PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 revenue increased to **$4.25 million** with positive gross profit, but net loss widened to **$14.1 million** as total assets decreased to **$104.6 million** and liabilities to **$58.0 million**, indicating going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$104.6 million** by March 31, 2025, primarily due to reduced cash, while total liabilities significantly decreased to **$58.0 million**, boosting stockholders' equity Condensed Consolidated Balance Sheet Summary (Unaudited) | Balance Sheet Items | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $25,363,853 | $29,958,106 | | Total current assets | $43,396,551 | $47,520,551 | | Goodwill, net | $27,751,921 | $27,751,921 | | Total assets | **$104,600,639** | **$109,622,288** | | **Liabilities & Equity** | | | | Total current liabilities | $50,417,322 | $50,576,622 | | Total long-term liabilities | $7,533,698 | $23,101,154 | | Total liabilities | **$57,951,020** | **$73,677,776** | | Redeemable noncontrolling interest | $20,568,332 | $19,361,205 | | Total stockholders' equity | $26,081,287 | $16,583,307 | | Total liabilities and stockholders' equity | **$104,600,639** | **$109,622,288** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenues surged to **$4.25 million** with a **$1.49 million** gross profit, but increased operating expenses led to a wider net loss of **$14.1 million** compared to the prior year Consolidated Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Revenues, net | $4,248,182 | $625,009 | | Gross profit (loss) | $1,488,550 | $(394,982) | | Operating loss | $(10,310,438) | $(9,127,195) | | Net loss | $(14,136,350) | $(9,876,084) | | Net loss per share - basic and diluted | $(0.15) | $(0.17) | | Weighted average shares outstanding | 105,004,818 | 63,035,122 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to **$6.7 million** in Q1 2025, but a sharp decline in financing activities led to a **$4.6 million** decrease in total cash, ending at **$25.4 million** Consolidated Statement of Cash Flows Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash flows used in operating activities | $(6,659,264) | $(7,455,524) | | Net cash flows used in investing activities | $(195,019) | $(1,212,413) | | Net cash flows provided by financing activities | $2,264,936 | $8,236,646 | | **Decrease in cash, cash equivalents, and restricted cash** | **$(4,589,347)** | **$(431,291)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's segment structure, significant customer concentration, complex debt instruments, and critically, management's conclusion of substantial doubt about its ability to continue as a going concern - The company operates through two business segments: Ondas Networks (private wireless solutions) and Ondas Autonomous Systems (OAS) (drone and automated data solutions)[23](index=23&type=chunk) - Due to a history of losses, a working capital deficit of approximately **$7.0 million**, and reliance on external financing, there is substantial doubt about the Company's ability to continue as a going concern for one year from May 15, 2025[31](index=31&type=chunk)[34](index=34&type=chunk) - Revenue is highly concentrated. For Q1 2025, three customers accounted for **43%**, **36%**, and **14%** of total revenue[109](index=109&type=chunk) - The company has multiple complex debt instruments, including convertible notes with related parties, which are detailed in Note 7 and Note 13[125](index=125&type=chunk)[139](index=139&type=chunk)[216](index=216&type=chunk) - Subsequent to the quarter end, the company increased its authorized common stock from **300 million** to **400 million** shares and increased the shares available under its 2021 Equity Incentive Plan[231](index=231&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=50&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A highlights **579%** revenue growth from OAS multi-drone sales, improving gross margin to **35%**, but operating expenses rose to **$11.8 million**, exacerbating liquidity concerns and substantial doubt about going concern [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased by **$3.6 million** driven by OAS multi-drone sales, improving gross profit, but a **$3.1 million** rise in operating expenses led to a wider net loss of **$14.1 million** Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 ($) | Q1 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Revenue, net | $4,248,182 | $625,009 | $3,623,173 | | Gross Profit (Loss) | $1,488,550 | $(394,982) | $1,883,532 | | Operating Expenses | $11,798,988 | $8,732,213 | $3,066,775 | | Operating Loss | $(10,310,438) | $(9,127,195) | $(1,183,243) | | Net Loss | $(14,136,350) | $(9,876,084) | $(4,260,266) | - The increase in revenue was primarily driven by approximately **$3.2 million** in increased product sales and **$0.5 million** in increased service revenue at the OAS segment, related to multi-drone sales[246](index=246&type=chunk) - Operating expenses increased mainly due to a **$2.9 million** rise in human resource costs, which included a **$1.2 million** increase in stock-based compensation and a **$1.3 million** increase in taxable fringe benefit expense at OAS resulting from an Israeli government audit[251](index=251&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces a **$7.0 million** working capital deficit and **$25.4 million** in