CHRIS CLARK | CEO of RocketDNA

Drones are no longer just gadgets for hobbyists or tools for capturing stunning aerial photography. In this episode, we delve into the world of drones and their revolutionary capabilities in the mining and agricultural industries with Chris Clark, the CEO of RocketDNA (ASX:RKT), a company that provides Drones as a Service.

Imagine drones that can conduct daily surveys, detect water leaks, count livestock, and even monitor environmental changes—all with a precision and frequency that were once unthinkable. As Chris puts it, "You can't fix what you don't measure," and drones are becoming the ultimate measuring devices.

But the innovation doesn't stop at data acquisition. RocketDNA is pushing the boundaries further by incorporating artificial intelligence to analyze the vast amounts of data drones collect. Chris shares how AI is transforming the way industries approach maintenance, safety, and decision-making. From detecting corrosion on critical assets to proactive surveillance, the applications are as diverse as they are game-changing.

One of the most intriguing aspects of the episode is the discussion around "drones in a box." These autonomous drones, which can be controlled from thousands of kilometers away, mean that fewer workers need to leave their families to work in harsh and dangerous conditions.

Chris's enthusiasm is palpable as he talks about the future of work in these industries. The image of a remote operator closing their laptop to go surfing after a day's work is not just a dream; it's a foreseeable reality.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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Chloe: Shares for beginners. Phil Muscatello and Finpods are authorised reps of Moneysherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

Chris: I'm quite look forward to the day that one day we can put one of our job ads up on seek. So when you look for a job ad, it's the remote operator sitting behind the screen, conducts a survey, closes down the laptop and then walks to the beach across the road and goes surfing. Right? And then it's all in a good day's work. So, uh, look, I think that's where the mining industry in general is evolving. There's a lot of pressure to decarbonize, but I think in hand in hand with electrification or a lot of these mining processes, there will be more and more autonomy and so we'll just feed in that as a supply, especially within the monitoring sort of space, and as a technology service provider. Uh, we only look forward to sort of grow our portfolio today being within the drone space, but as the robotics become a bigger component of it, especially within particular niche applications within these mine sites, that we'll be there to capture that.

Phil: G'day and welcome back to shares for beginners. I'm Phil Muscatello. There's much more to drone technology than looking for sharks and creating beautiful wedding videos. Drones are fundamentally changing the monitoring and management of the mining and agricultural industries in ways that were unimaginable just a few years ago. To explain, we're welcoming Chris Clark to the podcast. G'day Chris.

Chris: G'day, Phil, thanks for having me.

Phil: Thanks for coming on. Chris Clark is the executive chairman and CEO of, uh, Rocket DNA ASX code RKT. Rocket DNA is an ASX listed global drones as a service provider to the mining, agricultural and engineering industries. They provide scalable geodata and AI solutions using automated data capture and on site services which are designed to produce short and long term insights for decision makers.

Chris, the drone industry is really in an interesting space at the moment

So Chris, tell us about your background. I saw in your LinkedIn profile that you've never had a job interview.

Chris: Yeah, Phil, that's quite an interesting story actually. It actually really kind of happened straight out of uni. Came up with a sort of a crazy technology idea in the old days, which was before we even had apps and App Stores where we created a digital jukebox, but put it on a screen and installed it in pubs and bars as a young sort of 22 year old, and we got people to interact with it and send music to the screens and really sort of that was sort of our first forte into technology and how it can sort of be easily adapted and made enjoyable for the people or the end user. And it sort of just rolled from there into other sort of businesses and eventually got into drones. So, yeah, definitely technology at heart and how it helps people solve problems.

Phil: So drones, it's not as simple as buying your drone from jcars and taking off, especially in the industries that you're working in. What are the regulatory approvals that are required?

Chris: Yeah, the drone industry is really in an interesting space at the moment. They feel really what a lot of people are seeing is sort of that consumer end, as you've mentioned, using these small drones to capture sort of videos, do simple sort of inspections. But the drone industry at large has really matured into the three segments. So on top of the consumers, you've got the commercial sector in which we operate. So you're flying slightly larger pieces of equipment, generally around about 7 kg, flying anywhere between sort of five to 20 high end of the market. You got a lot of these military spec drones, which once sort of scale what you see in the movies, these sort of big military operator ones. But also the segment has transformed into how you're even taking a lot of these drones and being adapted in such wars, such as in the ukrainian war. So there's been quite an interesting sort of blend and mix of how drone technology has evolved within its actual particular applications. And really that's sort of been done regardless of how the regulatory approvals have evolved over time. What we've seen is, um, people are really keen to take this technology, solve a particular issue, and really then take it back to the regulators and say, look, I've sort of proven that this can be operated safely. How can we expand it? But to your point, it's not just as simple as sort of just buying a drone and getting into business the day after. It's a lot of these sort of regulatory hurdles in what you need to do, especially if you're going to be operating these very complex and remote environments and sort of doing these what we call beyond visual line of sight, sort of surveys and applications.

