Odysight.ai Inc. (ODYS)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 revenue was $0.15M, down 87% year over year and down sequentially, with gross margin at ~15% and net loss of $4.42M; management attributed softer revenue to the ongoing pivot away from the prior medical customer and toward aerospace/industrial deployments .
• Backlog stood at ~$14.2M and began monetizing in 2025; initiatives include UAV deployments, SH‑60 Seahawk installations, AW139 flight in Europe, and initial industrial orders, supporting revenue visibility into 2026+ .
• Cash balance was ~$29.8M at quarter-end, reflecting ample liquidity to fund R&D, commercialization, and backlog conversion, though operating expenses remained elevated due to growth investments and uplisting costs .
• No formal quantitative guidance was provided; management highlighted ongoing negotiations to expand backlog, which is the key near-term catalyst for order flow and revenue conversion .

What Went Well and What Went Wrong

What Went Well

• Backlog monetization began, with ~$14.2M backlog comprising major defense and industrial opportunities (hundreds of UAV installations, SH‑60 Seahawk, multiple POCs) that started to convert in 2025 and are expected to continue into 2026+ .
• European footprint established via TruVision AW139 flight with the Italian Air Force, marking first operational presence in Europe, plus delivery of a monitoring system for Heron TP UAV for Israel’s MOD .
• Initial commercial traction in industrial PHM: PO for 200 Industrial Predictive Monitoring Systems and rail safety deployment with Israel Railways, with discussions to expand .
• CEO quote: “We have built the foundation for sustained growth… monetization of our backlog has begun… our strategic pivot… is starting to deliver results” .

What Went Wrong

• Q3 revenue fell to $0.15M (vs $1.29M in Q3 2024) as the medical contract tailwind rolled off and the sector pivot temporarily impacted near-term revenue recognition .
• Operating expenses rose (nine months OpEx $14.4M vs $9.4M prior year), driven by product development, go‑to‑market investments, and uplisting one‑time costs, keeping operating losses high .
• Net losses widened year over year (nine months net loss $12.8M vs $8.2M), underscoring the funding of growth ahead of larger-scale deployments .
• CFO acknowledged short-term revenue fluctuations during the transition to aerospace/defense, despite strong technological progress and customer engagements .

Financial Results

Quarterly P&L Summary (USD Millions)

Notes:

• Gross Margin % computed from reported revenue and gross profit (rounded).
• EPS values marked with * retrieved from S&P Global.*

Q3 Year-over-Year Comparison (USD Millions)

KPIs and Balance Sheet Indicators

Results vs. Estimates (S&P Global)

S&P Global notice: Values marked with * retrieved from S&P Global. Consensus fields show N/A where S&P Global coverage was unavailable.

Guidance Changes

Earnings Call Themes & Trends

No company earnings call transcript was available in our source set for Q3 2025; themes reflect quarterly press materials.

Management Commentary

• CEO (Yehu Ofer): “The monetization of our backlog has begun… our strategic pivot… is now clearly starting to deliver results… deployments on UAVs, SH‑60 Seahawk aircraft and heavy industrial platforms… our TruVision® European flight… our first operational footprint in Europe” .
• CFO (Einav Brenner): “With revenues of approximately $2.6M and a strong cash position of approximately $29.8M… we remain well‑capitalized… The transition from the medical sector has temporarily impacted revenues… backlog… provides clearer revenue visibility into 2026 and beyond… we plan to manage our capital prudently while investing in programs that generate sustainable value and position Odysight.ai for profitability” .
• Prior quarter CFO framing: Transition to aerospace/defense may lead to short‑term quarterly revenue fluctuations despite strong tech progress and new collaborations .

Q&A Highlights

No public earnings call transcript was available; no Q&A specifics to report for Q3 2025 (no “earnings-call-transcript” found in our document set).

Estimates Context

• S&P Global consensus was unavailable for Q3 2025 revenue and EPS; coverage appears limited for ODYS. Actual Q3 revenue was $0.15M and EPS was ($0.27)* .
• Given backlog monetization beginnings and transition dynamics, near-term estimate revisions may focus more on 2026 revenue conversion profiles than Q4 run-rate.
  S&P Global notice: Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Near-term revenue is lumpy due to the pivot away from the medical customer; backlog conversion is the primary driver of improving run-rate and should be monitored closely quarter to quarter .
• Backlog quality is improving with defense/aerospace platforms (UAV fleets, SH‑60 Seahawk) and industrial PHM (200-system PO, rail safety), offering multi-year revenue visibility once deployments scale .
• Liquidity is strong ($29.8M cash), supporting R&D and commercialization; however, OpEx remains high, keeping operating losses elevated until revenue ramps .
• Europe expansion via AW139 flight builds credibility and pipeline in a large helicopter market; watch for additional European partner wins and PO conversions .
• With no formal guidance, the near-term stock narrative hinges on incremental backlog announcements, initial deliveries, and recognizable revenue from deployments (key catalysts) .
• Risk factors include customer concentration and execution across multiple jurisdictions; management flagged potential macro/regulatory and geopolitical risks, notably in Israel .
• Action: Track quarterly backlog changes, conversion milestones, and new POs; model improved 2026+ revenue trajectory with gross margin uplift as aerospace/industrial mix scales and medical contract effects fade .