cash, with management concluding substantial doubt about its going concern ability, relying on revenue growth and future financing - As of March 31, 2025, the company had cash and restricted cash of approximately **$25.4 million** and a working capital deficit of about **$7.0 million**[261](index=261&type=chunk) - The company has raised significant capital through various financing activities in 2024 and early 2025, including convertible notes, common stock sales, and redeemable preference shares[262](index=262&type=chunk)[263](index=263&type=chunk) - The company explicitly states there is substantial doubt about its ability to continue as a going concern, and future funding depends on revenue growth and the ability to raise additional capital[264](index=264&type=chunk)[265](index=265&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025[272](index=272&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended March 31, 2025[273](index=273&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company won a **$2.14 million** judgment in an Abu Dhabi legal dispute, but collection is not guaranteed and no receivable has been recorded - On October 9, 2024, the Abu Dhabi Civil Court of Appeals ruled in favor of Airobotics for **$2,138,945** plus interest and expenses in a non-payment case against a customer. Collection is being pursued, but success is not guaranteed and no receivable is recorded[212](index=212&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for a new risk concerning U.S. trade policy, which could increase costs and disrupt the supply chain - A new risk factor was added regarding changes in U.S. trade policy, including tariffs, which could increase costs, disrupt the supply chain, and adversely impact business operations and financial condition[280](index=280&type=chunk)[281](index=281&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) Director Joseph Popolo resigned from the board, and the Compensation Committee approved a **$400,000** annual salary and **$50,000** discretionary bonus for CEO Eric Brock - Director Joseph Popolo resigned from the board effective May 14, 2025, in connection with his nomination to be a U.S. Ambassador[286](index=286&type=chunk) - The Compensation Committee approved a **$400,000** annual salary (effective April 1, 2025) and a **$50,000** discretionary bonus for CEO Eric Brock[287](index=287&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=Ondas%20Holdings%20Reports%20First%20Quarter%202025%20Financial%20Results%E2%80%94On%20Track%20for%20Record%20Year) Ondas Holdings reported strong Q1 2025 financial results, including significant revenue growth and a robust backlog, while reaffirming its full-year outlook and highlighting key wireless platform validation Key Financial and Operational Metrics | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $4.2 Million | >500% Increase | | Backlog | $16.8 Million | - | | Cash Position | >$25 Million | - | - The company reaffirms its full-year 2025 revenue outlook of at least **$25 million**, driven by strong order momentum and growth in the Ondas Autonomous Systems (OAS) business[1](index=1&type=chunk) - The dot16 wireless platform gained significant market validation with its selection by the Association of American Railroads (AAR) for the Next Generation Head-of-Train / End-of-Train (NGHE) rail communications upgrade[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management commentary emphasizes strong momentum from the Ondas Autonomous Systems (OAS) business, driven by new orders and backlog fulfillment, alongside a significant market validation for Ondas Networks' dot16 protocol - CEO Eric Brock highlighted that the company's strong momentum is led by the outstanding performance of the Ondas Autonomous Systems (OAS) business unit, which is effectively executing on existing programs and expanding its customer base in Europe and other regions[3](index=3&type=chunk) - OAS is fulfilling a **$10 million backlog** from 2024 and has secured **$9.3 million in new orders**, increasing the total pipeline to **$16.8 million**, which supports the company's 2025 revenue goal of over **$25 million**[3](index=3&type=chunk) - At Ondas Networks, the selection of the dot16 wireless protocol by the Association of American Railroads (AAR) for the NGHE system is a major milestone, validating the technology for next-generation rail communications[3](index=3&type=chunk) - Joe Popolo is stepping down from the Board of Directors following his nomination to be the U.S. Ambassador to the Kingdom of The Netherlands[2](index=2&type=chunk)[4](index=4&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Business segment performance is characterized by substantial revenue growth in Ondas Autonomous Systems (OAS) driven by global demand and new orders, complemented by Ondas Networks' critical dot16 protocol selection by the AAR [Ondas Autonomous Systems (OAS)](index=2&type=section&id=First%20Quarter%202025%20and%20Recent%20Highlights%20%E2%80%93%20Ondas%20Autonomous%20Systems%20(OAS)) OAS revenue surged over 12-fold to $4.0 million, driven by strong global demand for its Iron Drone and Optimus platforms. The segment secured over $9.0 million in new orders year-to-date from defense and public safety customers and formed key strategic partnerships with Palantir and Volatus Aerospace to enhance scalability and market reach OAS