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Introduction & Market Context
Ondas Holdings Inc. (NASDAQ:ONDS) presented its first quarter 2025 earnings results on May 15, 2025, highlighting substantial revenue growth while continuing to navigate significant operational losses and share dilution. The company, which operates through two segments – Ondas Networks and Ondas Autonomous Systems (OAS) – reported a 580% year-over-year revenue increase amid ongoing efforts to establish its technology platforms in the railroad and defense sectors.
The presentation comes after a challenging 2024, when the company missed revenue forecasts and experienced a significant stock price decline. Despite the improved Q1 performance, Ondas shares closed at $0.876 on May 14, 2025, near their 52-week low of $0.537, reflecting continued investor concerns about the company’s path to profitability.
Quarterly Performance Highlights
Ondas reported Q1 2025 revenue of $4.25 million, a dramatic 580% increase from $625,009 in Q1 2024. The company also achieved a positive gross profit of $1.49 million, compared to a negative gross profit of $394,982 in the prior-year period.
As shown in the following financial results table:
Despite the revenue growth, Ondas continued to post significant losses, with a net loss of $14.14 million for Q1 2025, wider than the $9.88 million loss reported in Q1 2024. Operating expenses increased to $11.8 million from $8.73 million in the prior-year period, reflecting the company’s continued investments in growth initiatives.
The company’s cash position remained relatively strong at $25.41 million at the end of Q1 2025, compared to $14.59 million a year earlier, though down from $30 million at the end of 2024.
Detailed Financial Analysis
Ondas’ balance sheet reflected significant changes in Q1 2025, particularly regarding its debt structure. The company reduced its holdings convertible debt by $19.2 million during the quarter, from $44.62 million to $25.45 million.
The following balance sheet highlights the company’s financial position:
However, this debt reduction came at a significant cost to shareholders in the form of substantial dilution. The company’s outstanding shares increased from 93.17 million at the end of 2024 to 127.72 million by March 31, 2025, and further to 137.43 million by mid-May 2025, primarily due to debt conversions.
The following slide illustrates the extent of this dilution:
On a positive note, the company’s adjusted EBITDA loss improved slightly to $7.5 million in Q1 2025 from $7.68 million in Q1 2024, suggesting some progress in operational efficiency despite the higher absolute losses.
Strategic Initiatives
Ondas’ business strategy continues to focus on two distinct segments with separate market opportunities.
The Ondas Autonomous Systems (OAS) division generated $4.0 million in Q1 2025 revenue and secured $9.3 million in new orders year-to-date. The company highlighted several significant developments, including a funded development program with a defense vendor partner to enhance its Iron Drone Raider product, and new defense/homeland security customers in NATO countries.
The following slide details recent OAS achievements:
The company emphasized the substantial market opportunity for its drone systems, estimating a combined total addressable market of $5.3 billion for its Iron Drone Raider and Optimus System products in defense and homeland security markets.
Meanwhile, Ondas Networks continues to focus on the railroad industry, with progress in the adoption of the IEEE 802.16t standard (dot16) for rail communications. A significant development was the selection of dot16 as the communications protocol for future Next (LON:NXT) Generation Head-of-Train / End-of-Train (NGHE) devices by the Association of American Railroads’ Wireless Communications Committee.
Forward-Looking Statements
Looking ahead, Ondas reiterated its 2025 revenue target of at least $25 million, which would represent a substantial increase from the $7.2 million reported for full-year 2024. The company’s current backlog stands at $16.8 million, providing some visibility toward this goal.
The company outlined specific targets for 2025:
Management expects to maintain a healthy balance sheet to fund its growth plan and has filed a registration statement for a shelf offering to provide long-term flexibility. The company also announced plans for another OAS-focused Analyst Day in mid-June 2025.
While Ondas’ Q1 2025 results show promising revenue growth, investors will likely remain cautious given the company’s history of missed forecasts, ongoing losses, and significant share dilution. The execution of its strategic initiatives in both the railroad and defense/homeland security markets will be critical to achieving its ambitious 2025 revenue target and eventually reaching profitability.
Full presentation:
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