AgEagle Aerial Systems (UAVS) 15 Aug 232023 Q2 Earnings call transcript

Good afternoon, everyone, and welcome to AgEagle Aerial Systems 2023 Second Quarter Results Webcast. Presenting on today's webcast are AgEagle's Chairman and CEO, Barrett Mooney; and Nicole Fernandez-McGovern, the company's Chief Financial Officer and Executive Vice President of Operations.

Before I turn the floor over to them, I remind you that during today's call, statements that are not historical facts, including any projections, statements regarding future events or future financial performance or statements of intent or belief, are forward-looking statements and are covered by the safe harbor disclaimers contained in the company's public filings with the SEC. Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements.

At this time, I'd now like to introduce the company's Chairman and CEO, Barrett Mooney. Barrett?

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information I our review under SEC not AgEagle's our filings to Relations to the a understanding on financial a have website chance fuller sec.gov may the everyone encourage Investor of our business, you read XX-Q If you and and -- it have or access Filings. had disclosed. via SEC important to with it, section on website other other ensure you results

reported million contributed June same for attributable line quarter, which XXXX, drones months of during XXXX. sales our first million, $X.XX revenues revenues for decrease for of first by totaled which highlights total in I'll lower begin million XXXX. ended to The the second XX% three of to million statement. total in quarter to reviewing revenues the to XX, largely the compared the in was $X.XX in $X.XX compared the income reflected three months our Revenues $X.XX eBee

launch September. production next-generation as sales rave indicated adopters eBee of of rolled eBee next in aerial are procurements Many unmanned it commercial were our is new across final VISION expected they of in and VISION. the our customers have eBee The releases ahead eBee drone month. which by that decrease the system is Overall, be their currently expect reviews in the stages out to early VISION, the globe winning delaying

to over our year with by effectively quarters believe Drone with sales more the the a strategic price this to this next brand help were resellers, marketing that imported will start gain Walmart, efforts. for reduction move believe to of proposition legacy impacted we to price and the due also eBee compete additional drone customers value We drone QX reduction offered in as it our two products implemented we to fuel attract our -- products. traction value-added will which aligns

by supply constraints Sales of million and to June were sensors, cameras the was due also RedEdge-P on our $X.XX slightly the ended multispectral the XX% small released pipeline. that chain XXXX, Altum-PT, fueled dual decreasing fulfillment sales reduction XX, This million orders our from mainly affected RedEdge-P months constraints $X.XX respectively. XXXX and down, of three to our for newly

$XXX,XXX Control solution quarter-over-quarter our from were Ground soft software of Measured to declining on and HempOverview -- basis. also Subscriptions ground comparable approximately a $XXX,XXX

million, XX, the June XXXX. first For which decreased for million of to total ended half XXXX, $X.XX months six the revenues $X.XX compared XX% to

XXXX. XXXX, ended June mentioned, reasons the XX, six of I period the which million eBee our $X.XX declined For have months sales million for months reporting same to compared $X.XX to the drones six for already in

in ended ended June the six for to XX, our compared during software sensor declined months in six XXXX. first which was the drone million to $XXX,XXX roughly sales also $XXX,XXX of sales and compared revenues the million growth climb software decrease $X.X XX% June half to And business, months Offsetting $X.XX XXXX. for to approximately XX, saw the XXXX

Moving manufacturing operations, our to for for six to or XX% huge from succeeded the expenses reducing Likewise, as ongoing XXXX, achievement for a operating the million million XXXX. down decreased, AgEagle. income six $X months quarter-over-quarter period falling we compared statement. and months million sales of a XX, team June expenses also Due to XX, ended $X.X $XX.X operating in reporting consolidation the reported June integration basis, comparable $X.X million to XX% and million on ended $XX.XX our

introducing More due fees, specifically, to the and costs, in a offices spend fees compensation decline general less of in integration in our consulting integration consolidation expenses lower for stock administrative have decreases reductions costs in our roles, with costs, consulting of integration reduction costs. and notable a ERP legal in payroll-related and consulting R&D lower workforce, resulted efforts associated