Revenue Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $4.0 Million | $0.3 Million | - Captured over **$9.0 million** in new orders year-to-date for Iron Drone and Optimus platforms from customers in the Middle East, Europe, and the United States[7](index=7&type=chunk) - Key new orders include a **$3.2 million** order from the UAE for the Optimus Drone Network, a **$3.4 million** order from a European defense contractor for Iron Drone Raider, and a **$1.7 million** order from a new governmental security organization[7](index=7&type=chunk)[10](index=10&type=chunk) - Formed a strategic partnership with Palantir Technologies to integrate its Foundry platform, enhancing operational efficiency, and with Volatus Aerospace to enhance border surveillance capabilities in North America[10](index=10&type=chunk) [Ondas Networks](index=3&type=section&id=First%20Quarter%202025%20and%20Recent%20Highlights%20%E2%80%93%20Ondas%20Networks) Ondas Networks generated $0.2 million in revenue. The key achievement was the selection of its dot16 wireless protocol by the Association of American Railroads (AAR) as the new standard for Next Generation Head-of-Train / End-of-Train (NGHE) rail communications. This validates its technology and positions it for future commercial adoption in the critical rail sector Ondas Networks Revenue Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $0.2 Million | $0.3 Million | - The Association of American Railroads' (AAR) selected the dot16 protocol as the new standard for NGHE, a key milestone for modernizing safety-critical systems for all freight rail operators[11](index=11&type=chunk) - The IEEE formally adopted the 802.16t standard, enhancing secure, mission-critical industrial networks and supporting the upgrade of legacy systems in sectors like rail and energy[11](index=11&type=chunk) - Progress continues on key rail projects, including a follow-on order from Metra (via Siemens) and an ongoing field trial with a Class I railroad for PTC messaging over the 900 MHz A-block[16](index=16&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) The company's Q1 2025 financial results reflect substantial revenue growth and improved gross margin, primarily driven by the OAS segment, alongside increased operating expenses and a strong cash position [Q1 2025 Financial Summary](index=4&type=section&id=First%20Quarter%202025%20Financial%20Summary) Revenue increased seven-fold to $4.2 million with a gross margin of 35%, a significant improvement from a 63% loss in the prior year, driven by higher-margin product sales from OAS. Operating expenses grew to $11.8 million due to investments in scaling operations. The company ended the quarter with a strong cash position of $25.4 million Key Financial Summary for Q1 2025 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $4.2 M | $0.6 M | | Gross Profit (Loss) | $1.5 M | ($0.4 M) | | Gross Margin | 35% | (63%) | | Operating Expenses | $11.8 M | $8.7 M | | Operating Loss | ($10.3 M) | ($9.1 M) | | Net Loss | ($14.1 M) | ($9.9 M) | - The improvement in gross margin was primarily due to increased product revenue from the OAS segment, which carries higher margins than the service and subscription revenue recognized in Q1 2024[14](index=14&type=chunk) - The company ended the quarter with **$25.4 million** in cash, compared to **$30.0 million** at year-end 2024[18](index=18&type=chunk) - Adjusted EBITDA loss improved slightly to **$7.5 million** from **$7.7 million** in Q1 2024[18](index=18&type=chunk) [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were $104.6 million and total liabilities were $58.0 million. Cash and cash equivalents stood at $25.4 million, a decrease from $30.0 million at the end of 2024, while total liabilities decreased significantly from $73.7 million, primarily due to a reduction in long-term convertible notes Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $25.4 M | $30.0 M | | Total Current Assets | $43.4 M | $47.5 M | | Total Assets | $104.6 M | $109.6 M | | Total Current Liabilities | $50.4 M | $50.6 M | | Total Liabilities | $58.0 M | $73.7 M | | Total Stockholders' Equity | $26.1 M | $16.6 M | [Condensed Consolidated Statements of Operations](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended March 31, 2025, the company reported revenues of $4.2 million and a net loss of $14.1 million, or ($0.15) per share. This compares to revenues of $0.6 million and a net loss of $9.9 million, or ($0.17) per share, in the prior-year period. The wider net loss was primarily driven by a $3.9 million non-cash interest expense Condensed Consolidated Statements of Operations | Income Statement Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues, net | $4,248,182 | $625,009 | | Gross profit (loss) | $1,488,550 | ($394,982) | | Operating loss | ($10,310,438) | ($9,127,195) | | Net loss | ($14,136,350) | ($9,876,084) | | Net loss per share | ($0.15) | ($0.17) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For Q1 2025, net cash used in operating activities was $6.7 million, an improvement from $7.5 million in Q1 2024. Net cash used in investing activities was minimal at $0.2 million, while financing activities provided $2.3 million. The company's cash position decreased by $4.6 million during the quarter Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,659,264) | ($7,455,524) | | Net cash used in investing activities | ($195,019) | ($1,212,413) | | Net cash provided by financing activities | $2,264,936 | $8,236,646 | | **Decrease in cash** | **($4,589,347)** | **($431,291)** | [Financial Outlook](index=5&type=section&id=Operational%20and%20Financial%20Outlook) The company maintains its full-year 2025 revenue target of at least **$25 million**, projecting nearly 250% year-over-year growth, primarily led by the OAS business unit and supported by existing backlog and pipeline - The company maintains its revenue target of at least **$25 million** for the full year 2025, which would represent nearly **250% year-over-year growth**[19](index=19&type=chunk) - Growth is expected to be led by the OAS business unit, which is projected to generate at least **$20 million** in revenue[19](index=19&type=chunk) - This outlook is supported by a **$10 million backlog** from 2024 and a conservative view of expected new orders based on the current customer pipeline[19](index=19&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measure) Non-GAAP financial measures, including Adjusted EBITDA and Cash Operating Expenses, provide insights into the company's core operational performance, showing a slight improvement in Adjusted EBITDA loss despite increased cash operating expenses reflecting investments [Reconciliation of Adjusted EBITDA](index=13&type=section&id=RECONCILIATIONS%20OF%20ADJUSTED%20EBITDA) The company reported an Adjusted EBITDA loss of $7.5 million for Q1 2025, a slight improvement from a loss of $7.7 million in Q1 2024. This non-GAAP measure adjusts net loss for items including depreciation, amortization, interest, taxes, and stock-based compensation to facilitate analysis of core operating performance Reconciliation of Adjusted EBITDA | Reconciliation Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(14,136,350) | $(9,876,084) | | Depreciation & Amortization | $1,242,578 | $1,175,282 | | Other expense, net | $3,825,912 | $748,889 | | Stock-based compensation | $1,572,645 | $269,553 | | **Adjusted EBITDA** | **$(7,495,215)** | **$(7,682,360)** | [Reconciliation of Cash Operating Expenses](index=14&type=section&id=RECONCILIATIONS%20OF%20CASH%20OPERATING%20EXPENSES) Cash operating expenses for Q1 2025 were $9.0 million, an increase from $7.3 million in the prior-year period, reflecting investments to scale operations. This non-GAAP measure is calculated by subtracting non-cash items like depreciation, amortization, and stock-based compensation from total operating expenses Reconciliation of Cash Operating Expenses | Reconciliation Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating expenses | $11,798,988 | $8,732,213 | | Less: Depreciation | ($180,709) | ($123,071) | | Less: Amortization | ($1,061,869) | ($1,052,211) | | Less: Stock-based compensation | ($1,572,645) | ($269,553) | | **Cash operating expenses** | **$8,983,765** | **$7,287,378** |

Industry Overview - The global drone market is projected to reach US$57.8 billion by 2030, up from an estimated US$40.6 billion in 2025, indicating significant growth across various industries [1] - The commercial service market is the largest segment, expected to generate US$29.4 billion by 2025, followed by commercial hardware at US$6.7 billion and commercial software at US$1.7 billion [1] - The total number of drone flights globally increased by 25% in 2024, rising from 15.5 million to 19.5 million flights [2] Regional Insights - North America and Asia are leading in drone usage, with Europe closely following, while Latin America and Africa are experiencing accelerated growth due to improved local ecosystems and drone accessibility [2] - Asia recorded the highest number of drone flights in 2024 at 6.3 million, followed by North America with 3.9 million and Europe with 3.8 million [2] Company Developments - ZenaTech, Inc. is set to showcase its Drone as a Service (DaaS) and AI drone innovations at two major investor conferences in May 2025 [3] - Ambarella, Inc. has achieved a milestone of 30 million cumulative units shipped and is demonstrating its generative AI capabilities at the ISC West security expo [4][5] - AgEagle Aerial Systems Inc. demonstrated its eBee VISION drone at a military symposium, highlighting its operational advantages for military applications [7][8] - Ondas Holdings Inc. secured a US$3.2 million purchase order from a UAE governmental entity to expand its urban autonomous drone infrastructure [9]

Core Viewpoint - Ondas Holdings Inc. held its Q4 2024 earnings conference call, discussing financial performance and future outlook, emphasizing the importance of non-GAAP financial measures for understanding business trends [1][2]. Financial Performance - The company reported its Q4 2024 earnings, highlighting key financial metrics that reflect its operational performance [1]. - Non-GAAP financial measures were referenced, indicating that these metrics provide valuable insights into the underlying trends of the business, supplementing GAAP measures [2]. Management Commentary - The call featured insights from various company executives, including the Chairman and CEO, Interim CFO, and Presidents of different divisions, indicating a collaborative approach to discussing the company's performance and strategy [1]. - The management reiterated the significance of forward-looking statements, acknowledging the inherent risks and uncertainties that could affect actual results [1].