Phil: And the regulatory body is CAASA isn't it? So you're basically under the same regulations as the airline industry.

Chris: That's right. You've sort of taken your consumer drone and you decide this is something that you really want to start evolving into a commercial business. You got to start looking at the sort of the approvals and the licenses required. So you're looking at not only a license for yourself as a pilot, but then, as well as for your business. And then that really involves a safety and quality and maintenance program around all the equipment. And really this is about how do you scale beyond those one or two drones to really provide an enterprise service to large tier one and tier two customers?

Phil: And many of your pilots are actually ex commercial pilots, aren't they?

Chris: That's right, Phil. So what really kind of separates us and sort of puts us this interesting segment is that we sort of place ourselves between not only the mining and ag industries, which are very sort of traditional and sort of slow to adapt, uh, technology in one end. Meanwhile, we're geeks on our side, sort of understanding that there's a sort of new breed of tech that needs to evolve. But helping in solving these particular problems, as well as then bringing in the aviation and the sort of 100 year old industry of sort of the safety mentality. And bringing all these three things together is quite tricky. But we've managed to sort of pull that together through the kind of people that we've got in our business. They've all got experience from the traditional aviation industry, mining as well as technology. And that's what really makes us sort of special. And we generally find bringing in commercial pilots from the aviation industry into this new drone industry as well, helps us with those regulatory approvals, as well as sort of bring in almost best practice, if you will. They always say in the aviation industry, it's 100 years of rules written in blood. Because for all those rules that for you to fly in a commercial, uh, aircraft, for those to really have happened nowadays, it's something almost would have happened in the past that now there's a reason for it being there. So we've really kind of taken sort of a lot of these learnings from that industry and really brought into the drone space. And that's allowed us to get a lot of these approvals for these complex operations.

There is a gap between manned aircraft and satellite technology for geospatial data

Phil: So you've identified a gap between manned aircraft and satellite technology. How are you filling that space?

Chris: So what we find quite interesting, especially within the geospatial arena, is you got this need for geospatial data that's sort of happening. Definitely. Satellite technology is improving. Not only they're launching more satellites, these satellites, uh, are able to fly lower and really sort of provide sort of the resolution that customers, uh, are sort of needing. But the limitations of satellite technology is that it still remains relatively expensive for the end users, especially for the frequency of the data in which they need. And if they're not being limited by, let's say, cloud coverage, which might come over these satellites, they sort of only fly past once a week. You then miss that opportunity to capture that data. And when you're looking at manned aircraft, you're really operating on a schedule, you're still limited by the weather and also essentially batching all the jobs in the areas into a single flight to reach sort of the price point that customers are looking for. The difference with drone technology and the way that we position our business is we're really focused on these very fast changing environments. So let's take for example, the mining industry, which in the past, uh, only really needed their data once a month or sort of once a week. And we've transformed this using this autonomous drone data to allow them to almost get their data every day. And generally people say, well, Chris, why do I need data every day? And we sort of put it the same sort of level as the days when we all first got our, uh, phones. We got three g and then sort of 4g came out and people were saying, well, why do I need a phone that now? I was getting my 512 kilobits and now you're offering me something that's got two megabits per second. Why do I need faster data? What does that really do for me? And what we've seen, the mining industry, very similar in the cell phone mobile industry, is that the more frequent the data has happened, the more applications that these customers end up developing. So whether that be from now using drone technology to not only calculate the volumes and their production on a daily basis, but they can now start deploying this for applications to look for water leaks, to look for missing cows, to start counting crops, and you're really starting to monitor things on a daily basis. And that really comes from that old adage of, you can't fix what you don't measure. And in the days of very high labor costs, extreme environmental conditions, high inflationary sort of impacts customers, the sooner you can solve a problem, um, you lessen the impact and lessen the overall costs. And what we find is by deploying drones on a more frequent basis, you're lowering your overall cost per flight or acquisition costs while solving the problems in a much higher resolution because we're just flying that much lower.

