Ondas Holdings Inc. (ONDS) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial metrics, a growing customer pipeline, and strategic acquisitions that bolster Ondas' market position. The Q&A section highlights robust product demand, especially in defense and homeland security, and confidence in future growth, despite some unclear timelines. The positive outlook for 2026 and improving margins further enhance sentiment. While specific guidance details are deferred, the overall sentiment is positive, with an expected stock price increase of 2% to 8%.
Key Financial Performance
Revenue $10.1 million in Q3 2025, a more than sixfold increase year-over-year and up nearly 60% sequentially from Q2. This increase was driven by OAS revenues, which were $10 million compared to $1.0 million a year ago. The growth reflects ongoing deliveries of Iron Drone and Optimus systems and contributions from Apeiro ground robots related services under contracts for military and public safety customers.
Consolidated Backlog $23.3 million in Q3 2025, more than double where it started the year. Including acquisitions closed or pending closure in Q4, the backlog reaches over $40 million. The increase is attributed to strengthened visibility on customer order plans and pipeline maturation.
Gross Profit $2.6 million in Q3 2025, representing a 26% gross margin, compared to $0.05 million in Q3 2024. The increase in gross profit year-over-year results from increased higher-margin product revenue at OAS compared to lower-margin service and subscription revenue in Q3 2024.
Operating Expenses $18.1 million in Q3 2025, compared to $8.7 million in Q3 2024, an increase of $9.4 million. The increase was primarily due to higher personnel costs to support business growth and strategic initiatives, including $5 million of noncash items.
Adjusted EBITDA Loss $8.8 million in Q3 2025, an increase of $1.7 million from the previous year. This reflects higher operating expenses and investments in leadership and infrastructure to support growth.
Cash $433 million as of September 30, 2025, compared to $30 million as of December 31, 2024. The increase was driven by equity offerings and the exercise of warrants and stock options, raising $448.2 million during the first 9 months of 2025.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Optimus and Iron Drone systems: Demonstrating platform adoption and validation, benefiting from strong market demand, and positioned for a major counter UAS boom.
New technology platforms at OAS: Layering in new platforms to create an integrated autonomy ecosystem, enabling faster operational maturity and unlocking revenue and profitability upside.
Counter UAS market: Positioned to lead in the fast-growing counter UAS market, with strong demand in Europe and the U.S.
Ondas Capital: Launched to scale combat-proven unmanned and dual-use technologies from Ukraine and allied nations into U.S. and European production, broadening reach and strengthening industrial base.
Revenue growth: Generated $10.1 million in Q3 2025, a sixfold increase year-over-year, and raised full-year 2025 revenue target to at least $36 million.
Backlog growth: Consolidated backlog grew to $23.3 million, reaching over $40 million with acquisitions.
Operational scaling at OAS: Building infrastructure to support multiyear growth, scaling production, and sustaining capabilities to meet global demand.
Strategic acquisitions: Acquired multiple companies (e.g., Sentrycs, Apeiro Motion, Forum Defense) to expand capabilities in air, ground, and cyber domains, creating a unified system of systems.
Ondas Networks: Driving adoption of dot16 wireless connectivity platform, with formal designation by AAR for all owned frequencies.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Adoption Challenges: The transition from technology development to platform adoption in the autonomous and unmanned systems market may pose challenges. Success depends on scaling operations and achieving platform adoption, which could be hindered by market resistance or slower-than-expected adoption rates.
Regulatory and Compliance Risks: The company operates in highly regulated markets, including defense and security. Compliance with international regulations, particularly in counter-UAS technologies, could delay deployments or limit market access.
Supply Chain and Production Risks: Scaling production to meet global demand for autonomous systems and counter-UAS technologies may face challenges, including supply chain disruptions, delays in U.S. supply chain preparation, and production capacity constraints.
Economic and Financial Risks: Despite raising $855 million in equity, the company faces high operating expenses and cash utilization. Sustained losses and reliance on acquisitions for growth could strain financial resources if revenue targets are not met.
Competitive Pressures: The company operates in a highly competitive market with rapid technological advancements. Competitors may introduce superior technologies or capture market share, impacting Ondas' growth and profitability.
Strategic Execution Risks: The success of the company's strategic growth plan, including acquisitions and integration of new technologies, depends on effective execution. Failure to integrate acquisitions or achieve synergies could impact financial performance.
