ZenaTech Expands DaaS into Homebuilding Surveying, Underscoring Growth Amid Deep Financial Strain

What happened

ZenaTech announced the integration of drone-based workflows into land surveying services for national homebuilders, aiming to deliver improved speed and precision for permits. This move leverages the recently acquired Cardinal Civil Resources to expand builder services, aligning with the company's roll-up strategy to reach 25 DaaS locations by mid-2026. However, the DeepValue master report reveals that ZenaTech operates with deeply negative cash flow, operating margins below -100%, and high dependence on external capital, with no proven unit economics. Despite rapid revenue growth—DaaS drove 82% of Q3 2025 revenue—the company's financials show worsening losses and negative free cash flow, indicating scale is not translating into profitability. This expansion, while consistent with management's aggressive acquisition plans, does not address underlying risks of dilution or the need for sustainable operating leverage.

Implication

For investors, the news underscores ZenaTech's continued execution of its acquisition-driven strategy to capture market share in drone services for homebuilders. However, it does not alter the fundamental financial picture of negative cash flow and reliance on external funding, as detailed in the DeepValue report. The expansion could further strain resources, potentially leading to more dilutive capital raises if cash burn persists, given the company's history of deepening losses with scale. Investors should monitor whether such moves lead to improved unit economics or merely extend the period of losses, as the equity remains overvalued relative to operating risks. Given the 'POTENTIAL SELL' rating and high conviction in the report, this development suggests reducing exposure on strength until clearer evidence of operating leverage or a lower entry price emerges.

Thesis delta

The core thesis from the DeepValue report remains unchanged: ZenaTech's equity is overvalued given its negative cash flow, high dilution risk, and lack of proven unit economics. This expansion into homebuilding surveying is a tactical move within the existing aggressive growth strategy but does not shift the assessment of financial sustainability or the need for evidence of profitability before considering investment.