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Ondas Holdings Inc. (ONDS)·Q3 2025 Earnings Summary

Executive Summary

  • Record Q3 revenue of $10.10M, up 582% YoY and ~60% QoQ; gross margin 26% with operating loss of $15.5M as OpEx scaled for growth .
  • Raised FY2025 revenue target from at least $25M to at least $36M; introduced preliminary FY2026 target of at least $110M, driven by OAS demand and acquisitions pipeline .
  • OAS delivered ~$10.0M revenue in Q3; backlog ended at $22.2M (OAS) and $23.3M consolidated, supporting visibility into Q4 and 2026 .
  • Consensus beat: Q3 revenue $10.10M vs $7.04M estimate; EPS (-$0.03) vs estimated (-$0.047), reflecting stronger OAS product shipments; Q1 missed, Q2 beat (see Estimates Context) *.
  • Strategic catalysts: dot16 adoption across all AAR-owned rail bands, layered counter‑UAS expansion via Sentrycs, and a strengthened balance sheet (cash $433.4M; pro-forma ~$840.4M) to accelerate M&A and scale; management targets EBITDA-positive operating businesses in 2H 2026 .

What Went Well and What Went Wrong

What Went Well

  • “Record quarter with $10.1 million in revenue… sustained growth momentum at OAS amid a powerful demand cycle” – CEO Eric Brock; OAS platforms Optimus and Iron Drone highlighted .
  • OAS booked orders and pilots across Europe/Asia (e.g., $2.7M Iron Drone Raider, $3.5M Apeiro UGVs), expanded advisory board, and secured GreenUAS certification for Optimus, improving U.S. DoD positioning .
  • AAR Wireless Communications Committee designated dot16 as upgrade path across 160/900/450 MHz; multiple Class 1 POCs planned, broadening rail adoption prospects per Ondas Networks CEO .

What Went Wrong

  • Gross margin compressed to 26% in Q3 from 53% in Q2 given product/revenue mix and early-stage scale; management expects quarter-to-quarter variability .
  • Operating expenses rose $9.4M YoY to $18.1M (including ~$5.0M stock-based comp) to build OAS/corporate leadership and support acquisitions; operating loss widened to $15.5M .
  • Networks revenue expectations remain modest due to delayed Class I rail network buildouts; management guides for 2026 adoption rather than near-term contributions .

Financial Results

MetricQ1 2025Q2 2025Q3 2025Q3 2024
Revenue ($USD)$4,248,182 $6,273,388 $10,098,310 $1,480,792
Gross Profit Margin %35% 53% 26% 3%
Operating Loss ($USD)$(10,310,438) $(9,249,104) $(15,503,550) $(8,660,715)
Net Loss ($USD)$(14,136,350) $(10,750,150) $(7,480,856) $(9,526,268)
Net Loss attrib. to common ($USD)$(15,343,477) $(12,018,630) $(8,782,419) $(10,671,912)
EPS (Basic/Diluted, $)$(0.15) $(0.08) $(0.03) $(0.15)
Adjusted EBITDA ($USD)$(7,495,215) $(5,826,125) $(8,761,329) $(7,103,109)

Segment revenue breakdown (where disclosed):

SegmentQ1 2025Q2 2025Q3 2025
Ondas Autonomous Systems (OAS) Revenue ($USD)~$4.0M ~$6.1M ~$10.0M
Ondas Networks Revenue ($USD)~$0.2M n/an/a

Key KPIs and Balance Sheet:

KPIQ1 2025Q2 2025Q3 2025
OAS Backlog ($USD)$16.8M (pipeline/backlog context) $20.7M $22.2M
Consolidated Backlog ($USD)n/an/a$23.3M
Cash & Restricted Cash ($USD)$25.4M $68.6M $433.4M
Pro-forma Cash ($USD)n/an/a~$840.4M (incl. Oct. 7 equity)
Convertible Debt Outstanding ($USD)Holdings $25.4M Holdings $5.2M; Total $14.6M Total $9.5M (subsidiaries)
Stockholders’ Equity ($USD)$26.1M $90.8M $487.2M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY 2025≥ $25M ≥ $36M Raised
Revenue ($USD)FY 2026n/a≥ $110M (prelim.) Established
Networks Adoption2026n/aExpect meaningful adoption in 2026; modest 2025 revenue Qualitative
EBITDA (Operating businesses)2H 2026n/aTarget EBITDA-positive for operating businesses New target
Gross Margin TargetFY 2026n/aManagement reiterates ~50% target; more precision in January Indicative