Financial Data and Key Metrics Changes - Revenues increased 173% quarter-over-quarter to $4.1 million for Q4 2024, compared to $1.5 million for Q3 2024, but decreased 18% from $5 million for Q4 2023 [32] - OAS revenues were $3.6 million, an increase of 260% from Q3 2024 and a 10% increase from Q4 2023 [33] - Operating loss was $8.5 million for Q4 2024, compared to $12.6 million for Q4 2023 [36] - Cash held was $30 million as of December 31, 2024, compared to $15 million as of December 31, 2023 [40] Business Line Data and Key Metrics Changes - OAS secured two major programs with a military customer in the Middle East, significantly increasing its total addressable market (TAM) [12] - Ondas Networks revenues were relatively flat compared to Q3 2024 and down from Q4 2023, primarily due to extended timelines related to the 900 megahertz activity [32] - The company closed the year with a $10 million backlog primarily with OAS, reinforcing the strength of its pipeline [16] Market Data and Key Metrics Changes - The defense market is seeing massive demand growth, particularly for the Iron Drone Raider platform, which is positioned as a market-defining solution for drone interception [13] - The company is engaging with new defense and homeland security customers through government-to-government channels and direct marketing efforts [14] Company Strategy and Development Direction - The company aims to drive growth with existing programs and customers while expanding into new customer programs, particularly in defense and homeland security [20][21] - A strategic partnership with Palantir Technologies was announced to leverage their Foundry AI platform for operational efficiencies [26][28] - Ondas Networks is focused on advancing private wireless networks to critical rail operating and safety systems [86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in projecting at least $20 million in revenues from OAS, supporting total revenue expectations of $25 million for Ondas Holdings in 2025 [17] - The company anticipates 2025 to be an acceleration year with record revenue growth driven by existing programs and new customer opportunities [19][25] Other Important Information - Operating expenses decreased to $9.4 million for Q4 2024, down from $14.4 million in Q4 2023, primarily due to cost savings [35] - The company raised $35 million in Q4 2024, providing a strong liquidity position for expansion [18] Q&A Session Summary Question: Visibility into the $20 million revenue projection - Management expects to realize the $10 million backlog in revenue in the first and second quarters, with active engagement with military and public safety customers [96] Question: Update on Dubai customer shipments - No units were shipped in Q4, but advanced dialogue is ongoing regarding future shipments [98] Question: First responder opportunity in the U.S. market - There is significant interest in the Optimus platform, with a successful pilot program conducted for a major public safety customer [104] Question: Gross margins outlook - Expected gross margins to recover, projected to be in the 40% range in the first half of the year, potentially reaching 50% or better in the second half [111] Question: Clarification on the partnership with Palantir - The partnership involves integrating Palantir's Foundry AI into Ondas' operations, with potential for further collaboration in the future [120]

Fourth Quarter & Full Year 2024 Earnings Release NASDAQ: ONDS | March 12, 2025 Copyright 2025. All rights reserved. Nasdaq : ONDS Nasdaq: ONDS Disclaimer This presentation may contain "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Ondas Holdings Inc. ...

