Volatus Aerospace Inc. (TAKOF) Q3 FY2025 Earnings Call Transcript & Summary

All right. Greetings, everyone, and welcome to the Volatus Aerospace Q3 2025 Earnings Call. I am Danielle Gagne, former Head of Marketing and Communications at Volatus Aerospace and the moderator for this call. Before we get started, just a reminder that we welcome your questions, and we will be having a Q&A session at the end of the presentation. [Operator Instructions] This presentation will be recorded and made available on our investor website within 24 hours. I would also like to take a moment to point out that certain information set forth in this presentation contains forward-looking information, including future-oriented financial information and financial outlook and actual results may differ materially. The risks, uncertainties and other factors that could influence actual results are described in the presentation, in the press release and in our MD&A filed with Canadian regulators. This presentation also contains non-IFRS measures, which are also outlined in the presentation. There is a full disclosure on Page 2 of this presentation, which we will encourage you to read and can be found on Volatus' investor website at investor.volatusaerospace.com. The company considers the earnings call part of its routine disclosure to educate investors on information contained in the quarterly results and related MD&A. If you have any questions, feel free to contact the Volatus Aerospace IR team at [email protected]. Now that, that is done, it is an honor to introduce Glen Lynch, CEO; and Abhinav Singhvi, CFO of the Volatus Aerospace. I hand it over to you guys.

Thank you, Danielle, and thanks, everybody, for joining us here today. I'm actually working from a remote location, so I'm going to turn my camera off for most of this presentation. I'll turn it back on for questions. So first of all, again, good afternoon, and thanks very much for joining us for the Volatus Aerospace Q3 2025 Earnings Call. This quarter represents a pivotal moment, a turning point for our company, both in financial performance and in the technological depth and the scale of opportunities that are currently ahead of us. Today, I'll begin with the highlights from the corner, moving into technology and acquisitions that are reshaping our future, walk through our expanded 4-pillar ecosystem and explain how these developments significantly increase our market opportunity. Then we'll review the financial results for the quarter. Let me begin with the key highlights from our quarter. We entered the fourth quarter with a position of financial strength, roughly $40 million in cash and strong working capital. This gives us the flexibility and stability to scale with confidence. Operationally, we delivered over $5 million in ISR and public safety contracts and secured a new $15 million North American utility contract demonstrated continued momentum in essential infrastructure markets. We also advanced new regulatory approvals supporting expanded route operations and that ultimately will benefit us across defense, public safety and industrial customers. And finally, we made meaningful progress on our partnerships, particularly one I'll bring up is advancing our battery cell initiatives for the Arctic, specifically with an eye to the demands of the unique requirements of Canada's North and then preparing our Condor XL for the future of large-scale reforestation missions. We also achieved one of the most significant milestones in our company's history. The acquisition of a complete MALE class UAV technology stack. This gives Canada sovereign capability in medium altitude long endurance aircraft and positions us as a defense tech manufacturer, not just an operator. We're investing in design, production, secure supply chains and the long-term industrial base needed to lead domestic drone manufacturing and meet the challenges that have been raised by the Canadian government in our current geopolitical and economic scenarios. Defense demands across NATO continue to accelerate. Our expanded training engagements with NATO aligned partners are ultimately demonstrating credibility and ultimately, the potential of scale. And our AI-enabled software initiatives are advancing automation and mission effectiveness across all of the platforms that we're building. Together, these developments position Volatus for long-term leadership. Talk for a minute about our business model. It's now matured into a complete 4-pillar ecosystem, one that creates recurring revenue, deepens our customer relationship and increases the adoption of our platforms. In the first pillar, Pillar 1 is our design and manufacturing. So in that case, we design, we build and we test Canadian-made drones from small tactical systems, some from our partners to MALE class aircraft. So that's medium altitude long endurance aircraft. So basically larger drones. This gives us a sovereign technology and long-term scalability, which again is designed to meet the Canadian government's challenge, not just to increase defense spending but also to build domestic capacity and be able to actually build in Canada for Canada by Canadians. The second pillar is our ongoing turnkey services business where we operate one of the largest remote operations network in North America, delivering surveillance, inspection, data collection and cargo delivery. So these missions are generating recurring revenue and providing real-world feedback on our engineering teams. The third pillar is our integrated reseller and solutions, which basically does two things. It helps us sell both our technologies by providing a distribution mechanism that basically covers Canada, the United States, and U.K., Europe, Middle East and Africa, out of the U.K. but it's recognizing that customers increasingly want turnkey capability, and we actually provide that through operational solutions, hardware, software sensors, communications, support and entire life cycle maintenance. And the fourth pillar, I'll kind of pause on for a minute because if you picked up Danielle saying formerly our Head of Marketing and Communications, that's because she's now taking a strategic corporate role in leading our training strategy globally. So taking our training organizations around the world across the pond and basically collaborating and bringing it together as a single training organization. So our training is now a full strategic pillar. We offer training across small UAS, beyond visual line of sight, ultimately moving into Arctic operations. We currently do an enormous amount of public safety. We're doing ISR training, and we'll be developing and introducing new multi-crew RPAS missions and all of the training that's required ultimately for technical training to be able to operate the aircraft that we build and sell. This builds a customer capability and ultimately drives long-term adoption of our platforms. And together, these 4 pillars form a self-reinforcing ecosystem that positions Volatus as a long-term partner rather than a transactional vendor. So if we look at what that's done to our ecosystem, it's created some fairly significant expansion in our market opportunity. We now address more than $10.8 million in serviceable available market across defense, engineering, utilities, cargo and infrastructure monitoring. Defense alone in our area represents a $5.7 billion segment with an accelerated UAV procurement across NATO. Part of the reason that I'm actually working remotely today is we've been engaging with the Canadian military at multiple points across our company, where they're really pushing a collaborative effort. And I'll tell you as a Canadian, I'm extraordinarily proud of the effort that the military is making to engage directly with the industry to make sure that the solutions that we're providing ultimately meet the demands of the future of the Canadian Armed Forces. So our expanded product lineup from small tactical UAS to the larger MALE class platforms basically positions us for programs and contract categories that were previously inaccessible to us. This evolution has materially increased our addressable market and set the foundation for scalable growth in the years ahead. With that strategic context in mind, I'll now turn the call over to our CFO, Abhi. He's going to walk you through our Q3 financial results in more detail. Abhi, over to you.