Rocket DNA uses drones to help mining companies solve difficult tasks

Phil: I think listeners will be surprised to hear how many drone pilots are currently employed in the mining industry. How many are there?

Chris: Yeah, we've had some interesting reports looking really at some of the big role players. We're excited to see that drones have really become quite synonymous within this industry. And BHP currently has got about 600 trained drone pilots. Within their books. The Rios, uh, are sort of between the four to Glencore's in the. You're really seeing that drone technology is an industry that, within the mining industry, is something that's only just growing. We're only seeing more and more involvement. And what's actually more exciting is it's not just about the data acquisition anymore, but it's really about the analysis and insights that you're achieving from these drone flights. And that's really about where our focus is. Sort of now pivoted in recent months is when we started this business 15 years ago, it was all about the data acquisition, about the regulatory hurdles. And now what we're seeing is a lot of customers end up doing themselves. So we pivoted the business to focus on the autonomous sort of products, to almost bring the cost of data acquisition down to zero, and to then combine that with the analytical insights, using AI tools to help the customers solve problems. So, as an example, some of the things that we get to do for the customers is looking for corrosion on these critical assets. So, especially if some of these, let's say, electrical assets, are installed next to the ocean, we can really sort of provide that insight and help them prioritize what needs to be maintained and when.

Phil: So presumably you're going to be able to identify problems with a drone much earlier than if you were just going to do visual inspections from the ground.

Chris: Yeah, it's crazy for sort of the amount of bodies that these mining companies sort of throw at certain tasks. So, uh, as an example on the water leak detection, a lot of these companies that just have people driving up and down in a ute, 15, 20 day looking for water leaks. And it's critical to the mining company because not only do they get fined, but it's also critical to the environment because a lot of these water pipelines are also saline, so they want to minimize the environmental impact. And you've got two of these guys sort of driving up and down, and this is their role. And while by no means do we ever want to put anyone out of a role or position, we also can sort of identify, like, there's some of these sort of tasks that can really be simplified and automated using drone technology and sort of the visual based algorithms to solve them. And rather than putting people out in 45 degree heat and really exposing them to these sort of these dangers, we can have them analyzing the data, confirming and being part of the maintenance crews, which are then responding and fixing up the problems that happen. So we really kind of feel a lot of this autonomy in this technology, especially with the advent of AI, uh, is becoming a lot more accessible and a lot more accepted within the enterprise space, especially within mining industries, to lower the overall costs as well as improve safety.

Phil: So where's the focus of rocket DNA's operations?

Chris: Yeah, like I say, we've sort of come from this sort of 15 year background of all these multiple industries, from technology, from mining, and now it's really taken up into the next gear of this autonomy and automation space. We actually sort of did a bit of a, uh, rebranding in the last sort of year into rocket dna, standing for drones and automation. And this is really about focusing on those simple and generally they sort of call it the three ds, those dull, dangerous tasks that clients just really don't want to do anymore. And how we then incorporate drones and eventually even robotics into not only detecting, but actually solving and addressing those particular problems. Our sort of experience not only comes to the mining industry, but we've done a lot of applications within agriculture as well, whether that say, sort of doing cattle counting, plant population counting, and sort of just general detection and awareness of sort of hazards within a particular area and then alerting the customers within the african operations, we find a lot of great success within not only the mining, but the security sectors as well. So using this drone technology to do night operations and you're really looking for intruders. So we're doing sort of these perimeter patrols and sort of proactive surveillance routines.

So you talk about the research and development that the company is undertaking

Phil: So you talk about the research and development that the company is undertaking. Is this more in the hardware side of things, or is it about the artificial intelligence more so these days?

Chris: Yeah, it's a combination of both, Phil. So we view ourselves as system integrators. So we're not building all our hardware and software from scratch, but we're bringing all these tools together into creating a new solution. We will employ application developers and engineers on how to assemble and make the hardware and the software talk, realizing that the way we see that this market is going is being very application specific. So, in other words, we used to sell very expensive drones, which were like swiss army knives that could do everything. And where we're seeing the market going is that customers want to focus on a specific application, whether that be an inspection task or a survey task or a security task. And so we're then segmenting into each of those, finding and really lowering the overall cost of deploying these solutions because we realize that autonomy, there is a capital investment to make that happen and that it pays itself back over the one or two year period. And we've already trying to make that as easy as customers by offering leasing or financing solutions just to get that technology in and to allow them to be able to use it. So we're not only developing on our, uh, AI, uh, capabilities and tools and the hardware, but as well as then wrapping that within a really accessible commercial model that makes sense for those mining and agricultural customers.