Customer and Pipeline Risks: The company's growth projections rely heavily on expanding its customer pipeline and securing new contracts, particularly with U.S. DoD or DHS. Delays or failures in securing these contracts could impact revenue targets.
Technological Risks: The development and deployment of advanced technologies, such as counter-UAS systems, require continuous innovation. Failure to keep pace with technological advancements or address evolving threats could impact market position.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Expectations: Ondas has raised its full-year 2025 revenue target to at least $36 million, with expectations to generate more than $15 million in revenue for Q4. For 2026, the company is targeting at least $110 million in revenue.
Backlog Growth: The consolidated backlog grew to $23.3 million as of Q3 2025, and including acquisitions, it exceeds $40 million. The backlog is expected to grow further through the end of 2025.
OAS Business Growth: The OAS business unit is driving growth, with a robust customer pipeline and expectations for significant ongoing growth in 2026. Investments are being made to scale production, fuel services, and sustain capabilities to meet accelerating global demand for autonomous and unmanned systems.
Strategic Growth Program: The company is transitioning from stand-alone technology platforms to a system of systems model, integrating air, ground sensing, and communications into an autonomy ecosystem. This evolution is expected to unlock significant upside to both revenue and profitability.
Ondas Capital Initiative: Ondas Capital has been launched to deploy up to $150 million to scale battle-tested unmanned and dual-use technologies from Ukraine and allied nations into U.S. and European production. This initiative is expected to drive commercialization of critical defense and security technologies.
Counter-UAS Market Opportunity: The counter-UAS market is projected to grow from $2.4 billion in 2024 to over $10.5 billion by 2030. Ondas is well-positioned to capture a significant share of this market with its integrated counter-UAS solutions.
Ondas Networks Adoption: The AAR's Wireless Communications Committee has selected dot16 as the standard for all AAR-owned frequencies, including 900, 450, and 160 megahertz networks. This positions Ondas Networks for meaningful adoption by railroads in 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:If the company closes all 7 M&A deals, will annual revenues exceed $500 million per year?
A:No, the $500 million figure is not specific to the 7 targets but refers to the broader pipeline outlined by the company. This is incremental to the revenue targets for 2026.
Q:How should future OAS revenues be viewed in terms of one-time product/system sales versus recurring revenue?
A:The bulk of revenues in the next 12-18 months will come from platform sales, such as system sales and infrastructure build-outs. These will resemble recurring revenue due to a 10-year cycle. Defense markets currently show significant demand for purchases, while commercial markets will shift towards a drone and Data-as-a-Service model as they grow.
Q:How quickly can overlapping overheads from recent acquisitions be eliminated?
A:The company is focusing on establishing an OAS operating platform layer to accelerate revenue growth and capital efficiency. They do not anticipate reducing costs with acquired companies but aim to grow talent instead.
Q:Does the guidance for 2026 indicate EBITDA positivity?
A:The operating businesses are expected to be EBITDA positive by the second half of next year. A conference call in January will provide more details on covering holding company costs.
Q:Will most prospects in the counter-UAS market buy both Sentrycs and Iron Drone?
A:It depends on deployment locations. Some may require both soft and hard kill technologies, while others may need only one. The company believes it is well-positioned to guide customers on appropriate solutions.
Q:Which product categories and government agencies seem most promising in the U.S. market?
A:All categories show promise, with significant demand from the Department of Defense, DHS, critical infrastructure markets, and public safety. Counter-drone technology is expected to lead growth into 2026.
Q:Does Europe have sufficient near-air defenses, and can the company deploy its platform quickly?
A:Europe and other regions are in the early stages of counter-drone infrastructure build-out. Europe faces unique pressure due to the Ukraine war, creating significant demand for protecting critical infrastructure. The company sees this as a fruitful opportunity.
Q:Is there evidence that Sentrycs technology works to protect locations?
A:Yes, there is substantial evidence, as seen in customer expansion. The technology is robust and proven.
Q:When will the integration of Iron Drone with Sentrycs be accomplished?
A:The timeline will be discussed in the January call. The detection capabilities of Sentrycs are critical for Iron Drone's hard kill functionality, and integration is expected to be straightforward.
Q:How much does it cost to protect an airport or site, and are there recurring fees?
