Global drones-as-a-service provider RocketDNA (ASX: RKT) recently launched a new autonomous drone solution, xBot, expected to surpass its existing drone business in revenue.
In December 2023, the Company raised approximately $1 million to accelerate the manufacturing of xBot units and increase marketing capabilities around deployment. It has successfully launched and deployed the first batch of six xBot units operational in Australia and Africa. The second batch of five xBots in production is on track, with deployments scheduled from May 2024.
After extensive validation testing and feedback from the first xBot batch, the Company is confident in its market demand and drone manufacturing capacity for CY24.
RocketDNA CEO Christopher Clark said, “We are very excited as a management team at the growing opportunities and pipeline and look forward to delivering on our Phase 1 ‘land-grab’ strategy. Initial sales are showing customers taking one unit first (which is always the most difficult sale) and then to plan on expanding the number of units to cover the full operating area. With our second batch of xBots® now in production, we look forward to locking in revenue contracts for these units. At that time, based on our current pricing, margins and overheads, we expect to be EBITDA positive.”
Interest in RocketDNA’s automated drone-in-a-box solution is expanding the Company’s target market beyond mining. Discussions are underway with government authorities, ports, insurance companies, asset managers, agribusinesses, and security companies.
Moreover, RocketDNA is one of the few Civil Aviation Safety Authority (CASA) approved operators able to deploy remote autonomous drone systems at scale. This interests Tier 1 and 2 mining customers who require a full-service solution that includes after-sales support across their various operating sites.
Clark added, “With our second batch of xBots® now in production, we look forward to locking in revenue contracts for these units. At that time, based on our current pricing, margins and overheads, we expect to be EBITDA positive.”
RocketDNA has largely completed its significant upfront investment in the xBot solution and is moving through the enterprise customer trial and onboarding process. This initial process typically has many hurdles, like cyber and data security, operational health and safety, and data accuracy validations.
Last month, the Company signed its first long-term contract for its autonomous xBot solution with Keras Gold, a subsidiary of Calidus Resources. The three-year contract is worth $376k.
At the same time, the Company has undertaken some board changes. For instance, David Morton has transitioned from being a non-executive director to the chairman role of RocketDNA. Chris Clark has transitioned from the role of Chair to focus on his role as Managing Director and CEO. This comes as RocketDNA aims to streamline the business without adding headcount.
In CY23, RocketDNA reported revenue of $6.1 million against a loss of $1.7 million. In a bid to enter profitability, it changed its name, reimagined its board and launched xBot. While revenue growth for its existing Drones business remained flat, the Company expects xBot to see an average of 40.8% revenue growth in the coming years.
Expectations for 2025 sales will dictate introducing additional manufacturing resources and capabilities for xBot.
Alinda is a Business Reporter for The Sentiment
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