Ondas Q2 Earnings Call Lifts Outlook and Profitability Timeline

ONDS Raises 2026 Revenue Outlook

Chairman, CEO and President Eric Brock said that the higher target reflects broad demand and programs moving into delivery. He cited the U.S. Army Lethal Unmanned Strike program, ULTRA, IonStrike and INDO Earth's combat engineering vehicles.

Brock said that the 2026 target includes Cyberhawk's expected second-half contribution. Management expects adjusted EBITDA losses to narrow sequentially beginning in the third quarter as revenue and gross profit scale.

Revenues of $83.8 million topped the Zacks Consensus Estimate of $66.9 million. The company reported a loss of 3 cents per share, which was narrower than the consensus estimate of a 7-cent loss.

Ondas Builds Around Backlog and Pipeline

Brock said that Ondas entered the second half with $757 million in pro forma backlog, including DZYNE and Cyberhawk. Its two-year strategic program pipeline exceeded $11 billion, while third-quarter orders reached about $105 million through Aug. 10.

Oshri Lugassy, co-CEO of Ondas Autonomous Systems, said that backlog spans four target market segments and multiple geographies. His near-term priority is converting orders into revenues while continuing to replenish backlog organically.

Lugassy highlighted opportunities across long-endurance ISR, kinetic counter-UAS, persistent stratospheric ISR and unmanned ground systems. The focus is moving larger opportunities from pipeline to funded programs.

ONDS Targets Operating Leverage After Cost Surge

CFO and Treasurer Neil Laird said that adjusted cash operating expenses reached about $93 million as Ondas invested ahead of growth. Adjusted EBITDA was a loss of about $51 million, which he called the expected peak loss quarter.

Laird said that operating-expense growth should normalize from the third quarter onward. Adjusted gross margin was 50.4% compared with 51.5% in the prior quarter, with management expecting some second-half pressure from mix and acquired excess capacity.

Brock said that the operating platform should reach adjusted EBITDA profitability in the fourth quarter of 2026, with company-wide profitability targeted for the fourth quarter of 2027. He told a Stifel analyst that selected corporate spending should moderate.

Ondas Integrates Acquisitions Through Shared Platform

Ryan Hartman, CEO of Ondas Sentinel, said Palantir Foundry and Warp Speed are central to the One Ondas integration model, connecting workflows across inventory, supply chain, manufacturing and finance.

Hartman told an Oppenheimer analyst that the first integration tools became operational about a week after the World View acquisition. He said those tools had been operating for months and were being used with DZYNE and World View.

Hartman also said that SkyWeaver, developed with Palantir, completed ground and aerial testing. The platform is intended to connect Ondas systems with customer command-and-control environments and support cross-selling.

ONDS Q&A Tests Growth Durability and Execution

A Needham analyst asked whether roughly 30% growth could persist into 2027. Brock viewed 30%-40% growth across the portfolio as sustainable, while individual systems and markets will grow at different rates.

A Northland Capital Markets analyst asked about supply-chain readiness. Brock acknowledged challenges around newer programs but said Ondas has strategies and capacity to support planned fulfillment through 2026 and into 2027.

A Maxim Group analyst asked how M&A fits with profitability targets. Brock said that acquisitions must remain financially and strategically accretive, while the next six to 12 months will emphasize demonstrating EBITDA and operating leverage.

Ondas Keeps Focus on Delivery and Scale

Brock summarized management's priorities as commercial scale, operational scale, AI and innovation and disciplined corporate development. The operating agenda centers on backlog conversion, manufacturing and support capacity and technology integration.

In closing, Brock focused on execution through the second half and sustaining momentum into 2027. Management tied that outlook to delivering existing programs and translating higher revenues into operating leverage.

ONDS Zacks Rank and Style Score Signals

ONDS carries a Zacks Rank #3 (Hold). Its Value Score, Growth Score, Momentum Score and VGM Score are all F, the weakest grade in the Zacks Style Score hierarchy and not the favorable A or B combination emphasized for stronger-ranked stocks. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Rank and Style Scores are complementary indicators. As the Zacks Rank is tied to earnings estimate revisions, it can change as estimates are revised following the just-reported results.

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