Executive Summary

Q2 2025 revenue was $0.94M, up 31% sequentially vs. Q1 2025, but down sharply year-over-year as large software/services renewals and a large Washington D.C. project from 2024 did not repeat; gross margin compressed to 32% (vs. 35% in Q1 2025 and 57% in Q2 2024) .
Against limited Street coverage, revenue came in below the $1.00M consensus*, while EPS of $(0.21) was above the $(1.60) consensus*, with just one estimate for each metric (low visibility) .
Management announced a restructuring targeting a 15–20% OpEx run‑rate reduction over 6–9 months and highlighted delayed federal/military deals expected to land in Q3, alongside tangible MDU and ITS wins (major US carrier MDU order; Orange County, Eugene, Nordic municipality, Japan) .
Liquidity tightened into quarter‑end (cash and equivalents $0.39M), though the company raised ~$1.35M around Q2 (including $1.0M agreed June 30, closed July 2) and kept debt low; Board approved a crypto treasury strategy in August .

What Went Well and What Went Wrong

What Went Well
- Commercial traction: initial order from a major US carrier for GigaLine MDU; continued ITS wins in Orange County and Eugene; Nordic municipality and Japan infrastructure orders .
- Strategic hires and focus: CRO Americas (Mark DeVol) and Director of Federal Sales (Jason Chasse) to accelerate US Federal/Military and local government opportunities .
- Restructuring aimed at profitable growth: plan to reduce costs by 15–20% over 6–9 months via automation, AI, offshoring/outsourcing, and organizational refocus; management reiterated low debt and improving cost discipline .
What Went Wrong
- YoY decline and margin compression: Q2 revenue fell to $0.94M (from $3.43M in Q2 2024) and gross margin fell to 32% (from 57%) due to non‑recurring 2024 software/services renewals and lower volumes .
- Losses widened vs. prior year: operating loss $(1.77)M (vs. $0.07M operating profit in Q2 2024); adjusted EBITDA $(1.71)M (vs. $0.01M in Q2 2024) .
- Liquidity pressure: cash and equivalents declined to $0.39M at June 30; reliance on equity capital around quarter‑end to bolster working capital .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$3.431	$0.721	$0.941
Gross Margin %	57%	35%	32%
Total Operating Expenses ($M)	$1.877	$2.063	$2.078
Operating Income (Loss) ($M)	$0.066	$(1.812)	$(1.773)
Net Loss ($M)	$(0.078)	$(1.860)	$(1.901)
Diluted EPS ($)	$(0.01)	$(0.22)	$(0.21)
Adjusted EBITDA ($M)	$0.011	$(1.695)	$(1.714)

Actuals vs. S&P Global Consensus

Metric	Q2 2025 Actual	Q2 2025 Consensus*
Revenue ($USD Millions)	$0.941	$1.000*
Primary EPS ($)	$(0.21)	$(1.60)*
# of Estimates (Revenue / EPS)	—	1 / 1*

Values marked with * retrieved from S&P Global.

Balance Sheet / Liquidity KPIs

KPI	Q1 2025 (Mar 31)	Q2 2025 (Jun 30)
Cash & Equivalents ($USD Thousands)	$1,122	$393
Credit Line ($K)	$444	$236
Short‑Term Loan ($K)	$75	$305
Deferred Revenue – Current ($K)	$281	$325
Shares Outstanding (Common)	9,019,758	9,540,221

Context and drivers

Management attributed YoY declines to non-recurring 2024 software/services renewals (biennial; next in 2027) and a large 2024 D.C. deal, with 2025 revenue expected to be back‑end loaded; fixed indirect cost absorption also pressured gross margin .
Federal/Military opportunities were delayed from Q2 to Q3, while MDU and ITS activity continued (major US carrier MDU order; Orange County, Eugene, Nordic city, Japan) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	Not provided	Not provided	Maintained: no formal guidance
Gross Margin	FY 2025	Not provided	Not provided	Maintained: no formal guidance
OpEx run‑rate reduction target	Next 6–9 months	Not provided	15–20% reduction vs. Q2 2025 baseline	New initiative
Federal/Military deal timing	Q3 2025	Not provided	“Awaiting sizeable business that was delayed in Q2 and is expected in Q3”	Qualitative update
Capital allocation	Ongoing	Not provided	Crypto treasury strategy approved (Aug 2025)	New policy

