On Thursday, Ondas Holdings (NASDAQ:ONDS) discussed second-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Ondas Holdings reported record revenue of $83.8 million for Q2 2026, marking a 13-fold increase year-over-year and 67% sequential growth.
The company increased its full-year 2026 revenue target to $525-$550 million, supported by a $757 million backlog and a strategic program pipeline exceeding $11 billion.
Key strategic initiatives include the One Ondas integrated platform and AI-enabled multi-domain system-of-systems solutions, emphasizing operational integration and global expansion.
Ondas Holdings continues to invest in its operating platform, with $29 million allocated for growth initiatives, while maintaining a strong cash position of $1.4 billion.
Management highlighted significant growth in the Ondas Autonomous Systems and Ondas Sentinel businesses, with noted successes in counter-UAS and precision strike segments.
The company expects adjusted EBITDA losses to narrow in the second half of 2026, with profitability anticipated in late 2026 for its operating platform and company-wide by Q4 2027.
Full Transcript
OPERATOR
Welcome to the Ondas Holdings second quarter 2026 earnings and business update conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then one on your telephone keypad. To withdraw your question please press star and then two.
Before we begin, the company would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Ondas Holdings' best current judgment, they are subject to risks and uncertainties that can cause actual results to differ materially from those implied by these forward-looking statements. These risk factors are discussed in Ondas Holdings' periodic SEC filings and in the earnings press release issued today, which are both available on the company's website.
Ondas Holdings undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances except as required by law. During this call, Ondas Holdings will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the non-GAAP financial measures to the most direct comparable GAAP measures is shown in our press release issued today, which is available at the Investor Relations section of our website.
This non-GAAP information is provided as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. However, management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. Please note this event is being recorded. I would now like to turn the presentation over to Eric Brock, Chairman and CEO. Please go ahead.
Eric Brock, CEO
Thank you, Operator, and good morning, everyone. We appreciate you joining us today and your continued interest in Ondas Holdings. I'm pleased to be joined this morning by key members of our leadership team: Neil Laird, our Chief Financial Officer and Treasurer; Oshri Lou Gassi, Co-CEO of Ondas Autonomous Systems; Meir Kleiner, President of OAS; and Ryan Hartman, CEO of Ondas Sentinel. We have a lot to cover today, so we will dive right in. Let's turn to today's agenda.
I'll begin with a high-level review of our second quarter performance, the continued execution of our core plus strategic growth plan, and the progress we are making toward building One Ondas. Neil will then review our second quarter financial results, balance sheet, and the investments supporting the significant growth we expect in the second half of 2026 and beyond. We will then provide a growth and operational update, including commercial momentum, major customer programs, expansion across our four strategic market segments, and the continued scaling of our global operating platform.
We will also discuss the integration of our expanding technology portfolio and our progress toward delivering AI-enabled multi-domain system-of-systems solutions. I'll close with our updated financial outlook and management priorities for the next phase of Ondas Holdings' growth. We will then open the call for questions. Let me begin with the operating model behind our strategy. Ondas Holdings continues to execute its core plus strategic growth plan.
And to be clear, Ondas Holdings is not simply a collection of acquired companies. We are building and operating one integrated global platform, One Ondas. That means assembling mission-ready technologies, world-class engineering talent, experienced leadership teams, customer relationships, and operational capabilities, and then integrating those assets into a unified growth platform. The value of this model becomes most visible when we combine technologies across domains.
We are connecting persistent multi-domain ISR capabilities to the complete detect, identify, track, and defeat chain. In counter-UAS, for example, we are bringing customers a unique layered architecture that can include passive detection, cyber takeover, electronic warfare, interception, and fully autonomous kinetic defeat. These integrated capabilities are designed to protect critical locations from hostile drones ranging from small FPV drones to larger, more sophisticated threats.
We are integrating these capabilities through software-defined command and control, enabling customers to operate a coordinated system-of-systems rather than a collection of disconnected products. But technology integration is only part of the equation. We are also integrating engineering resources, sales and marketing teams across more than 60 countries, production and supply chain capabilities, field support, training, sustainment, and customer service.
As we have said before, exceptional technology that is useful, built to customer requirements, and operational in the field is essential. Developing that technology is extremely challenging, and we are proud to have operationalized the incredible portfolio we have at Ondas Holdings. With that said, technology by itself is not sufficient to win. Customers in global defense, homeland security, public safety, and critical infrastructure markets need partners that can deploy, support, and sustain mission-critical systems at scale.
That is what One Ondas is all about. It is how we create value for customers, employees, partners, and shareholders. It is how we win. And Ondas Holdings is playing to win. The execution of our strategy is increasingly reflected in our financial performance, with these KPIs demonstrating the strength and momentum of our business. We delivered another quarter of record revenue, generating approximately $83.8 million in the second quarter. That represents more than 13-fold growth versus a year ago.
We expect to sustain this momentum and deliver another significant revenue ramp in the second half of 2026 based on our results, backlog, and current visibility. We are also increasing our full-year 2026 revenue target to a range of $525 to $550 million. The growth is broad-based across the portfolio, supported by continued strength in our core businesses, the conversion of large orders already in backlog, and the transition of several emerging platforms from development and qualification into deployment.
Our two-year strategic program pipeline has expanded to more than $11 billion, and our pro forma backlog now stands at approximately $757 million, including Design and Cyberhawk, growing more than 11x during 2026 and providing substantial revenue visibility. Meanwhile, order momentum remains strong. We have already captured approximately $105 million of new orders quarter to date, further adding to backlog during this Q3. At the same time, we continue investing in the operating platform required to support this growth.
Cash operating expenses were elevated in the quarter, reflecting the full-quarter impact of businesses added earlier in the year, principally World View and Mistral, as well as approximately $29 million of growth investment across corporate development, Ondas Holdings capital partner initiatives, and the broader operating platform. We made these investments ahead of the significant revenue and gross profit ramp we expect in the second half and beyond.
We expect the growth in these OpEx investments to moderate from here, providing substantial operating leverage as revenue scales. We also remain very well capitalized. We ended June with approximately $1.4 billion in cash, cash equivalents, restricted cash, and short-term investments. Even after deploying $325 million for new acquisitions in Q3, we retained significant financial flexibility to support organic growth, scale our operating platform, and execute our strategic growth program.
