ZenaTech, Inc. (NASDAQ:ZENA) (FSE: 49Q) (BMV:ZENA) ("ZenaTech" or the "Company"), a technology solution provider specializing in AI-powered drones, Drone as a Service (DaaS), enterprise SaaS and Quantum Computing solutions, today provides a business update and future outlook in a letter to shareholders from CEO Shaun Passley, Ph.D. Unless otherwise indicated, all financial figures are expressed in Canadian dollars.

To our valued shareholders,

ZenaTech continues its evolution from a technology development company with a software revenue base to a diversified, multi-product and vertically integrated operating company with a scalable Drone as a Service platform, and advancing commercial, government and defense drone technology portfolio, and an enterprise software business.

I am proud of what we accomplished during the first half of 2026. We continued to execute our business plan, scale our DaaS operations and advance our drone and software platforms for business, government and defense markets.

Second-quarter revenue reached $9.3 million, up 316% year over year, while revenue for the first six months reached $17.7 million, up 425% from the comparable period last year. First-half revenue also exceeded our full-year 2025 revenue of $12.9 million by approximately 37%. Drone as a Service remained our primary revenue engine, contributing $8.6 million, or nearly 93% of total revenue in the quarter, and $16.4 million during the first half.

We have now delivered seven consecutive quarters of sequential revenue growth since Q4 2024. Quarterly revenue increased more than 13 times over that period, from approximately $0.7 million in Q4 2024 to $9.3 million in Q2 2026.

In June 2026, ZenaTech was added to the Russell 3000® Index, an important market-recognition milestone as we continue to expand the Company.

Our Q2 operating expenses increased with our larger workforce, acquired operations, sales and marketing activity, technology development and public-company costs. We recognize that scaling revenue must ultimately translate into improved operating leverage. Our focus is therefore not only on adding locations, but also on integrating them, deploying drone-enabled workflows and expanding higher-value data and analytics services.

Following our May financing, we ended the quarter with $12.2 million in cash, $34.6 million in combined cash and marketable securities, and $24.3 million in working capital. Total assets increased 50% to $149.3 million and shareholders' equity increased 34% to $91.4 million. These resources provide flexibility to fund integration, product development and disciplined acquisitions, while we remain focused on careful capital allocation.

Drone as a Service

The scale of our operating platform continues to expand. In Q2 2026, we completed four land survey and legacy service business acquisitions, bringing our cumulative DaaS acquisition count to 24 at June 30. Subsequent transactions increased that count to 29 to date and expanded our presence into additional sectors and regions, including Alberta, Ohio, Idaho and, most recently, Georgia. ZenaTech's DaaS operations now have a physical presence in 14 U.S. states. We also expanded our corporate footprint with offices in South Korea and the United Kingdom, while our broader DaaS operations and acquisition activity extend across the U.S., Canada, the UK and Australia…