Earnings Call Themes & Trends

TopicQ1 2025Q2 2025Q3 2025Trend
OAS growth and backlogOAS revenue ~$4.0M; backlog/pipeline building, new defense/HLS customers OAS revenue ~$6.1M; backlog $20.7M; multi‑geography orders (UAE, Europe, Asia) OAS revenue ~$10.0M; backlog $22.2M; layered CUAS positioning Accelerating
Counter‑UAS demandIron Drone validation; new orders and demos Airport + border security deployments; demos and NATO-aligned demand Layered soft+hard kill (Sentrycs + Iron Drone); global deployments >25 countries Strengthening
Rail/dot16 adoptionAAR selects dot16 NGHE; 220 MHz ACSES ramp IEEE ratification; Class 1 trials; ACSES deliveries AAR expands dot16 to 160/900/450 MHz; multiple Class 1 POCs Positive
Regulatory/policyFAA BVLOS NPRM; Buy American; OBBA Continued BVLOS and NGHE timelines CISA advisories accelerate NGHE Gen4, timeline 2026 Supportive
M&A strategyPartnerships (Palantir, Volatus); strategic plan outlined Rift Dynamics investment; Zickel acquisition Definitive agreement with Sentrycs; Apeiro, 4M Defense, SPO, Insight added Expanding
Tariffs/macron/an/aTariff adjustments for India manufacturing; early 2026 deliveries Watch

Management Commentary

  • “Ondas delivered a record quarter with $10.1 million in revenue… sustained growth momentum at OAS amid a powerful demand cycle” – Eric Brock, CEO .
  • “We believe… one of the strongest balance sheets in the industry… demonstrated its ability to deploy capital effectively to drive growth, scale operations, and build a robust financial model characterized by increasing operating leverage and a clear path toward profitability.” – Eric Brock, CEO .
  • “Business continues to strengthen at OAS… integrating Apeiro, SPO, Insight, Sentrycs, and 4M Defense… unlocking meaningful cross‑domain opportunities—linking air, ground, and sensing systems under one unified vision.” – Oshri Lugassy, OAS Co‑CEO .
  • “AAR’s WCC announced in September that IEEE 802.16t (‘dot16’) will serve as the upgrade path for the legacy 160 MHz LMR voice network… broadening industry acceptance.” – Markus Nottelmann, Ondas Networks CEO .
  • “We are raising our full year 2025 revenue target to at least $36 million… and targeting at least $110 million in revenue for 2026.” – Eric Brock, CEO .

Q&A Highlights

  • M&A pipeline: Advanced activity with seven targets within a >20-company pipeline; potential incremental revenue >$500M from pipeline, above the ≥$110M 2026 target; integration focus on operating leverage rather than cost cuts .
  • Profitability path: Management expects operating businesses to be EBITDA positive by 2H 2026; January events to detail the full 2026 model including holding company costs .
  • Product mix and margins: Gross margins expected to trend higher with scale; management reiterated ~50% target into 2026 pending precision update in January .
  • Layered counter‑UAS: Sentrycs “Cyber‑over‑RF” soft kill complements Iron Drone hard kill; integration timelines to be detailed in January; deployments can cost “millions per airport” with recurring components depending on layers .
  • U.S. demand: Strong signals from DoD, DHS, critical infrastructure, and public safety with counter‑drone likely “leading the charge” in 2026 .

Estimates Context

MetricQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 ActualQ3 2025 Estimate*Q3 2025 Actual
Revenue ($USD)$4,937,320*$4,248,182 $5,755,960*$6,273,388 $7,038,720*$10,098,310
EPS (Primary, $)$(0.0980)*$(0.15) $(0.0980)*$(0.08) $(0.0471)*$(0.03)
# of Estimates (EPS)5*—5*—7*—
# of Estimates (Revenue)5*—4*—7*—
  • Q1: Miss on revenue and EPS vs consensus; Q2: Beat on both; Q3: Strong beat on revenue and beat on EPS (primary) *.
  • Values marked with an asterisk are retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution at OAS and layered counter‑UAS strategy drove a decisive Q3 beat and a guidance raise; visibility supported by $23.3M consolidated backlog and broadening pipeline .
  • Gross margin variability reflects product mix and early scale; management targets higher margins into 2026 with operating leverage and manufacturing localization (Apeiro fiber spools, U.S. builds) .
  • Balance sheet has become a competitive weapon (cash $433.4M; pro‑forma ~$840.4M), enabling accretive M&A and faster scale in defense/security markets .
  • Rail tailwind: dot16 selection across AAR bands and multiple Class 1 POCs set the stage for 2026 adoption; near‑term Networks revenue remains modest .
  • Near-term trading catalysts: additional Q4 acquisitions, potential initial U.S. DoD/DHS customer capture in 2025, and January investor events detailing 2026 financials .
  • Medium-term thesis: Build a scaled “systems of systems” provider across air/ground/sensing/C‑UAS with improving margins and EBITDA-positive operating units by 2H 2026 .

Appendix: Additional Operational Details

  • OAS highlights: European/Asian government pilots validate Iron Drone Raider in GPS‑denied environments; U.S. pipeline maturing alongside Optimus GreenUAS certification .
  • Networks: CISA bulletins accelerating NGHE Gen4 specs (security vulnerabilities), with Ondas’ 802.16t protocol integrated; ACSES radio deliveries for NEC starting Q4 .
  • Financing and equity: YTD financing of ~$448.2M through 9M25; holdings convertible eliminated in July; stockholders’ equity rose to $487.2M .

*Values marked with an asterisk are retrieved from S&P Global.