Summary of Ondas Inc. Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: Q2 2026 revenue reached approximately $83.8 million, marking a 67% sequential increase and over 13-fold growth year-over-year.

Pro Forma Organic Growth: On a pro forma basis, revenue grew approximately 85% year-over-year, indicating strong performance across the underlying businesses.

Gross Profit: Increased to about $36 million, with an adjusted gross margin of 50.4%.

Operating Expenses: Totaled approximately $199 million, with over half attributed to non-cash or acquisition-related items. Adjusted cash operating expenses were around $93 million.

Cash Position: Ended the quarter with approximately $1.4 billion in cash and equivalents, providing significant financial flexibility.

Backlog: Pro forma backlog grew to $757 million, a 66% sequential increase.

2Strategic Updates and Business Highlights

Ondas is executing its Core + Strategic Growth plan, focusing on integrating technologies and operational capabilities across its portfolio to create a unified platform, referred to as One Ondas.

The company has expanded its 2-year strategic program pipeline to over $11 billion, driven by acquisitions and organic growth.

Key growth drivers include Sentrycs (Cyber-over-RF Counter-UAS systems), Airobotics (autonomous drone infrastructure), and 4M (intelligent demining).

New leadership appointments, including David Barnea as President of Ondas Defense, aim to enhance global expansion and customer relationships.

The integration of acquired technologies is progressing, with notable advancements in SkyWeaver, an AI platform for multi-domain operations.

3Forward Guidance and Outlook

Ondas increased its full-year 2026 revenue target to between $525 million and $550 million, projecting significant growth in the second half of the year.

For Q3 2026, revenue is expected to be between $140 million and $155 million, indicating a 73% sequential growth.

The company anticipates narrowing adjusted EBITDA losses in the second half and expects to achieve profitability for its operating platform by Q4 2026 and for the company overall by Q4 2027.

Ondas aims to exit 2026 with an annualized run rate revenue of $1 billion.

4Bad News, Challenges, or Points of Concern

Operating Expenses: While investments in growth are necessary, elevated operating expenses could pressure margins in the short term.

Supply Chain Challenges: The company acknowledged challenges in the supply chain, which are common across the industry, but is working to mitigate these issues.

Margin Pressure: Expected gross margin pressure in the second half due to product mix and excess capacity from recent acquisitions.

Integration Risks: Rapid integration of acquired companies poses challenges, although Ondas is leveraging partnerships (e.g., with Palantir) to streamline this process.

5Notable Q&A Insights

Pipeline Growth: The increase in the strategic pipeline from $4 billion to $11 billion includes contributions from the DZYNE acquisition and organic growth across all market segments.

Customer Engagement: The integration of systems and technologies is enhancing customer engagement, with a focus on delivering comprehensive solutions rather than standalone products.

M&A Strategy: Future acquisitions will focus on enhancing existing segments rather than filling gaps, ensuring strategic and financial accretion.

Operational Integration: The operational platform is maturing, with AI and cloud technologies (GovCloud and Microsoft Azure) facilitating faster integration and operational efficiencies. Overall, Ondas Inc. is positioned for significant growth, backed by a strong financial foundation and an expanding portfolio, while also navigating challenges related to integration and operational scaling.