ParaZero Announces 2024 Financial Results

Rhea-AI Summary

ParaZero Technologies (PRZO) reported its 2024 financial results, with sales increasing 50.2% to $932,154, driven by a strategic shift towards OEM integrations. The company strengthened its cash position in early 2025 through a $3.1 million registered direct offering and $1.3 million from warrant exercises.

Key developments include launching the DropAir Precision Airdrop System for blood transfusions in high-risk zones, advancing Counter-UAS solutions, and securing new defense contracts. In the commercial sector, ParaZero received a $187,000 order from a U.S. Advanced Air Mobility company and delivered a special drone safety system for a Fortune 500 automotive manufacturer.

Financial highlights show increased operational costs, with R&D expenses rising 237% to $2.1 million and net loss expanding to $11.1 million. The company ended 2024 with $4.2 million in cash and expects stockholders' equity of $3.6 million following recent financing activities.

Positive

• 50.2% sales growth to $932,154 in 2024
• $3.1M raised through registered direct offering in early 2025
• $1.3M received from warrant exercises
• $187,000 purchase order from U.S. Advanced Air Mobility company
• Secured new Tier-1 defense customer orders
• Strategic shift to OEM integrations providing recurring revenue

Negative

• Net loss increased 193% to $11.1 million
• R&D expenses surged 237% to $2.1 million
• Cost of sales increased 83.3% to $873,861
• Sales & marketing expenses rose 121.6% to $1.1 million
• Shareholders' deficit of $0.3 million at year-end 2024
• Loss per share increased to $0.99 from $0.77 in 2023

Insights

Financial Analyst

ParaZero's 2024 results present a mixed financial picture with important nuances for investors. The 50.2% revenue growth to $932,154 demonstrates product traction, particularly as the company shifts toward OEM integrations that generate recurring revenue streams. However, this positive signal is overshadowed by concerning financial metrics.

The company's losses widened significantly to $11,054,230 - a 193% increase year-over-year with a concerning loss-to-revenue ratio exceeding 10:1. Multiple expense categories saw substantial increases: R&D expenses jumped 237% to $2,143,353, sales and marketing rose 121.6% to $1,081,003, and G&A expenses increased 62.9% to $2,400,000. While some expense growth is expected in an expanding company, the magnitude raises sustainability questions.

On the balance sheet side, ParaZero ended 2024 with a shareholders' deficit of $0.3 million, but has since strengthened its position through capital-raising activities in early 2025 - securing $3.1 million through a registered direct offering and $1.3 million from warrant exercises. This improved their reported equity position to $3.6 million post-financing.

The financial strategy appears to be investing heavily in product development and market expansion while managing a tight cash position. The shift toward OEM integrations represents a strategic pivot toward more predictable revenue, but investors should closely monitor whether this translates to improved margins and decreased cash burn in upcoming quarters.

Aerospace Industry Specialist

ParaZero is making strategic moves in high-growth drone safety segments while broadening its market reach. The company's expansion into defense applications comes at a pivotal moment, as demonstrated by their DropAir precision airdrop system designed for blood transfusions in high-risk zones - addressing a specific tactical need that conventional delivery methods struggle with.

The advancement of their Counter-UAS solution and securing orders from a Tier-1 defense customer represents meaningful validation of their technology. Importantly, both systems received approvals from Israel's Defense Export Controls Agency, removing a critical regulatory barrier for defense sales.

On the commercial front, ParaZero continues strengthening its position in the safety-critical urban air mobility sector. The $187,000 purchase order from a U.S.-based Advanced Air Mobility company signals industry recognition of their safety systems. Similarly, their project with a Fortune 500 automotive manufacturer suggests potential applications beyond traditional drone markets.

The regulatory achievements are particularly significant. Securing the Design Verification Report approval from EASA and CE Class C5 compliance for multiple products provides ParaZero with distinct competitive advantages. These certifications often determine which safety systems get integrated into commercial drone fleets. The FAA waiver for Beyond Visual Line of Sight operations using their technology further validates their safety approach.