This chart is a simple visual of the transformation underway in our financial performance. Quarterly revenue has grown from approximately $4.2 million in the first quarter of 2025 to $83.8 million in the second quarter of 2026. We believe this is what the early part of an S-curve should look like. Technology adoption curves are generally not linear; they are exponential. Once platforms are validated, customer requirements are established, and programs move from testing into scaled deployment, growth can accelerate rapidly.
Our strategy is designed around that dynamic. As we execute our core plus strategic growth plan, we are not only expanding the technology portfolio, but also building the operating platform required to support an exponential growth curve across production, supply chain, customer deployment, field support, and sustainment. Importantly, the underlying core growth of our businesses remains a major driver of the financial model and the economic value we are creating.
On a pro forma basis, assuming our current portfolio companies had been owned throughout both periods, Ondas Holdings generated approximately 85% organic revenue growth in the second quarter compared with Q2 2025. That is an important distinction. The growth reflected here is not simply the result of adding acquired revenue. Our underlying businesses are also expanding rapidly within the Ondas Holdings platform. Core organic growth is a theme we will return to throughout today's discussion.
We have strong momentum and are positioned for growth to accelerate further during the second half of 2026 and into 2027. This slide provides additional detail showing our growth model is working. The model begins with strong mission-ready technology platforms in markets with very significant customer demand. That technology and demand are supported by the operating platform Ondas Holdings is building, providing working capital, global customer relationships, expanded sales capabilities, production resources, supply chain support, and field services.
As mentioned, on a pro forma basis, Ondas Holdings delivered approximately 85% organic year-over-year revenue growth during the second quarter. Backlog also continued to grow, increasing approximately 33% sequentially from Q1 to Q2 on an organic basis. We continue to see a particularly strong organic ramp across the Ondas Autonomous Systems businesses. Sentrix continues to see substantial demand for its cyber over RF counter-UAS systems, with second quarter pro forma revenue up approximately 298% year over year.
The Sentrix team is performing extremely well, benefiting from the expanding global sales platform, customer access, and operating resources available through Ondas Holdings. Our success at the FIFA World Cup and recent win with the Jacksonville Jaguars are early signs that Ondas Holdings is winning as the long-term investment cycle kicks into high gear. A Robotics also delivered very strong growth, with revenue up approximately 112% year over year.
That growth was supported by Iron Drone, continued customer demand for autonomous drone infrastructure, and new integrated system-of-systems customer engagements. Similarly, 4M delivered approximately 258% year-over-year pro forma revenue growth. With the capital, customer access, operating support, and international reach of Ondas Holdings behind it, 4M is expanding its intelligent demining and land intelligence business into substantially larger programs.
Rotron is proving to be another excellent addition to our portfolio. Rotron captured approximately $34.2 million in orders during the second quarter alone, compared with approximately $25 million of expected 2026 revenue we underwrote in the acquisition. Rotron's international pipeline outside the UK is also expanding under Ondas Holdings, and we believe its capabilities in jet propulsion, precision strike, UAV development, and platform commercialization will be meaningful value creators over the coming years.
This performance is not isolated to one company or market segment. We are seeing strong organic growth across multiple businesses, and the data increasingly validates both our operating platform thesis and our execution. I want to pause on this slide because it illustrates the One Ondas operating model. At the top is Ondas Holdings Inc., responsible for capital allocation, corporate strategy, the Ondas Holdings brand, investor engagement, governance, and overall enterprise direction.
Beneath that is our shared operational platform. This layer provides capabilities across supply chain and production, field support and services, global sales and marketing, government affairs, finance, and corporate infrastructure. These shared resources accelerate commercialization, improve execution, and allow the specialized technology companies within Ondas Holdings to scale more efficiently. Those specialized companies bring deep domain expertise, differentiated intellectual property, exceptional engineering talent, established customer relationships, and mission-ready products.
We are integrating those capabilities across four major high-growth market segments: Aerial Security, ISR and Persistent Intelligence, Precision Strike, and Autonomous Ground Systems, with AI software serving as a common enabling layer across the portfolio. Exceptional technology is merely the starting point in these markets. Customers need complete solutions built to requirements, integrated, reliably delivered, and supported across the mission lifecycle.
Partners need a platform to bring technologies to market and pursue larger global programs. Employees need the resources, infrastructure, and capital to scale innovation. And investors need this model too. Our shared operating layer deploys capital more efficiently, accelerates revenue, reduces duplication, and generates increasing P&L leverage as the platform scales—leverage that is fundamental to sustained profitability and attractive long-term returns.
Ashri and Ryan will discuss this model in greater depth later, including how we are integrating technologies, pursuing larger programs, and scaling execution across the portfolio. As we deploy capital and scale Ondas Holdings, one of our most important responsibilities is ensuring we have the strongest, most capable leadership team possible. We have made tremendous progress across Ondas Holdings. We are assembling a mission-driven leadership team deeply committed to delivering robust operational autonomous capabilities to customers in defense, homeland security, public safety, and critical infrastructure markets across the United States, Israel, and allied nations. I am pleased to welcome David Barnia as President and Chairman of Ondas Defense Limited. David joins Ondas Holdings following a distinguished career serving the State of Israel, most recently as Director of the Mossad. He brings nearly three decades of intelligence, national security, and operational leadership experience and intimate knowledge of modern warfare and the current battlefield. David's mandate is to help lead our global expansion, strengthen our relationships with international defense and security customers, and advance the integration and adoption of our AI-enabled multi-domain autonomous systems platform.
He will work closely with me, Ashri, and the broader leadership team to maximize the impact of our technologies and services across our global customer base. To summarize, our plan is working, and I am extremely proud of our team's performance. We have had a very strong first half and believe we can accelerate this momentum through the remainder of the year. The revenue ramp we expect in the second half is significant and increasingly visible through our backlog, order book, and deployment schedules.
Demand remains broad-based, and we expect to benefit from major program deliveries and new product adoption cycles across each of our principal market segments. As we convert these orders into revenue, we are expanding production, supply chain, deployment, and field support capacity to meet customer requirements efficiently and reliably. In Aerial Security and counter-UAS, we continue to see strong global demand across the portfolio. We expect Sentrix's cyber over RF platform to remain a key growth driver as customers increasingly adopt layered, multi-site counter-drone infrastructure.
