Core Insights - Ondas Holdings Inc. reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.11, marking an earnings surprise of -36.36% [1] - The company generated revenues of $4.25 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.43% and significantly up from $0.63 million a year ago [2] - Ondas shares have declined approximately 65.8% year-to-date, contrasting with a slight gain of 0.2% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $5.15 million, while for the current fiscal year, the estimate is -$0.40 on revenues of $22.37 million [7] - The estimate revisions trend for Ondas is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Communication - Network Software industry, to which Ondas belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Revenues increased over 500% to $4,200,000 in Q1 2025 from $600,000 in Q1 2024 [14] - Gross profit was $1,500,000 representing a 35% gross margin in Q1 2025 compared to a gross loss of $400,000 in Q1 2024 [15] - Operating expenses increased to $11,800,000 for Q1 2025 from $8,700,000 in Q1 2024 [16] - Cash held was $25,400,000 as of March 31, 2025, down from $30,000,000 as of December 31, 2024 [17] Business Line Data and Key Metrics Changes - OAS revenues were $4,000,000, an increase of over 600% from Q1 2024 [14] - Revenue from OnDaaS Networks was $200,000, relatively flat compared to $300,000 in Q1 2024 [14] - The backlog grew to $16,800,000, with over $9,000,000 in additional orders secured year to date [7] Market Data and Key Metrics Changes - OAS is expanding its presence with new defense and homeland security customers across Europe, the Middle East, and the U.S. [8] - The Iron Drone Raider system is operational in a live combat environment, demonstrating its effectiveness [8] - The company is seeing strong global demand for Iron Drone as nations seek multi-layered kinetic counter UAS solutions [39] Company Strategy and Development Direction - The company anticipates a record year of revenue growth in 2025, primarily driven by OAS [5] - The strategy includes capturing programs of record and expanding those programs to generate recurring business activity [41] - The company aims to secure additional military customers and expand its partner ecosystem to support global sales and marketing [44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2025 and beyond, citing strong demand and a growing backlog [46] - The company is focused on advancing U.S.-based manufacturing plans to align with defense procurement priorities [40] - Management highlighted the importance of capitalizing on emerging investment cycles in defense and security markets globally [49] Other Important Information - The company plans to host a second OAS-focused Investor Day in June to provide updates on business plans and financial outlook [52] - A significant debt reduction was achieved through the conversion of convertible notes to equity, reducing outstanding convertible debt to $20,600,000 [18][20] Q&A Session Summary Question: Follow-on orders and their size - Management indicated that initial orders are often pilot programs, with significant expansions expected thereafter [54][55] Question: Opportunities in Europe - Management confirmed ongoing discussions with other countries in Europe, highlighting increased defense spending due to geopolitical tensions [56] Question: Growth opportunities for Optimus - Management noted existing customers will expand programs, with significant opportunities in public safety and defense sectors [61][62] Question: Budget sources for U.S. public safety - Funding for public safety initiatives is coming from both state/local governments and federal sources, with increasing budgets for drone technology [63][64] Question: Impact of tariffs on supply chain - Management acknowledged potential impacts from tariffs but emphasized careful sourcing and plans to move production to the U.S. [72][76] Question: Pipeline breakdown between current customers and new logos - Management indicated significant expansion opportunities with new customers, alongside growth with existing customers [81][82]

Financial Data and Key Metrics Changes - Revenues increased over 500% to $4,200,000 in Q1 2025 from $600,000 in Q1 2024 [17] - Gross profit was $1,500,000 representing a 35% gross margin in Q1 2025 compared to a gross loss of $400,000 in Q1 2024 [18] - Operating expenses increased to $11,800,000 for Q1 2025 from $8,700,000 in Q1 2024 [19] - Cash held was $25,400,000 as of March 31, 2025, down from $30,000,000 as of December 31, 2024 [20] Business Line Data and Key Metrics Changes - OAS revenues were $4,000,000, an increase of over 600% from Q1 2024, driven by military customer programs and deployments in the UAE [17][18] - Revenues from OnDaaS Networks were $200,000, relatively flat compared to $300,000 in Q1 2024 [17] Market Data and Key Metrics Changes - OAS is expanding its presence with new defense and homeland security customers across Europe, the Middle East, and the U.S. [8] - The Iron Drone Raider system is operational in a live combat environment, demonstrating its effectiveness [9] Company Strategy and Development Direction - The company anticipates a record year of revenue growth in 2025, primarily driven by OAS [5] - The strategy includes capturing programs of record and expanding those programs to generate recurring business activity [45] - The company aims to secure additional military customers and expand its partner ecosystem in 2025 [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2025, supported by a growing backlog and customer pipeline [50] - The company expects to add more military and homeland security customers beyond the initial goals set for 2025 [12][48] Other Important Information - The company announced a shelf registration statement for $225,000,000 to support future growth opportunities [53] - Joe Popolo will be stepping down from the board to take on new responsibilities as the U.S. Ambassador to the Netherlands [51] Q&A Session Summary Question: Follow-on orders and their size - Management indicated that initial orders are often pilot programs, with significant expansions expected thereafter [59][60] Question: Discussions with NATO and other countries - Management confirmed ongoing discussions with other countries, particularly in light of increased defense spending in Europe [61] Question: Opportunities for Optimus in the U.S. - Management highlighted existing customers expanding programs and targeting public safety and critical infrastructure markets [66][68] Question: Margin profile of recent orders - Management stated that Iron Drone margins are better than Optimus, with both systems having margins north of 50% [74] Question: Supply chain and tariff risks - Management noted that while tariffs on China are significant, they are managing supply chain risks by sourcing away from China [78][80] Question: Pipeline breakdown between current customers and new logos - Management expects significant expansion opportunities with both current customers and new logos in 2025 and beyond [84][86]

Financial Performance & Outlook - Ondas reported a significant revenue increase of 580% for Q1 2025, reaching $4,248,182 compared to $625,009 in Q1 2024[17, 18] - The company is targeting at least $25 million in revenue for the full year 2025[14] - Cash and restricted cash stood at $25.4 million at the end of Q1 2025, compared to $14.6 million a year ago[19, 20] - Convertible debt was reduced by $19.2 million to $25.4 million at the end of Q1 2025[22] Ondas Autonomous Systems (OAS) - OAS secured $9.3 million in new orders year-to-date, increasing the backlog to $16.8 million[14] - OAS generated $4.0 million in revenues for Q1 2025[38] - The company estimates a combined Total Addressable Market (TAM) of $5.3 billion for Iron Drone Raider and Optimus System in Defense & HLS markets[40] Ondas Networks - dot16 was selected as the communications protocol for future Next Generation Head-of-Train / End-of-Train (NGHE) devices[14, 28] - Ondas Networks is supporting 900 MHz system deployments, including a follow-on order from Metra[34] - The company expects delivery of PTC data radios for Amtrak in early Q3 2025[34]

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. ...