Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Record Q2 2026 revenue of $83.8 million, up 13-fold year-over-year and 67% sequentially.
- Pro forma organic revenue growth of 85% year-over-year, indicating strong underlying business momentum.
- Pro forma backlog reached $757 million, up 66% sequentially, with $105 million in new orders in Q3 to date.
- Two-year strategic program pipeline expanded to over $11 billion, up 2.5x since May.
- Raised full-year 2026 revenue guidance to $525-$550 million, implying over 30% organic growth.
- Strong balance sheet with $1.4 billion in cash and investments, supporting further M&A and growth investments.
- Pulled forward adjusted EBITDA profitability for the operating platform to Q4 2026 and company-wide to Q4 2027.
- Key programs ramping: US Army LUS IDIQ, Iron Strike, Ultra, and IndoEarth, providing visibility into H2 2026 growth.
- Successful integration of acquisitions, accelerated by Palantir Foundry, enabling faster value realization.
- Expanding global footprint with 25 locations and 1,700 employees, enhancing customer reach and operational scale.
Negative Points
- Adjusted EBITDA loss of $51 million in Q2, reflecting elevated cash operating expenses of $93 million.
- Cash operating expenses increased significantly due to full-quarter impact of acquisitions and $29 million in growth investments.
- Gross margin pressure expected in H2 2026 due to product mix and recently acquired excess capacity.
- Supply chain challenges persist, particularly for new programs like LUS and counter-strike, requiring ongoing management.
- Integration of acquisitions like Design and CyberHawk adds complexity and near-term OpEx step-up.
- Dependence on large program deliveries (e.g., LUS, IndoEarth) for H2 revenue ramp, with potential timing risks.
- Pipeline conversion and order cadence may be lumpy, as seen with quarterly fluctuations in backlog growth.
- M&A strategy requires disciplined execution to avoid dilution and ensure accretion, with no guarantee of future deals.
Q & A Highlights
Q: Can you elaborate on the significant uptick in the strategic program pipeline from $4 billion to $11 billion, specifically what is included from the Design acquisition versus what is new and incremental organically?
A: Eric Brock (Chairman and CEO): The uptick is broad-based across our four market segments and is also broad-based regionally. The Design acquisition has contributed significantly to our ISR and Counterdrone systems pipeline, particularly in Europe. We are also seeing strength in Precision Strike with Rotron and growing demand in the Asia-Pacific region. The recent addition of General Charlie Flynn to our Advisory Board will be supportive of our efforts to penetrate and serve the Asia-Pacific market and pull through this pipeline.
Q: Given the strong 85% pro forma organic revenue growth in Q2, is the implied ~30% organic growth for the full year an apples-to-apples comparison, and is this growth rate sustainable into 2027?
A: Eric Brock (Chairman and CEO): As we move through the year, the comparison base grows, so we are seeing a sustainable 30% to 40% growth level across the portfolio. While some systems and markets will grow faster than others, the underlying demand and adoption curves are strong across the board. We are trying to achieve higher growth rates, but 30% to 40% would be very attractive and strong performance. The frequency and size of orders we are capturing has been growing, which supports this outlook.
Q: Regarding the corporate investments and the pull-forward of the EBITDA profitability targets, will these costs scale down on a dollar basis or a percentage basis?
A: Eric Brock (Chairman and CEO): The level of spending on corporate development, Ondas Capital, and partner programs is likely at a steady state for the next six to 12 months. We may see it moderate or potentially decline into 2027. However, we are growing a substantial business, and these investments are designed to ensure we capture market position in a market with a strong growth curve over the next five to 10 years. The operating leverage will come from strong revenue growth and gross profit generation.
Q: How is the systems-of-systems approach, unified by the Skyweaver platform, changing engagement with government agencies, and when will these larger multi-domain opportunities start to convert into the P&L? Also, how should we think about normalized OpEx exiting Q4 given the Design and CyberHawk closures?
A: Eric Brock (Chairman and CEO) and Ryan Hartman (CEO, Ondas Sentinel): Adding Design to the Q3 P&L will present a step-up in operating expenses, but this comes with higher revenues and gross profit, which is reflected in our outlook. Customers are very receptive to our systems-of-systems approach and our ability to deliver, support, and sustain systems in the field. Ryan Hartman added that Skyweaver increases the probability of winning programs that need to connect to customer C2 systems and enables cross-selling, such as connecting a stratospheric balloon with an Ultra UAS for collaborative missions. This is exactly what customers are looking for in terms of autonomous mission connectivity.
Q: Can you elaborate on how you built the operational platform with Palantir, including the cloud used, the role of AI, and how quickly you can integrate acquired companies?
A: Ryan Hartman (CEO, Ondas Sentinel): The integration is built on Palantir Foundry and WarpSpeed. We have designed AI agents with read/write capabilities into ERPs, MRPs, material planning, inventory, and financial systems. This provides a unified picture of the businesses and creates efficiencies in supply chain and manufacturing. We even use AI agents to merge policies in minutes versus days. The platform is built on GovCloud and Microsoft Azure to maintain compliance with security requirements and CMMC level two certifications. The first tools became operational about a week after the Worldview acquisition, and all the tools mentioned are operational today, actively being used to integrate Design and Worldview.
Q: What are the expectations for Precision Strike versus ISR in the second half, and can you provide more color on the shape of the ramp for the Lethal Unmanned Systems (LUS) segment?
A: Eric Brock (Chairman and CEO): The LUS program, first captured by Mistral late last year, is in high demand. We have made significant progress in scaling production to begin commercial deliveries in Q3 and Q4, and we expect deliveries to continue into 2027. While I don't want to put a specific number on it or shake out the quarters, the LUS program will be a material part of the second-half growth. The demand for counter-drone and precision strike capabilities is significant and will be a major focus for the foreseeable future, as the industry needs to build much larger inventories of these technologies.
Q: How is the health of the supply chain, and are there any constraints? Also, with the CyberHawk acquisition, will you expand more into the commercial/critical infrastructure space?
A: Eric Brock (Chairman and CEO): We see CyberHawk as a platform company to build around, and they came with a significant pipeline of strategic opportunities. The industrial segment is important for us to build, and we see the opportunity there. On the supply chain, we are doing the hard work to energize supply chains, particularly for new programs like long-endurance ISR and counter-strike with Design. We have challenges, but they are not unique to Ondas. We have the strategies and capacity to fulfill our goals for 2026 and 2027. As an industry, we need to build ecosystems and scale, which reinforces our thesis of building a scaled platform.
Q: What is driving the M&A strategy from this point forward? Are you looking to fill portfolio gaps or is it more revenue-oriented?
A: Eric Brock (Chairman and CEO): I don't see gaps in our portfolio, but I do see significant opportunity to deepen each segment we are in. The opportunity set for strategic acquisitions remains strong. It is critical that these deals are accretive, strengthen the operating platform, and advance our objectives around profitability, growth, and market position. Disciplined financial and strategic creation will be the emphasis going forward.
Q: Can you provide more detail on the Digital BAT program announced with the Israeli Ministry of Defense?
A: Oshri Lugassi (Co-CEO, Ondas Autonomous Systems): We are very excited to support this program. We will manufacture and mass-produce the next-generation one-way attack system for the battlefield. We are establishing a large manufacturing site with the ability to achieve mass production
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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