Ondas Inc. — Q3 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue reached $167.5 million, a 100% sequential increase from $83.8 million in Q2 2026 and a more than 16-fold year-over-year increase from $10.1 million in Q3 2025.
• Pro forma organic revenue grew 64% year-over-year.
• Gross profit was $36.5 million (21.8% margin) in Q3 2026, compared to $36.1 million (43.1% margin) in Q2 2026 and $2.6 million (25.8% margin) in Q3 2025.
• Adjusted Gross Profit was $58.3 million (34.8% margin) in Q3 2026, up from $42.3 million (50.4% margin) in Q2 2026.
• Operating expenses totaled $226.0 million in Q3 2026, driven by $88.1 million in non-cash expenses ($57.8 million stock-based compensation, $25.3 million amortization) and $14.1 million in acquisition-related cash expenses.
• Adjusted Cash Operating Expenses were $118.7 million in Q3 2026, compared to $88.8 million in Q2 2026.
• Operating loss was $189.5 million in Q3 2026, compared to $162.9 million in Q2 2026 and $15.5 million in Q3 2025.
• Net loss was $64.7 million in Q3 2026, compared to $89.7 million in Q2 2026 and $7.5 million in Q3 2025.
• Total other income, net was $133.1 million in Q3 2026, including $125.1 million in non-cash gains from warrant remeasurement.
• Adjusted EBITDA loss was $59.7 million in Q3 2026, compared to $46.2 million in Q2 2026 and $8.1 million in Q3 2025.
• Backlog increased 36% sequentially to $835 million as of Q3 2026.
• Cash, cash equivalents, restricted cash, and short-term investments totaled $820.3 million as of September 30, 2026.

Guidance and Future Outlook:

• Raised full-year 2026 revenue target to at least $550 million, up from the prior range of $525–$550 million.
• Targets Q4 2026 revenue of greater than $250 million.
• Projects Q4 2026 pro forma organic year-over-year growth of at least 75%.
• Initiated a 2027 revenue target of at least $1.1 billion, excluding additional acquisitions, representing 100% year-over-year growth and over 40% organic growth.
• Expects Adjusted EBITDA profitability at the operating platform level in Q4 2026.
• Pulled forward company-wide Adjusted EBITDA profitability target to Q3 2027, one quarter earlier than the previous Q4 2027 guidance.
• Anticipates significant declines in Adjusted EBITDA losses in coming quarters due to operating leverage from revenue and gross profit growth.
• Expects gross margins to recover to historical levels in Q4 2026, though similar levels to Q3 are expected due to mix and variability.

Business Segments and Product Lines:

• Established Ondas Sentinel as a core U.S. defense platform, integrating DZYNE Technologies and World View.
• Formed Regna AI, a standalone company focused on sovereign AI applications leveraging NVIDIA Nemotron models and Palantir platforms.
• Created a dedicated Land Systems segment within the OAS business unit, consolidating unmanned ground vehicle (UGV) and autonomous land technologies including Roboteam, IndoEarth, 4M, Apeiro Motion, and Ottopia.
• Captured $214 million in new orders during Q3, including $100 million in Sentinel bookings ($53.7 million ULTRA follow-on, $21.7 million IonStrike).
• Expanded Sentrycs counter-UAS presence at 2026 FIFA World Cup venues and selected by multiple NFL stadiums for counter-drone protection.
• Secured a U.S. Army follow-on task order for the Lethal Unmanned Systems (LUS) IDIQ.
• Selected for the multi-million dollar "Digital Bat" program with the Israeli MOD for a next-generation tactical attack drone.
• Launched Dronebuster® REACH, with the first system under contract for delivery to the U.S. Office of Naval Research.
• Completed the first flight of Blitz Block 3, a next-generation low-cost autonomous UAS platform.
• Completed six strategic acquisitions: DZYNE Technologies, Cyberhawk, Gate/Bron, Ottopia, Insignito, and Caribou Labs.
• Announced a planned acquisition of Stemme to strengthen production capacity for the ULTRA S12 airframe.
• Opened a new training and flight operations hub in Springfield, Ohio, near Wright-Patterson Air Force Base.

Market and Competitive Landscape:

• Demand remains strong for counter-UAS systems to protect civilian and military airspace.
• The company is expanding its addressable market through software, services, and repeat revenue potential via the integrated platform.
• Ondas is preparing to rapidly increase production capabilities to meet growing U.S. and allied demand for affordable, persistent long-endurance ISR.
• The company is investing in production, supply-chain, deployment, and sustainment infrastructure to deliver at scale.

Risks and Challenges:

• Gross margin in Q3 2026 was impacted by higher amortization of capitalized intellectual property, step-up in acquired inventory, and inefficiencies in the early stages of ramping large programs.
• Elevated operating expenses in 2026 reflect front-loading of costs ahead of revenue ramp and investments necessary for long-term growth.
• Reported earnings volatility is driven by non-cash gains/losses from warrant remeasurement, which are unrelated to core operating performance.
• Forward-looking statements are subject to risks, uncertainties, and assumptions, including those detailed in the company's SEC filings.

Management Commentary and Tone:

• Chairman and CEO Eric Brock stated the quarter demonstrates the benefits of the integrated operating platform, enabling mission-ready technologies to move faster from evaluation to deployment.
• Management emphasized the next phase is "disciplined execution" to deliver on commitments, integrate capabilities, and convert demand to sustainable growth and profitability.
• Management expressed confidence in a strong finish to 2026 with accelerating momentum in Q4 as volume deliveries ramp.
• The company views early ramp-up inefficiencies as temporary and believes elevated operating expenses are necessary investments to support significant revenue expansion in 2027.

Other Key Points:

• Conference call scheduled for November 12, 2026, at 8:30 a.m. ET.
• The company held approximately $820 million in cash and short-term investments as of September 30, 2026.
• The company revised its definition of Adjusted EBITDA and Adjusted Cash Operating Expense to exclude changes in the fair value of contingent consideration and other acquisition-related obligations.
• The company introduced Adjusted Gross Profit and Adjusted Gross Margin to provide insight into underlying profitability excluding acquisition-related accounting charges.
• Total assets increased to $4.03 billion as of September 30, 2026, from $1.13 billion as of December 31, 2025.
• Total liabilities increased to $1.66 billion as of September 30, 2026, from $661 million as of December 31, 2025, largely due to warrant liability increases.
• Stockholders' equity increased to $2.37 billion as of September 30, 2026, from $442 million as of December 31, 2025.