We also believe Ion Strike, which came to Ondas Holdings through our recent acquisition of Design, is positioned to begin receiving commercial volume orders and initial deliveries during the second half of the year. We see urgent demand for cost-effective kinetic solutions like Ion Strike, capable of defending against increasingly sophisticated Shahed-class drones and coordinated swarms. In Precision Strike, Mistral is positioned to begin deliveries against approximately $240 million of aggregated orders associated with the U.S. Army. We also expect continued advancement on Project Breakstop, while Rotron ramps production and deliveries against material orders and a growing international pipeline. Across ISR and persistent intelligence, our backlog and pipeline for both Ultra and Stratlite deployments continue to grow. We have been expanding production and operational capacity to support the launch of Ultra programs and the increased adoption of Stratlites for maritime domain awareness and other persistent ISR missions.
In Autonomous Ground Systems, Indo Earth is expected to begin deliveries during the fourth quarter on the Combat Machinery program, which has total program potential of approximately $140 million. These programs represent important customer adoption curves. As initial deployments move into larger-scale production and follow-on requirements, we believe they can support meaningful, sustained growth across the platform. Our priorities remain: continue driving organic growth, convert backlog, efficiently leverage the investments we have made in our scalable operating platform, and demonstrate the strength of the Ondas Holdings financial model.
That concludes my introductory comments. I will now hand the call over to Neil, who will review our second quarter financial performance.
Neil Laird (Chief Financial Officer and Treasurer)
Thank you, Eric. The second quarter showed record revenue and represented another important step forward in demonstrating the scalability of our financial model. Revenue increased to approximately $83.8 million, up 67% sequentially and more than 13 times the prior-year period. Importantly, this wasn't simply acquisition-driven. On a pro forma organic basis, assuming our current portfolio had been owned in both periods, revenue grew approximately 85% year over year, reflecting strong execution across our underlying businesses and proving out the power of our growth platform.
With $175 million of new orders during the quarter and continued strength into Q3, we believe that customer demand remains exceptionally strong. Across our platform, gross profit increased to approximately $36 million, while adjusted gross margin—a new metric which excludes the non-cash items of stock compensation expense and amortization of acquisition-related intangible assets—was 50.4%, relatively stable versus 51.5% in the prior quarter despite normal product mix variability.
As we've discussed previously, quarterly margins will fluctuate as deliveries shift between programs. We expect some gross margin pressure in the second half due to mix and recently acquired excess capacity. However, our longer-term target remains to achieve gross margins in excess of 50%. Operating expenses increased to approximately $199 million, but more than half of the total consisted of non-cash or acquisition-related items such as stock compensation, contingent consideration revaluation, amortization of intangible assets, as well as $4.4 million in acquisition-related transaction costs.
To better understand the business, we encourage investors to look at our underlying adjusted cash operating expenses, which amounted to approximately $93 million during the quarter. This includes normal operating expenses as well as investments to support the integration of recently acquired businesses, continued deployment of Palantir Foundry and warp-speed commercialization activities, and infrastructure required to support the significant revenue growth we expect over the coming quarters.
The second quarter represented a large increase as we invested ahead of and in support of a transformational growth curve. The important distinction is that the growth of our operating expense will normalize in the third quarter and beyond, while revenue and gross profit are expected to rise significantly, resulting in significant leverage in our model. Given these investments, which are occurring ahead of a broader revenue ramp, adjusted EBITDA was a loss of approximately $51 million during the quarter.
This result was consistent with our expectation that the second quarter would represent the peak in adjusted EBITDA losses. As revenue accelerates during the second half, we expect those investments to begin producing meaningful operating leverage. Turning to the balance sheet, which remains strong and provides us with significant advantages, we ended the quarter with approximately $1.4 billion in cash, cash equivalents, restricted cash, and short-term investments, compared to $616 million at the end of 2025.
Included in our total assets are investments in unaffiliated public and private companies totaling $70 million. These investments are aligned with our broader platform strategy. They support key partners, enhance access to critical technologies, improve supply chain efficiency, and we believe will generate attractive returns over time. During the third quarter, we've already deployed approximately $325 million of cash to complete the Design and Cyberhawk acquisitions, both important elements for our near-term and long-term growth outlook.
Our balance sheet allows us to invest aggressively in our operating platform, support larger customer opportunities, and continue executing our disciplined acquisition strategy from a position of strength. If there's one message we'd like investors to take away from today's call, it's that our confidence in the trajectory of the business has never been stronger. We believe the first half of 2026 has validated the strategic investments we've made over the past year.
We enter the second half with record backlog, accelerating production, strong demand signals across a rapidly expanding product set, an exceptionally strong balance sheet, and increasing confidence in our outlook. We believe the foundation is now in place for substantial growth and meaningful operating leverage over the coming quarters. With that, I'll turn it back to Eric.
Eric Brock, CEO
As Neil noted, adjusted cash operating expense increased significantly in the second quarter to approximately $93 million. There were two principal drivers of that increase. First, our strategic M&A program added new businesses to the Ondas Holdings platform. These come with operating costs but also bring meaningful revenue and gross profit, established customer relationships, contracted backlog, and expanding pipelines. We believe these additions materially strengthen Ondas Holdings' earnings power and long-term growth potential and should be viewed as investments in scale, not incremental overhead.
Second, we continue to invest in the growth platform at both Ondas Holdings Inc. and across our operating platform at the Ondas Holdings level. In addition to our underlying finance, accounting, and governance expenses, we invested approximately $29 million in growth opex related to corporate development, the Ondas Holdings capital ecosystem and partner initiatives, and our operating platform, including our work with Palantir. At the operating platform level, growth opex—in terms of OAS leadership and operating infrastructure—totaled approximately $6 million.
These are deliberate, front-loaded investments to ensure Ondas can integrate acquisitions efficiently, expand its global sales and marketing reach, scale supply chain and production, and provide the field support, sustainment, and services a much larger business requires. We are not building the operating platform for the Ondas of today, but for the significantly larger company we expect Ondas to become. We believe we are well on our way, driving substantial growth, generating increasing operating leverage, and building a large and profitable global company over the next 12-plus months.