at other not with reflects and months XXXX, Collectively, notes the X% also December compared to which respectively, interest of month June to -- statement our three expense related other to ended original in foreign the X% by for first half and XXXX, $XXX,XXX transaction $XXX,XXX expense drone respectively. investor of an issued annum XXXX, $XXX,XXX three losses income XX, per $XXX,XXX business. amounted of hardware and our net this for approximately and six Our to and accounting currency issue discount along net for promissory incurred

in net a month a of a of quarter-over-quarter we to X% incurred everything of year. XX this per year on represented basis. million June or share $X.X three the loss I've the loss result months improvement a net loss for comparable prior comparable $X.XX As share covered, compared or a loss per per of million This three for period $X.XX $X.XX the

that XXXX. net also in a loss the significant are for of six proud we very We the months improvement our achieved fact of

first XXXX, the half for net or or For net $X.XX of of which the loss XX% six reduced XXXX. $X.XX months from $X.XX was million ended share per $XX.XX June XX, loss loss our per share, totaled a loss million reported

sheet. your our turning attention balance Now to

which as million totaled of million of a compared months June ended of the $X.XX million As of XXXX. compared six decrease December XX% $X.X June $XX.XX used to for Cash as to or six (ph). position months million, XX, the during operations in XX, $X.X $X.XX our was XXXX, our cash used of XX, million, cash first XXXX XXXX

working stockholders' December $X.XX to we June As total $XX.XX of million XXXX, of $XX.XX $X.XX compared of capital stockholders' XX, capital and had This total working of XX, as equity million million of and million. XXXX. of equity

highlights, now to overview will financial and the turn Barrett? over call of concludes Barrett. This I back my the

Thank Nicole. you,

quarter challenges, supply results consolidation reflect through second are yielding competitive indeed to global optimize overcome inflationary to to issues, work our and operations efforts tangible and the our chain While offices effectively pressures and AgEagle that of integration other business our continues workforce results. and

but now top our the spend. marketing As we're finding and Nicole cash set reducing grow We've just pricing, innovation net loss, the less revenue. our focusing balance on heavily our strategies up burning very to outlined, and we lowered on line are

organization, Effective In in revenue sales drone, centralizing become benefits significant sensor consolidating branding execution addition industry team sales leadership people stronger oversight reduction of regions by in starts efforts our with and place the and leadership, some the to integrating transparent teams, up overall over and provide our marketing software the of aligning form the sales right operating changes coming past performance quarters. should that in and in shaken and forward. responsibility. We've operations, our to we've direct more our we the have months our and spend, have made our to global ensuring sales organization global several drive reorganized of manufacturing

military in-house government for expanded an strategically provide opportunities team agencies. sales direct our sales government to and our also U.S. We've manage to executive with

Nicole share mentioned, been that priced global As will our AgEagle win. refining also and that pricing to and protect help sensor solution works are hard market our strategies to we've ensure drone, the software to competitively

a with innovative new path coupled believe bringing enhancing next When lead we market, product we value exciting to into we us remain products shareholder, and as that customer enhancements employee will to I chapter. our the and that move are on

the our products that engineering outcomes. and create and and is efforts. AgEagle's and This to chapter leverage to technologies input on meet development expertise underserved core research government next the opportunities leading-edge at demands products customers. commercial the of about use can at continually deliver clients commercialize and to collected We innovating from focused and then is uncover enabling introducing our our However, AgEagle

Representing For to Measured on-site. Ground our our review Check I last work specifically mobile in offerings Control the a and key to enables mentioned drone-captured set our unveil to instance, apart webcast, early from and of their in unique users validate the for Field as Field we for second market. way feature the competitive differentiator change Check's in quality customers AgEagle, are solution imagery app AgEagle pleased designed materially sets software the a other quarter,

costs complete time ensuring users trip first eliminate site the processing reworks with associated to in by before project for and loss ready right time leaving of as outputs target adoption Capturing a is unique on capture project build that a imagery its in ever high-resolution and ground This moving-forward control is have on into greater to allows and expect one true we of site. one changer we our industry material game a a capabilities. impact a basis will awareness data