Company Performance - Ondas Holdings Inc. reported a quarterly loss of $0.14 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, representing an earnings surprise of -55.56% [1] - The company posted revenues of $4.13 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 33.19%, compared to revenues of $4.96 million a year ago [2] - Over the last four quarters, Ondas has surpassed consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Stock Movement and Outlook - Ondas shares have declined approximately 71.7% since the beginning of the year, contrasting with the S&P 500's decline of -5.3% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at -$0.07 on revenues of $5.13 million, and -$0.30 on revenues of $24.91 million for the current fiscal year [7] Industry Context - The Communication - Network Software industry, to which Ondas belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Business Segments and Operations - Ondas Holdings operates through two main segments: Ondas Networks, providing wireless connectivity solutions, and Ondas Autonomous Systems (OAS), focusing on drone and automated data solutions[20][21]. - The FullMAX platform enables significant increases in data throughput for mission-critical applications, targeting North American freight rail operators to upgrade legacy systems[23][24]. - Ondas Networks is developing partnerships with Siemens Mobility to market FullMAX-based networking technology for the North American Rail Industry, focusing on the Advanced Train Control System protocol[29]. - OAS achieved the first-ever FAA Type Certification for the Optimus 1-EX UAV on September 25, 2023, allowing for beyond-visual-line-of-sight operations without a human operator on-site[28]. - The company aims to expand fleet deployments of the Optimus System™ in the US and internationally, targeting critical infrastructure and public safety applications[32]. - The FullMAX platform is designed for long-term use, with customers typically deploying networks that last 10-15 years, creating ongoing revenue opportunities through software and hardware maintenance agreements[33][34]. - The company’s strategy includes monetizing its software-based intellectual property through embedded FullMAX software sales and Software-as-a-Service arrangements[33]. - OAS markets its drone solutions through direct sales and channel marketing strategies, focusing on large customers with active drone programs[38]. Market Opportunities and Growth - The total addressable market (TAM) for OAS is estimated to exceed $100 billion, encompassing the global defense and civil UAV market as well as the drone services market[58]. - The North American rail network consists of 140,000 miles of track and 25,000 locomotives, with an estimated addressable market of approximately $1.3 billion for private railroad networks[57]. - The drone services market is projected to grow from $32.1 billion in 2025 to $213.9 billion by 2032, driven by regulatory clarity and increased integration of drones into national airspace[59]. - The C-UAS technology market is valued at $3.1 billion in 2025 and is expected to grow at a compound annual growth rate of 27.2%, reaching $10.6 billion by 2030[60]. - The company anticipates further expansion in its customer pipeline across the U.S., Middle East, and Europe due to increasing demand for autonomous drone solutions[77]. Product Development and Innovation - The Optimus System™ is a fully autonomous drone platform designed for high-resolution aerial data collection and analysis, applicable in security, surveillance, and supervision across various sectors[44]. - The Iron Drone Raider™ system, acquired in March 2023, is a counter-drone solution aimed at military, government, and enterprise customers, addressing the growing threat of small drones[48][49]. - The Optimus System™ enables continuous asset digitization and real-time monitoring, enhancing data-driven decision-making for mission-critical operations[47]. - The integration of Kestrel™ with the Optimus System™ allows for Beyond Visual Line of Sight (BVLOS) operations, expanding deployment potential in complex airspace environments[45]. - The company holds a total of eight issued patents in the U.S. and six issued international patents, with expiration dates ranging from 2029 to 2041[190]. - The company has applied for patent protection for existing and proposed products, including FullMAX systems and Iron Drone Raider™, which are critical for product functionality[191]. - The OAS segment holds a total of six issued patents in the U.S. and 22 international issued patents, with expiration dates ranging from 2034 to 2048[86]. Financial Performance and Risks - As of December 31, 2024, the company had an accumulated deficit of approximately $236 million, up from $198 million in 2023, indicating significant operating losses since inception[108]. - The company expects operating expenses to increase significantly as it pursues growth strategies, including substantial investments in research, development, and marketing[109]. - Three customers accounted for approximately 52%, 26%, and 10% of revenue in 2024, highlighting dependence on a small number of customers[89]. - Revenue recognition is unpredictable, with significant portions deferred into future periods due to various factors affecting deployment and acceptance of products[203]. - The company may require additional capital to fund growth if business growth falls short of expectations, with potential reliance on equity or debt offerings[201]. - The lengthy sales cycle for new customers can range from one to three years, leading to potential cancellations or changes in product plans[129]. - The company has incurred significant operating losses and cannot assure that it will achieve or sustain profitability in the future[108]. Strategic Partnerships and Collaborations - Ondas Holdings is pursuing external opportunities for growth through partnerships, joint ventures, and acquisitions to enhance its product offerings for critical infrastructure customers[32]. - The