Thanks, Glen. So this slide highlights the snapshot of our financial performance. Our revenue grew 60% to $10.6 million in Q3 2024 from $6.6 million last year same quarter. And this has all been organic and the growth has driven majorly by equipment sales for this quarter. Our gross profit has increased to $3.4 million, remained stable at 33% blended gross margin. A movement from 34% margin, but that's because of the change in the product mix, yet we have been able to maintain higher gross margin, and that's because of the efficiencies and cost synergies that have been bringing together for the last several quarters since the M&A with Drone Delivery Canada. Our adjusted EBITDA drain has reduced to $660,000 now, down from $1.3 million same quarter last year. The 52% improvement, we expect to see more improvement as we scale quarterly revenue. Right now, we are -- with our existing fixed cost base, we expect that between $13 million to $14 million revenue profile for each quarter, the company will be breaking even. September 30, end of the Q3, our cash position was $17 million. As of now, the pro forma cash position is $40 million, considering the recent financing we have closed. Revenue mix has changed from almost, I would say, last quarter was 16% equipment and now it's 53%. So there's been a change in the profile of the product mix of the company. The next slide highlights the details of our Q3 financials. So as I said, the Q3 came at $10.6 million, driven largely by exceptional strength in our equipment segment. Equipment sales have increased by 423% compared to last year, reflecting a clear tailwind in the industry demand across both commercial and defense markets. Services are performing well, but the mix of this quarter was more heavily weighted towards equipment. Gross profit was $3.47 million compared to $2.25 million last year. Our blended gross margin have been 33%, down movement from 34% entirely due to the shift in product mix. Equipment continues to have a shorter sales cycle and lower margin profile compared to services, but the higher volume is a positive indicator of market adoption, and position us well for recurring services and long-cycle programs going forward. Our loss from operations was $2.84 million, meaningful improvement from $4.19 million compared to Q3 of last year. On a year-over-year basis, we are seeing the benefit from continued cost synergies even as we ramp up the hiring and operational activity right now. This quarter also reflects the restart of our R&D investment in the Condor XL program. And starting next quarter, we'll be -- we'll see higher spending as we begin setting up the manufacturing facility in Mirabel. On a pro forma basis, which removes the noncash items like depreciation and share-based payments, the operational loss was $844,000 compared to $2.7 million last year. And if we strip out legal and advisory costs, which was associated with last year's merger, the comparable Q3 '24 loss was $1.25 million, still a meaningful -- meaning still we delivered a 33% year-on-year EBITDA improvement on a pro forma basis. The adjusted EBITDA for the quarter was $660,000, an improvement of 52%. While we continue to invest in R&D and prepare for Mirabel, this quarter's improvement underscores the operational leverage we are gaining through our combined businesses. Overall, Q3 reflects strong commercial momentum, disciplined cost management and continued progress on our path towards profitability, even as we invest in strategic program that positions the company for long-term growth, import defense and commercial segment. The next slide highlights the revenue snapshot. So revenue is up $10.6 million from $6.6 million, a 60% jump. This has been our strongest quarter to date and reflects broad-based momentum across commercial, industrial and defense customers. Looking at the product mix, we have seen significant shift over the last -- over the past year, at least. In Q3 '24 services represented 84% of revenue and equipment 16%. As the demand for drones and integrated systems have accelerated this year, the mix has evolved meaningfully. By Q1 and Q2 of this year, our equipment rose to 44% and 48%, respectively. And this quarter, it has reached 53%. The shift is strategically important, higher equipment volume demonstrates the increasing adoption of our platforms, particularly in commercial and defense application. While services continues to provide stable, high-margin recurring revenue. Together, they create a well-balanced and scalable growth profile, reinforcing the strength of our operating model. The next slide highlights the gross profit profile of the company. In Q3, the gross profit was $3.47 million, up from $2.25 million in the same quarter last year, increase of more than 50% year-over-year. This reflects the continued strength of our revenue growth and contribution from higher equipment volumes. For the first 9 months of the year, the gross profit reached $8.7 million compared to $7 million for the same period in 2024, that translates into a 32% margin versus 34% last year. The slight margin movement is entirely driven by the shift in the product mix. Equipment represented a significantly larger share of revenue this quarter. And while equipment carries lower margins than services, the mix shift is a direct result of strong adoption and strong push by the company into defense segment. Overall, the trend remains very positive. We are consistently expanding gross profit, maintaining our margin stability despite heavier equipment mix and scaling the business in a disciplined and profitable way. This concludes our review of financial results for this quarter. To summarize, we have delivered strong revenue growth, continued improvement in profitability, solid balance sheet to support our strategy moving forward, and wins across both commercial and defense segment. With that, I would like to open the line for questions.

