Q2 2021 Ondas Holdings Inc Earnings Call
Welcome to the I'm, just wondering second quarter 2021 earnings conference call.
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The earnings press release issued today, which are both available on the company's website.
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I would now like to turn the conference over to Eric Roth Chairman and CEO. Please go ahead good morning.
And welcome to <unk> second quarter Investor call I'm joined today by Stuart Cantor, our president and CFO, a REIT Moser.
Oh of our wholly owned subsidiary American Robotics.
For those of you have been following the company you are well aware that <unk> had a very eventful second quarter in May we entered into a definitive agreement to acquire American robotics, a leading developer of commercial drone systems in the first company approved by the FAA to operate its grows beyond visual line of sight without the presence.
The human operator.
The acquisition was completed on August 5th we received overwhelming support from our shareholders with approximately 99, 7% of the votes cast supporting the acquisition.
Then in June we completed a 51 and a half million dollars public offering the proceeds of which will allow the company to support the planned rapid growth for both <unk> networks and American Robotics. We also use the opportunity to retire almost all of the company's debt, leaving us with an extremely strong balance sheet.
During the quarter, we advanced our plans toward driving full Max network adoption with the class one rails, we expanded our strategic partnership with Siemens in subsequent substantially completed our phase one development work with aura to support their nationwide command and control network for commercial grounds.
Our agenda for the call today will include a financial update from our CFO Stewart Cantor covering the second quarter and first half of 2021. We will then provide an update on the <unk> network business before handling the call over to <unk> for an update on American robotics I'll provide a summary outlook for the company at the end before turning the call over for Q.
Renee.
I will now hand, the call to you to provide more details on Q2 and the financial outlook.
Thank you Eric as Eric mentioned, we did have an eventful quarter, which included making a $2 million loan to American robotics in April in advance of the announced agreement in May executing on a 51 and a half million equity raise in early June and leading the effort to complete the acquisition.
All while continuing to advance both beyond just networks and American robotics as businesses.
As I shared our financial results for Q2, and the first half of the year. Please note that we have included financial statements in this morning's press release and will be filing our 10-Q by the end of the day.
The numbers, we are reporting do not include financials for American robotics for the quarter will be publishing a our second quarter and pro forma financials in several weeks.
Also like to mention that we don't intend to provide financial guidance given the maturity of the businesses and the recent acquisition of a or we.
We will continue to update our shareholders in real time as we achieve milestones.
Moving to our results in the second quarter.
Revenues decreased by 25% to approximately <unk> 9 million for the three months ended June 30th 2021, as compared to approximately $1.2 million for the three months ended June 30th 2020.
The decrease in revenue was primarily due to lower product sales, which were offset by increase in increase in development revenue in the three months ended June 30th 2021.
As compared to the three months ended June 32020, during which the company fulfilled a large network product order.
Gross profit decreased by 50% to point 3 million for the three months ended June 32021, as compared to <unk> 6 million for the three months ended June 30th 2020.
This was as a result of lower revenue and higher cost of goods related to development agreements.
Gross profit on a percentage basis, it's approximately 35% for the three months ended June 32021, compared to 53% for the three months ended June 32020.
The lower gross profit percentage was driven by the change in mix between development revenue at a lower margin and product revenues.
Operating expenses were relatively flat at $3.4 million for the three months ended June 32021, as compared to the three months ended June 32020.
Stock based compensation decreased by approximately <unk> 8 million in the three months ended June 32021, which is offset by a total increase of approximately $8 million for professional fees related to the American robotics acquisition and facilities related expenses for the three months ended June 32021.
The company realized an operating loss of approximately $3.1 million for the three months ended June 32021, as compared to $2.8 million for the three months ended June 32000 Twenty's.
France was driven primarily by lower revenues and lower gross profit during the period.
Net loss was approximately $2.8 million for the three months ended June 32021, as compared to a net loss of $3.2 million in the three months ended June 32020.
The net loss was lower primarily due to loan forgiveness of approximately <unk> 7 million and a decrease in interest expense of approximately <unk> 1 million as compared to the three months ended June 32020.
Now transitioning to our first half numbers over the prior year.
Revenues grew by 50% to approximately $2.1 million for the six months ended June 30th 2021, as compared to approximately $1.4 million for the six months ended June 30th 2020.
Revenue growth was due primarily to larger development projects with Siemens and Ora during the first half of 2021.
Gross profit increased by 45% to point 9 million as a result of higher revenue for the six months ended June 30th 2020, one as compared to <unk> 6 million for the six months ended June 32020.
Gross profit on a percentage basis was approximately the same at 45% for the six months ended June 32021.
As compared to 47% for the six months ended June 32020.
Operating expenses increased approximately 21% to $6.9 million for the six months ended June 32021, as compared to $5.7 million for the six months ended June 32020. This.
This increase was driven primarily by professional fees associated with the acquisition of American robotics.