company relies on strategic partnerships, such as with Siemens Mobility, to accelerate the adoption of its wireless technology, which is critical for revenue growth[113]. - Airobotics has expanded its collaboration in the UAE, deploying additional Optimus Systems for public safety, conducting thousands of autonomous flights monthly in densely populated areas[68]. - Airobotics received a purchase order from a major semiconductor manufacturer to extend the deployment of the Optimus System™ for aerial security at a critical fabrication facility[69]. - Airobotics secured $9 million in purchase orders for Iron Drone Raider™ system deployments and upgrades in the third quarter[74]. - Airobotics expanded its market reach in Europe through partnerships with HHLA Sky and C-Astral Aerospace, anticipating new customer orders in 2025[72]. Regulatory and Compliance Challenges - The company operates in a highly regulated environment, with potential costs arising from compliance with federal, state, local, and foreign laws and regulations[172]. - Changes in regulatory conditions affecting critical infrastructure industries could adversely impact customers' ability to implement the company's technologies[173]. - The company faces uncertainty regarding the expansion of drone solutions sales due to evolving regulations from the FAA and other governmental agencies[174]. - The company is subject to various government regulations, and failure to comply could result in sanctions that negatively impact business operations[178]. - The company is subject to rigorous data protection and privacy laws, with potential reputational damage and litigation risks if compliance is perceived to be inadequate[180]. Operational Risks and Challenges - The company faces risks related to project performance delays, which could result in additional costs and impact revenue recognition[123]. - The company relies on third-party contractors for manufacturing, which exposes it to risks related to quality control and supply chain disruptions[124]. - The company faces risks related to contractor performance, which could jeopardize its ability to fulfill obligations and affect service quality[125]. - Material delays or defaults in customer payments could adversely impact the company's financial condition and ability to cover project expenditures[127]. - The company maintains warranty obligations for its products, which could lead to variable costs and potential financial impacts if product failure rates exceed estimates[136]. - The company is exposed to potential product liability claims due to defects or failures in its products, which could harm its financial condition and reputation[133]. - The company is focused on maintaining safety standards at project sites, as failures in safety procedures could lead to significant losses and impact future project opportunities[128]. Human Resources and Talent Management - The company relies on key personnel, including the CEO and CFO, for business operations, and their loss could negatively impact business strategies[147]. - Competition for skilled personnel is intense, particularly in Silicon Valley, which may affect the company's ability to attract and retain talent[148]. Market and Economic Conditions - General economic conditions, both global and regional, may impact the company's stock price and overall performance[217]. - The market for electronic components is experiencing a global shortage, particularly in semiconductors, which could impact product delivery and development[157]. - The absence of long-term supply contracts exposes the company to price fluctuations for raw materials and components, potentially increasing operating costs[158]. Stock and Financial Market Risks - The company’s common stock is listed on Nasdaq under the symbol "ONDS," with a risk of being quoted only on OTC Markets if the listing is not sustained[212]. - Limited trading activity in the company's common stock may result in significant price fluctuations, impacting the ability to sell shares at desired prices[210]. - The market price of the common stock may fluctuate unpredictably due to various factors, including overall market performance and significant corporate announcements[213]. - The company may issue up to 300,000,000 shares of common stock, which could lead to substantial dilution for existing stockholders[218]. - The issuance of additional shares may cause the price of the common stock to decline, especially if a substantial portion is resold into public markets[218]. - Concentration of ownership may lead to interests that differ from those of other investors, potentially affecting corporate strategies[216]. - Securities class action litigation could arise following periods of market volatility, potentially harming the company's financial condition[214].

Financial Data and Key Metrics Changes - Revenues increased 173% to $4,100,000 for Q4 2024 compared to $1,500,000 for Q3 2024, but down 18% from $5,000,000 for Q4 2023 [22] - For the full year 2024, revenues were $7,200,000 compared to $15,700,000 for 2023, largely due to extended timelines and war-related disruptions [25] - Operating loss was $8,500,000 for Q4 2024 compared to $12,600,000 for Q4 2023 [25] - Adjusted EBITDA loss was $28,500,000 for 2024 compared to $29,700,000 for 2023 [27] Business Line Data and Key Metrics Changes - OAS revenues were $3,600,000, an increase of 260% from Q3 2024 and a 10% increase from Q4 2023 [22] - Revenues from ONDAS Networks were $500,000, relatively flat compared to Q3 2024 and down $1,100,000 from Q4 2023 [22] - The company closed the year with a $10,000,000 backlog, primarily with OAS, reinforcing the strength of its pipeline [12] Market Data and Key Metrics Changes - The company established a presence in the global defense market, securing two major programs with a military customer in the Middle East [10] - The demand for drone interception technology is growing, positioning IronDrone as a market-defining platform [10] Company Strategy and Development Direction - The company