Ondas Holdings (NASDAQ:ONDS) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Summary
Ondas Inc reported a tenfold increase in revenue for Q1 2026, reaching $50.1 million, significantly surpassing their prior target and achieving product company-level EBITDA profitability ahead of schedule.
The company is expanding its global presence with strategic acquisitions, including Worldview and Mistral, and partnerships, such as with Palantir, to enhance their multi-domain ISR capabilities and autonomous systems platform.
Ondas Inc increased its full-year 2026 revenue target to at least $390 million, supported by a substantial backlog of $457 million and a strong cash position of $1.48 billion, enabling continued investments in strategic growth and operational scale.
Operational highlights include a successful launch of Iron Wave, a multi-layered robotic solution, and strong performance from subsidiaries like Aerobotics and Centrix, with significant growth in order capture and backlog.
Management emphasized their commitment to building a scalable operating platform through disciplined execution and strategic growth, with a long-term focus on capturing market opportunities in the unmanned and autonomous systems sector.
Full Transcript
OPERATOR
Welcome to The Ondus Inc. First Quarter 2026 Earnings and Business Update Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal Conference specialist by pressing the Star key followed by zero. After today’s presentation there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad and to withdraw your question, please press Star then two. Before we begin, the Company would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect on this best current judgment, they are subject to risks and uncertainties that can cause actual results to differ materially from those implied by these forward looking statements. These risks are discussed in Ondas Inc periodic SEC filings and in the earnings press release issued today, which are both available on the Company’s website. Ondas Inc undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances. Except as required by law. During this call, Ondas Inc will refer to certain non GAAP financial measures. These non GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the non GAAP financial measures to the most directly comparable GAAP measures as shown in our press release issued today, which is available at the Investor Relations section of our website, this non GAAP information is provided as a supplement, not as a substitute or as superior to measures of financial performance prepared in accordance with GAAP. However, management believes these non GAAP measures provide investors with valuable information on the underlying trends of our business. Please note this event is being recorded. I would now like to turn the presentation over to Eric Brock, Chairman and CEO. Please go ahead sir.
Eric Brock (Chairman and CEO)
Thank you Operator and good morning everyone. We appreciate you joining us today and your continued interest in Ondas. Before we begin, I want to thank ThinkReal for allowing us to share his Systems of Systems music video ahead of the formal program. He is an Ondas investor and a talented creator active on X. We are grateful for his support, appreciate his creativity and look forward to seeing more of his work. With that, let me set the stage for today’s discussion. Our Plan is working over the past year we laid out a clear core plus strategic growth strategy to build ONDAZ into a scaled global operating platform for unmanned and autonomous systems serving defense, security, industrial and critical infrastructure markets. We believe our results in today’s update increasingly validate that strategy. We are building a world class systems of systems portfolio across air, ground and now the stratosphere through internal innovation, disciplined execution and strategic acquisitions. We continue to add differentiated capabilities across multiple operational layers. At the same time, we are executing against our operating plan and capturing growth synergies across the Ondas Inc platform. We are leveraging shared customer relationships, expanding go to market reach and building a broader global footprint to scale efficiently. We are also expanding our global market opportunity as reflected in growing customer traction, strategic partnerships, major program opportunities and a larger backlog. All of this continues to support what we believe is a powerful financial model driven by strong market tailwinds, operating leverage, scalable infrastructure and attractive long term returns on capital. We believe the strategy is sound, execution is improving quarter by quarter and the market is increasingly recognizing the value of what we are building as shown by growing support from customers, strategic partners and institutional investors. Today we look forward to updating you on our progress and explaining why we remain highly optimistic about andas future. Let’s turn to today’s agenda. This morning we will outline how the business is scaling across our technology portfolio, operating platform, go to market capabilities and financial model. I’ll begin with key first quarter 2026 highlights and our progress against our strategic objectives. Neil will then review our Q1 financial results. Next, we will provide an operational update on customer momentum, global expansion and progress across our product solutions and go to market roadmaps. We will also take a closer look