. He described SKYDRA as an operational planning and simulation platform intended to help defense organizations, airports and critical infrastructure operators plan scenarios and train teams before deploying hardware. In Q&A, management said SKYDRA had recently launched and was being actively demonstrated, with a sales pipeline developing but no long-term contracts yet.
Executives also discussed supply chain concerns amid geopolitical instability and said the company is focused on strengthening domestic and allied supply networks. Lynch described Volatus’ approach as “build-partner-buy,” with the goal of sourcing in Canada when possible, then from allied suppliers, and otherwise from “trusted partners.” He said partnerships like the one announced with Sentinel R&D were aligned with developing Canadian industrial capability and accelerating entry into new platform categories by combining manufacturing processes with Volatus’ approach to integration and autonomy.
Management also discussed defence-related government engagement, including participation in conferences and initiatives such as Minerva and IDeaS, and outlined expectations that the Defense Industrial Strategy would first drive investment in industrial infrastructure before larger “programme-type” acquisitions became more common. Singhvi said management felt the strengthened balance sheet allowed the company to pursue larger defense contracts as it grew.
Volatus is a leader in innovative global air solutions for intelligence and cargo. With more than 100 years of combined institutional knowledge in aviation, Volatus offers comprehensive solutions utilizing piloted and remotely piloted aircraft systems for a wide range of industries, including oil and gas, energy services, healthcare, public safety and infrastructure. The Company is committed to improving operational efficiency, safety and sustainability through cutting-edge aerial technologies.
The article “Highlights from Fleetcor Technologies’ Q4 earnings calls” was originally published by MarketBeat.