So can you describe a use case for AI in data collection using drones

Phil: So can you describe a use case for AI and how it's used to wrangle the data?

Chris: Yeah, it's almost so many opportunities for drones. Some of the like, say really the big areas and segments is really around the automated measurements. So we're doing a lot of volumetric reporting, which is all fully automated. So the drone flying out of the box every single day, calculating the stockpiles and reporting, uh, and quantifying all that data within a very short period of time that then expands into other applications such as, like we mentioned, sort of the corrosion detection. So we'll be flying along conveyor belts looking for overheating idlers or the ball bearings within there. So, uh, before these things set on fire, we're able to detect and do sort of those thermal inspections.

Phil: So they do thermal inspections as well as visual? Yeah.

Chris: So these autonomous drones will be sort of being deployed, especially on the inspection units, monitoring conveyors, monitoring solar farms, doing the inspections of the panels, identifying if all the anomalies that we're detecting out of the panels and determining does a panel need to be replaced or not. And like say, all the way down to quantifying sort of on the agricultural side where we're counting sheep, counting cows. And this is really about making sure, preventing sort of cattle wrestling, or just sort of counting the populations every evening as the cows are coming back, making sure that you haven't lost a couple. And if you have, you send the drone out to go and try find it again. So I don't think there's not a day that comes by that customers come to us with a very unique sort of solution. And we don't sort of try to say that we could do everything, but if it works, we sort of stick to that 80 20 rule where we can do the 80% really, really well and cost effective. And that's really what we're sort of focusing on in building.

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Xbot is a fully autonomous drone that can be deployed in remote locations

Phil: I'd love to hear about the drone in a box. And in the blog post we'll put a couple of videos. I've seen some great videos of these in operation, but describe it for us in word picture for the podcast.

Chris: Yeah, our drone of the box solution, or what we call our xbot, is a fully autonomous drone. So no more. All the days that you need to send a pilot to site, you deploy these drone of box. It's powered by our, uh, communications with enabled sort of styling capacity and power solution. You can put it out in these remote sites and literally just leave it out there. We then control and fly these from our remote operating centers based in Perth or Adelaide, which can be hundreds of kilometers away, and we can fly them day or night for you. And ideally, these drone sort of export units are operating either on a scheduled basis or an ad hoc, so we can trigger them to an alarm system or to respond to certain particular sort of alerts, or we can just be conducting the flights at a specific sort of time every day. And really, the applications around this are quite huge within these particular industries, especially where you're finding sort of a shortage of labor, where you just are struggling to get people out to these very far remote locations, as well as where it just takes time, or the roads are flooded, or there might just be a critical event that needs that visual confirmation. So what we're seeing is especially like a mining environment, where some of these dump trucks are fully sort of autonomous. They're very highly sensitive. Tumbleweed blows across the whole road and these trucks just stop. And right now you need to send a human being out to sort of clear the way and make sure that there's nothing in front of the truck to allow this truck to keep driving. And deploying this drone technology to proactively clear out the hall roads, make sure that there's nothing in the way, is sort of really seeing great benefits for these customers.

Phil: Drone with a broom.

Chris: Yes.

Phil: I love watching the video of them because it's like a box sitting in the middle of nowhere. And it unfurls, it blossoms. Look, it blossoms like a flower. And out comes the drone, ready to be deployed. Is it remotely powered as well? I mean, is it solar powered? And everything is self contained?

Chris: Yeah, we've got a hybrid battery and generator solution for this, so they consume quite a lot of power. So if you want to do a solar option, you've probably got to install about 16 sort of these panels to power it. So it definitely is an option. We've sort of looking at how often you deploy these drones. A lot of the customers want to put out this installed capacity to fly more than once per day. And ideally you're installing them in these remote locations where there is no existing power, where people don't want to go all day, they only go on very, not very often to sort of do these inspections. We'll sort of deploy it with this hybrid battery and generator option, which sort of charges it and only turns the generator on for sort of an hour a day, charges up the drone, conducts some flights, charges up the batteries and lets the operations go. And then you only need to top up the diesel every two weeks.