The company appears to be executing on a dual-market strategy - serving existing drone safety needs while positioning for emerging urban air mobility applications - though the increasing R&D expenditure indicates substantial investment in future capabilities rather than immediate commercial returns.

TEL AVIV, Israel, March 21, 2025 (GLOBE NEWSWIRE) -- ParaZero Technologies Ltd. (Nasdaq: PRZO) (the “company” or “ParaZero”), an aerospace company focused on safety systems for commercial unmanned aircrafts and defense Counter UAS systems, reported today its financial results for year ended December 31, 2024.

Key Highlights of ParaZero’s Achievements in 2024 & Recent Highlights:

• Sales increased by 50.2% to $932,154 for the year ended December 31, 2024, mainly thanks to shifting towards sales to OEM integrations, which couples with recuring revenues in addition to the traditional aftermarket segment.
• Since the beginning of 2025, the Company has significantly strengthened its cash position by completing a registered direct offering of aggregate gross proceeds of approximately $3.1 million, in addition to receiving $1.3 million in proceeds from warrant exercises.

Expanded operations in the defense sector & Recent Highlights:

• During 2024, the company enhanced its penetration to the defense market with new developments and collaborations. The company launched its DropAir - Precision Airdrop System for rapid delivery of blood transfusions in high-risk operational zones. ParaZero successfully tested the system in collaboration with a leading drone company and moved forward to phase II of the project with Israeli Ministry of Defense.
• The company continued to advance its Counter-Unmanned Aerial Systems (C-UAS) solution, securing new orders, including from a Tier-1 defense customer.
• Both systems gained approvals from the Israeli Defense Export Controls Agency (DECA), under the Israel Ministry of Defense (MOD).

Commercial developments:
ParaZero continued to establish its position as a leader in safety systems for urban mobility and aerial vehicles.

• The company launched number of new collaborations that led to new orders, including a $187,000 purchase order from a U.S.-based Advanced Air Mobility (AAM) company.
• In addition, it successfully delivered a special drone safety system project for a leading Fortune 500 automotive manufacturer as part of the customer's proprietary drone program.
• ParaZero received a significant order from a leading Australian distributor, strengthening its presence in Australia.
• ParaZero announced its expansion in the U.S. through collaboration with one of North America’s largest drone distributors, Drone Nerds, to promote and sell ParaZero’s products.

Regulatory approval:
The Company continues to facilitate its customers in achieving regulatory approvals for their operations as well as securing new approvals for its solutions.

• ParaZero received the prestigious Design Verification Report (DVR) approval from the European Union Aviation Safety Agency (EASA) for its SafeAir M-300 Pro and SafeAir M-350 Pro parachute safety kits. Its SafeAir systems, integrated with the DJI Matrice 350, DJI Mavic 3T and DJI Mavic 3E, have successfully achieved CE Class C5 compliance.
• The company also announced that a leading drone solutions provider, utilizing ParaZero’s advanced safety technology, secured a Federal Aviation Administration (FAA) waiver to conduct Beyond Visual Line of Sight (BVLOS) drone operations.

“2024 was a year of advancements for ParaZero, as recent geopolitical events have demonstrated the growing reliance on drones in modern warfare, both as offensive tools and as critical assets for delivering essential supplies in high-risk operational zones. At ParaZero, we have spent over a decade developing and refining our innovative, patent-protected technologies to address these evolving threats,” stated Boaz Shetzer, CEO of ParaZero. “I am proud of the company’s ability to successfully translate our innovation to meet the new needs of our customers and the market.”

Shetzer added, “Our commitment to enhancing operational efficiency and safety is evident in our recent accomplishments, including strategic collaborations in the defense, urban mobility and aerial vehicle sectors, the successful advancement of our new DropAir Precision Airdrop System, the late-stage development of our C-UAS solution and our leadership in regulatory achievements.”  