X.X was leading drone Blue our imagery. at high-resolution expanded year direct multispectral purpose-built pixel enabling per sensors. satellite and bands, commercial of in Featuring dual a for RedEdge-P at feet, XX drone May comparison flight release drone with of inches one resolution mirroring Landsat X RedEdge-P of bands multispectral the also industry and higher sensors at dual Sentinel-X satellite line We in and just this and our the XXX between

the RedEdge-P we and a getting environmental solution market setup in management, of invasive the species sensors. plants, is restoration the dual an weed including expected industry-leading bodies, is and doubles The market which reaction sales It's trees to identification, our for vegetation monitoring, monitoring, weeds. meaningful from of single analysis counting for and and its coastal about RedEdge-P dual, analytical workflow. line capabilities band, of ideal on excited the the species water with water early We're the provide growth habitat of camera benefit our blue and differentiating vegetation kind very and are protection first

next-generation latest groundbreaking a we fully the methodologies goals reconnaissance sectors engineering our months several eBee VISION, spent drone integrated our VISION. wing spanning with mission inventing eBee that have operators market been surveillance and of our respective their This design to number eBee for in understand developing and meeting advancements the fact-finding missions, and objectives. resulted When fixed intelligence, team innovation, with

in with a of an as branded the battery, which sensor all we've of a microcontroller. of reaction to its the fully ultra-precise and our front-end flight. its the combined cells drone flow in charge, Gaudos. simulate low-power modeled to smart voltage its Some Gaudos state in gauge, time battery while those most our constraints, to energy include is make to battery real a behavior model of to battery of our allowing source Each health, state of the customers

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helping engineered our as a designed enabled us highly set multi-fidelity properly through And and to the Jarvis duration, flight able speed, to eBee cost-effective design climb discern rate the as AgEagle development maneuverability decision-making of time, and Jarvis, of metrics us in also, best analyze and a efficient, were tool, manner. developed, we design flight process in which all VISION. analysis to expedite tool prototyping Through of smart application advance well the real we optimal

competed and eBee operators eBee with comprehensive users. qualified live sessions who -- July drone and team demonstrations In efforts, VISION their to a our completed In the were AgEagle government respective training military in world, first seeking power sales of from the our and agencies operations. training confirmed trainers and with as and preorder European numerous been military has session intensive we the support of leverage officials customers alone, engaged VISION across new we of

military capabilities continue scouting, operational surveillance, the to deployment with community. benchmarks among These in use technical and all usability, specified criteria meet of confirm and case other performance new eBee teams fast customers international exceed flight time by AgEagle's VISION that

training to positive sessions for led procurement have units preordered. several indications very Our being and

innovation VISION we customers accelerating partners demand and for this eBee take new in indeed the new advantage reselling and is showcasing Interest as of to our existing worldwide. the

other our eBee growth AgEagle will like new VISION expect a We introductions, coming the significant in for that driver product quarters. be

and to environment, the in of equity to continue we add market expect and investing drones, ability prospects future. Q&A for further Before move today's performance and business, to optimistic the we're in session webcast, to differentiate on still our growth I'll the financial in sensors long-term challenging AgEagle can you a deliver face our customer-centric that consistent We remain confident innovation software. the our about in predictable

said, of that questions some that With kindly today's let's our sent address webcast. in advance us the Nicole, shareholders of

Great.

Barrett. Okay,

cash to the available our if we plan additional increase through First question our end A position. capital has relates year. this shareholder on to operations to fund of cash raising asked,

question. Good

critical operations we our While terms to we in placement. successful direct a capital and number fair to capital cash meet past concurrent are to quarter. considerations, that until we not capital when at variables and we've our growth of through How raising and been grow to to will June to achieving growth will strategies dynamic flowing. capital working the the the currently raise coming and capital really environment depend obtain capital commitment innovation additional this towards a revenues guaranteed. our were prevailing equity fund of cash future in and ability into markets historically be registered very begin reasonable raise flow, Nonetheless, through and raise additional capital needs, factored strategies work private number We is on and pleased offering positive and our evaluating