Much of our growth opex is discretionary, and we expect the rate of growth in these expenses to moderate from here as revenue and gross profit continue to scale. Let's now turn to our growth and operational update. Oshri and Ryan will cover our customer engagement, expanding pipeline, and major programs, along with the continued integration of our businesses under the One Ondas operating model. They'll also address the global scale we're building across sales, partnerships, supply chain, and field support, and the integrated multi-domain systems-of-systems platforms we're bringing to market, where software-enabled integration is delivering broader, more valuable customer solutions. Before I hand over to Oshri, I want to highlight an important addition to our Advisory Board, and that is General Charlie Flynn, who joined the Ondas Holdings Advisory Board earlier this month. General Flynn recently retired from the U.S. Army after 39 years of distinguished service. A four-star general, he most recently served as Commanding General of U.S. Army Pacific and previously as the Army's Deputy Chief of Staff for Operations, Plans, and Training.
General Flynn is well suited to help Ondas Holdings navigate the U.S. Department of Defense and allied Ministries of Defense, refine our multi-domain ISR and autonomous systems roadmap, and position our platforms for broader operational adoption. He brings exceptional experience, judgment, and relationships to Ondas Holdings, shares our mission, and understands the urgency of delivering advanced autonomous capabilities to the United States and its allies.
I am grateful that Charlie has chosen to support Ondas Holdings, and we look forward to his contributions as we continue building and scaling the company. With that, I'll hand over to Oshri to discuss our growth and operational progress.
Ryan Hartman (CEO of Ondas Sentinel)
Thank you. Ondas Holdings has made tremendous progress building the global operating platform required to support our rapidly expanding business. As we scale, it is critical that we do so under a One Ondas Holdings strategy. We are not a collection of independent companies. We are integrating our talent, technologies, customer relationships, infrastructure and operating capabilities to leverage the considerable resources we have assembled across the organization.
The benefits extend across every major aspect of our business: sales and marketing, supply chain and production, field support, sustainment and services, engineering and product development, technology integration, and finance and accounting. Today, Ondas Holdings operates in more than 60 countries through 25 physical locations with approximately 1,700 employees around the world. This footprint provides the local market knowledge and customer proximity to compete globally while letting our businesses draw on shared expertise and capabilities across the broader Ondas Holdings platform.
This scale strengthens our ability to pursue and deliver larger programs, expand production, deploy systems more rapidly, and provide customers the reliable field support and service they require. Our footprint continues to grow, but scale itself is not the objective. The goal is to make every Ondas Holdings business more capable, more efficient and more valuable as part of an integrated global platform. We believe this One Ondas Holdings operating model will support faster growth, stronger customer outcomes and increasing operating leverage as the business scales.
Having significantly expanded our global footprint through both organic growth and strategic acquisitions, our focus is now on scaling the operating platform. We're building the infrastructure required to support a much larger enterprise across manufacturing, commercial operations, partner networks and global facilities. We've substantially increased capacity and reach over the past year. We're deliberately building an organization that can support growth at scale.
We are creating the operational foundation needed to serve more customers, execute more programs, and deliver across a broader set of mission requirements than ever before. That's where our Palantir partnership becomes especially important. Foundry is helping us establish a common operating framework that connects data, workflows and decision making across the enterprise. It gives leadership real-time visibility into operations and lets teams coordinate across manufacturing, supply chain, flight operations and finance.
As we integrate acquired businesses and expand our capabilities, this infrastructure becomes a powerful force multiplier, helping us scale efficiently while improving execution across the enterprise. As we've been building the foundation, we're also accelerating integration and quickly realizing value. One of the biggest challenges in any acquisition strategy is integration. Historically, bringing together systems, processes, operational data, supply chains and business functions can take years.
Our integration strategy, coupled with our Palantir partnership, fundamentally changes that dynamic. Foundry dramatically accelerates integration, allowing us to bring newly acquired organizations into the Ondas Holdings ecosystem in a fraction of the traditional timeline. The impact extends beyond software deployment. Faster integration means faster visibility into operations, faster standardization of processes, faster collaboration between teams, and ultimately faster realization of the value from our acquisitions.
We believe this capability represents a meaningful competitive advantage, allowing us to rapidly transform acquired technologies, talent and operations into a unified enterprise platform capable of operating at significantly greater scale. Ultimately, Foundry is becoming the operating system that enables Ondas Holdings to move with speed while maintaining the agility to innovate and grow. We have made significant progress translating capabilities and next generation solutions as we operationalize our system-of-systems strategy.
First, our Ironwave product line is not only operational, but being fielded by a customer with very strong performance. Ironwave provides forward-deployed aerial and ground-based ISR capabilities through an integrated platform architecture designed to support mission execution at the tactical edge. This is another important step in expanding our ability to deliver multi-domain solutions to customers. Second, we're beginning to see the real benefits of combining the technologies acquired across the Ondas Holdings portfolio.
A strong example is the effort combining Design Sawtooth counter-UAS technology with Sentrix Cyber over RF capabilities. This unified solution will soon enable a more complete detect, identify and defeat capability, bringing multiple layers of sensing, electronic effects and command and control into one platform. We believe this integration can create a highly differentiated counter-UAS capability that addresses a rapidly growing market requirement and demonstrates the value of our systems-of-systems approach.
Finally, I'd like to update you on Skyweaver, our edge AI platform being developed with Palantir. Last week we successfully conducted both ground and aerial testing of the Skyweaver platform, validating key aspects of the architecture and providing a clear path toward final development and broader operational integration. Skyweaver is designed to serve as a unifying intelligence layer across the Ondas Holdings portfolio, enabling operators to ingest, process and act on information from multiple domains in real time.
As it matures, we believe it will become a foundational capability supporting true system-of-systems operations across air, ground and future mission environments. Taken together, these developments reflect our broader strategy: integrating advanced technologies, accelerating innovation through software and delivering multi-domain operational capabilities that help customers make better decisions when every second counts. With that, I'll turn the call back over to Eric.
