3D Robotics

Analyzing Parrot's latest financial report

3689712097?profile=originalParrot is the only publicly-listed consumer/commercial drone company, so their quarterly and annual financial reports are one of the few places to get accurate and up-to-date numbers on how the drone industry is really doing. They published their Q4 2016 and full-year 2016 financials earlier this week and as always it makes for interesting reading.

Some observations:

  • Consumer drones continue to be tough for everyone (aside from DJI) due to rapid price declines and commodification: Parrot's consumer drone sales fell by 46% in 2016.
  • Gross margins fell even faster, from 50% in Q4 2015 to 20% in Q4 2016
  • As a result, Parrot lost a lot of money in 2016: losses were $138m for the year and $45m in Q4 alone.
  • Sales are slowing at their commercial drone subsidiary, Sensefly, too, down 32% to $15m for the year.
  • But their partially-owned software subsidiary, Pix4D, had another great year, up 160% to $16m for the year.  

Parrot says that it expects 2017 to be better, in part because it will cut costs by eliminating 250 jobs and introduce new products. It will also spin off its older automotive and consumer electronic sides and become a pure-play drone company. 

Bottom line: drone hardware is a tough market, consumer drone hardware is even tougher, but the market for commercial drone software, while still young, is looking good. 

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  • yep, I understood revenue as profit. 

    Now it is much clearer :P.

  • 3D Robotics

    Hector: I think you're confusing three words: revenues, volume and profit: 

    • Volume = units
    • Revenue = dollars in (units * average wholesale selling price)
    • Profit = dollars in - costs

    Consumer is the *least* profitable sector, although it has the highest unit volumes and revenues. In other words, they sell at lot of the cheapest drones, but don't make money doing so. ("make money" means profit)

  • Mmm I am a bit confused.

    So, this +31% more on sales is not only about Consumer drones? (so far their most profitable segment according to Parrot).

    Indeed, they say that the margins went lower. No idea whether these new margins make the product appealing again now, or whether they believe the margin is going to be bigger again any soon.

  • 3D Robotics

    Hector: I think you may be mixing their toy drones with their higher-end Bebop and others that directly compete with DJI. Their overall consumer drone revenues were down 31% year-on-year in Q4 (from $65m in Q4 2015 to $45m in Q4 2016), while units were up, which means that the mix shifted from the higher priced Bebops to the lower priced toys. 

  • I do not think they are doing worse in Consumer's drones:

    Consumer drones: Consumer drones generated 45.0 million euros of revenues (53% of Group revenues / 83% of Drone revenues). A pricing policy aligned with the competitive environment has supported an increase in the volumes of drones sold (+31% from Q4 2015) and market share gains, but has had a significant impact on margins.

    They have sold more (pretty much more!) drones than a year ago.

  • Hi Rob,

    I actually expected my very negative comments on 3D printers to elicit some response, because this is definitely one place where they or at least the concept of them is popular.

    Sort of like holding up a Pro Trump sign in front of the California State Capitol in Sacramento, but that is a can of worms I have no intention of engaging in here and you already know my feelings in that regard.

    I am happy you kicked in here, I actually figured you were the one among us who was actually using a 3D printer effectively.

    But I do have to point out that you are using it on a very high value very short run product where the time is actually justified.

    And yours has so many custom innovations in it I am sure it benefits from the process even if the material isn't optimal.

    And yes the one place you can make up for some of the deficits in the material itself is by clever design with structural reinforcements just where you need them.

    In fact, I think you are the perfect example of the rare instance where a 3D printer is of optimal value in producing a commercial product.

    Most products can not be profitably produced 1 or 2 at a time.

    And I also think that if you are building a product like that, if production does ramp up at some point the 3D printer(s) tends to become a bottleneck that is difficult to get beyond.

    So in some ways, inevitably a dead end for anything other than very small unit production.

    For you, probably a perfect solution, quick and easy and a lot of parts with the same sort of CNC construction methodology - great stuff.

    For us DIY'rs and inventors, they are also really good for trying out innovative concepts quickly and easily without having to be an elitist snob with a complete machine shop.

    If I ever do buy one I will be talking to you - good to know you have found some plastics you actually like.



  • @Rob. That is an excellent example of how 3D printers can make professional looking low volume products. What plastic material are you printing with?
  • I expect that 3D printing and drones have one thing in common.  Once you have one you have to learn how you're going to use it for something more than just trivia and novelty.

  • Developer


    Kickstarter wrong model. Think Thingiverse  (The link is 2015-16 BTW)


    Thingiverse Reaches 1 Million Uploads, 200 Million Downloads | All3DP
    MakerBot Thingiverse reached a landmark last week with one million uploads and two hundred million downloads on its platform.
  • Wow. That is very nice Rob. You can't beat designing something in CAD, then printing it out...
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