at Worldview, our multi domain ISR roadmap and our work with Palantir to advance mission autonomy and layered ISR capabilities for defense and security customers. We’ll close with an updated 2026 outlook and then open the call for questions. I’m also pleased to be joined this morning by key members of our leadership team. Joining me today are Neil Laird, our Chief Financial Officer, Oshri Lugassi, Co CEO of Ondis Autonomous Systems and Mayor Kleiner, President of oas, all of whom are well known to many of our investors and stakeholders. We are also joined by Ryan Hartman, President and CEO of Worldview, who will provide additional insight into our multi domain ISR capabilities and long term Strategic Roadmap. Neil and I will lead today’s presentation and will aim to be efficient with your time while providing meaningful detail on the progress we are making across the business. OSHRI will provide the operational update for oas. Let’s now turn to some of the key takeaways from the start of 2026. We began the year with tremendous momentum which we have sustained. I’m extremely proud of our performance and want to recognize our employees who partners and customers for their exceptional efforts and support. We believe we have built a highly talented and mission driven organization at ONDAZ and that team is executing at a very high level. In the first quarter we generated more than $50.1 million in revenue representing ten fold growth year over year and over 25% above the high end of our prior target. To put that into perspective, our Q1 revenue alone was approximately equal to all of the revenue Ondaz generated during full year 2025. We believe that clearly demonstrates the pace at which we are scaling the business and expanding our financial model. Revenue growth during the quarter was driven by strong performance across our counter drone and defense related markets with particularly strong contributions from our Sentrix Cyber OVERRF platform and our Iron Drone Interceptor systems. We also saw upside contribution from Bird Aerosystems where demand for airborne missile defense and protection systems continues to strengthen as threats to both military and commercial aircraft increasingly evolve. Importantly, we achieved product company level EBITDA profitability during the first quarter, approximately 2/4 ahead of our internal plan. We believe this is another important validation point for the operating and financial model we have been building. At the same time, it is important to recognize that we continue to make substantial investments across the organization including leadership expansion, operational infrastructure, global go to market capabilities and strategic growth initiatives designed to support the next phase of scale. So while we are pleased to reach this milestone ahead of schedule, we also believe there remains significant operating leverage ahead of us as the platform continues to mature. As Neil will discuss in greater detail, our strengthening financial profile is also reflected in the continued expansion of our backlog and and the strength of our balance sheet. Following the closing of the Worldview and Mistral acquisitions in April, backlog increased to more than $450 million, providing significant visibility into our 2026 outlook and beyond. Our focus now is on efficiently converting that backlog into customer deliveries, revenue growth and cash flow generation. Our balance sheet also remains a major strategic advantage with approximately $1.4 billion in cash and short term investments. We have substantial financial flexibility to continue investing in the business, supporting organic growth initiatives and advancing our strategic growth program. We believe that capital position gives ONDIS a meaningful competitive advantage as we continue to scale the platform and pursue additional accretive opportunities. Finally, based on the strength we are seeing across the business, we we are pleased to raise our full year 2026 revenue outlook to at least $390 million. In summary, 2026 is off to a terrific start and we are demonstrating our ability to execute against our long term objectives and financial model which we believe is allowing us to create substantial shareholder value. Over the past year, Ondas has transformed from a small unmanned systems developer to into a growing global enterprise with increasing operational scale across markets and geographies. As shown on this slide, we now operate across 15 offices in key regions supporting engineering, manufacturing, business development, customer operations and field support worldwide. Our customer footprint is also expanding with active deployments in more than 45 countries across defense, homeland security, critical infrastructure and public safety markets. This expansion is not just geographic, it reflects the build out of a scalable operating platform for large customers, complex deployments and long term strategic programs worldwide. ONDAZ now has more than 1,000 employees globally supporting operations, engineering, manufacturing integration and customer delivery, positioning us to meet growing demand and keep scaling in unmanned and autonomous systems. Leadership requires more than strong technology. It requires an integrated operating platform that can deliver mission critical systems at scale across engineering, manufacturing, deployment, training and global support. That is what we are building at Ondas by expanding not only our technology base but also our