A:Costs depend on the deployment of detection, soft kill, and hard kill technologies, potentially running into millions of dollars per airport. There are recurring fees, but specifics will be outlined in January.
Q:What is driving the $11 million uptick in the 2025 guidance?
A:The increase is due to both organic success and contributions from recent acquisitions, such as Apeiro.
Q:How much additional M&A is included in the 2026 guidance?
A:No additional M&A is included beyond the acquisitions already announced, including the Sentrycs acquisition.
Q:How are gross margins expected to trend in the coming years?
A:Gross margins are expected to improve into 2026, with a target of 50%. More precise details will be provided in January.
Q:How unique is Sentrycs technology compared to other soft kill solutions?
A:Sentrycs uses Cyber-over-RF technology to detect, track, and take control of drones without interference or jamming. While similar technologies exist, Sentrycs is considered the most robust and effective in the market.
Q:What is the confidence level in the 2026 guidance and product mix?
A:The company is confident that margins will improve with scale and a better product mix.
Q:Will there be significant inventory buildup or production bottlenecks as revenue scales?
A:The company expects some inventory buildup but does not foresee production bottlenecks. U.S. production capacity for drone platforms is progressing well.
Q:How is the company incentivizing its teams amid rapid M&A activity?
A:The company uses cash compensation and equity incentives to align team performance with business growth. Management teams are motivated by the opportunity to build substantial equity value.
Q:Review of Unclear Management Responses
A:The company avoided providing specific timelines for the integration of Iron Drone with Sentrycs and detailed cost breakdowns for airport/site protection. Additionally, they deferred providing precise financial models and margin details until the January call.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AAR frequency
Apeiro
Cohen
Cyber RF
Drone Raider
General Manager
Manager Sentrycs
OAS infrastructure
RF technology
Sentrycs OAS
Sentrycs technology
Tier defense
UAS solution
acquisition program
air ground
architecture
company technology
control
corridor
counter UAS
cyber
defense security
delivery
domain
drone threat
foundation
framework
group
interference
megahertz network
portfolio
reach
robotics
scalability
sensor
term value
value creation
ONDS Transcript
Ondas Inc. (ONDS) Q1 2026 Earnings Call Transcript
Unknown5-14
The earnings call showed mixed signals. While there was a 25% revenue increase and improved gross margin, the company still reported a net loss and negative cash flow. The use of non-GAAP measures raises concerns about financial transparency. The raised revenue outlook and strategic partnerships suggest potential future growth, but current financials and lack of detailed strategic discussion temper expectations. Given these factors, a neutral stock price reaction is anticipated over the next two weeks.
Ondas Inc. (ONDS) Q4 2025 Earnings Call Transcript
Positive3-25
The earnings call summary indicates strong financial performance with significant cash flow from financing activities and strategic acquisitions. The Q&A highlights robust demand due to geopolitical factors, successful integration of acquisitions, and positive growth forecasts. The partnership with Palantir and the development of innovative products like ISR systems and stratosphere balloons further enhance the outlook. Despite some uncertainties in management responses, the overall sentiment is positive, with expectations of long-term growth and operational leverage. The stock is likely to react positively, driven by strong demand and strategic initiatives.
Ondas Holdings Inc. (ONDS) Q3 2025 Earnings Call Transcript
Positive11-13
The earnings call reveals strong financial metrics, a growing customer pipeline, and strategic acquisitions that bolster Ondas' market position. The Q&A section highlights robust product demand, especially in defense and homeland security, and confidence in future growth, despite some unclear timelines. The positive outlook for 2026 and improving margins further enhance sentiment. While specific guidance details are deferred, the overall sentiment is positive, with an expected stock price increase of 2% to 8%.
Ondas Holdings Inc. (ONDS) Q2 2025 Earnings Call Transcript
Positive8-12
The earnings call summary and Q&A session indicate a positive outlook. The company is on track for record revenue growth and backlog expansion, with strategic partnerships enhancing market reach. Debt reduction and operational efficiency improvements are positive indicators. While some responses were vague, the overall sentiment from analysts was optimistic, especially regarding potential large contracts and expanding customer base. The reaffirmed revenue guidance and strategic acquisitions further support a positive sentiment, likely resulting in a stock price increase over the next two weeks.
ONDS Slides
ONDS Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
