Key Takeaways Ondas revenues jumped to $10.1M last quarter, up more than sixfold YoY, driven almost entirely by OAS.ONDS expects modest 2025 revenues from Networks, with dot16 rail adoption seen as a 2026 catalyst.Ondas expects 2025 revenue to be at least $36M, sees Q4 topping $15M, and targets $110M in 2026Ondas Holdings Inc. ((ONDS) is a provider of private wireless data solutions through its Ondas Networks division and autonomous drones via Ondas Autonomous Systems (“OAS”). OAS has emerged as the main gr ...

Core Insights - Ondas Holdings (ONDS) is transitioning into a multi-domain defense and security technology platform through aggressive acquisitions [1][9] - Recent acquisitions enhance capabilities in unmanned ground systems, robotics, fiber optic communications, subsurface intelligence, and demining robotics [2][9] Acquisition Strategy - ONDS has acquired Sentry CS Ltd., which specializes in Cyber-over-RF and Protocol-Manipulation counter-UAS technology [3] - The company also acquired a controlling interest in Insight Intelligent Sensors, focusing on AI-driven electro-optical sensing systems, and 4M Defense Ltd., known for its advanced demining capabilities [3] - In August, ONDS secured a 51% controlling interest in S.P.O Smart Precision Optics, a manufacturer of advanced optical components [4] - The acquisition of Apeiro Motion adds expertise in ground robotics and mission-critical automation technologies [4] - A minority investment in Rift Dynamics enhances ONDS' defense portfolio with modular drone platforms [5] Financial Performance - The backlog has reached $40 million at the end of the third quarter, bolstered by recent acquisitions [6][9] - ONDS shares have increased by 103.4% over the past three months, contrasting with a 5.3% decline in the Communication-Network software industry [11] - The forward 12-month price/sales ratio for ONDS is 37.51X, significantly higher than the industry average of 2.02X [13] Earnings Estimates - The Zacks Consensus Estimate for ONDS earnings for 2025 has been revised upwards by 9.4% over the past 60 days [14] - Recent revisions indicate a positive trend in earnings estimates, with significant upward adjustments for future quarters [16]

Industry Overview - The drone industry is rapidly transforming with significant adoption of autonomous systems across government, military, and commercial sectors, driven by advancements in autonomous technology and AI-powered navigation [1] - The global drone tech market is projected to grow at a CAGR of 14.3% from 2025 to 2030, while the commercial drone market is expected to grow at a CAGR of 20.8% from 2025 to 2032, presenting long-term investment opportunities [2] Ondas Holdings (ONDS) - Ondas Holdings focuses on private wireless data solutions and autonomous drones through its Ondas Autonomous Systems (OAS) division, which includes companies like Airobotics and American Robotics [4] - In the last reported quarter, OAS revenues reached $10 million, with a backlog of $22.2 million, indicating strong demand for its Optimus and Iron Drone systems [5] - The company has secured GreenUAS Cleared List certification for the Optimus drone, positioning it for inclusion in the Department of War Blue List as an NDAA-compliant platform [6] - Ondas is concentrating on the counter-UAS market with its Iron Drone System, which utilizes an intercepting drone to counteract drone attacks [7] - The company is pursuing mergers and acquisitions to enhance its portfolio, including plans to acquire Sentry CS Ltd. and other companies [8] - There are concerns regarding heavy dependence on the OAS division for revenue growth, as delays or cancellations from large customers could significantly impact revenues [9] Draganfly (DPRO) - Draganfly is a Canada-based developer of drone solutions, with a product lineup that includes various drones aimed at military and public safety applications [11] - The company has over five NDAA-compliant drone systems, providing a competitive advantage as the U.S. and NATO phase out non-compliant systems [12] - Draganfly's recent border-security demonstration with its Outrider drone generated strong interest from law enforcement and federal agencies [13] - The company received its first major U.S. Army FPV drone order, which includes supply chain support and training for onsite assembly [14] - In Q3 2025, Draganfly reported revenues of $2.16 million, a 14.4% increase year-over-year, indicating improved customer engagement and product sales [14] - Draganfly has a strong balance sheet with $69.9 million in cash and minimal debt, allowing for strategic investments in capacity and R&D [15] Price Performance and Valuation - Over the past six months, ONDS has gained 731.8%, while DPRO has increased by 261.8% [16] - ONDS is trading at a forward 12-month price/sales ratio of 39.28X, significantly higher than DPRO's 3.06X [19] - Analysts have revised earnings estimates for ONDS upward by 9.4% in the past 60 days, while DPRO has seen marginal upward revisions [17][21] - In terms of Zacks Rank, DPRO is currently rated as a better investment pick with a Zacks Rank 2 (Buy), compared to ONDS's Zacks Rank 3 (Hold) [22]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $2,155,000, an increase of 14.4% year over year, comprising $1,600,000 from product sales and $530,000 from services [6][38] - Gross profit was $420,000, with a cash balance of just under $70,000,000 as of September 30, 2025 [6][38] - Total comprehensive loss for the quarter was $5,400,000 compared to a loss of $364,000 in the same quarter last year [39][40] - Gross margin for Q3 2025 was 19.5%, down from 23.9% in Q2 2025, primarily due to product mix [41] Business Line Data and Key Metrics Changes - The company unveiled the Outrider Southern Border drone, designed for specific mission sets along the Southern Border, which is expected to have a large addressable market globally [7][32] - Collaborations with Palatin AI to incorporate AI into the drone fleet, enhancing capabilities for military and defense applications [9][12] - The appointment of military advisors to bolster defense capabilities and support sales teams [8] Market Data and Key Metrics Changes - Canada announced a significant increase in defense spending, with a focus on drone technology, positioning the company favorably in that market [23][58] - The U.S. Army is expected to order millions of drones, with the company anticipating a meaningful share of that market [56][67] Company Strategy and Development Direction - The company aims to create blue ocean opportunities by focusing on specialized markets such as border security and military applications, rather than competing in saturated markets [71][75] - Plans to expand manufacturing capacity significantly, with seven new plants expected to quadruple production capacity by the end of next year [20][65] - The strategy includes integrating various payloads and AI systems into the drone fleet to meet diverse customer needs [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EBITDA positive and cash flow positive status in the near future, with strong visibility on growth [47] - The company is focused on building a strong team and culture through strategic acquisitions, emphasizing the importance of people over technology [48][50] - Management highlighted the unique position in the market due to Canadian manufacturing capabilities and the growing demand for defense-related products [24][58] Other Important Information - The company has been recognized as a leader in NDAA compliant drones, with a comprehensive lineup that includes multiple systems [13] - A significant order from a Fortune 50 telecom company for heavy lift drones was noted, indicating potential for future growth in commercial applications [25][26] Q&A Session Summary Question: What are the scenarios for any potential future raise? - The company has $70,000,000 cash on hand and is burning about $1,000,000 per month, indicating no acute need for cash raises but will consider opportunistic raises for strategic acquisitions focused on people [46][47] Question: Can you expand on the press release about manufacturing and overseas military facilities? - The manufacturing in overseas military facilities is primarily for assembly and modification, allowing for rapid adaptation to tactical needs [51][52] Question: Will the company be able to capture a meaningful piece of the U.S. Army's drone orders? - Management believes they can capture a meaningful share of the anticipated orders, emphasizing the importance of providing value to customers [56][57] Question: Is border security still the main focus for the company? - Yes, border security remains a significant focus, with specialized solutions being developed to address various challenges [59][60] Question: Do you see consolidation in the drone industry? - Yes, consolidation is expected as many small companies enter the market, but the company is well-positioned to leverage available talent [61][63] Question: What is the current production capacity and plans for 2026? - The company currently has a capacity of about $100,000,000 and plans to expand further in 2026 [65] Question: What percentage of revenues will be military versus commercial? - Military sales are expected to grow significantly, potentially making up 90% of revenues in the near future [67]