TLDR
- ONDS shares dropped 4.54% premarket despite record third-quarter revenue growth.
- Ondas Q3 revenue reached $167.5 million, more than 16 times last year’s total.
- New orders hit $214 million as Ondas’ backlog expanded 36% to $835 million.
- Operating losses widened to $189.5 million as gross margins fell to 21.8% in Q3.
- Ondas targets at least $550 million in 2026 sales and $1.1 billion in 2027.
Ondas Inc. (ONDS) shares rose 2.87% to close at $5.73, gaining $0.16, before plunging 4.54% to $5.47 in premarket trading. The decline followed the company’s release of record third-quarter revenue and strong order growth. Despite the sharp revenue increase, rising operating costs and weaker profit margins weighed on its financial performance.
Ondas Reports Record Q3 Revenue as Order Backlog Expands
Ondas reported third-quarter revenue of $167.5 million, doubling its $83.8 million revenue from the previous quarter. Revenue also increased more than sixteenfold from $10.1 million during the same period last year. Meanwhile, pro forma organic revenue grew 64% annually, reflecting stronger demand across its defense and autonomous systems businesses.
The company secured $214 million in new orders during the quarter, supporting its expanding defense technology operations. Its order backlog increased 36% sequentially to $835 million, reflecting growing demand for autonomous defense technologies. Ondas Sentinel contributed $100 million in bookings, including follow-on orders for ULTRA systems and IonStrike platforms.
Ondas also raised its full-year 2026 revenue forecast to at least $550 million following its quarterly performance. Management expects fourth-quarter revenue to exceed $250 million, supported by increased production and deliveries. The company introduced a 2027 revenue target of at least $1.1 billion, excluding potential future acquisitions.
Operating Losses Rise Despite Strong Revenue Growth
Ondas reported gross profit of $36.5 million, compared with $36.1 million in the previous quarter. However, its gross margin declined to 21.8% from 43.1%, reflecting production inefficiencies and acquisition-related accounting adjustments. The company attributed additional margin pressure to higher intellectual property amortization and changes in product sales.
Operating expenses increased to $226 million from $199.1 million in the preceding quarter. These expenses included $57.8 million in stock-based compensation and $25.3 million in amortization costs. Operating losses widened to $189.5 million from $162.9 million, despite the substantial revenue increase.
The company’s net loss narrowed to $64.7 million from $89.7 million during the second quarter. Other income included $125.1 million in noncash warrant-related gains, which helped reduce the reported net loss. Meanwhile, adjusted EBITDA losses increased to $59.7 million, reflecting higher spending on expansion and operations.
Ondas Expands Defense Operations and Advances Profitability Targets
Ondas expanded its defense portfolio through six acquisitions, including DZYNE Technologies, Cyberhawk, Ottopia, Insignito, and Caribou Labs. The company also established Ondas Sentinel to strengthen its position in the United States defense market. Additionally, Regna AI will develop sovereign artificial intelligence applications for defense and national security operations.
The company expanded its counter-drone operations through new contracts and deployments at major sporting venues. It strengthened manufacturing capabilities and opened a flight operations facility in Springfield, Ohio. These developments support growing demand for surveillance, autonomous systems, and military technology.
Ondas expects its operating platforms to reach adjusted EBITDA breakeven during the fourth quarter of 2026. Management also moved its company-wide adjusted EBITDA breakeven target forward to the third quarter of 2027. Nevertheless, the premarket stock decline contrasted with record revenue, expanding orders, and stronger long-term sales projections.