operations and go to market capabilities. In recent months, we have significantly expanded our US Market reach, production infrastructure and strategic ecosystem through the April acquisitions of Worldview and Mistral. We believe both businesses fill key strategic gaps and accelerate the scaling of our platform while adding differentiated technology, customer relationships, leadership, engineering talent and operational capabilities to support growth in 2026 and beyond. We also announced a strategic partnership with Palantir, which we see as strong validation of ondaz’s capabilities and growth strategy. The partnership gives us access to Palantir’s AIP stack and operational software, helping us scale internally while advancing mission autonomy and multi domain ISR solutions. It also aligns both companies on customer opportunities, go to market initiatives and and long term roadmap development. During the quarter, we also launched Anberg, our Germany based joint venture with Heidelberg, initially focused on Germany and Ukraine. With broader European expansion over time as defense and security markets increasingly require localized manufacturing, sovereign alignment and regional operating capabilities, we believe Ondas strengthens our position in the European defense modernization cycle and across EU and NATO markets. As our global operating platform grows, so do our customer reach talent base and ability to deliver integrated systems of system solutions at scale. In the last 12 months, Ondis has significantly expanded its opportunity set and addressable and obtainable markets. We are now positioned across four major defense technology verticals including Counter UAS and Aerial Security, ISR and surveillance systems, loitering munitions and and autonomous strike systems and unmanned ground Robotics. Within our Aerial Security and Counter UAS vertical, our portfolio now includes the Sentrix Cyber Over RF platform, the Iron Drone radar interception system, Insightsense EoIR sensing technologies and Burnt Aerosystems Airborne Missile defense and Protection systems. Our ISR portfolio includes worldview Stratilites, the Optimus autonomous drone platform and Rotron UAV systems providing capabilities spanning tactical to high altitude persistent intelligence and surveillance operations. In loitering munitions and autonomous strike systems. We now include the Rotron Skylance and Defender platforms, the Rift Dynamics Wasp system and related border security and autonomous response infrastructure capabilities. Of course, Mistral is additive here with a broad lineup of both ISR and strike capabilities being deployed with US defense customers. In ground robotics, our portfolio includes Roboteam and Apero Motion UGV platforms, Indo Earth’s heavy military engineering and support capabilities and 4M’s demining and land intelligence operations. These markets are huge and global and rapidly growing and Ondas is building a very impressive set of capabilities to deliver effective and mission ready capabilities satisfying our customer roadmaps. What is important here is not simply the expansion of the portfolio itself, but the evolution of ONDAZ into a broader multi domain autonomous systems platform. We will be introducing new systems of systems capabilities over the course of 2026. This includes our newly introduced Iron Wave platform which I will highlight in just a moment. As I mentioned, we are increasingly integrating our technologies into systems of systems deployments and aimed at some of the fastest growing segments of the global defense and security market. This includes a range of new platforms that connect aerial and ground domains with integrated sensors and AI enabled command and control capabilities. We have a number of these platforms underway and we will share updates as development progresses through 2026. One example is Iron Wave, a newly introduced systems of systems platform featured in this video. Ironwave is a combat proven multi layered robotic solution built around a mobile UGV platform that integrates multiple autonomous systems to support maneuvering forces in complex operational environments. It includes a mobile containerized unit for remote operations enabling rapid deployment and sustained frontline support while bringing multiple ONDIS technologies together in a unified operational system. The platform provides both aerial defense and offensive support combining CUAS detection and neutralization against multiple drone threats with both ground and aerial assault effectors. Ironwave is powered by an AI assisted mobile command and control center with secure communications, onboard power and advanced operational management software for coordinated multi domain missions. The UGV can also deploy smaller robotic systems to investigate confined spaces and complex environments more safely for reconnaissance and operational control. Ondas provided the initial Iron Wave systems to combat units during the first quarter and they are now operational with multiple military units in active combat environments. The system has received strong feedback for improving mission effectiveness, enhancing force protection and helping protect troops during combat operations. We are very happy with this introduction and think Iron Wave and our Systems of systems pipeline is both differentiating ONDAZ and expanding our addressable markets. That concludes our introductory comments. I will now hand the call to Neil to provide a detailed financial update.