Full Year 2024 Financial Highlights:

• Sales increased by $311,646, or 50.2%, to $932,154 for the year ended December 31, 2024, compared to $620,508 for the year ended December 31, 2023. This increase was mainly attributed to that fact, that the company shifted towards sales to OEMs integrations that contributed to a higher volume of sales rather than to the aftermarket segment. This shift is accompanied with recuring revenues.
• Cost of sales increased by $397,251, or 83.3%, to $873,861 for the year ended December 31, 2024, compared to $476,610 for the year ended December 31, 2023. The increase was mainly due to the increase in the volume of sales during the year ended December 31, 2024 and an inventory write off of approximately $114,680
• Research and development expenses increased by $1,506,552, or 237%, to $2,143,353 for the year ended December 31, 2024, compared to $636,801 for the year ended December 31, 2023. The increase resulted mainly from labor costs of $843,881 accompanied an increase in by materials and experiments costs of $386,839.
• Sales and marketing expenses increased by $593,099, or 121.6%, to $1,081,003 for the year ended December 31, 2024, compared to $487,904 for the year ended December 31, 2023. The increase resulted mainly from labor, professional services and more subcontractors’ costs of $449,788 accompanied an increase in by travel and conferences participation costs of $122,288.
• General and administrative expenses increased by $927,128, or 62.9%, to $2,400,000 for the year ended December 31, 2024, compared to $1,472,872 for the year ended December 31, 2023. The increase resulted mainly from professional services rendered after the IPO and costs associated with becoming a public company.
• Other finance income, net was $200,724 for the year ended December 31, 2024, compared to finance income, net of $210,675 for the year ended December 31, 2023. Other finance income, net, primarily includes income from interest on deposits and exchange rate differences.
• Net loss and comprehensive loss increased by $7,282,851, or 193%, to $11,054,230 for the year ended December 31, 2024, compared to a net loss of $3,771,379 for the year ended December 31, 2023. The increase was the result of an increase of mainly a non-cash item, changes in fair value of derivative warrant liabilities, along with an increase in operating expenses, as described above.
  
• The loss per share in 2024, was $0.99 compared to net loss per share of $0.77 in 2023.
• As of December 31, 2024, the company’s cash and cash equivalents was approximately $4.2 million and the company’s total shareholders’ deficit was approximately $0.3 million.

As a result of the warrant exercise and registered direct offering in January 2025 and February 2025, and as of the date of this current report, the Company believes it has stockholders’ equity of $3.6 million.

A copy of ParaZero’s annual report on Form 20-F for the year ended December 31, 2024 has been filed with the U.S. Securities and Exchange Commission at https://www.sec.gov/ and posted on ParaZero’s investor relations website at https://parazero.com/investor-relations/. ParaZero will deliver a hard copy of its annual report, including its complete audited consolidated financial statements, free of charge, to its shareholders upon request at michal@efraty.com.

About ParaZero Technologies

ParaZero (Nasdaq: PRZO) is an aerospace company focused on drone safety systems for defense and commercial drones and urban air mobility aircraft. Started in 2014 by a passionate group of aviation professionals and drone industry veterans, ParaZero designs smart, autonomous parachute safety systems designed to enable safe flight operations over populated areas and beyond-visual-line-of-sight (BVLOS) as well as for various military applications including Counter UAS. For more information about ParaZero, please visit https://parazero.com/

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s Annual Report on Form 20-F filed with the SEC on March 21, 2025. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. ParaZero is not responsible for the content of third-party websites.

Investor Relations Contact:

Michal Efraty
Investor Relations
michal@efraty.com

ParaZero Technologies Ltd. | 30 Dov Hoz, Kiryat Ono, Israel 5555626
P: +972-36885252 | E: contact@parazero.com | F: +972-3-688-5246

 

ParaZero Technologies Ltd. BALANCE SHEET (U.S. dollars in thousands, except share data and per share data)

