Overview
Since the Report + 0.5%
Revenue grew 1,558.6% year over year, EPS beat the estimate by 23.1%; the stock fell 7.5% in its first reaction.
- RevenueQ3
- $167.5M
- ▲ 1,559% YoY · Beat Estimate by 12.9%
- EPSGAAP
- −$0.10
- Estimate −$0.13 · 23% Better
Verdict
BUYOndas grew third-quarter revenue more than 16-fold in a year to a record $167.5 million, beating expectations by 12.9%. The full-year target rose to at least $550 million, but the stock fell 7.5% intraday as gross margin dropped from 43.1% to 21.8% in one quarter. The next question is what margin comes with the more than $250 million of revenue expected in the fourth quarter.
Close on Report DayNov 12
$5.30▼ 7.5%Report-Day Move
- Market Cap(Today)
- ≈ $3.10 B
- 1Y Return(At Report)
- − 4%
- Net Margin(Trailing 12M)
- 96.3%
Earnings Summary
In 30 Seconds- Revenue of $167.5 million beat expectations by 12.9% and the top of the company's own range by 8%.
- The full-year target rose to at least $550 million, with more than $250 million expected in the fourth quarter.
- The stock fell 7.5% intraday as gross margin dropped from 43.1% to 21.8% in one quarter.
The Numbers
GAAP Gross Margin
21.8%
Q2 43.1% · 21.3-Point Decline
Backlog
$835M
▲ 36% QoQ · $214M Bookings
Adjusted EBITDA
−$59.7M
Q2 −$46.2M · Loss Up 29%
Stock Reaction
−7.5%
Intraday 12:40 ET; Updated This Evening
Quarterly Revenue ($ Million)
10.10
Q3 25 · $10.1 M
30.10
Q4 25 · $30.1 M · QoQ + 198.1%
50.12
Q1 26 · $50.1 M · QoQ + 66.5%
83.77
Q2 26 · $83.8 M · QoQ + 67.1%
167
Q3 26 · $167 M · QoQ + 99.9% · YoY + 1,558.6%
Above 250
Q4 26E · Above 250 · QoQ + 49.3% · YoY + 730.6%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Q4 26 Revenue (Floor)250 million
At Least 250 · Derived Estimate 224.311.5% Above Estimate ▲
- 2026 Revenue (Floor)550 million
Prior 525–550 · Estimate 525.74.6% Above Estimate ▲
- 2027 Revenue (Floor)1.1 billion
Excluding New Acquisitions · Organic >40%New Target
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±12% around the midpoint.
Company-Specific Metrics
Bookings in Quarter
$214 M
Press Release
Cash and Investments
$820 M
Press Release
Metrics come only from the company's own filings; each one names the document it was taken from.
“This quarter demonstrates the growing benefits of Ondas' integrated operating platform. We expect a strong finish to 2026, with momentum accelerating in the fourth quarter as volume deliveries ramp.”
- ULTRA and IonStrike Demand
- Interceptor Drone Shortage
- Margin and Working Capital Discipline
Summary and Review
Summary
Ondas reported third-quarter revenue of $167.5 million. A year ago it was $10.1 million, an increase of 1,559%. Revenue also doubled from the previous quarter. Revenue beat the $148.3 million estimate by 12.9%. GAAP loss per share was $0.10, 23% better than the expected $0.13 loss. The company guides to more than $250 million of fourth-quarter revenue. All three gates are open: revenue, profit and guidance beat expectations. Backlog rose 36% in the quarter to $835 million.
Even so, the stock fell 7.5% intraday. The market read this report as a margin story, not a growth story. GAAP gross margin was 43.1% in the second quarter and 21.8% this quarter. A year ago gross margin was 25.8%, so the annual decline is 4.0 points. The adjusted EBITDA loss widened from $46.2 million to $59.7 million. The main item that shrank the per-share loss was a $125.1 million non-cash warrant gain. The operating loss rose to $189.5 million.
Our score is 80 and our view is buy. Under our decision table, all three gates are open. The sharp margin decline and continuing cash burn pull the score to the bottom of the band. Management attributes the lower margin to a heavier precision-strike mix and temporary ramp inefficiencies. It expects similar margins in the fourth quarter because of mix. This is a report card on the quarter, not a stock recommendation.
Full Review
Revenue topped the high end of the target.
