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Ondas Holdings Inc. (ONDS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $6.27M, up 48% sequentially from Q1 ($4.25M) and up 555% YoY from Q2 2024 ($0.96M); gross margin expanded to 53% from 35% in Q1 and -20% in Q2 2024, driven by higher-margin OAS product mix .
  • Results beat Wall Street consensus: revenue $6.27M vs $5.76M estimate* and EPS -$0.065 vs -$0.098 estimate*; 5 EPS and 4 revenue estimates contributed; management reaffirmed 2025 revenue target of at least $25M, with OAS over $20M .
  • Backlog rose to $22.0M (OAS backlog $20.7M), cash increased to $68.6M, and remaining holding-company convertible notes were retired in July, materially improving balance sheet flexibility .
  • Strategic momentum: OAS secured large orders (e.g., Optimus $14.3M; Iron Drone deployments in Europe/Asia), and U.S. BVLOS rulemaking plus Blue UAS alignment are cited as catalysts for adoption and potential DoD wins in 2H 2025 .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • OAS execution: “record quarter with $6.3 million in revenue” on accelerating deliveries and global demand; pipeline maturing across defense and homeland security with new customers and largest Optimus order to date ($14.3M) .
  • Policy tailwinds: FAA BVLOS rulemaking and executive actions signal support for domestic drone dominance; Ondas positioned to benefit via Optimus and Iron Drone exposure to defense/public safety demand .
  • Balance sheet: cash $68.6M and full retirement of holding-company convertible debt in July, enabling growth investments and M&A while reducing interest burden .

What Went Wrong

  • Profitability still sub-scale: operating loss widened to -$9.25M (from -$8.30M YoY), net loss -$10.75M; cash operating expenses increased to $9.35M to support scaling and strategic initiatives .
  • Interest expense elevated: +$0.86M YoY in Q2, including faster amortization of debt issuance costs tied to accelerated conversion of debt; other expense increased .
  • Ondas Networks commercialization timing: rail network buildouts remain uncertain; near-term Networks revenue expectations “modest” despite AAR selection of dot16 and multiple field trials .

Financial Results

Consolidated P&L vs prior periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$4.13M $4.25M $6.27M
Gross Margin %22% 35% 53%
Operating Loss ($USD)-$8.52M -$10.31M -$9.25M
Net Loss ($USD)-$10.34M -$14.14M -$10.75M
EPS (basic & diluted) ($)—-$0.15 -$0.08

Year-over-Year (YoY) vs Q2 2024

MetricQ2 2024Q2 2025
Revenue ($USD)$0.96M $6.27M
Gross Margin %-20% 53%
EPS (basic & diluted) ($)-$0.14 -$0.08

Segment Breakdown (revenue)

SegmentQ4 2024Q1 2025Q2 2025
Ondas Autonomous Systems (OAS)$3.6M $4.0M ~$6.1M
Ondas Networks$0.5M ~$0.2M —

Note: Q2 2025 total revenue was $6.27M; management disclosed OAS ~$6.1M; Networks contribution was not separately disclosed in Q2 .

KPIs and Cash/Leverage

KPIQ4 2024Q1 2025Q2 2025
Backlog (consolidated) ($)$10.0M (exit 2024 OAS backlog) $16.8M $22.0M
OAS Backlog ($)——$20.7M
Cash & Restricted Cash ($)$30.0M $25.4M $68.6M
Adjusted EBITDA ($)-$7.00M -$7.50M -$5.83M
Cash Operating Expenses ($)$7.89M $8.98M $9.35M
Holdings Convertible Debt (EOQ) ($)$44.6M (Holdings) $25.4M $5.24M; fully retired in July

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($)FY 2025≥$25M (Q1) ≥$25M (Q2) Maintained
OAS Revenue ($)FY 2025≥$20M (Q1) >$20M (Q2) Maintained/affirmed
Bookings Target ($)2H 2025—$23M+ (slide) New/Explicit
Backlog Exit ($)FY 2025—Expect “record backlog” New qualitative
Networks RevenueFY 2025Modest (timing uncertain) Primarily dev programs/modest sales Maintained conservative posture

