Ondas(ONDS) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights 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] - 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] Management Commentary 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] - 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] - 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] - 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][4] Business Segment Performance 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) 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] - 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][10] - 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] Ondas Networks 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] - 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] - 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] Financial Results 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 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] - The company ended the quarter with $25.4 million in cash, compared to $30.0 million at year-end 2024[18] - Adjusted EBITDA loss improved slightly to $7.5 million from $7.7 million in Q1 2024[18] Condensed Consolidated Balance Sheets 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 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 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 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] - Growth is expected to be led by the OAS business unit, which is projected to generate at least $20 million in revenue[19] - 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] Non-GAAP Financial Measures 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 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 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 |