All right. We have a number of questions that have already come in. Let me pull those up and get us started. So regarding the $600-plus million pipeline, can you describe the profile, services, geographies and negotiation position, small -- i.e., small number of high profitability contracts or large numbers of low probability contracts?

So I can take that. So the $600 million sales pipeline is spread across -- it's mostly commercial. We generally don't disclose the defense pipeline purely because the longer sales cycle they have and a lot of uncertainties across geopolitical situation, plus it's a lot dependent on the government's decision to go forward and the speed. On the commercial segment, which is $600 million plus right now, the profile is divided among services and equipment. Highly -- high, I would say the weightage is much higher on the equipment side purely because the sales cycle is much smaller. So within, I would say, 30 to 60 days, we generally know where we are moving with the sales cycle. Services is the longest sales cycle takes. Historically, we would say 90 to 120 days, it's been taking a little longer this year -- purely because the size of the contracts are also getting much larger. For example, the recent win we declared last month with the utility company, the initial plan of the -- initial project results were supposed to or the contracting was supposed to come out in Q2. It came tail end of Q3. So something that was supposed to start kick off in Q3 is now pushed to Q1, mid-Q1. So that's a shift we are seeing in the services. The wins are coming our way, but it's been taking much longer on the side of the, I would say, the larger blue chip companies we have. It's highly weighted towards Canada and Europe. U.S. services is growing much faster. Equipment side, because of the Trump administration and the ban on the Chinese products and push towards NDA government products, there has been a void in that marketplace. And what we are doing is we are tying up partnership-wise, manufacturing-wise, developing products that are more NDA compliant to fill in that void on the U.S. market. On the last part of the question is the probability. I would say, well, it's much -- it's medium, I would say almost 60% of our overall pipeline is in the probability phase, which is over 50%. And when I say that, when we divide the win probability within the company, any deal that gets qualified, it's basically 10%. With the moment we move into costing phase, the probability goes up. Negotiation, it further goes up to 60%. And if we have been officially given a contract, it goes to 90% phase. And once we start executing, that's when we closed the deal at 100%. So I would say on the deal probability, most of the contracts are over 50% phase right now, purely because these are much -- on the equipment side, qualified leads that are progressed towards costing and beyond. And on the services, it's more on the stages of negotiation or we are waiting for the -- at the end of the day, the contracts to be awarded.

