ZenaTech: A big bet on the rise of AI drones and drones-as-a-service

Key Takeaways

• ZenaTech is focusing its efforts into building AI drones, combining Drone as a Service, SaaS, and AI as its key revenue drivers.
• Previously building software for agriculture, ZenaTech has shifted rapidly toward drone services, now driving ~70% of revenue after recent acquisitions.
• Growth has jumped sharply, largely through acquisitions, with revenue reaching C$7.7M (YTD to Q3 2025) vs. ~C$2M for FY2024.
• The investment case depends on whether it can evolve from a services roll-up into a scalable tech platform.
• However, the company remains early-stage, loss-making, and highly dilutive.

About ZenaTech

ZenaTech was established in 2017, developing software for agricultural technology. It later began experimenting with drones for farmlands, before later pivoting its focus to drone production in 2022.

These days, ZenaTech describes itself as a technology company focused on AI drones, Drone as a Service, enterprise SaaS, and quantum computing solutions.

In practice though, the business today is best understood as having two parts:

1. Legacy Software operation that sells recurring business software
2. Drone Services - fast growing through acquisitions.

The company’s older financials make that evolution easy to see. In its 2024 annual report, ZenaTech said it still had only one operating and reporting segment; its latest report shows its change.

The strategy: buy first, optimize later

Rather than waiting for customers to adopt its drone technology, ZenaTech is taking a more immediate approach:

1. Acquire land surveying and engineering firms
2. Use those businesses to generate revenue today
3. Introduce drones, AI, and automation over time

The idea is to:

1. Capture customers and workflows first
2. Then improve margins by reducing labor and increasing efficiency

This gives ZenaTech a faster path to monetization, but also introduces execution risk.

Catalysts

Drone as a Service is now the real growth engine

The biggest catalyst in the ZenaTech story is that Drone as a Service has moved from concept to actual revenue driver. In the third quarter of 2025, the company reported C$3.57 million of drone-services revenue versus C$776,908 from enterprise SaaS.

Over the first nine months of 2025, drone services accounted for about 72% of total revenue. That is a dramatic shift in business mix for a company that, just a year earlier, was still primarily a software story.

Management also said the quarter included four acquisitions of land survey engineering companies, bringing the Drone as a Service footprint to ten U.S. locations by quarter-end, plus international locations in Dubai and Dublin. That matters because it suggests recent growth is not just coming from one lucky contract or a single pilot program, but from an expanding operating footprint.

The company has also set an ambitious target to acquire a total of 25 Drone as a Service-related companies by mid-2026. That is aggressive, and it raises execution risk, but it also shows the scale of management’s ambition.

The market backdrop is supportive

The broader industry setup is favorable too. Fortune Business Insights Research estimates the global commercial drone market could reach US$55.8 billion by 2030, up from a 2022 base of roughly US$8.8 billion.

Meanwhile, the FAA’s latest aerospace forecast says the U.S. commercial drone fleet stood at roughly 727,000 aircraft at the end of 2022 and could grow to about 955,000 by 2027.

Those forecasts do not prove ZenaTech will win meaningful share, but they do support the broader thesis. Drones are becoming part of real industrial workflows in surveying, agriculture, infrastructure inspection, logistics, and security.

That creates room for service providers that can bundle hardware, software, compliance, and analytics into one offering.

There is also a regulatory tailwind worth watching. In 2025, the U.S. government took steps aimed at expanding commercial drone use and supporting more advanced operations while also trying to reduce dependence on Chinese drone suppliers.

That does not guarantee near-term revenue for ZenaTech, but it does make the long-term policy environment more supportive for domestic drone operators and manufacturers.

The full-stack angle adds intrigue

What makes ZenaTech more interesting than a typical services roll-up is its ambition to build a full-stack platform :

1. Drone hardware
2. AI-powered analytics
3. Enterprise software
4. Potential expansion into defense applications

If successful, this could:

1. Improve margins
2. Increase customer retention
3. Support a higher valuation multiple

That’s the upside case: A transition from labor-heavy services → scalable, tech-enabled platform.

