Ondas (ONDS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $957,851, down sharply year-over-year due to delayed railroad deployments, supply chain disruptions from the Gaza conflict, and lower product sales at both Ondas Networks and OAS, but key technical and operational milestones were achieved, including 900 MHz integration and Iron Drone Raider orders.

• The company advanced its 900 MHz network integration, secured initial commercial orders, and expects further area-wide deployments in the second half of 2024.

• Iron Drone Raider achieved major progress, including initial and follow-on orders from global military customers, positioning the company as a leader in the counter-drone market.

• American Robotics secured a contract with the U.S. Coast Guard for emissions monitoring, opening new opportunities in government and commercial markets.

• The company anticipates a material recovery in revenue in the second half of 2024, driven by defense, public safety, and industrial demand, with OAS expected to lead the rebound.

Financial highlights

• Q2 2024 revenue was $957,851, down from $5.5 million in Q2 2023; gross margin was -20% versus 56% year-over-year.

• Operating loss for Q2 2024 was $8.3 million, slightly improved from $8.5 million in Q2 2023; adjusted EBITDA loss was $6.7 million versus $5.6 million.

• Operating expenses dropped to $8.1 million from $11.6 million year-over-year, due to cost controls and reduced R&D.

• Cash and equivalents were $5 million at June 30, 2024, down from $15 million at year-end; working capital deficit was $22.8 million.

• Net long-term borrowings were $2.5 million; short-term borrowings were $29.4 million, both net of discounts and issuance costs.

Outlook and guidance

• Revenue recovery is expected in the second half of 2024, primarily from OAS, with modest expectations for Ondas Networks and significant demand for Optimus and Iron Drone platforms.

• Clarity on 2025 900 MHz deployment plans anticipated in Q4 2024; management focused on securing orders for 2025.

• Investor Day planned for September to provide detailed OAS business plan and financial model.