Eric Brock, CEO
Thank you, Ryan. The work Ryan just described, embedding AI-enabled command and control across our platforms, is central to how we differentiate our systems-of-systems offerings as we scale. Let's now turn to our outlook for the second half of 2026 and the priorities guiding the next chapter of Ondas Holdings growth. As highlighted throughout today's presentation, Ondas Holdings has transformed its business and built meaningful scale. At the same time, we're scaling the operating platform to commercialize and deliver these technologies globally, improving capital efficiency, strengthening unit economics, accelerating delivery and supporting the much larger programs we're now pursuing. The opportunity ahead requires us to keep scaling and management is focused on four priorities. First, commercial scale: converting our backlog and pipeline, expanding our global reach and turning initial deployments into recurring, long-duration programs. Second, operational scale: strengthening shared capabilities across the platform, expanding global manufacturing capacity and driving consistent execution as volumes increase.
Third, AI and innovation: embedding agentic AI autonomy and advanced software more deeply across the portfolio to deliver integrated, software-defined, multi-domain solutions rather than standalone products. Fourth, corporate development: disciplined portfolio expansion through strategic acquisitions, technology partnerships, including our work with Palantir, and further expansion into key global markets. These priorities reinforce one another, converting the demand we're seeing into sustained revenue growth, stronger operating leverage and long-term value for our customers and shareholders.
Against that backdrop, we are increasing our full-year 2026 revenue target to between $525 million and $550 million at the midpoint. This would represent more than 10 times Ondas Holdings' 2025 revenue and greater than 30% organic growth on a year-over-year pro forma basis. For the third quarter, we expect revenue of between $140 million and $155 million at the midpoint. That represents approximately 73% sequential growth and greater than 30% organic growth year over year on a pro forma basis.
Clearly, our outlook implies another significant sequential ramp in both the third and fourth quarters. We believe we have meaningful visibility into that ramp through our backlog and rapidly expanding pipeline. Importantly, we expect growth to remain broad-based across market segments as depicted in this pie chart. Several major programs already in backlog are also expected to contribute meaningfully during the second half. We are beginning volume shipments against more than $240 million of orders captured under the U.S. Army's $982 million lethal unmanned strike IDIQ. We also expect growing contributions from Ultra and Ion Strike as those platforms begin their adoption curves and volume deliveries during the third and fourth quarters. Similarly, Indo Earth is expected to begin delivering against the $140 million combat engineering vehicles program announced earlier this year. As Neil discussed, our first-half cost structure reflected substantial front-loaded investment in the operating platform required to support this growth.
As revenue and gross profit scale, we expect adjusted EBITDA losses to narrow in the second half, beginning in the third quarter. While we continue investing in the opportunities ahead, we see upside to our previously announced adjusted EBITDA profitability objectives and are pulling forward the timeline by a quarter. We now expect our operating platform, consisting of Ondas Holdings Autonomous Systems and Ondas Holdings Sentinel, to reach profitability in the fourth quarter of 2026, and for Ondas Holdings to reach company-wide adjusted EBITDA profitability in the fourth quarter of 2027.
Finally, if we execute against the planned fourth quarter ramp, we expect to exit 2026 at $1 billion in annualized run-rate revenue. Indeed, we are tracking well ahead of our 2030 target of $1.5 billion in revenue by perhaps a couple of years. We have significant work ahead, but the strength of our backlog, the breadth of our pipeline and the increasing scale of the operating platform give us confidence we can sustain momentum through the balance of 2026 and into 2027.
Let me wrap up our prepared remarks before we open the call for questions. We believe Ondas Holdings is positioned to win in large and expanding defense and security markets. We have built a differentiated portfolio across four strategic market segments supported by growing backlog and commercial momentum, a global customer base, strategic partnerships, and an increasingly integrated technology and operating platform. Most importantly, we believe we have a clear path to profitable, scalable growth, and we plan to demonstrate that operating leverage as we move through 2026 into 2027.
Our focus now is execution: converting backlog, delivering on major programs, integrating our capabilities across the platform, and realizing the operating leverage inherent in the model. We believe these assets, technologies and execution capabilities position Ondas Holdings to build the global leader in autonomous defense and security technologies and create substantial long-term value. Thank you again for joining us today. Operator, we will now open the call for questions.
OPERATOR
Now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Our first question comes from Austin Baleg with Needham. Please go ahead.
Austin, Analyst
Hey guys, thanks for taking my question and congrats on the great results and solid execution. I just wanted to dig into the big uptick in the pipeline opportunity here, going from about 4 to 11 billion. I was curious if you could elaborate on what is included in Design acquisition, but then also what was new incremental organic. It looks like APAC saw a really big uptick in this pipeline.
Eric Brock, CEO
Austin, thank you. So the uptick in our strategic pipeline is really broad‑based across the four market segments we're active in, and as you can see, it is also broad‑based regionally. Design has certainly brought quite a bit on the ISR and counter‑drone systems, in particular in Europe. We're seeing strength across segments as well. I highlight what we're seeing with impressive strength with Rotron, and we think these are also very relevant, and we're seeing demand in Asia Pacific as well.
I do want to highlight, or come back to, General Flynn has joined us. He is, you know, part of his mandate is to help us penetrate and serve the Asia Pacific region. So we think that's going to be supportive in us pulling through this pipeline.
Austin, Analyst
Awesome. And then maybe just one quick follow‑up. So appreciate the color on the pro forma organic revenue in the quarter, 85%, and I believe for the full year you said it will imply around 30% organic growth. I'm just kind of curious if you can—Is that an apples‑to‑apples comparison between the two, or does that 30% number imply something else?
Eric Brock, CEO
Well, clearly, as we're moving through the year into 2027, the base we're comparing to is growing. So what I'm seeing from here is a 30% to 40% growth level across the portfolio. Of course, some of the systems and markets will grow faster than others, but I think it's fair to say that we're seeing underlying demand and adoption curves across the board. And that's the context I can share. So if you're thinking about 2027, those are the metrics I'd be focused on.
Austin, Analyst
Okay, yeah. And I guess my quick follow‑up was, as we think about 2027, is this kind of 30% revenue cake or something that's sustainable, or how should we be thinking about growth as we enter next year?
