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01/10 16:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Ondas shows strong growth with a 500% revenue increase and improved gross margins, bolstered by a strategic partnership with Palantir. The raised guidance for OAS revenue and reduced convertible debt are positive indicators. However, increased operating expenses and a significant share count rise pose concerns. The Q&A highlights potential growth in defense markets and high-margin products, but some management responses lacked clarity. Overall, positive sentiment is driven by strong financial performance and strategic positioning, suggesting a likely stock price increase of 2% to 8%.
Revenue $4.2 million in Q1 2025, an increase of over 500% from $0.6 million in Q1 2024. This increase is primarily driven by execution against the $10 million backlog and additional orders secured year-to-date.
OAS Revenue $4.0 million in Q1 2025, an increase of over 600% from Q1 2024. This increase reflects the shipment of products and services from the $14.4 million orders, primarily related to two new programs secured with a military customer.
Gross Profit $1.5 million in Q1 2025, representing a 35% gross margin, compared to a $0.4 million gross loss in Q1 2024. The increase in gross margins year-over-year results from higher margin product revenues at OAS compared to lower margin service and subscription revenue in Q1 2024.
Operating Expenses $11.8 million in Q1 2025, up from $8.7 million in Q1 2024. The increase is due to investments in headcount and programs at OAS, as well as additional stock compensation expense.
Operating Loss $10.3 million in Q1 2025, compared to $9.1 million in Q1 2024.
Adjusted EBITDA Loss $7.5 million in Q1 2025, improving slightly from the $7.7 million loss in Q1 2024.
Cash Position $25.4 million as of March 31, 2025, down from $30 million as of December 31, 2024, but up from $14.6 million as of March 31, 2024. The decrease from December 2024 reflects cash used in operations, while the increase from March 2024 reflects financing received during the last 12 months.
Cash Used in Operations $6.7 million in Q1 2025, slightly down from $7.5 million in Q1 2024, due to improved cash collections from orders.
Convertible Debt $25.4 million in convertible debt outstanding as of March 31, 2025, down from $44.6 million at the end of 2024, reflecting significant conversion of outstanding convertible notes into equity.
Iron Drone Radar System: Operational status as a best-in-class, low-collateral counter-UAS platform with a $1.7 million order from a governmental customer for border security.
Optimus Drone Fleet: Expansion under the Drone Box program in the UAE, supporting public safety missions in urban environments.
OAS Revenue Growth: Generated $4.2 million in revenue in Q1 2025, with a backlog of $16.8 million and a full-year revenue goal of at least $25 million.
New Customer Acquisition: Secured two new military or homeland security customers in 2025, increasing the goal from two to four new customers.
dot16 Communications Protocol: Selected by the Association of American Railroads as the standard for Next-Generation Head of Train / End of Train systems.
Revenue Increase: Revenues increased over 500% to $4.2 million in Q1 2025 from $0.6 million in Q1 2024.
Gross Profit: Gross profit was $1.5 million, representing a 35% gross margin in Q1 2025.
Partnerships: Formed strategic partnerships with Palantir Technologies and Volatus Aerospace to enhance capabilities and market reach.
Debt Reduction: Reduced convertible debt from $44.6 million at the end of 2024 to $20.6 million.
Earnings Expectations: Ondas Holdings Inc. missed earnings expectations with a reported EPS of $-0.14612, compared to expectations of $-0.11.
Regulatory Issues: The company is subject to regulatory scrutiny, particularly in defense and homeland security sectors, which may impact business operations and customer engagements.
Supply Chain Challenges: There are ongoing supply chain challenges, particularly in the 900 MHz deployments, which are experiencing slow progress and extended timelines.
Debt Management: The company has significant convertible debt outstanding, which has increased the share count due to conversions, potentially diluting shareholder value.
Market Pressures: Market-related factors have pressured Ondas' share price, leading to more shares being issued than anticipated due to the conversion of convertible notes.
Revenue Fluctuations: Revenues are expected to fluctuate from quarter to quarter, particularly for Ondas Networks, due to uncertainty around customer activity and rollout timelines.
Operating Losses: The company reported an operating loss of $10.3 million for Q1 2025, indicating ongoing financial challenges as revenues do not yet cover operating expenses.
Cash Utilization: Cash utilization remains a concern, with the company needing to manage its cash flow effectively to support operations and growth.
Revenue Growth: Ondas is reaffirming its full year revenue goal of at least $25 million for 2025, with at least $20 million to be generated by the OAS business unit.
Backlog Growth: The backlog has grown to $16.8 million, with expectations for further growth in 2025.
Customer Acquisition: Ondas aims to add at least four new military or homeland security customers in 2025, increasing from an initial goal of two.
Strategic Partnerships: Ondas has formed strategic partnerships with Palantir Technologies and Volatus Aerospace to enhance capabilities and market reach.
Technology Development: The ratification of the dot16t standard positions Ondas for commercial adoption in rail networks.
Revenue Expectations: Ondas expects to generate at least $25 million in revenue for 2025, primarily driven by OAS.
Operational Efficiency: The company anticipates improved cash efficiency and operating leverage as revenues grow.
Debt Management: Ondas plans to continue reducing its convertible debt, which has decreased from $44.6 million to $20.6 million.
Future Growth: The company expects sustained or accelerated growth into 2026, supported by a growing backlog and customer pipeline.
Investor Engagement: Ondas intends to host an OAS-focused Investor Day in the second half of June to provide updates on business plans and financial outlook.
Shareholder Return Plan: Ondas Holdings has filed for a $225 million shelf registration statement, which is part of a responsible corporate financial strategy to capitalize on emerging investment cycles in defense and security markets globally. This registration provides flexibility for future investments and growth opportunities.
Convertible Notes: Since October 2022, Ondas has raised $70 million in cash through convertible notes, which included $80.5 million in total notes due. The company has seen a significant reduction in convertible debt from $44.6 million at the end of 2024 to $25.4 million as of March 31, 2025.
Share Count Increase: The share count increased from 93.2 million to 137.4 million during the first five months of 2025, primarily due to the conversion of convertible notes.
The earnings call reveals strong financial metrics, a growing customer pipeline, and strategic acquisitions that bolster Ondas' market position. The Q&A section highlights robust product demand, especially in defense and homeland security, and confidence in future growth, despite some unclear timelines. The positive outlook for 2026 and improving margins further enhance sentiment. While specific guidance details are deferred, the overall sentiment is positive, with an expected stock price increase of 2% to 8%.
The earnings call summary and Q&A session indicate a positive outlook. The company is on track for record revenue growth and backlog expansion, with strategic partnerships enhancing market reach. Debt reduction and operational efficiency improvements are positive indicators. While some responses were vague, the overall sentiment from analysts was optimistic, especially regarding potential large contracts and expanding customer base. The reaffirmed revenue guidance and strategic acquisitions further support a positive sentiment, likely resulting in a stock price increase over the next two weeks.
Ondas shows strong growth with a 500% revenue increase and improved gross margins, bolstered by a strategic partnership with Palantir. The raised guidance for OAS revenue and reduced convertible debt are positive indicators. However, increased operating expenses and a significant share count rise pose concerns. The Q&A highlights potential growth in defense markets and high-margin products, but some management responses lacked clarity. Overall, positive sentiment is driven by strong financial performance and strategic positioning, suggesting a likely stock price increase of 2% to 8%.
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