Neil Laird (Chief Financial Officer)
Thank you Eric we are pleased to report strong first quarter 2026 results that mark an inflection point in the growth of the business both organically and through our strategic growth program. These results validate our strategy, demonstrate the strength of our core business, and highlight the scalability of our operating model as we prepare for a significantly larger phase of growth. Revenue in the first quarter was $50.1 million, a tenfold increase year over year and up 66% sequentially from the fourth quarter 2025. This performance was 25% above the high end of our prior year Q1 targets and reflects strong demand across our ONDAZ Autonomous Systems segment. Gross profit was $24.7 million, representing a 49% gross margin, a significant improvement from 35% in the prior year and 42% in the fourth quarter 2025. This reflects both favorable product mix and the benefits of scaling revenue across our cost base. Operating expenses increased to $67.3 million, driven primarily by investments in personnel and infrastructure to support the scaling of our operating platform as well as increased activity related to our acquisition program. We view these investments as both intentional and necessary to support the significant revenue growth we expect in 2026 and beyond. Let me briefly address the movement in other expenses during the quarter, which was primarily driven by non cash accounting items. As a result of the structure of the October 2025 and January 2026 financings, certain warrants are required to be classified as a liability and are marked to market each reporting period using a Black Scholes valuation methodology. In the first quarter, this resulted in a non cash gain of approximately $389.5 million, which is reflected in other income. As a reminder, this charge is purely accounting driven and and does not impact our cash position operations or the underlying economics of the business. We expect this line item will continue to result in variability in our reported earnings going forward. We also had several other non cash Items, including a $51.5 million accounting gain on the deconsolidation of Ondas Networks due the capital restructuring of that company in January of 2026. Other key items to note in other income include $12 million in interest generated primarily by interest ear cash balances following our recent capital raises and a $46.2 million non cash charge to adjust the value of an acquired variable interest entity. We believe it is important for investors to focus on the underlying operating performance of the business where we are seeing strong revenue growth, significant backlog expansion and continued execution of our strategic plan. Cash operating expenses were $36.9 million. A summary of cash operating expenses was included as a table in our earnings release and as an appendix to this presentation. Net income for the quarter was $362.9 million, driven by the $389.5 million non cash gain related to warrants discussed above. Adjusted EBITDA was a loss of $10.9 million compared to a loss of 7.5 million in the prior year. Overall, the financial results reflect a business that is scaling rapidly, investing ahead of growth and beginning to demonstrate the operating leverage embedded in our model. This level of growth reflects the high demand signal from customers, strong execution in our core business and the early impact of our strategic growth program. Now turning to our cash flow and capital position, we ended the first quarter with $1.48 billion in cash, cash equivalent, restricted cash and short term investments compared to $616.1 million at the end of 2025. In addition, the company holds long term investments of $42.3 million, up from $35.6 million at the end of 2025. We believe this large cash balance provides us with significant financial flexibility to execute our growth strategy. Cash used in operating activities for the first quarter was $51.3 million compared to $6.7 million in in the first quarter 2025. This includes approximately a $47 million increase in working capital to support expected revenue growth. Cash used in investing activities was $474.2 million, the majority of which approximately $429.1 million was for the purchase of short term investments net of maturities and another $31.8 million for deployed into acquisitions as part of our strategic growth program. In addition, we invested $5 million in the quarter in long term equity investments. Our short and Long term investments are aligned with our broader platform strategy. They support key partners, enhance access to critical technologies, improve supply chain efficiency, and we believe will generate attractive returns over time. Cash provided by financing activities was $968.5 million primarily from our January equity offering throughout the year, along with proceeds from warrant and option exercises. Looking ahead, we expect cash efficiency to improve over the course of 2026 as revenue and gross profit scale. We continue to expect higher cash usage in the upcoming quarter reflecting continued investment ahead of growth. In particular, the second quarter will have a step up in spending related to the acquisitions that occurred year …
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