Third-quarter revenue was $167.5 million. In the second quarter it was $83.8 million, so sequential growth was 100%. Last quarter the company guided to $140-155 million for this period. The actual figure beat the top of that range by 8%. That closes the first item on last quarter's list of expected developments. Over five quarters, revenue went from $10.1 million to $30.1, $50.1, $83.8 and $167.5 million. A large part of the growth comes from acquisitions. Pro forma organic growth was 64%. This year the company completed six acquisitions, including DZYNE, Cyberhawk and Ottopia. It also created a new business unit for land systems. It booked $214 million of new orders in the quarter. About $100 million of that came from the Sentinel unit.
Margin halved in one quarter.
GAAP gross margin was 21.8%. It was 43.1% in the second quarter and 25.8% a year ago. That is a 21.3-point sequential decline and a 4.0-point annual decline. Adjusted gross margin fell from 50.4% to 34.8%, a 15.6-point decline. The company attributes this to a larger share of lower-margin precision-strike products. Temporary inefficiencies from the production ramp also weighed. It expects similar margins in the fourth quarter because of mix. Last quarter, a margin recovery was on the list of expected developments. That did not happen; margin fell further instead. Unless the product mix changes, a quick margin recovery looks hard. Growth is still expensive. In a quarter when revenue doubled, gross profit was only $36.5 million.
Losses are growing, cash is falling.
The operating loss rose to $189.5 million. It was $162.9 million in the second quarter and $15.5 million a year ago. The adjusted EBITDA loss was $59.7 million, 29% larger than the $46.2 million in the second quarter. The net loss was $64.7 million. That figure includes a $125.1 million non-cash warrant gain. This item is the main reason the per-share loss beat expectations. Cash and investments fell to $820.3 million from $1.4 billion at the end of the second quarter. Shares outstanding were 590.2 million. The weighted average share count was 618.0 million, up from 503.6 million in the second quarter. At this pace, the need for new financing could come up.
Guidance up, 2027 target of $1.1 billion.
The company raised its 2026 revenue target from $525-550 million to at least $550 million. That is 4.6% above the $525.7 million market expectation. It guides to at least $250 million of fourth-quarter revenue. Subtracting nine-month revenue of $301.4 million from the full-year expectation implies $224.3 million for the quarter, an 11.5% gap. The 2027 target is at least $1.1 billion, excluding new acquisitions. The organic growth target is above 40%. Company-wide adjusted EBITDA is expected to turn positive in the third quarter of 2027; the prior target was the fourth quarter. At the operating-platform level, that threshold is expected in the fourth quarter of 2026. Orders in the quarter included Israeli Ministry of Defense and US Army programs.
Next quarter, watch the margin line.
In March's fourth-quarter report, watch one line: GAAP gross margin. This quarter it was 21.8%. A move above 30% would support the view that the margin loss is temporary. Staying below 20% would mean revenue growth is not turning into profitability. The second measure is fourth-quarter revenue. Topping $250 million is needed for the full-year target to hold. If revenue hits the target but margin stays low, this quarter's story repeats. In that case the market will again look at profitability rather than growth. The third measure is cash: see how much of the $820.3 million in cash and investments is used in a quarter. A drop below $600 million would raise the odds of new financing. Our earnings day guide explains what to look for.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Revenue rose 1,559% year over year to a record $167.5 million, beating expectations by 12.9%.
- Revenue beat the top of the $140-155 million range the company set last quarter by 8%.
- Backlog rose 36% in the quarter to $835 million, with $214 million of bookings.
- The 2026 target rose to at least $550 million, and 2027 targets at least $1.1 billion.
- The company-wide EBITDA breakeven target moved up from the fourth to the third quarter of 2027.
Risks
5- GAAP gross margin fell from 43.1% to 21.8% in one quarter, a 21.3-point decline.
- The adjusted EBITDA loss widened to $59.7 million, and the operating loss reached $189.5 million.
- A $125.1 million non-cash warrant gain shrank the per-share loss.
- Cash and investments fell from $1.4 billion in the second quarter to $820.3 million.
- A large part of growth comes from acquisitionsPro forma organic growth was 64%.
What to Watch
4- Q4 2026 earnings (~March 2027)The above-$250 million revenue target and gross margin will be tested.
- Q4 2026Positive adjusted EBITDA is expected at the operating-platform level.
- Q4 2026Deliveries begin on the $140 million combat engineering vehicle program.
- The Stemme acquisition is expected to close.
Upcoming Earnings
To Understand This