ZenaTech today operates as an acquisition-driven services business, and its valuation depends on whether it can transition into a scalable, technology-led platform rather than being treated as a low-margin roll-up.

Financial Picture

The financial history helps explain both the appeal and the risk. In 2024, ZenaTech generated C$1.96 million of revenue, up 7% from 2023. But net loss widened sharply to C$4.48 million, versus just C$242k in 2023. The annual report says the company was still mostly a software business then, and that losses were driven in part by listing-related costs and investment in drone development.

Cash flow was also weak. Cash used in operating activities in 2024 was C$9.87 million, compared with C$1.98 million in 2023. Purchase of equipment, long-term investments, and product development costs added to the cash demands, while financing activities provided C$14.9 million in 2024. Put simply, the business was not self-funding its growth, relying on long-term debt and raising more capital from shareholders.

By late 2025, though, the balance sheet had expanded materially. As of its latest quarterly report, total assets hit C$78.5 million compared with C$34.65 million at December 31, 2024, while working capital improved to C$23.6 million. On the surface that looks encouraging but much of that stronger balance sheet has come alongside substantial financing activity and a more complex capital structure.

Risks

The first major risk is integration risk. ZenaTech’s growth so far has been driven largely by acquisitions. That can look powerful in reported revenue, but the real question is whether those businesses can be integrated into a coherent platform that actually earns better margins over time. If the acquisitions remain a loose collection of local service businesses, the market may eventually treat the company like a low-multiple roll-up instead of an automation platform.

The second is dilution risk, and this is arguably the most important one. The combination of convertible debt, preferred shares, warrants, and an active shelf registration means existing shareholders could be diluted significantly if the company keeps funding acquisitions and growth through securities issuance. The company clearly values capital flexibility, but investors need to be honest about the trade-off.

The third is governance risk. ZenaTech says it is considered a controlled company under Nasdaq rules because CEO Shaun Passley controls more than 50% of the outstanding voting stock. The filing also notes that, because of that status, the company can rely on exemptions from certain governance requirements, including rules around board independence and compensation committee structure. Minority investors therefore do not have the same protections they would in a more standard governance setup.

The fourth is execution risk on the drone thesis itself. It is one thing to acquire surveying businesses; it is another to prove that drones and AI materially improve unit economics, expand demand, or create a meaningful moat. Until that becomes clearer, part of the company’s premium narrative remains unproven.

Valuation

ZenaTech is best valued on forward revenue given it remains loss-making and is still in an expansion phase.

Assuming the company can scale revenue to approximately C$130M by 2031 through continued acquisitions and growth in its Drone-as-a-Service segment, and applying a 4× revenue multiple, this implies a future valuation of around C$528M (~US$385M).

_Realistic revenue estimates for a high-growth company like ZenaTech.

This may be quite bullish but the analyst estimate for Zenatech’s FY2026 revenue is $32M – higher than the estimate here._

Discounting this back at a 10% rate gives a present value of roughly US$239M. Based on an estimated 56.31M fully diluted shares, this results in a fair value of approximately US$6.84 per share.

With shares currently trading around US$2.28, this suggests the stock may be undervalued given its growth potential tied to its revenue jump, after it increased the share of its drone-related revenues.

Conclusion

ZenaTech is one of those small-cap stories where the upside is easy to understand. It sits at the intersection of drones, automation, AI, industrial services, and domestic drone policy tailwinds. The company has also shown a real inflection in revenue, with Drone as a Service now clearly driving the business rather than sitting in the background as a future promise.

But the risks are just as clear. This is still a loss-making company with aggressive expansion plans, a complex financing structure, and meaningful dilution risk. It also operates under controlled-company governance and still has to prove that its acquisitions can become a genuine platform rather than just a collection of purchased revenues.

Overall, ZenaTech looks like a high-risk, high-reward bet. For speculative investors, the appeal is obvious. For more conservative investors, the company probably still needs to prove a lot more before the story can be treated as anything close to a durable long-term compounder.

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Simply Wall St analyst Jolt_Communications and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.