Eric Brock, CEO
I think it is sustainable. And I'd also add that we have some very significant platforms that are really just beginning their adoption curves. One thing you've seen at Ondas over the course of 2026 is that the frequency and size of the orders we're capturing has been growing. And I think that's going to be the case as we're moving over the next 3, 6 to 12 months. So, you know, the growth rates we're talking about—I think we're trying to achieve higher growth rates—but, you know, 30% to 40% would be very attractive and strong performance all the same.
Austin, Analyst
All right, well, thanks guys, for taking my questions. Keep up the great work.
Eric Brock, CEO
Thank you.
OPERATOR
And the next question comes from John Siegeman with Stifel. Please go ahead.
John Siegeman, Analyst at Stifel
Hey, good morning. Thank you for taking my question, and congratulations on the backlog and revenue. Just maybe one question on the corporate investments. I know, Eric, you mentioned these are one‑time in nature, and you're confident you're pulling forward the EBITDA targets next year, but it was unclear to us if these costs will scale down on a dollar basis or percentage basis. Maybe you can expand a little bit more on what you're actually investing, given it diverges from your confidence next year.
Thank you.
Eric Brock, CEO
Yeah, sure. Thanks, John. So I think the level of spending on the Corp Dev and Honest Capital and partner programs is probably a steady state, at least for the next 6 to 12 months. We may see that moderate, or we may—We're certainly going to see it moderate, and we potentially could see a decline into 2027. At the same time, we do believe we're growing a substantial business, and those investments are really designed to ensure that we're capturing market position in a market we think has a very strong growth curve over the next five to ten years.
So I think you're going to see the operating leverage from Ondas on strong revenue growth and gross profit generation. Thank you.
OPERATOR
And the next question comes from Scott Seal with Roth Capital. Please go ahead.
Scott Seal, Analyst at Roth Capital
Good afternoon—Good morning, excuse me. Thanks for taking the questions and congrats on the momentum that you continue to build with the M&A opportunities. Eric, this was sort of answered in the opening remarks, but I want to dive in a little bit more in terms of continuing to build the systems‑of‑systems and multi‑domain approach now that's being unified with the Skyweaver platform. How is it really changing the level of engagement with government agencies and potential customers out there?
What's built into the pipeline when you look at that huge 11 billion, ramping up from 4 billion, I think, prior quarter? And when do we start to see some of the conversion of these—I'll call them larger, diverse, multi‑domain sort of opportunities—When does that start to transition into the P&L? And then just a real quick follow‑up on the financials and opex. Given the timelines for the closure of Design and Cyberhawk, how should we be thinking about normalized opex as we're exiting the fourth quarter of this year?
Eric Brock, CEO
Sure. So let me take the last one first. Clearly, adding Design in the Q3 P&L will present a step up in operating expenses. At the same time, that's coming with higher revenues and gross profit. And when we talk about our outlook for both the top line and the operating leverage, that's reflected—the expectations around Design and the contribution to the P&L over the next six‑plus months is reflected in that outlook. So we do expect operating leverage, and Design to provide operating leverage.
On top of that, in terms of customer engagement and pulling through a pipeline, we certainly see a lot of receptivity to the systems‑of‑systems. But of course it's not just that. It's Ondas and companies like Ondas becoming platform companies where we can deliver the technologies and the roadmaps and start to add more and more autonomy to the unmanned operations. So, when we're seeing customers, they really like our technology roadmap and capabilities.
They're also very excited about the financial strength, the ability to energize supply chains, and the ability to deliver in the future and support and sustain systems in the field. What I'm seeing is that we're bringing the talent together, we're able to bring the technologies together, and the customers are very receptive to that because you're seeing a company like Ondas step up and be able to be a long‑term partner in critical technologies that are really essential to securing our country.
Ryan, would you add anything to Skyweaver in particular, and how that's impacting conversations in terms of us growing?
Ryan Hartman (CEO of Ondas Sentinel)
Yeah, thanks Eric. And thanks, Scott, for the question. I'd add two things as it relates to the pipeline and how to view Skyweaver in that pipeline. First is, through the addition of Skyweaver into our platforms, we're increasing the probability of win for programs that need to be connected into the customer C2 systems and through the ability to do mission autonomy. And then the second thing I would add is that it enables an increase in cross‑selling.
So when you have a stratospheric balloon with Skyweaver that can be connected to an Ultra in the Group 5 UAS space, and they can be collaborating on a mission, it just increases the ability to sell Stratolites where there are Ultra customers or vice versa. And in our customer engagements, those are exactly the kinds of things that they're looking for—the ability to autonomously connect our platforms and provide a greater level of mission autonomy.
Scott Seal, Analyst at Roth Capital
Great, thanks so much.
Eric Brock, CEO
Thanks, Scott. Operator.
OPERATOR
Timothy, your line may be muted.
Timothy, Analyst
Oh, sorry, I didn't hear the question. I apologize for that. Eric, you've put together an incredible world‑class set of physical AI assets and software, board and management. The 11 billion pipeline is kind of scary to execute on, and I know you're very focused on it. Ryan, you did touch on this, but on slide 9 you talked about the operational platform. Can you give us—And I know you're saying you're integrating these companies quicker than basically most kind of roll‑ups work—Can you elaborate on how you've built that operational platform?
I know you said Palantir is partnering there. What cloud are you using? How much is AI involved? How quickly can you kind of integrate these companies together? Any more color there would be very helpful.
Eric Brock, CEO
Yeah, sure. So first, Tim, we're very deliberate in building out a scalable operating platform. And I do bristle a bit at the term roll‑up, because what we're doing is combining exceptional technologies, adding value across domains, and then we're investing in the operating platform, which is first and foremost the people—people, process. We've added incredible leadership you've seen over the past 12 months, with Oshri Lagasse coming on in his critical role, partnered with Mayer, and many, many leaders inside of Ondas.
More recently, Ryan Hartman and Matt McHugh have joined, and they both have experience leading large organizations. And of course we've also added David Bartier to help us globalize the business. So leadership is really, really essential. On the technology side, I will ask Ryan to expand upon what we're doing with Palantir, and he can be more specific on some of the technical aspects of it as well. So Ryan.