The company realized an operating loss of approximately $6 million for the six months ended June 32021, as compared to a similar loss for the six months ended June 32020.
Increased operating expenses from the American Robotics acquisition was the primary driver. Despite the growth in revenues and gross profit net loss was approximately $6 million for the six months ended June 32021, with a similar net loss for the six months ended June 32020.
And now turning to our balance sheet. The company held cash and cash equivalents of approximately $58.5 million as of June 32021, as compared to approximately $26.1 million as of December 31.2020.
We'd like now to move to the milestones achieved for in our second quarter for on dust networks, along with the networks outlook and then transition to the same for American robotics.
We continue to work closely with the class one rails and our strategic rail partners Siemens to advance the adoption of <unk> full Max platform and the 900 megahertz network Greenfield spectrum.
Our multiple test networks with BNS F. N C. Sx continued to be exercised in the field and our real world learnings are paving the path for implementation.
Also the rail industry continues to rally around the age of $2.16 S. NATO to Dot 16 T standard with active participation in the standards process we'd.
We'd like to remind you that the standard is based on our full Max technology.
The Federated or shared network capability of our full Max platform is an important feature of the 900 megahertz network.
The rail industry leadership Committee notified us in June that the rail lab was approved and that we can expect to receive the purchase order in the second half of 2021.
We will share that news as soon as we receive it.
This order is more validation of the opportunity we have in the rail markets.
Also as we move through the year, we'll look to share more information regarding the timing of the 900 megahertz network deployment.
Our partnership with Siemens continues to deepen and widen with a major launch of our dual mode <unk> products. This September.
<unk> is putting their full marketing muscle behind these products, which will continue to become more and more apparent in the near future and the feedback from the rail customers as they understand the value and the capabilities of Adcs with full Max inside.
And remember these products smooth the transition for the existing legacy ATC network to the new Greenfield 900 megahertz spectrum.
Continuing with Siemens on our last earnings call. We made you aware of a new development program that was initiated in Q1, we received the initial purchase orders last quarter and that development project, which is our first onboard locomotive product is well underway with expected completion by the end of the year.
Importantly, Siemens intends to market this product worldwide not just in North America.
We'll provide additional updates on this exciting new product in the near term.
We also wanted to note that we expect to secure additional product integration agreements with Siemens in the second half of 2021.
Also in June both Aura and American Robotics, we're invited to participate in the FAA as unmanned aircraft systems beyond visual line of sight Aviation Rulemaking Committee.
Want to tell you that we substantially completed that work in the second quarter with more than 80 hours of real world helicopter flight testing.
The development work is now transitioning to a test and demonstration network.
Whereas customers with additional demand for equipment.
I'd also like to highlight that aura has made some significant announcements recently on.
On July 28th they announced the closing of an approximate $31 million series E financing.
And this followed a previous announcement on July 12, and which NASA had selected aura for their advanced air mobility campaigning for integrating air taxis cargo delivery aircraft and other new air vehicle concepts into national Aerospace.
Also I'd like to highlight in June both Ora and American Robotics, we're invited to participate in the FAA as unmanned aircraft systems beyond visual line of sight.
Asian Rulemaking Committee.
To summarize we believe the networks business is on the cusp of a widespread adoption for several critical industries.
Now I'd like to transition back to Erik to introduce American robotics and <unk>.
Eric.
Thank you Stuart.
We continue to make substantial progress on the <unk> networks front now lets turn to American robotics as you have heard American robotics is leading the charge in the commercial drone sector <unk>.
Bring both a first in class and a best in class complete drawing a box platform called the Scout system. In addition, AAR has secured unique and critical regulatory approvals would be the FAA that allow for widespread commercial deployment of scout systems.
<unk> is a type of solution that is coveted by our critical infrastructure customers and the addressable market for the scout grown platform can be extended with the integration of Amdocs is mission critical <unk> wireless technology.
Scout can benefit from Argos networks robust wireless connectivity and honest networks customers can benefit from a new hugely valuable means of data collection.
The <unk> acquisition was a bold move around us and the reception has been extremely positive opening the eyes of our customers ecosystem partners and many industry participants are looking for complete end to end next generation data solutions.
Vijay and the American robotics team have already been hard at work scaling our business plan.
I will now as we used to give an update on where we're at in ramping that growth plan. After reef that we'll wrap the call and turn to Q&A. Please.
Thank you Eric.
Pleasure to attend our first quarterly investor call officially under beyond our some grella.
We've had quite a year since we announced our historic FAA approval, which culminated in emerging American robotics and Argos Holdings.
I speak for our entire team that we are thrilled to be here and are ready to scale and deliver for both our customers and investors.
We've already begun to put together the key building blocks for growth at American robotics.
As previously discussed we launched our growth plan after receiving initial funding from <unk> April 2021.
Prior to reaching the definitive agreement in May.
We started building inventory of <unk> systems and have launched our hiring plan to put a world class team in place to support our rapid growth potential.