		Note		December 31, 2024				December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents					4,178,866				7,428,405
Trade receivables					114,564				22,376
Other current assets		3,4			421,919				651,560
Inventories		5			394,193				264,468
TOTAL CURRENT ASSETS					5,109,542				8,366,809
NON-CURRENT ASSETS:
Restricted Deposit		2Z			68,001				—
Prepaid expenses, net of current portion					33,333				—
Operating lease right-of-use asset		6			418,790				8,127
Property and equipment, net		7			107,906				49,981
TOTAL NON-CURRENT ASSETS					628,030				58,108
TOTAL ASSETS					5,737,572				8,424,917

 

LIABILITIES AND SHAREHOLDERS’ EQUITY (U.S. dollars in thousands, except share data and per share data)

		Note		December 31, 2024				December 31, 2023
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Trade payables					184,247				56,682
Operating lease liabilities		6			202,563				7,543
Other current liabilities		9			933,995				690,861
TOTAL CURRENT LIABILITIES					1,320,805				755,086
NON-CURRENT LIABILITIES:
Derivative warrant liabilities		13A			4,511,491				1,564,773
Operating lease liabilities, net of current portion					216,917				0
TOTAL NON-CURRENT LIABILITIES					4,728,408				1,564,773
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY (DEFICIT):
Ordinary shares, NIS 0.02 par value: Authorized 200,000,000 and 25,000,000 as of December 31, 2024 and December 31, 2023; Issued and outstanding 12,817,092 and 10,073,956 shares as of December 31, 2024 and as of December 31, 2023, respectively		10A			72,061				56,227
Additional paid-in capital					29,093,585				24,471,888
Accumulated losses					(29,477,287	)			(18,423,057	)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)					(311,641	)			6,105,058
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)					5,737,572				8,424,917

STATEMENTS OF COMPREHENSIVE LOSS (U.S. dollars in thousands, except share data and per share data)

				Year ended December 31,
		Note		2024				2023				2022
Sales		11			932,154				620,508				560,118
Cost of Sales					873,861				476,610				337,565
Gross profit					58,293				143,898				222,553
Research and development expenses					2,143,353				636,801				640,328
Selling and marketing expenses					1,081,003				487,904				264,728
General and administrative expenses					2,400,000				1,472,872				766,711
Initial public offering expenses					—				345,925				389,396
Operating loss					5,566,063				2,799,604				1,838,610
Change in fair value of convertible notes		8C1			—				504,976				—
Change in fair value of derivative warrant liabilities		13A			5,688,891				277,600				—
Issuance expenses attributable to derivate warrant liability		10B			—				247,129				—
Interest expenses on related party loan		15			—				152,745				17,386
Other finance income, net					(200,724	)			(210,675	)			(202,958	)
Net loss and comprehensive loss					11,054,230				3,771,379				1,653,038
Net loss per ordinary share, basic and diluted					0.99				0.77				0.49
Weighted-average number of ordinary shares outstanding, basic and diluted (*)					11,129,978				4,891,071				3,349,071

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (U.S. dollars in thousands, except share data and per share data)

		Ordinary shares								Additional
		Number of shares				Amount				paid-in Capital				Accumulated Losses				Total
		U.S. dollars
BALANCE AS OF DECEMBER 31, 2021			359,743				1,945				6,380,403				(12,998,640	)			(6,616,292	)
Conversion of Former Parent Company’s debt into ordinary shares and warrants			3,237,699				19,511				6,403,797				—				6,423,308
Stock based compensation			—				—				91,377				—				91,377
Benefit to the Company by an equity holder with respect to funding transactions			—				—				112,715				—				112,715
Comprehensive			—				—				—				(1,653,038	)			(1,653,038	)
BALANCE AS OF DECEMBER 31, 2022			3,597,442				21,456				12,988,292				(14,651,678	)			(1,641,930	)
Stock based compensation			—				—				490,015				—				490,015
Conversion of convertible note into ordinary shares			504,976				2,734				2,017,170				—				2,019,904
Issuance of ordinary shares and warrants upon initial public offering, net of issuance costs			1,950,000				10,561				5,919,064				—				5,929,625
Issuance of ordinary shares, pre-funded warrants, and warrants upon private placement, net of issuance costs (*)			4,021,538				21,476				3,045,180				—				3,066,656
Benefit to the Company by an equity holder with respect to funding transactions			—				—				12,167				—				12,167
Comprehensive loss			—				—				—				(3,771,379	)			(3,771,379	)
BALANCE AS OF DECEMBER 31, 2023			10,073,956				56,227				24,471,888				(18,423,057	)			6,105,058
Stock based compensation			—				—				75,357				—				75,357
Exercise of pre-funded warrants and consultants warrants (*)			1,088,590				5,792				(5,792	)			—				—
Exercise of warrants A			1,654,546				10,042				4,552,132				—				4,562,174
Comprehensive loss															(11,054,230	)			(11,054,230	)
BALANCE AS OF DECEMBER 31, 2024			12,817,092				72,061				29,093,585				(29,477,287	)			(311,641	)