Okay.

our from purchase are big orders? shareholder, question Next our where

collaboration through clear, sales AgEagle and committing strategy to developing energy sales close customers very of it reselling several our we over and large share winning around of government direct to global organizations that provides a for in with I can working made tenders resources sales partners we the NGO on the with network potential world. that As time, is are on resellers. our customers XXX

April, in DoD's adds is with system and of to our a positioning won revenue trusted the contract robotic front, that sales and AgEagle the as command interoperability eBee customized drones Innovation VISION's the company, Unit is to government. from and we to DoD's full the federal software in direct profile. compatible U.S. It the autonomous deliver a control On which and compliance new and significant air yields produce to partner our Defense

expect now Multiple that and Moreover, We Contract the defense an will in opportunities sector. and company offerings that will working new to our that government initiative turn state markets within a sales on GSA, significant enhancing time. larger we are new federal, been to Schedule expect produce lead by additional Award we and we've our over this and local sales fully the potentially awarded for

approach important approach and in It our resellers, is to note that at tenders we growth large continue this as long-term AgEagle, partnership we'll local a with strategy.

expansion drone We and efforts. their from up to and stand However, continue recognize deliver. drones to drone, which be better programs the through their insight the software expanding their ready our sales business to program of benefit the serve enterprises, drone and and their and customers butter commercial will of building number growing and our and to bread value coming likely capture these businesses inform data decisions to are that of sensors

comes who know solve example would utilized to shareholder an from to our a being how of drones final question are problems. like Our

Well, boy, that's a question. big

from use world these are of thousands various and the solutions that AgEagle's in I say have available. provide to the industries, to that cases we've studies of our many continued demonstrate would customers. We case drone value around

website. our are viewing So interested, for for available on that shareholders they're those

flooding here's month. team direct come I'll recent one it just to of Vermont please, that a studies. So and the download example you relates of ravaged those mind, The there does state to few drone the case to last and initial flooding But for began persisted relentless in in that was farms remained that the documenting documenting then for the weeks laboratory that occurred downpours following the aftermath July Vermont's with tasked of University early at and catastrophic region. that spatial the analysis

the And had sent from aircraft flood and the It support a and played was UAS, FEMA e-mail the huge to inventory was for they collect that of to peak in was of that efforts. system, only short geospatial flooding an response. assess satellites, us that that key long of disaster able the to University In was the declaration. official, Vermont eBee their including it to crude a the the conditions said damage that recovery role needed

the deliver kind role. of strong cases for and are out playing position our our there continue use we a job is So where are that efforts initiatives are business sales those there that our And a our drones with the whole. we that ongoing, sure for make educate know a we to we to customers, as as as market, really educate

-- Nicole, concludes I that, as that that our final with session. so So Q&A said question, you our concludes think

reiterate end future. we to the webcast, the Before wanted for vision I just our

are solutions drone a strong proven we than solutions company best-in-class of partnerships. with uniquely R&D to AgEagle known and positioned growth-minded, through a offer strategic a innovation, emerging foundation legacy is more to industries decade First, as experience. and product and

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more we our fly construction will crop the places position as our Second, that team of drone allow health, Those as war than in tactical leaf-level fighter. varied ever. from autonomous inspections, on data will bench customers high-quality mapping applications pipeline autonomously to as (ph) us changes drones puts and the for deep surveillance and expertise design pole believe surveys, regulatory collect in to benefit drones

that in who trust build innovating way believe on winning robotics. will we the Finally, together experienced and passionate, collaborative, to group pave are we intent culture of employees building an are marketplace. our We of diverse, solutions this future a the will professionals autonomous that resilient

continued thank to share all our to back that, today, like We you our I'd joining Morgan, of shareholders for thank you. to progress. with all forward to I'd their to for look like and support. So continuing webcast our

webcast. Systems This for a concludes attending, you Aerial Barrett. results Thank XXXX wonderful your of quarter Thank day second and rest AgEagle have you,