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesPalantir Foundry to scale OAS ops ; Foundry integration, AI roadmap AI-enabled mission planning, real-time engagement integrations across Optimus/Iron Drone Expanding integration and feature set
Regulatory tailwindsFAA waivers and Blue UAS path discussed FAA BVLOS rulemaking launch; Blue UAS additions via Green UAS in July Strengthening catalysts
Product performanceIron Drone/Optimus orders (H2’24), combat-readiness Optimus $14.3M order; Iron Drone deployments in Europe/Asia; UAE fleet expansion Scaling deployments
Regional trendsUAE expansion; Europe reseller partnerships New defense/HLS customers in Europe/Asia; U.S. public safety PO for Kestrel Broader geographic adoption
Supply chain/manufacturingNetworks pilots and A-block migration DMS partnership for U.S. manufacturing; Kinetyc facility; design-for-manufacture at scale Building capacity
Rail/dot16 commercializationAAR NGHE selection; Amtrak 220 MHz radios timeline Ratified 802.16t; expanding pilots across 900/220/160 MHz; NGHE 4.0 spec finalization Momentum but timing uncertain
R&D executionEnhanced Iron Drone GNSS navigation; platform improvements Continued AI-enabled planning/engagement; integrations into detection/C2 systems Ongoing development

Management Commentary

  • “Ondas delivered a record quarter with $6.3 million in revenue, reflecting accelerating execution and global market adoption at Ondas Autonomous Systems (OAS)” — Eric Brock, CEO .
  • “BVLOS rulemaking supports nationwide deployment of autonomous drones like Optimus and Iron Drone Raider” — Q2 presentation and call remarks .
  • “Dot16 is increasingly seen as presenting opportunities to upgrade all existing railroad-specific networks… and improve the overall security of the networks” — Markus Nottelmann, CEO Ondas Networks .
  • “We continue to build strong momentum across our OAS platforms, securing major multi-million-dollar contracts… and we are on track for a record year” — Oshri Lugassy, Co-CEO OAS .

Q&A Highlights

  • Bookings outlook and deal size: pipeline includes pilots converting to infrastructure build-outs; potential “tens of millions” orders over 6–18 months; guidance positioned conservatively .
  • Margin trajectory: ~50% GM a reasonable current target with potential to improve via volume and design-for-manufacture; expect quarter-to-quarter volatility near-term .
  • Acquisitions: at least two control acquisitions targeted in 2025, accretive to 2025/2026; 2026 OAS $40M outlook was organic; M&A adds upside .
  • Networks momentum: deeper rail engagement; expectation for revenue generation in 2026 across 900 MHz and 450 MHz NGHE applications as pilots scale .
  • DoD pipeline: goal to secure at least one DoD order by year-end; multiple potential contracts in play with timing variability .

Estimates Context

MetricQ2 2025 Consensus*Q2 2025 Actual
Revenue ($USD)$5,755,960*$6,273,388
EPS (Primary) ($)-0.098*-0.0653
# of Estimates (Revenue/EPS)4 / 5*—
  • Results were above consensus on both revenue and EPS; beats driven by higher-margin OAS product deliveries and backlog conversion .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • OAS-led growth is inflecting: sequential and YoY acceleration with marquee defense/public safety wins; watch for additional orders and pilot-to-program conversions in 2H 2025 .
  • Regulatory backdrop is improving (BVLOS, Blue UAS), likely expanding TAM and lowering deployment friction in U.S. markets; near-term catalysts include potential DoD orders .
  • Profitability path: margins improving with product mix but remain volatile; scaling manufacturing and design-for-manufacture should support margin lift over time; opex investments are building capacity .
  • Balance sheet de-risked: cash $68.6M and holding-company convertibles retired; provides flexibility for M&A and working capital to support growth .
  • Networks opportunity validated by AAR/IEEE; commercialization timing still the key risk; progress across 900/220/160 MHz and NGHE spec finalization bears monitoring .
  • Estimates likely move up on OAS momentum and sustained backlog growth; maintain focus on order timing and execution risk tied to defense/public safety deployments .
  • Trading implications: stock narrative tied to defense wins, BVLOS/Blue UAS milestones, and further large orders; watch for Investor Day follow-ups and additional integration/partnership announcements .