STATEMENTS OF CASH FLOWS (U.S. dollars in thousands, except share data and per share data)

		Year ended December 31,
		2024				2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			(11,054,230	)			(3,771,379	)			(1,653,038	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation			22,814				17,087				18,495
Stock based compensation			75,357				14,815				52,286
Interest expenses with respect to funding from related party			—				112,373				12,509
Change in fair value of convertible loan			—				504,976				—
Changes in fair value of derivative liabilities			5,688,891				277,600				—
Issuance expenses attributable to derivative warrant liabilities			—				247,129				—
Inventory write-down			114,617				33,360				12,387
Foreign currency exchange differences with respect to amount due to a Former Parent Company			—				—				(243,948	)
Finance expenses			689				583				4,021
Loss from exchange differences on cash and equivalents			31,579				—				—
Changes in operating assets and liabilities:
Trade receivables, net			(92,188	)			161,689				(176,863	)
Other current assets			229,641				(472,020	)			(96,782	)
Prepaid expenses, net of current portion			(33,333	)
Deferred initial public offering cost			—				—				(252,041	)
Inventories			(244,343	)			6,995				34,205
Operating lease right-of-use asset			135,266				48,766				(48,633	)
Trade payables			127,565				9,422				10,145
Operating lease liabilities			(134,681	)			(45,911	)			(48,975	)
Other current liabilities			243,134				(83,785	)			404,597
Net cash used in operating activities			(4,889,222	)			(2,938,300	)			(1,971,635	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted deposit			(68,001	)
Purchase of property and equipment			(80,738	)			(25,757	)			(9,725	)
Net cash used in investing activities			(148,739	)			(25,757	)			(9,725	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cost associated with the conversion of the Former Parent Company’s debt			—				—				(84,780	)
Proceeds from issuance of convertible notes			—				—				1,514,928
Proceeds from exercise of warrants			1,820,001
Issuance of ordinary shares in initial public offering, net of issuance costs (Note 10c)			—				6,695,957				—
Issuance of ordinary shares, pre-funded warrants and warrants in private placement, net of issuance costs (Note 10b)			—				4,106,699				—
Receipt of loan from related party			—				245,000				500,000
Repayment of loan from related party			—				(745,000	)			—
Receipt of loans from the Former Parent Company			—				—				107,994
Net cash provided by financing activities			1,820,001				10,302,656				2,038,142

FAQ

What caused ParaZero (PRZO) sales to increase by 50.2% in 2024?

Sales increased due to a strategic shift towards OEM integrations, which provided recurring revenues alongside traditional aftermarket segment sales.

How much did ParaZero's (PRZO) R&D expenses increase in 2024?

R&D expenses increased by $1.5 million (237%) to $2.1 million, mainly due to increased labor costs and materials expenses.

What major defense developments did ParaZero (PRZO) achieve in 2024?

ParaZero launched DropAir for blood transfusions in high-risk zones, advanced C-UAS solutions, and secured orders from Tier-1 defense customers.

What regulatory approvals did ParaZero (PRZO) secure in 2024?

ParaZero received EASA Design Verification Report approval for SafeAir M-300 Pro and M-350 Pro kits, and achieved CE Class C5 compliance for multiple DJI drone integrations.