Phil: So autonomous drones are the same as drone in a box. That's the way they work, isn't it?

Chris: Yes. So the really idea is that we're now transitioning from somebody going out to site, manually, setting up this drone, and then flying and capturing. And I guess with anything that you want to automate, you first want to prove the workflow manually. And, uh, once you're ready, then you automate it so you identify this area. The drone in a box is sort of a great visual way to represent the solution. So the drone is all preset up, it's auto charging. The drone takes off out of the box, it completes a mission. The current sort of units have got about a five kilometer range from the box, so you can achieve about 10 end to end. And it then comes back, lands, auto charges, and sort of the box closes around it, so it's weather protected, and then it starts uploading the data. This all just happens automatically. You preset the flight plans, the timetables for this unit to operate, um, according to whatever the customer sort of needs. But in the background, we sort of call it this autonomous solution, because while you still got a remote pilot, they're not anymore all on site watching the drone. They're now sitting at a control center monitoring the weather, monitoring the air traffic, and performing those radio calls. So there's still a human in the loop, but it's pretty much like driving a Tesla on autopilot. You've got to be behind the wheel, but you can sort of sit on your hands and watch the drone in action. And the exciting thing is you can actually then scale that out to multiple drones all at the same time, which really allows you to achieve scalability and efficiencies within the operations.

You have contract based manual drone data capture for mining customers

Phil: And the other leg of the business is what you call contract based manual drone data capture. Tell us about that side of things. Is that a bit more bespoke for each individual customer.

Chris: Yeah. So this is the legacy part of our business. So where you've got customers who just require maybe a once off, sort of project related work, or have got other sort of specific needs where they want to have, uh, sort of a face to face interaction. We also cater towards those specifically even mining customers that struggling to find surveyors. So we train up our sort of aviation and our drone pilots within sort of the survey realm to be able to go out, capture process, and then under our sort of our quality systems, be able to deliver survey grade data to these customers. So it's really about filling a need, employing young people, getting them onto the ladder and exposing them to the industry within sort of a safe, very controlled, very well proven system.

Phil: Is that part of what you're looking for as a labor force and building up a labor force? Is that correct? And if someone who's listening is interested, where would they go?

Chris: Yeah, we're always looking for great people to join the business. We always say, you'll never be doing the same thing every year. So while you might start off as a drone pilot, this year we're training up a lot of our team to be technicians and robotic engineers. Some of our team already are, uh, studying data science. So we're a very young company. We're very innovative in how we sort of develop our people and our products as well. And so everyone in our company is full time employed. So it's really about sort of moving with the market, moving with the customers, and then sort of growing and developing our staff into these very new segments. So, yeah, we're training the team for roles that don't even exist yet. And I think what's always interesting is a lot of people think, well, when mines go autonomous, or they bring autonomous solutions, everyone loses jobs. And actually what we find is quite interesting, and I was actually told this by someone within Rio, as an example, is when Rio converted all their trucks to autonomous systems and trains, when they did sort of a headcount, they actually ended up employing 5% more people than what they had before. And what you find is that you still need people to maintain these systems, you still need people who are incorporating the data, who are monitoring these systems as well. Except now you're not doing it on my site, you're now doing it closer to your families, at homes, from an operating center. So I think that's just the way that especially this mining industry is going. It's young people are just not, uh, finding working on mine sites as attractive as what they used to. People want to be close to their families. And I think technology is just going to enable that more and more. So we're really quite excited to be part of that wave of change, to allow people to still be within this industry, play with technology, still be aviators at heart, but apply their skill sets in a different way.

Phil: You don't really think about that, do you? This kind of a knock on effect. It's not something that's clearly identified, but obviously people do want to be close to their families and technology is enabling this now and remote access to what needs to be done out on m remote sites.

Chris: Yeah, I'm quite look forward to the day that one day we can put one of our job ads up on seek. So when you look for our job ad, it's the remote operator sitting behind the screen, conducts a survey, closes down the laptop, and then walks to the beach across the road and goes surfing.

Phil: Right.

Chris: And then it's all in a good day's work. So, look, I think that's where the mining industry in general is evolving. There's a lot of pressure to decarbonize, but I think in hand in hand with electrification of a lot of these mining processes, there will be more and more autonomy and so we will just feed in that as a supply, especially within the monitoring sort of space. And as a technology service provider, we only look forward to sort of grow our portfolio today being within the drone space. But as the robotics become a bigger component of it, especially within particular, uh, niche applications within these mine sites, that we'll be there to capture that.