Earnings Call Themes & Trends

Topic	Q4 2024 (Q‑2)	Q1 2025 (Q‑1)	Q2 2025 (Current)	Trend
Federal/Military	150% YoY growth in orders; DoDIN APL/JITC/NIST certifications; large base modernization opportunity	Focus on federal growth; added partners; pipeline building	Delays in Q2 with expectations for Q3; Director of Federal Sales hired	Momentum intact; timing pushed
MDU (GigaLine)	Dozens of trials/initial installs; strong value prop for last 100m	Continuing trials and initial deployments with carriers/ISPs/developers	First US major carrier order for MDU deployment	Converting to initial carrier wins
Smart City/ITS	Wins in D.C., Seattle; UK highways NRTS phases dependent on gov’t timing	Nordic city, EU projects; growing partners	Orange County and Eugene follow‑ons; Nordic municipality; Japan infra	Broadening footprint
AI/Cyber (MetaShield)	SaaS security integrated with network; expect 2025 revenue ramp 2H	Continued progress; partners	Companywide AI adoption for efficiency/growth; MetaShield positioning reiterated	Expanding scope/use
Cost discipline / Debt	OpEx down 13% YoY; nearly debt‑free; pursuing selective debt to reduce dilution	OpEx modestly lower; interest expense reduced; equity bolstered	Restructuring targeting 15–20% OpEx reduction; low debt maintained	Further cost optimization

Note: A Q2 2025 earnings call transcript was not available in our document set; trends above leverage Q4 2024 call plus Q1–Q2 press releases .

Management Commentary

CEO: “We grew 31% in revenues sequentially vs. Q1… awaiting sizeable business that was delayed in Q2 and is expected in Q3… adopting a plan to restructure the company… building a more efficient, AI‑enabled, automated organization” .
CFO: “The associated 15–20% cost reduction will create sustainable operational leverage towards breaking even… significant reduction in interest expenses reflects our improved debt situation” .
Strategy: Focus on Federal/Military, ITS/IoT, and MDU; strengthened US sales leadership (CRO Americas, Director of Federal Sales) to accelerate execution .

Q&A Highlights

No Q2 2025 earnings call transcript was available in our document set. As relevant context from the most recent available call (Q4 2024): management emphasized revenue “lumpiness” due to order timing and encouraged viewing performance on an average basis; they prioritized controlled investment in sales/marketing and prudent OpEx, while not providing profitability timing guidance for 2025 .

Estimates Context

Q2 2025 revenue was $0.941M vs. S&P Global consensus of $1.000M*; Primary EPS was $(0.21) vs. $(1.60) consensus*, with one estimate on each metric (low visibility) .
Given the qualitative shift of delayed federal/military deals into Q3 and ongoing restructuring, estimate dispersion may remain high; Street models may adjust quarterly cadence while awaiting proof‑points on Q3 federal wins and OpEx savings trajectory .
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Sequential improvement but fragile base: Q2 revenue improved 31% q/q, yet remains far below 2024 levels; margin compression and fixed‑cost absorption drove losses .
Near‑term catalyst is execution on federal/military: management flagged Q2 delays expected to convert in Q3; monitor awards and delivery timing .
Early MDU carrier validation: initial US major carrier order is a meaningful signal for the MDU thesis; track follow‑on orders and GL900/GL9000 ramp .
Restructuring should bend the cost curve: 15–20% OpEx run‑rate reduction targeted over 6–9 months; evidence should appear in 2H/early 2026 OpEx trajectory .
Liquidity watch: cash was $0.39M at quarter‑end; the ~$1.0M July placement and warrant overhang provide runway, but cash generation from Q3/Q4 deals is key .
Risk/reward setup: Low estimate depth and lumpy bookings can drive share volatility; upside hinges on federal deal conversion, MDU carrier scale‑up, and cost reduction proof‑points .

Supporting documents: Q2 2025 press release and 8‑K ; Q1 2025 press release and 8‑K ; Q4 2024 call transcript and FY2024 press release ; additional Q2 2025 press releases (federal/military; AI; MDU; ITS; international) .

ACTELIS NETWORKS INC (ASNS)·Q2 2025 Earnings Summary