Draganfly Inc

Draganfly Inc. (NASDAQ: DPRO) is a Canada-based company. The Company is a provider of drone solutions, Artificial intelligence (AI) driven software, and robotics. The Company provides solutions for public safety, agriculture, industrial inspections, security, mapping, and surveying. Its products include Apex, Commander 3XL, Heavy Lift Drone, Flex FPV, Commander 3XL Hybrid, Starling X.2, Payloads and Sensors, Draganflyer Commander2, Software, Precision Delivery System, Legacy Products and Projects, and Development Projects. 

Key Business and Financial Updates:

• Revenue Growth and Margin Performance in Q3 FY2025: Draganfly Inc. reported third-quarter 2025 revenue of USD 2.16 million, representing a 14.4% year-over-year increase from USD 1.89 million in Q3 2024. Product sales rose 22.1% to USD 1.62 million, reflecting stronger demand across defense and commercial channels. Gross profit declined modestly to USD 0.42 million from USD 0.44 million, with gross margin compressing to 19.5% versus 23.4% in the prior-year quarter due primarily to product mix effects and a USD 43,337 non-cash inventory write-down. Excluding this write-down, gross margin would have been 21.5%. Operating loss widened to USD 4.93 million compared to USD 3.68 million in Q3 2024, while comprehensive loss totaled USD 5.43 million, reflecting higher operating expenses and derivative fair value adjustments.
• Profitability, Cash Flow, and Capital Structure: Adjusted comprehensive loss, excluding non-cash derivative revaluations and inventory impacts, amounted to USD 3.58 million compared with USD 3.77 million in Q3 2024, indicating relative stability on an adjusted basis. Net loss for the quarter was USD 5.17 million versus USD 0.20 million in Q3 2024, primarily influenced by a USD 1.84 million negative change in derivative fair value. Operating expenses increased to USD 5.35 million from USD 4.13 million year-over-year. Notably, the Company significantly strengthened its liquidity position, ending September 30, 2025, with cash and cash equivalents of USD 69.88 million compared to USD 6.25 million at year-end 2024, driven largely by a USD 25 million registered direct offering. Total assets expanded to USD 77.08 million, shareholders’ equity rose to USD 70.43 million, and working capital improved to USD 69.54 million, reflecting substantial balance sheet reinforcement.
• Strategic Defense and Commercial Expansion: Operationally, Draganfly advanced its positioning within the U.S. defense ecosystem. The Company was selected by the U.S. Army to supply Flex FPV Drone Systems and secured additional deployments of its Commander 3XL UAV with a major U.S. Department of Defense branch and a global defense contractor focused on persistent surveillance. Commercial diversification also progressed, with multiple Heavy Lift Drone systems sold to a Fortune 50 telecommunications company for emergency response applications. The Company expanded its U.S. manufacturing footprint to support scalable domestic production and successfully demonstrated advanced UAV capabilities during the T-REX 24-2 Military Technology Exercise. These milestones underscore increased institutional validation across tactical, ISR, and infrastructure markets.
• Capital Markets Positioning and Growth Readiness: Beyond operational execution, Draganfly enhanced its financial flexibility through the filing of a new base shelf prospectus enabling up to CAD 300 million in future public offerings. The strengthened capital base, coupled with minimal non-current liabilities of USD 0.21 million, positions the Company to pursue product innovation, manufacturing scale-up, and potential acquisition initiatives. While operating losses remain elevated amid investment in growth and capability expansion, revenue acceleration, defense contract traction, and a substantially improved liquidity profile collectively indicate a transition phase toward scalable commercialization within the evolving global drone solutions market.

Key Company specific risks for DPRO:

• Revenue Concentration and Contract Volatility Risk: Draganfly Inc. operates with relatively modest quarterly revenue (USD 2.16 million in Q3 FY25), making results highly sensitive to the timing, size, and renewal of individual defense and enterprise contracts. A limited number of large orders particularly from U.S. defense or telecommunications customers can materially influence reported revenue and gross margin. Delays in procurement cycles, contract modifications, or budget reallocations within government agencies may create revenue volatility and impair near-term financial predictability.
• Sustained Operating Losses and Cash Burn Risk: Despite revenue growth, the company reported a Q3 FY25 net loss of approximately USD 5.17 million and a nine-month loss of USD 13.36 million, reflecting continued operating deficits. While the cash balance increased materially following capital raises, recurring operating losses and expansion of manufacturing capacity could require additional funding over time. Dependence on capital markets introduces potential dilution risk, particularly in periods of constrained small-cap financing conditions.
• Margin Compression and Competitive Technology Risk: Gross margin declined to 19.5% in Q3 FY25 (versus 23.4% in Q3 FY24), reflecting product mix shifts and pricing dynamics. As the unmanned aerial systems (UAS) industry matures, competitive pressures from larger, well-capitalized defense and drone manufacturers may constrain pricing power. Rapid technological evolution particularly in autonomous systems, AI integration, and ISR capabilities require sustained R&D investment. Failure to maintain technological differentiation or secure long-term production scale could adversely affect profitability and market positioning.

Technical Observation (on the daily chart):

• Trend Structure and Moving Average Configuration Indicate Sideways Consolidation Bias: Draganfly Inc. (NASDAQ: DPRO) is currently trading near USD 7.65, positioned marginally below both its 21-day moving average (USD 7.79) and 50-day moving average (USD 7.88). The flattening slope of these intermediate moving averages suggests a loss of directional momentum following the prior rally toward the USD 14.40 high. Price action over recent months reflects a broad consolidation phase characterized by reduced volatility and tighter trading ranges. The inability to sustain closes above the 50-day moving average indicates persistent overhead supply, while downside attempts have thus far remained contained above structural support near USD 6.00–6.50. Overall, the prevailing configuration reflects neutral-to-cautious technical conditions rather than a confirmed directional breakout.
• Momentum Indicators Reflect Equilibrium Without Clear Accumulation Signal: The Relative Strength Index (RSI-14) is currently positioned near 49, closely aligned with the neutral 50 threshold. This reading suggests balanced buying and selling pressure, with neither bullish momentum expansion nor capitulation dynamics evident. Importantly, RSI has not established a sustained bullish divergence nor entered oversold territory, reinforcing the interpretation of range-bound market behavior. Volume metrics remain subdued relative to prior expansion phases, indicating limited institutional participation during recent sessions. The absence of decisive accumulation volume reduces the probability of an imminent upside breakout, while the lack of distribution spikes mitigates near-term downside acceleration risk.
• Key Support and Resistance Levels Define Critical Inflection Range: From a structural standpoint, immediate resistance is concentrated between USD 7.80 and USD 8.00, corresponding to the 21-day and 50-day moving averages and recent consolidation ceilings. A sustained close above this band would be required to reestablish short-term upward bias and potentially open a path toward the USD 9.50–10.00 supply zone. On the downside, primary support is observed near USD 6.00–6.50, with deeper structural support at approximately USD 4.50–5.00 should selling pressure intensify. In aggregate, DPRO remains technically range-bound within a broader post-rally digestion phase, with directional resolution contingent upon a decisive breakout accompanied by expanding volume and momentum confirmation.

Draganfly Inc. reported Q3 FY2025 revenue of USD 2.16 million, reflecting 14.4% year-over-year growth, supported by a 22.1% increase in product sales driven by defense and commercial demand; however, gross margin compressed to 19.5% due to product mix effects and inventory write-downs, while operating loss widened to USD 4.93 million and net loss reached USD 5.17 million, partly influenced by derivative fair value adjustments. Despite continued operating losses, the company materially strengthened its financial position, with cash rising to USD 69.88 million following capital raises, total assets expanding to USD 77.08 million, and shareholders’ equity increasing to USD 70.43 million, providing enhanced liquidity and strategic flexibility. Operationally, Draganfly advanced its footprint within the U.S. defense ecosystem through multiple UAV deployments and Army engagements, expanded U.S. manufacturing capacity, and secured commercial contracts including a Fortune 50 telecommunications client. While revenue momentum and institutional validation have improved, the company remains in a capital-intensive growth phase, with margin sensitivity, contract concentration, and competitive technology pressures continuing to shape its near-term risk profile within the evolving global drone solutions market.

As per the above-mentioned price action, important resistance near USD 8.00- USD 8.50, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given for Draganfly Inc. (NASDAQ: DPRO), at the current price of USD7.65, as of February 19, 2026, 07:10 am PST.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective, and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is February 19, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.