Ryan Hartman (CEO of Ondas Sentinel)
Yeah, thanks for the question. So there's a couple things we're doing. A lot of the integration is built on Foundry and Warp Speed, and so we have worked with Palantir to design AI agents that have read‑write capability into ERPs and into MRPs and material planning systems, into inventory systems and financial systems. Ultimately what that enables us to do is have a unified picture of the businesses and create efficiencies through supply chain and manufacturing processes, and then even doing things like building AI agents to merge policies—so we can merge a policy in a couple minutes versus days and weeks for teams to write new policies or adopt policies. All this is built on GovCloud and Microsoft Azure, so we're staying compliant with our security requirements and legislation related to having our facility clearance licenses and CMMC Level 2s, etc. So, yeah, it's largely based on AI and the ability to use AI to create a common operating picture. And over time we'll start to either gracefully degrade or sunset some of the legacy systems in the background, but we won't have to have merged them because we've created a common operating picture built on Palantir Foundry.
Timothy, Analyst
I mean, Brian, how mature is this and how much better can it get? Like, when did it really become operational?
Ryan Hartman (CEO of Ondas Sentinel)
So some of the first tools became operational about a week after Worldview was acquired by Ondas. So we started there, we built the infrastructure. The first thing we built was an inventory management tool, then a supply chain tool, and then started to build out some of the other tools. So all of the tools that I've mentioned are operational today. We're actively using them to integrate Design and Worldview to start with, and then we'll be adding additional tools.
But everything I've mentioned is already operational and has been for months.
UNKNOWN Analyst
So Eric, lastly, do you have a sense of how much you've improved revenue growth or margins for the portfolio companies?
Eric Brock, CEO
We've got underlying growth rates that are extremely high adoption, multi-year adoption curves that are really just launching now. So I don't necessarily see us improving them as much as unlocking them. Right. We're putting the infrastructure that can drive the adoption, support the adoption. Again, it is a multi-year cycle on everything we have in our portfolio. So that's the context I would share.
UNKNOWN Analyst
Very helpful. Thanks Tim.
OPERATOR
And the next question comes from Clark Jeffries with Piper Sandler. Please go ahead.
Clark Jeffries, Analyst at Piper Sandler
Hello. Thank you for taking the question. One thing that stands out is these comments around momentum accelerating in 2H26 as deliveries are ramping on counter-drone ISR, precision strike. I wanted to ask what the expectations are on precision strike versus ISR in the second half and maybe specifically a little bit of color on what's organic in the sequential ramp in Q4. You called out some, you know, lethal unmanned systems deliveries in second half and Indo Earth starting in Q4, but wondering if you could put a little bit more color on maybe the shape of the curve for that lethal unmanned systems segment and if that's a big portion of the ramp to Q4 and then one follow up.
Eric Brock, CEO
Sure, sure. So the Lust program was first captured by Mistral late last year—was fourth quarter, I believe. And since that time they've been preparing and energizing the supply chain and moving forward on production and the things they need to do to turn orders into deliveries. And we feel like we've made quite a bit of progress on that. I'll point to just in the last week or so, a couple weeks I think it was, we saw an additional order on that IDIQ.
So clearly the systems are in demand and we're working through now, as I said, scaling production so we can begin commercial deliveries in Q3 and Q4. And I think we're going to see that program continue deliveries into 2027 as well. I don't want to put a number on it and I also don't want to shape the corners around it because, you know, as we're doing this, you know, putting a stick in the ground as to when will the deliveries come and what quarter they're in is hard to say at the moment.
At the same time, the demand here and our growth is broad. So we feel good about what we'll talk about in the second half, but the Lust program will be a material part of it, of course.
Clark Jeffries, Analyst at Piper Sandler
Yeah, certainly it seems like the market is accelerating in some of these core programs and we're sort of gauging the ramp that's coming over the next 12 months just on.
Eric Brock, CEO
So yeah, clearly on the counter-drone and precision strike the demand is significant and I think this is going to be over really for the foreseeable future. We came into, as you've seen, with epic fury and the conflict in the Middle East and certainly in Ukraine, strike and counter-drone, they go hand in hand and we just have not built enough inventories here. In fact, you know, on a sustainable basis, we're going to have to have much larger inventories of these technologies.
So we're getting ready not just in the second half here, but in 2027 and beyond. These are important categories for Ondas.
Clark Jeffries, Analyst at Piper Sandler
Yeah, certainly that was my follow up question. You know, just on the 105 million of orders quarter to date, there's even a mention of 90 million of proposals on the long-range, long-endurance ISR segment. You know, it's just appreciable to me that you have, you know, 300 million tied to precision strike, 258 million tied to ISR, over 70% of backlog to these two categories. Is the order pipeline pretty similar to that? Is it consistent or are there any other segments that are disproportionately adding to the kind of the quarter-to-date volume of orders?
Eric Brock, CEO
Thank you, Clark. It really is broad. So it's, I think for our platform technologies the underlying growth is just very strong and there's not any single platform that's going to drive our success.
Clark Jeffries, Analyst at Piper Sandler
Thank you very much.
OPERATOR
And the next question comes from Michael Latimore with Northland Capital Markets. Please go ahead.
Michael Latimore, Analyst at Northland Capital Markets
Great, thanks. So just on the supply chain, you know, how is the health of the supply chain? Are there any constraints you're seeing in any categories? And then second, you know, with Cyberhawk buying into the kind of critical infrastructure space, commercial relative to defense, is that something that you might expand on going forward? You know, doing more acquisitions in the kind of the commercial space. So supply chain and then industrial.
Eric Brock, CEO
Let's start with industrial. Yeah, we do see Cyberhawk as a platform company that we can build around and we're seeing—and they came with quite a bit of pipeline in terms of strategic options or opportunities. And of course, Ondas has been active in these markets as well. So I do see the industrial segment for us as being important to build and I see the opportunity is here. On the supply chain, we're doing all the hard work to energize supply chains, particularly on the new programs that we're going to see adoption.
So I highlight what we're seeing with long-endurance ISR as well as counterstrike with design. We talked a bit about Mistral and their supply chain work and the production ramp they're preparing for. So, you know, we've got challenges, there's no question—they're not unique to Ondas—but we do think we've got, you know, we put the strategies and capacity to fulfill what we're trying to do over the course of the year into 2027. And Mike, I think we're going to have a regular conversation around this on each quarter because the industry is growing a lot—Ondas is growing a lot.
