Volatus Aerospace Wins Up to 5,000 Tactical Drones as Defence Revenue Target Jumps to 40%

Defence rose from under 5% of Volatus revenue in 2024 to 25% in 2025, with a C$25M Canadian drone framework and a NATO option underway.

Volatus Aerospace is rapidly repositioning itself from a civil drone operator into a defence supplier, and the numbers presented at the Corpay conference by CFO Abhinav Singhvi make the shift hard to ignore. Defence accounted for less than 5% of total revenue in 2024, climbed to 25% in 2025, and management is targeting roughly 40% for 2026 — with a long-term ambition of 60% to 65%.

The stock trades at EUR 0.3430, about 28% above its 52-week low, yet still sits 12% below its 200-day moving average of EUR 0.3859. That gap tells its own story: investors have heard the strategic pitch, and now they want to see it converted into reported earnings.

A Canadian Framework Deal Worth Up to C$25 Million

The clearest evidence that the pivot is gaining traction comes from Ottawa. As Reuters reported, Volatus secured a government contract to procure up to 5,000 tactical ISR drones under a framework agreement valued at as much as C$25 million, with a capped unit price of C$5,000 per system. First deliveries are scheduled to begin in the fourth quarter of 2026.

The company qualified for all five program lines of Canada's national Defence Drone Initiative — a positioning that matters as the federal government pushes defence spending from the 2% of GDP threshold reached in 2025 toward 5% by 2035. Adding in other awards, Volatus's pure defence order backlog now stands at up to C$30 million.

NATO Customer Exercises Its Option

A separate NATO contract has also moved forward. Volatus completed delivery of the first drone fleet under a tranche worth roughly C$4.5 million for an ISR training system, a milestone that followed publicly disclosed supply-chain disruptions earlier in the program. The customer has now begun exercising its option on the second tranche and placed additional orders — a signal of satisfaction that carries weight given the earlier setbacks. The full contract could reach up to C$9 million.

Mirabel: The Industrial Backbone

Underpinning both the NATO and Canadian programs is the company's production site in Mirabel, Québec, expanded just over a week ago. The 53,000-square-foot facility handles manufacturing and systems integration, runs production of drone docking stations, and supports integration and output of the V-series aircraft. It is also being prepared for serial production of heavier platforms, including the Condor drone, designed for a 180-kilogram payload and a 200-kilometre range. Since the expansion was announced, the share price has slipped 0.6%.

That in-house capacity is the prerequisite for executing large orders without repeating the bottlenecks that hampered earlier deliveries. Without vertical integration, Volatus would remain exposed to the same global supplier dislocations that delayed the NATO program in the first place.

Cash, Margins and a Pipeline Above C$500 Million

Financially, the company points to a balance sheet strengthened by 20 completed acquisitions. Cash stood at C$61 million at the end of June. In the prior year, Volatus generated C$34 million in revenue at a 32% gross margin, with equipment sales up 106% and revenue from Europe and the UK climbing roughly 244%.

Management expects approximately C$18 million in annual recurring revenue over the next five years. The total order backlog to be worked through during that five-year window exceeds C$100 million, while the unweighted sales pipeline currently tops C$500 million.

The civil side of the business remains active alongside the defence push. Volatus operates more than 90 uncrewed and roughly 28 crewed aircraft, conducts up to twelve daily remote flights at Edmonton airport, and controls 1.7 million kilometres of route rights across Canada.

Execution Is the Only Remaining Question

The strategic case is now well documented: a growing defence backlog, a qualified position on every line of Canada's drone initiative, a NATO client expanding its order, and a factory built to scale. What the market has not yet seen is the transition from pilot programs to steady serial production without further delays. Until that shows up in the financial statements, the share price is likely to keep reflecting patience rather than conviction.