Ondas (ONDS) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 bookings of $14.4 million, primarily from major military orders for Iron Drone Raider and Optimus platforms, marking entry into global defense and homeland security markets and expanding the customer pipeline in the US, Europe, and the Middle East.

• Significant milestones in Ondas Networks (rail communications) and OAS (drones), including new orders, expanded customer engagement, and deployment of Optimus for perimeter and border security.

• Raised over $10.5 million in capital during Q3 and Q4-to-date, reflecting continued investor support and CEO participation.

• Strong momentum in both business units, with expectations for substantial revenue growth in Q4 and 2025 as backlog is fulfilled and new orders are secured.

• OAS shifted focus from service to product revenue, with regulatory milestones and new government funding supporting growth.

Financial highlights

• Q3 2024 revenue was $1.48–$1.5 million, down from $2.67–$2.7 million in Q3 2023, mainly due to delayed railroad orders and extended project timelines.

• Gross margin for Q3 2024 was 3% ($47,560–$48,000), compared to 21% ($554,878–$555,000) in Q3 2023, impacted by lower-margin development projects and subscale operations.

• Operating loss was $8.7 million, and adjusted EBITDA loss was $7.1 million for Q3 2024; net loss increased to $9.5 million from $7.3 million year-over-year.

• Cash and equivalents stood at $2.9 million as of September 30, 2024, down from $15 million at year-end 2023.

• Cash used in operations for the nine months ended September 30, 2024, was $25.4 million, with a working capital deficit of $22.3 million.

Outlook and guidance

• Significant revenue growth expected in Q4 2024 as OAS fulfills backlog and additional military orders are recognized, with gross margins north of 50%.

• Revenue from $14 million in military orders expected to be recognized in Q4 2024 and Q1 2025.

• Anticipate sustained and growing revenue throughout 2025, driven by both existing and new customers in military, public safety, and rail markets.

• Ondas Networks expects modest Q4 revenues but sees major financial opportunity in 900 MHz deployments in 2025.

• Management is advancing funding strategy and has applied for a Nasdaq extension to meet minimum bid requirements.