Phil: We'll get back to the show right after this brief message.

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You've identified critical asset infrastructure as another area to move into

So you've identified critical asset infrastructure as another area to move into. How are you approaching the use of drones in this sector?

Chris: It's so fascinating to see the number of public organizations now coming to market, especially looking at this autonomy. So again, you're looking at the police, water companies, electrification companies that employ these large band of drone pilots that are out there doing all these very manual inspections. But really the missing gap is around the data and data analysis, because you're just collecting large, uh, swaths of this data. But then it takes just as long for someone in general, a subject matter expert, to go and actually analyze and say, is this a problem or not? And I think a lot of us are sort of underestimating the time it takes to sort of train up these models. I'll sort of be the first one to say, well, AI is very exciting. It's still limited by human input. Someone still has to train that model. So to source those subject matter experts to identify what water leaks are pretty straightforward. But things like corrosion, you got three to four different levels of corrosion on, let's say, even a simple asset such as an insulator on transmission lines. And how do you then prioritize and help customers decide which insulators need to be replaced or not? And so I think there's still a lot of opportunity for those subject matter experts to be training up these models and then to be deployed on mass scale within these automated workflows. So the public space, it's going to be a completely different environment for the next two, three years. And that's mainly driven by the capital markets because, like with every other public organization, when you want to go out and replace your transmission lines or your transformers, you go to the market, you raise debt and you change it out. But with interest rates where they're sitting at the moment, governments just can't afford to go and replace all the assets when they need to. They'll say to you, sort of transmission lines every sort of 40 to 60 years, transformers every 2030 years. But we've got this massive $5 billion, uh, capital expenditure bill that's coming up, even just in one state, which they need to change. All these assets they can't afford to do all the time. So they're going to need to start prioritizing which assets they change when. And only technology and consistent monitoring of these assets is going to help them sort of decide. So, and you're not only seeing that in Australia, you're definitely seeing that in the US as well, how they're going to deploy their capital and to know, uh, which critical assets they need to change when is just going to create more and more opportunities for these highly intelligent and very fast paced monitoring algorithms.

WA police have just released a tender for a drone in a box solution

Phil: So tell us about policing applications. I mean, this is quite an interesting area as well. How's it working in WA?

Chris: Yeah, so Wa police have just come out with recent tender as an example for a drone in a box solution that allows them to monitor and respond to triple zero calls on a very quick basis. So the idea it is that you can deploy the drone in a box solutions to these remote police stations and then before even the police get there, the drone is really flying out to the site to sort of the response and able to sort of start sending back a, uh, live stream of the site to provide that situational guidance. And that's really important, especially since you sort of might have heard some of these incidences that have happened in Queensland, in Victoria as well, where police officers have essentially been almost ambushed responding to these remote regional areas as well. So we're quite excited that you're not just putting this technology out just because you can, but you're putting out this technology to solve, uh, a real problem and to really help police and again, keep them out of harm's way.

Phil: I can tell you're really excited about this, aren't you? Is there anything that's just over the horizon that you've got in the back of your mind that this Sort of technology can be utilized for?

Chris: Yeah, I think where we're going to be seeing this drone's technology is, it's going to be pretty synonymous. We sort of joke it's going to be like the laser printer, where we're going to be having hundreds of drones flying above our heads, each doing their little application, hopping between boxes and providing instantaneous sort of feedback. So you'll be able to interact with a large language model. Say, hey, Siri, go find this truck for me, or where have I put this diesel? Or find me my lost keys. And in a couple of minutes you'll be able to detect a provider, GPS coordinate and guide you directly there. So I think this technology is going to make our lives a lot easier, relevant, and again, remove people from these very dangerous areas. And that's really what we're excited about. Focusing is really solving these real problems and taking that not only from the automation, but all the way to those data insights that really gets us very excited.

Phil: So where is RocketDNA's revenue currently generated from?