If I can just add -- I'll add a couple of points there, Danielle. Abhi, that was a good job. Just for clarification, Abhi referred to NDAA, which is the National Defense Authorization Act in the United States. It basically is a mechanism that ensures that the products comply with the U.S. requirements. A lot of what is impacting the United States is a fairly fast change in their America First initiatives, which basically caught a supply chain, a little off-guard, somewhat underdeveloped in the United States. That underdeveloped supply chain is being addressed aggressively by companies like, for example, unusual machines is really focused on that area. So that will -- I think that will bounce back. It will have some impact over the next 12 months. So I suspect as the industry realigns to more American made products in the United States. So that's an impact in the United States that doesn't really impact many other parts of the world, although most of the world ultimately will align -- or most of our markets will align in some capacity to that. Danielle, what's the next question?

Sure. The next question is kind of looking at our defense initiatives. Looking at our approach to that and through our approach with the lobbyist and whether or not they're -- what you're seeing there, as well as do you see any of the carve-out in the federal budget being able to benefit Volatus in the long term?

So the latter half is the easy part of the question. You just say, yes, we do. The major thing that we're seeing right now is Canada has just gone through basically 3 decades of under or absolute minimal investment in our Canadian armed forces. The force depletion has been significant. There's basically -- I heard the -- one of the defense events I was at last week. They described it as a loss of muscle and bone mass, which right now, the institution is scrambling to rebuild, but they're building -- their ability to sustain and change is all feeding out of the same pipe. So there's a lot going on. That affects speed. I must admit I have had engagement in the last 5 business days, I've been engaged for almost daylong sessions with 3 different areas of the military. Defense is really reaching out, they're engaging. So there's no question at the defense level, at the soldier level. And the institution of the Canadian Armed Forces are working very hard with the industry to actually meet that build in Canada ramp-up as well as ultimately their first obligation, which is equipping our soldiers and whatnot. Now the Canadian government seems to be obviously providing the money -- is committed to providing the money and putting enormous energy right now into actually trying to achieve the objectives that have been set out. The problem is the bureaucracy in the middle, which is full of great people, but it's a bureaucracy that's been built over a very long time and it's been a bureaucracy that hasn't had the ability to act for all kinds of reasons that are outside of the control of the bureaucracy. So essentially, you have willingness at the top and at the operational level, but the mechanism of government right now is really where they're focusing on trying to make things happen, and they're making progress there. I think there's a lot of will at all levels, including in the bureaucracy to make change, but it takes time. And remember, the budget, we've gone through an election, the change in government policy, all of the things going on in the government that everybody is associated with and then ultimately, the approval of the budget and now everybody is scrambling to make things happen. So I see significant opportunity. The difficulty -- and I saw another question that we may have just skipped over that had to do with the conversion rates and how we're bidding. A lot of the challenges right now is addressing immediate concerns. We're in there. They're moving quickly. But frankly, that's not where the major change happens in the major contracts. So it's tough to say how fast it will happen because the defense apparatus itself doesn't know. But they are moving quickly to achieve the mandate that they've been given from the Canadian government. And again, the uncertainty and the reason that we don't tie those forecasts in is because I think it would be irresponsible to do it because it would be a wild-ass guess, pardon me. So it's definitely worth the work because the money has been allocated. In answer to the question that I did flip over earlier concerning how we're bidding. There's RFPs. There's unsolicited proposals, there's working papers, there's working groups. We're engaged at all levels and increasing our resources to suit.

Our next question. You mentioned that we raised a lot of funds in the presentation are up to $40 million. Can you talk about how that's going to be utilized and how that's going to impact investors?

Okay. Abhi?

