Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ondas Holdings Inc (ONDS, Financial) secured $14.4 million in orders for its Iron Drone and Optimus platforms, marking its entry into military markets.
- The company achieved the largest bookings quarter in its history, demonstrating strong demand for its autonomous systems.
- Ondas Holdings Inc (ONDS) is seeing tangible engagement with additional military customers, indicating potential for further expansion.
- The company is making progress in the railroad sector with significant orders from Metra and a Class One railroad in Chicago.
- Ondas Holdings Inc (ONDS) is positioned for significant revenue growth in Q4 2024 and 2025, driven by military and public safety applications.
Negative Points
- Revenues for Q3 2024 were approximately $1.5 million, down from $2.7 million in Q3 2023, primarily due to extended timelines in the 900 MHz network activity.
- Gross margin decreased to 3% in Q3 2024 from 21% in Q3 2023, reflecting a change in revenue mix and lower margin development projects.
- Operating expenses increased to $8.7 million in Q3 2024 from $6.5 million in Q3 2023, contributing to an operating loss of $8.7 million.
- Cash and cash equivalents decreased to $2.9 million as of September 30, 2024, from $15 million at the end of 2023, indicating liquidity challenges.
- The company faces uncertainty regarding the timing of customer activity and commercial rollouts, particularly in the railroad sector.
Q & A Highlights
Q: Can you explain the potential for more volume orders for the Iron Drone platform following combat success?
A: Meir Kliner, President of Ondas Autonomous Systems, mentioned that while specific details about operations in Israel can't be disclosed, they have been working with the Defense Forces for the past eight months. Eric Brock, CEO, added that they are in the process of delivering orders and integrating systems, expecting more orders in 2025 but can't provide precise timelines yet.
Q: Do you need additional certifications for the DFR (Drone First Responder) opportunity in the US?
A: Eric Brock, CEO, stated that no additional certifications are needed beyond the existing regulatory processes. Meir Kliner added that after receiving the FAA type certificate, the regulatory process is quicker and easier for delivering first responder solutions.
Q: What gross margin can be expected on the $14 million orders?
A: Meir Kliner, President of Ondas Autonomous Systems, indicated that the gross margin for these orders will be north of 50%.
Q: Can you provide an update on the Dubai opportunity and the shipment of systems?
A: Meir Kliner confirmed that eight systems have been shipped to the customer in Dubai, with plans to have 22 systems deployed by the end of 2025.
Q: How does the recent US election impact the DFR opportunity and federal support for the domestic drone industry?
A: Eric Brock noted that support for DFR and drone integration into security infrastructure is bipartisan. The current administration has shown particular support for the domestic drone sector, which is broadly shared across political lines.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