anticipates a record year of revenue growth in 2025, primarily driven by OAS [7] - Key objectives for 2025 include driving growth with existing programs and expanding into new customer opportunities [14] - A strategic partnership with Palantir Technologies was announced to enhance operational efficiencies through AI [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least $20,000,000 in revenues from OAS in 2025, supported by a growing backlog [12][61] - The company expects margins to recover in 2025 with higher revenues and improved scale from larger production volumes at OAS [26] - Management highlighted the importance of operational scale and customer engagement to support growth [64] Other Important Information - The company raised $35,000,000 in Q4 2024, providing a strong liquidity position for expansion [13] - Cash held as of 12/31/2024 was $30,000,000, compared to $15,000,000 as of 12/31/2023 [27] Q&A Session Summary Question: Visibility into $20,000,000 revenue target and mix between Optimus and IronDrone - Management expects the $10,000,000 backlog to be recognized in revenue in Q1 and Q2 2025, with active engagement on new programs [66][67] Question: Development of first responder opportunities in the U.S. market - There is significant interest in the Optimus platform, with successful pilot programs conducted [73][74] Question: Impact of U.S. tariff posture on product delivery and costs - Management does not foresee a major impact from tariffs, as they do not source much from China [75][76] Question: Gross margins expectations for the year - Management expects gross margins to recover, projecting them to be in the 40% range initially, potentially reaching 50% or better [78] Question: Clarification on the partnership with Palantir - Management clarified that the partnership involves integrating Palantir's Foundry AI to enhance operational capabilities and develop advanced solutions [84][85] Question: Status of regulatory deadlines for network requirements - Management indicated that the railroad industry is committed to meeting regulatory deadlines, with specific timelines for spectrum utilization [90][91]

Revenue Expectations - Ondas Holdings anticipates record revenue of at least $25 million in 2025, with the Ondas Autonomous Systems (OAS) business unit expected to contribute at least $20 million[1]. - The Company expects a revenue target of $25 million for 2025, representing nearly 250% growth year over year from 2024[29]. - The OAS business unit is expected to generate at least $20 million in revenue, exceeding previous expectations of $15-18 million[29]. Financial Performance - Full year 2024 revenues were $7.2 million, down from $15.7 million in 2023, primarily due to extended customer timelines and war-related disruptions[22]. - Revenues for the year ended December 31, 2024, were $7,192,694, a significant decrease from $15,691,430 in 2023, representing a decline of approximately 54.3%[51]. - Gross profit for the year ended December 31, 2024, was $0.3 million, or 5%, compared to $6.4 million, or 41%, in 2023[23]. - Gross profit for 2024 was $345,183, down from $6,381,174 in 2023, indicating a gross margin drop from 40.7% to 4.8%[51]. - The net loss attributable to common stockholders for 2024 was $(42,419,462), compared to $(46,358,617) in 2023, showing an improvement of approximately 8.5%[51]. - Net loss decreased to $38.0 million for the year ended December 31, 2024, from a net loss of $44.8 million in 2023[26]. - Adjusted EBITDA loss narrowed to approximately $28.5 million for the year ended December 31, 2024, compared to $29.7 million for 2023[27]. - Adjusted EBITDA for the year ended December 31, 2024, was $(28,521,379), slightly better than $(29,678,672) in 2023[56]. Operating Expenses - Operating expenses decreased to $35.0 million for the year ended December 31, 2024, compared to $46.1 million in 2023, reflecting cost savings and integration synergies[25]. - Total operating expenses decreased to $34,954,487 in 2024 from $46,110,474 in 2023, a reduction of about 24.3%[51]. - The Company's operating loss narrowed to $34.6 million for the year ended December 31, 2024, compared to a loss of $39.7 million for 2023, reflecting a decrease in operating expenses[26]. Cash Flow and Assets - Cash increased to $30.0 million as of December 31, 2024, up from $15.0 million in 2023, due to raising $50.2 million in financing[28]. - Cash, cash equivalents, and restricted cash at the end of 2024 were $29,999,321, up from $15,022,000 at the end of 2023, reflecting an increase of 99.9%[53]. - The company reported a net cash flow provided by financing activities of $50,178,620 in 2024, significantly higher than $18,730,150 in 2023[53]. - Total current assets increased to $47.5 million as of December 31, 2024, from $23.6 million in 2023[48]. - Total liabilities rose to $73.7 million as of December 31, 2024, compared to $47.1 million in 2023[49]. - Total stockholders' equity decreased to $16.6 million as of December 31, 2024, from $33.1 million in 2023[49]. Strategic Developments - The partnership with Palantir is expected to enhance operational capabilities and support the growth strategy for OAS[1]. - The leadership team was strengthened with Oshri Lugassi appointed as Co-CEO of OAS and Markus Nottelmann as CEO of Ondas Networks[1]. - OAS is focusing on expanding programs in Israel and the UAE while securing new military customers and critical infrastructure clients in the U.S.[5]. Market Conditions - The Company anticipates fluctuations in bookings and revenue growth due to variability in expected orders and timing of new customer additions[30]. - Ondas Networks generated $1.9 million in revenue for 2024, down from $6.7 million in 2023, due to extended network adoption timelines[15]. - Cash flows used in operating activities were $(33,469,623) for 2024, compared to $(34,019,519) in 2023, indicating a marginal improvement[53]. - The company incurred interest expense of $(3,620,258) in 2024, down from $(4,154,759) in 2023, a reduction of about 12.8%[51].