And we have to, as an industry, build ecosystems around this until the scale. And we think, you know, it comes back to the thesis and the philosophy around how Ondas is building a scale platform. We think we need more of this. We also think we need that on the vendor side as well.
Michael Latimore, Analyst at Northland Capital Markets
Okay, great. Yeah, congrats on the strong results here.
Eric Brock, CEO
Thanks, Mike.
OPERATOR
And the next question comes from Amit Dyal with H.C. Wainwright. Please go ahead.
Amit Dyal, Analyst at H.C. Wainwright
Thank you. Good morning everyone. Thank you for taking my questions. The main question I guess I have right now, you know, Eric, is just around, you know, what's driving the M&A strategy from this point forward. Are you still looking to fill maybe, you know, gaps in the portfolio or is it more revenue-oriented? Just any color on, you know, that would be helpful, thank you.
Eric Brock, CEO
Sure. So firstly, I don't see gaps in the portfolio but I do see quite a bit of opportunity to deepen each segment we're in. And the opportunity set for strategic acquisitions remains strong, disciplined. It's really important to drive our strategic program along with our financial model. These deals have to be accretive and they have to strengthen the operating platform in parallel and advance our objectives around profitability and growth and market positions.
So I think the discipline and financial accretion, strategic accretion is really going to be the emphasis.
Amit Dyal, Analyst at H.C. Wainwright
Understood, thank you. And then just a follow up with respect to the backlog number grows. How should we think about backlog being filled? You know, within one or two quarters or maybe, you know, slightly longer, I guess maybe 12-month time frame. Just any color on that. Thank you.
Eric Brock, CEO
So the pipeline is large and growing as we articulated. It's also maturing. I mentioned earlier, what we're seeing is opportunities to move, you know, our order size up and the cadence as well in terms of the velocity of order capture. Now we have this global platform, right? We've got footprints in many markets and they're maturing. So I do believe that we have the wherewithal to continue to grow backlog as we're scaling the P&L, the revenue.
OPERATOR
And the next question comes from Max Michaels with Lake Street Capital Markets. Please go ahead.
Max Michaels, Analyst at Lake Street Capital Markets
Hey guys, thanks for taking my question and congrats on the quarter. Just want to go back to sort of the organic revenue growth of 85%. Thanks for the data as well around Centrix Aerobotics as well as Forum, those segments seem to be kind of rolling hot here. Just curious to know, I know we're talking big growth rates at 85%, but is there any other segment of the business now that may not be performing to what you guys originally had expected and sort of what the game plan around that is to kind of get those segments of the business up and moving?
And last, follow up from me, can you touch on, give a little bit more detail on sort of the Digital VAD program you guys announced the other day with Israel?
Eric Brock, CEO
I can't highlight a segment that we're disappointed in. What I would say is that from a resource and capital allocation standpoint where we're going to spend our time, we make decisions. So if we're seeing having particular success with one platform, a specific customer, we'll spend more time and attention to drive that. And sometimes that can be at the expense of attention on another platform. But I wouldn't say that that's a weakness in the platform we're not focused on.
It's just—and what we're trying to do is get the highest returns for our time and capital we're deploying on the OPEX side. Yeah, sure. That's a great program. We're really excited to support it. And Mayor, I'll ask you to expand on it.
Mayor Kleiner
So as we walk in the announcement, we're going to manufacture a mass production of active vitrons. The next generation is going to be in the battlefield, as Eric said. We are very happy about that and we're going to have a big manufacturer site to have the ability to build a mass production in the short term and we are very excited about that and we will take it to the next phase. Also, more and more territories, not only in Israel.
OPERATOR
And the next question comes from Matthew Galinka with Maxim Group. Please go ahead.
Matthew Galinka, Analyst at Maxim Group
Hey, thanks for taking my question and congrats on the results. With respect to the, I guess, pull forward on EBITDA positive for the, on the corporate level, I'm just curious, looking a year out, whether you can say, you know, as you think about capital deployment at that point when you hit that milestone, you know, do you expect to be more selective in how you might deploy towards acquisitions or how you'll make allocation decisions to maintain that positive EBITDA going forward or is it going to be just situational on kind of where the market and opportunities are?
Eric Brock, CEO
Well, you know, it's a great question, Matt, and I believe we're very selective today and we're going to continue to be. I'll come back to the discipline around the financial model and accretion. Of course, that does also mean that we're very focused on demonstrating EBITDA leverage in the near term. I'd say over the next six to 12 months we want to demonstrate that EBITDA and operating leverage. At the same time, we'll be investing to ensure we're capturing as much market position as we can because as we've outlined in the past, we think this market is going to grow significantly.
We're going to penetrate these unmanned autonomous sectors and also the value is going to accrue to platform companies and there's going to be fewer and fewer of them. As such, what we're trying to really do is capture market capitalization for our investors. So when thinking about, you know, those investments, that's on OPEX, ensuring we have the right operating infrastructure to win and support and drive bigger and faster growth. That's not OPEX related to, you know, the M&A program.
The M&A program comes in with companies that we've modeled. We see significant revenue opportunity, gross profit, profit. We expect them all to be very highly accretive as we're spreading that gross profit and operating income across Ondas Incorporated and the growth platform we have at the holding company.
UNKNOWN Analyst
Thank you. And just as a follow-up, Ironwave — I think you mentioned you had a successful deployment there. I'm just wondering if it moves the needle for other potential customers.
Eric Brock, CEO
Absolutely. We're seeing tremendous feedback and, in fact, when you look at our pipeline and how we're expecting the cadence of orders in the coming months and quarters, we do think Ironwave will be very material. We think we can expand. Firstly, with our current customer and success, that should open other markets for us. And there is interest globally in Ireland all day long.
OPERATOR
This concludes our question and answer session. I would like to turn the conference back over to Eric Brock for any closing remarks.
Eric Brock, CEO
Okay, thank you, operator. So as we wrap the call, I want to thank you again for spending time with us this morning. As we outlined, we're very pleased with where the business is, and we do expect a strong second half of 2026. We're focused on execution and sustaining this momentum into 2027. We look forward to providing more updates in the coming weeks and months. So we'll go back now, do the important work of building a company, and we hope you have a great day. Thank you.
OPERATOR
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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