Yes, sure. So the first thing is for more information on this one, we have filed a prospectus which actually lays down the use of proceeds. But for this call, I'll summarize it. The majority of the capital is actually being invested one towards the development of the Mirabel facility, which is coming out with our own proprietary technology, the [ caliban ] investment we have done last month, this is a family of drones, mostly MALE categories, which is basically medium altitude long range, long endurance drones. It's a big gap that exists in the marketplace today because the market is crowded with small drones. And the small drone, the threats with the small drones have been mitigated with large drone, which is $40 million to $45 million asset. There are really no -- a lot of assets to operate in medium range. That's the gap we are planning to fill. And that's why the, I would say, 50% chunk of the capital we have raised with this $26 million is going to get invested. Other than that, the investment is going in scaling the Services segment is going in the inventory management of the company. So the plan is to ramp up inventory within the organization and also some funds are part for potential M&A opportunities that we deem fit, which are more accretive for the company.

And as you express the 4 new pillars, can you talk a little bit about where your prime business focus is amongst them?

So actually, they're interrelated. They're interrelated and intertwined. So they form an ecosystem. If you design and build drones and nobody learns how to fly them, that's a problem. If you don't create the support mechanisms, the maintenance, the in-service, the ability to manage the life cycle -- life cycle of the asset, that doesn't help. And then the key part is a lot of the space that we're moving into, this is New Frontier. It's New Frontier for Canada. It's a New Frontier for much of the world. There are not a lot of operators outside of the defense community that have the ability or capability to operate long drones. The strategy that Volatus has is to literally develop those capabilities, which we're one of the larger drone operators. When I say larger, I'm talking about in size -- in terms of the size of the drones we're operating, I guess, as well as the size of the company, but the size of drones that we're operating. The key part here is by ensuring that we have all of the capabilities to design and build quality products that are meeting the current market requirements, current and anticipated requirements by being able to train our people, by being able to operate the aircraft and then ultimately, sell systems, we can train other people to do what we're doing. And in some cases, they may choose to have us continue to do it. But ultimately, that's how they all fit together. So I can't say there's -- one is more important than the other. I would say what's going on in the sector of defense, and manufacturing is chewing up a significant amount of my immediate time because it's an expanded growth area for Volatus. And I also have a background of manufacturing. So at this moment, it's very early stage, and I'm actively involved to make sure that this project moves quickly. But I wouldn't say that you can really separate one from the others at this moment in time, it functions as a single ecosystem.

Well said. Does the training plan to offer designation or designations recognized or required by the government to be a certain type of operator?

So yes, it does. We're multi-jurisdictional and -- multi-market, multi-jurisdictional. So for example, in the U.K., we're a recognized assessment entity. We actually have 2 of those designations in the U.K. They don't have that requirement in Canada, but we do have a program of flight reviewers and training courses and exams and flight reviews or flight -- we'll call them flight reviews, that's what they are, that ultimately, in Canada, for example, achieve advanced pilot certifications, which is a pilot certificate by Transport Canada. And now they have a new category of licensing, it's called complex Level 1, which basically deals with the new regulatory environment, allowing pilots to function with the larger aircraft and in a beyond visual line of sight environment. Those regulations changed on November 4. So this is all very new. We knew it was coming, and we're well prepared for it as an RPAS operator, commercial RPAS operator. But that's basically the answer to the question is yes. There's pilot certificates in the United States, Canada and the U.K. that are all recognized designations or qualifications.

So we have a couple questions. I think we get this every time. When are we going to start making a positive profit?

Abhi, I'm going to let you -- easy questions go to Glen, tough questions go to Abhi.

Thanks, Glen. So I made a point. So quarterly revenue, if we do between $13 million to $14 million in quarterly revenue, we actually hit breakeven. We do $16 million to $17 million quarterly revenue. We actually become free cash flow positive as well. So I also saw a question about being net income positive and there was a 2027 question mark. The plan is to move much faster for us. And we are going to involve both organic and inorganic strategy to get there as soon as possible. So right now, I would say within the next few quarters and the reason I'm not committing on a particular quarter is because -- so there are a lot of contracts in line of sight but that we are just waiting to get awarded or information to come in on the decisions that will change the entire dynamics of the company.

Can you speak to the strategic importance of Mirabel and how -- and when that's going to complete building?

