Volatus Aerospace (Volatus Aerospace Stock Quote, Chart, News, Analysts, Financials TSXV:FLT) has been rated a “Buy” by Ventum Capital Markets analyst Rob Goff, who says the stock is “cleared for takeoff” as federal defence spending ramps up and military partnerships gain momentum.
Goff maintained his C$0.32 price target in his June 9 corporate update, citing Ottawa’s accelerated plan to boost military spending by up to $15 billion, an increase that could lift defence budgets to 2% of GDP within five years, with NATO suggesting an even higher target.
“We see Volatus’ regulatory clearance and international partnerships setting the stage for the company to hunt for large military orders where Volatus with its partners have assembled a comprehensive, politically friendly solution,” Goff said. “Furthermore, the Canadian government has noted a priority on increased expenditures across Canadian vendors. We are not including prospective wins in our baseline forecasts. However, the political narrative clearly sets the potential for ‘elephant’ status contract wins.”
Ventum’s baseline forecast was slightly exceeded in Q1 2025, with Volatus reporting $5.7-million in total revenue and $1.8-million in gross profit, compared to expected figures of $5.2-million and $1.6-million. Goff called the impact positive and added that while major contract wins could further boost the outlook, Volatus is already on track to grow its recurring revenue from a strong pipeline.
“The defence spending tailwinds give rise to greater prospects of significant outperformance,” he said. “Recent federal contract renewals, expanded national drone flight authorizations, and a successful G-20 defence demonstration improve near-term visibility across public sector channels as execution ramps into peak season.”
Expanded flight approvals, ongoing cost savings and key international partnerships are helping strengthen Volatus’s long-term position in logistics, infrastructure and surveillance.
“The recent $3.0M LIFE equity financing and conversion of $3.1M in unsecured convertible debt materially improve balance sheet flexibility, bringing pro forma cash to ~$3.9M and removing near-term refinancing risk,” Goff said. “With a streamlined cost base and a growing base of service-oriented contracts, we believe Volatus is increasingly well-positioned within the evolving aerial infrastructure and government services landscape.”
Volatus narrowed its Adjusted EBITDA loss to $0.98-million in Q1 2025, a 70% year-over-year improvement from the pro forma Q1 2024 loss of $3.16-million and better than Ventum’s forecast of a $1.3-million loss. The improvement reflects tighter cost controls and early synergy gains despite $387,000 in severance and discontinued operations charges during the quarter. These charges point to further cost savings ahead.
Ventum now expects a modest $0.2-million EBITDA loss in Q2, down from its earlier forecast of a $1.2-million profit, due to delays in executing service contracts. However, it still anticipates Volatus reaching positive EBITDA in Q3, with a break-even result in Q2 still possible. Ventum’s 2025 projections were lowered to $45.3-million in revenue, $15.3-million in gross profit, and $3.9-million in EBITDA, down from $51.7-million, $17.2-million, and $5.6-million respectively, to reflect Q1’s pull-forward of equipment sales and deferred utility and infrastructure work.
Quarterly service revenue is expected to rise to $12-million in Q3 and $11.1-million in Q4, assuming contract awards proceed as expected. With gross margins holding at 32–34%, Ventum sees Q2 and Q3 as key points to demonstrate margin expansion through disciplined cost control and a stronger mix of service-based revenue.
Goff expects Volatus to generate $3.9-million in Adjusted EBITDA on $45.3-million in revenue in fiscal 2025. He forecasts those figures will improve to $10.4-million in EBITDA on $67.5-million in revenue in fiscal 2026.
Goff said Volatus is entering an inflection point in its transition to a higher-quality, service-oriented business model.
“With a growing base of utility and government clients and execution set to rebound in H2/25, we see a credible path to sustained profitability and positive revaluation. Recurring revenue is gaining momentum, supported by long-cycle infrastructure and public sector contracts that we estimate could anchor a $60M+ annual run rate exiting 2025. Early-stage synergy capture and disciplined cost management have improved EBITDA efficiency, setting the foundation for scalable growth.”
Ventum expects Volatus Aerospace’s margins to rise above 30% over time as equipment sales shrink as a share of revenue and operational efficiency improves. Delayed utility and inspection contracts are scheduled to begin in the second half of 2025, which is expected to boost performance. With a leaner balance sheet after a $3.0-million LIFE financing and the retirement of $3.1-million in convertible debt, Ventum believes Volatus has enough liquidity to operate through the year.
-30-
About The Author /
Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.
RELATED POSTS
Share
Tweet
Share
Comment