Chris: So, Phil, we're very proud as a business being focused on the majority of our business being annual, recurring, or contracted revenue. So, uh, the way that we generate is we're selling these long term contracts to customers for this continuous data set. We're not just doing, just flying a drone once we're focused on that majority of the market that needs their data, uh, at least once a week. I think they always said, thing was, Larry Page, sort of Google said that every business that's like a toothbrush, something that you need to use at least twice a day, is a good business. And we've sort of built ourselves around the same sort of motto, uh, where we only want to deploy applications that customers see, uh, sort of a daily benefit in using. And that's helped us derive these long term contracts. So we've currently got commitments backed by contracts, or what they call annual recurring revenue of about $2.8 million per year. We're, uh, a relatively small micro cap of only $5 million in market capitalisation. But the advantage of us as a business is we're really nearing that cash break even point. We got $2.3 million in the bank, and that's really just helping us build on these long term contracts. We don't have these peaks and valleys in our revenue base. You just sort of see this slow uptick. And the great thing about these contracts is that once you're on site, the customers, they never let you leave, as long as you keep delivering good service and the customers keep renewing.

RocketDNA released its latest quarterly report, up 6% on prior year

Phil: Okay, so run us through the numbers on the latest quarterly report that's just been released. The quarterly numbers;

Chris: Yeah. So RocketDNA released its latest quarterly report. So we got a December financial year in. So this will be our full, sort of our final quarterly for full year 2023. And overall, a really solid quarter and a year for the company as we grew, again, really much focused on the contracts sort offor revenues, as well as managing the pivot from our legacy business into our autonomous business. But if you sort of look at the numbers, we're really up with 6% revenue growth on the prior quarter and sort of with 67% growth on thefor revenue sort of figures, closer to about the $6 million for the full year, sort of mark roundabout on the revenues. And really our ARR, annual recurring revenue,, uh, figures ended about $2.8 million at the end of the December quarter, so up 18% on the prior year.

Phil: And of course, that is a highlight, operating with no debt.

Chris: Yeah, it's quite unique in this environment. I think a lot of micro caps over the last couple of years have taken deals which are probably going to hinder them in the future. And we've just been pretty diligent in how we've managed our finances. We're a small team, but we've been running this business for a very long time, so we can understand the peaks and the waves and when to raise money and when to go hard and when to go slow. And I think we've just read it very well. So, yeah, we got enough money in the bank to see us out to the profitability, and it's just really all about now, building on the opportunities, getting out these new units to the mining customers for trial.

RocketDNA provides exposure to a use case scenario for artificial intelligence and robotics

Phil: So how can listeners find out more about RocketDNA?

Chris: Yeah, Phil, you can check out more on our website on rocketdna.com. And yeah, we're pretty active. Sign up for our newsletter as well. If you want to learn anything about sort of the drones and the AI space, we always sort of send out a monthly newsletter that's sort of forward looking in sort of the sectors in which the industry is growing and how we're applying AI within these very high frequency data generated environments.

Phil: It's interesting, isn't it, because people sort of ask the question, how do I get exposure to artificial intelligence as an investment? And it's really happening in so many different places that you wouldn't expect. Like, for example, John Deere, the tractor company and agricultural company, they appear in robotics and AI etfs as well. And it's really a business like yours as well, as it does provide exposure to a, uh, use case scenario for artificial intelligence and robotics, I'd assume as well.

Chris: Yeah, I think especially since the prevalence of chat GPT and these very accessible large language models has made AI become a lot more relatable and the possibilities of what AI can be done. Right, because if you think about Chat GPT, it's pretty much a Google that you can just talk to in your natural language, but other than that, you can still find the same information out there just by doing a search engine. So AI is, I guess, sort of speeding up the data. And again, sort of what's, I guess, really important to note is that AI is still based on that human experience. You can build a whole business on a single AI model. If you're looking at cameras as an example of security, detecting of people, detecting of vehicles, ah, those models were built over, uh, years and years before they can be incorporated into very small cameras. And what we're starting to see is that not only the visual detection, but the interpretation of results is sort of this next sort of wave. So a lot of people are very concerned about how their data gets out there. And we're always saying, if you own a particular data set or you have a sort of know how, definitely now is the time to jump on and start building those models into how we can automate that. And Rocket DNA is very well positioned, especially in the visual and geospatial sense of how we can take again these large data sets and extract information out them. So generally, depending or helping you look for things that may not be very apparent or very difficult to find or may only creep up once in a while but are very important when they do occur.

Phil: Chris Clark, thank you very much for joining me today.

Chris: Thank you, Phil. Appreciate it.

Phil: The company and or guest has contributed to the cost of production for this episode.

Chloe: Thanks for listening to shares for beginners. You can find more sharesforbeginners.com. if you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.

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