Right now, we're in the build-out phase for the factory. The planning for the factory layout in the offices is done where there's an active RFP out right now to develop the composite toolings. We're going to regenerate new tooling. And so it's moving fairly quickly. We've started the hiring process. Our objective with Mirabel is to actually be at some level of production by February, probably be late February by the time parts are arriving, but the plant is in the process right now of properly documenting the quality management system and whatnot. And we should be in, I would say, early-stage production by the time we get into the month of March. One thing I will mention, answering about Mirabel in itself, there's a whole bunch of reasons. Canada is a great country and a massive and very talented aerospace industry, but Montreal specifically is one of the largest aerospace cities in the world, representing at least historically more than half of the total aerospace industry in Canada. So strong knowledge base, strong supply chain in the immediate area, and as well as good provincial support for the activities that are developing there. And that's the primary reason that it's there, but it's moving quite quickly.

So in this highly competitive market, how would Volatus Aerospace position themselves to separate them from competitors? What is your differentiator?

So there's a lot of claims in the market about who does what first. All I'm going to tell you is Volatus has been -- 50% of our growth has come from acquiring companies that have done some extraordinary things. One of them, for example, is Drone Delivery Canada. And while they were very early in their revenue producing stage, they focused on a segment that was difficult to generate revenue. The reality is they developed one of the most capable remote operation centers and operational capabilities for remote operations. Right now for -- just to give you an idea, if the weather in Edmonton is in good form, we fly drones in and out of Edmonton International Airport as many as 16 times a day. That's the target. That's when I say 16, that's one trip in one trip out is -- that's 2. So basically, 8 round trips a day is what they're doing when the weather is permitting, that's several thousand kilometers away from our bond facility, which is where the pilot is located. So one of the key points there is that we are operating on a much larger scale in terms of beyond visual line of sight operations across the country. And I think in terms of operating large drones, we have approvals to fly the Condor, for example, which is 1,000 pounds. I think that works out to about 450 or 460 kilograms. So we're talking about large vehicles. But basically, it's the scale of the company. The breadth of its capability is the fact that it's an entire ecosystem. So we literally cover all of that. And from a just a pure equipment standpoint. We have one of the broadest technology partners in the portfolios in the industry because of the breadth of our partnerships that we have with other OEMs as well as our own products. So we're perhaps -- I would say, we believe we're the largest company in Canada, one of the largest in North America, fairly confident with that. But basically, the key point is it's the breadth of our capability. So there isn't very much that these aircraft are capable of doing that Volatus isn't qualified, capable to make them do.

We have a lot of questions in here, so I'm going to try to combine a couple of them together regarding the Condor. So are you seeing additional use cases in the pipeline for the Condor? And will it be sold as equipment and service? And would it be used in the Arctic? And how does all this step kind of lead in to our cargo Q1, Q2 milestones that we foresee in next year?

So yes, yes, no, is the first part. So do we see a lot of opportunities growing for platforms like the Condor? Yes. We're seeing that in many markets right now, not just the Canadian market and dual use, so both civil and defense. So defense, for example, there's a lot of applications. While we've said we don't expect large-scale impact from logistics before about 2030, the reality is that's based on what we can see, but there's a lot of things happening there that could change that. In terms of the question about the Arctic, the answer to that is a little bit. The reality is the Arctic. So of the 3 medium altitude long endurance drones that we have, 2 of those platforms were acquired, specifically because of their ability to be hardened for the Arctic environment. There's a whole bunch of things that go with that. It's -- for those that haven't operated there, it's not as simple as kind of turning up the heat because it's really cold. There's an awful lot that goes on to the technical requirements for equipment to be able to perform and perform safely and efficiently in the Arctic. And one of them, for example, is the type of fuel that are used to the engines and the Condor is gas powered. So it's good there at certain times of the year, but not good at all times of the year. So some of the summer operations we can do. Really, we see opportunities for the Condor in defense in more tempered parts of the country. So more in kind of the subarctic areas, which is -- there's a lot more flyable days there. Temperatures are really designed for that type of equipment. But that's really the answer for the Condor.

So we have a question here about whether -- who do we see as our competitors? What's the competitor profile for Volatus?

So -- that's funny. Today, these days, the biggest thing that impairs our ability to grow fast is time. But honestly, there's so much demand in the RPAS space right now. This is a rising tide, right, the entire Canadian industry. The industry is full of what we always say lovingly 2 guys in a truck, what I basically mean is a lot of small operators. But frankly, there's a lot of talent in the Canadian industry and a lot of capability in terms of technology and operating capability. So we do face some competition on contracts. We like to think we win more than our fair share. Certainly, we work hard for that. We are, by far, the largest in terms of what we do, but realistically, there's some real talent there. And I don't want to say that there is no competition, but the reality is there's so much demand that it's really -- it's not a factor at this current part of our growth.

Has there been any contract wins start deferred beyond 2025?

Yes, there has. There's -- obviously, there's a lot going on in a geopolitical level, and that impacts the decision-making speed of some of these organizations. We think about it, right? We watch it in the news and something happens in the news that creates a changing circumstance. That changing circumstance has a whole bunch of people sitting back and say, okay, what does that mean for us. So that can impact a lot of the decisions. We've had contracts, the big -- the large contract that we announced in the power utility space, we expected that I think it was Q2 originally, and it ended up happening very late in Q3. So the truth of the matter is there's definitely a lot of deferrals. But at the same time, there's a lot of increase in our pipeline. So -- the opportunities are growing, but the timing is -- it's one of the reasons we're cautious about talking about the defense pipeline because we just can't predict timing. Even on the Civil side, bigger contracts -- but obviously, some level of uncertainty affects the ability of organizations to dedicate resources.

Things move slow, money changes all the time. So we can see some strategic investment from unusual machine, a U.S. company. Can you shed more light on the relationship, Abhi?

Sure. Probably Glen, you can do that as well. You have met Alan.

Yes. So first of all, they're an interesting machine. I talked about the maturity of the supply chain in the United States. Their unusual machines is not a drone company, they're a parts company. So they're solving that supply chain problem in the United States. And first of all, I'm a big fan of their executive leader. We spend a lot of time overlapping at conferences and so on, and it's a very mutually supportive environment. Quite frankly, they're liable to be one of our important suppliers as time goes by. So I think for them, the strategic investment kind of ties them into us as an OEM. And for us, it creates the same kind of a tie from their standpoint. But that's really the fit with unusual machines.

As we wrap up today, I think we've got -- we've hit every question. Oh, there is one. How many full-time employees does the company have across all of the organization at this point?

So that number is a moving target at the moment. What -- typically, we say about 180 full-time employees across the 4 primary countries that we reside in. That number is growing right now, particularly because of what's going on in defense, not just in Canada, but in other markets. So the defense market in general, and it has the potential to grow quite significantly as the manufacturing ramps up in Quebec.

So I'm going to go around the room and let Abhi and Glen say their last words, and we'll wrap up today. Glen, do you want to start us off?

Yes. I'm going to say it's -- I don't think we -- as a CEO, I don't think I've ever had more work to do than I have right now. I also don't think I've seen a more exciting time in my lifetime as an executive leader with what's going on in Canada, with what's going on in the industry. I know the changes or the uncertainties that are formed. And frankly, I'm very sympathetic for that. But what we have to do is continue to build. And whenever there's change, change is difficult, but it creates enormous opportunities and that's exactly what we're seeing. There's more change has happened in the last 4 months in Canada than happened in 4 decades. I'm super excited about what's going on here right now. I think the opportunities are considerable. And frankly, we're stepping up to that challenge, and I would encourage anybody that's listening that you should equally be following our drum tides and a significant opportunity for the entire industry.

Okay. Well, Danielle, that was not part of the discussion. So now I'm...

No script.

I know, so [indiscernible] So here is the -- as a CFO, it becomes difficult, too, right? So we are scaling the business very responsibly. We are investing where there's a clear strategic returns for the company, for the stakeholders invested specifically for trusting us with their money. And the intent is to strengthen the financial foundation needed to support our long-term objective. We are just not focused on short-term goals, but it's more to drive the business from a long-term point of view. What's coming up in the next 3, 5, 10 and 20 years from now. That's one of the reasons when -- and this is something which is an open information is this -- the company has such a strong insider shareholding. We own 23% of the company. We used to hold 23%, we still hold 23%. The stock has given an a different, I would say, momentum in the several past months and yet not a single share was sold by any one of the management, board or insider involved in the company. Our focus remains on the execution driving profitability, creating meaningful return on investment to the stakeholders and to measure the return on invested capital on every segment of the business we are driving. And that's the objective. So we'll keep driving the business profitability and keep scaling the business and the intent is to build the strongest and the most, I would say, competitive drone company in this space.

Thank you. And Abhi, you handled that well off the cusp. Thank you, everyone, for joining us. The recording will be available online within 24 hours. So take a look at investor.volatusaerospace.com shortly, and you will see this as well as our presentation at that time. Thank you, everyone, for joining us, and have a great rest of your evening.

Thanks, all.