Previously, we indicated plans to produce tens of units of <unk> systems, and we have made our initial orders to do so.
We've identified customers for initial installations as we move through Q3 and Q4 of this year.
Our customer pipeline has historically been focused on AG markets.
Since receiving our critical FAA approvals and with the funding the acquisition by under US we are.
<unk> seen a significant demand ramp in high valued industrial markets, such as oil and gas.
Winning in rail.
Applicability for this technology is huge and at the outset, we will concentrate our energies on the largest sophisticated customers who have existing drone programs that they're looking to scale with automated solutions. We also plan to leverage on das networks customer base and in worldwide distribution partners.
This business plan calls for significant investment in people across all aspects of the organization, we are adding software hardware manufacturing and customer support engineers, and we will be continuously advancing our scout platform and its capabilities.
Importantly, we are now investing in and building out our field service operational capabilities as our customers are large sophisticated and demand quality execution from their vendors combining that requirement with a significant market demand for our products, we're investing to ensure an industry leading experience from day one.
To that end I want to highlight a few critical hires that relate to this plan.
In May of this year, we hired Kevin Willis was American robotics VP of sales.
Kevin has hit the ground running as he brings with him decades of experience, including serving as the vice President of sales for <unk> systems, which was sold to Amazon and now operates as Amazon robotics.
Michael Gatewood has been hired as American robotics director of flight ops, Michael oversee formalized and grow the company's flight operations program.
Prior to American Robotics, Michael with flight operations manager at Aerovironment and brings within two decades of engineering and aviation management experience.
Additionally, last week, we announced the hiring of Michael Clat worthy as our VP of operations, Michael has been exceptional higher that will help accelerate our corporate and customer comps prior to American robotics, Michael was the head of operations for <unk> systems, which is Baker Hughes internal drone company.
Michael helped found arbitrage when it was part of GE and has grown their operations from concepts to 500 customer sites per quarter.
As mentioned, we see significant pent up customer demand and have received purchase orders.
Post deal announcement, I would like to highlight too.
First we announced the purchase order from stockpile reports in July stock.
Stockpile provides best in class supply chain data solutions for both products that are mined in process such as rock gravel.
In aggregate this is a huge industry with more than 10000, and sand and gravel mines and more than 3000 ready mix and asphalt plants in the U S alone.
And stockpile has an impressive customer base of leading players serving over 300 companies in 48 countries.
The data generated analyzed by stockpile is used not just for inventory management, but also has tremendous value for supply chain optimization.
You're going to have near real time information on inventory levels the opportunity to create.
That impact the bottom line profitability for stockpile customers is massive.
Again, there are thousands of these types of locations in the U S alone and just one of stockpiles customers generate nearly $5 billion per year in revenue.
The market is eager for a better supply chain data and the scouts system is the best positioned technology to deliver.
Similarly, we also announced in July a purchase order from a fortune 100 oil and gas producer.
The oil and gas industry represents a major new market for American robotics.
With more than 90000 oil and gas wells and over 500000 miles of pipeline in the U S. They require constant monitoring and inspection.
This customer has a variety of use cases, ranging from well pad inspection to demanding of remote facilities and emissions monitoring this customer like many industrials has an active drilling program that currently relies on pilots.
The scouts system will take over many of these jobs generate.
More frequently more reliably and at a lower cost.
Eric I'll turn it back over to you now.
Thank you Reece quite clearly we are full steam ahead at American Robotics, we got an early start in May I'm launching their plan and we will accelerate customer activity as quickly and prudently as we can our goal is to position American robotics to eventually deploy thousands of autonomous scout systems in the field, we intend to build.
Dominate commercial drone platform and our all in on doing so we.
We do want to carve out time could do a deeper dive with our investors on the American robotics market opportunity growth strategy and many additional details around the a business plan to do this we intend to schedule and a focused business update targeted for September we will be in touch with more details about that event soon.
Let's wrap it up before we move to Q&A Argos has made tremendous progress this year positioning the company for huge growth in large open ended markets importantly, we are getting closer to turning the investments we've made into revenue, we announced and closed the transformative acquisition of American Robotics, and just a few short months and then significantly strengthened our balance sheet by raising 51 five.
And our public offering the equity offering allowed us to eliminate virtually all our debt is secured growth capital to allow us to fully execute our plan. We have momentum. In addition to the huge opportunity with American robotics and is executing on our critical initiatives and driving platform adoption, starting with the rails Siemens and Ora we are establishing.
Tablets are empty Iot platform as the default next generation wide ear mission critical industrial network opt.
Operator, we can now open the call to Q&A.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
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Today's first question comes from Tim Horan of Oppenheimer. Please go ahead.
Hey, guys. Thanks, a lot.
Could you elaborate on I think you said in June the lab approve the full Max equipment maybe.
What lab.
Just a little bit more color around what does that mean.
Yes.
Sure absolutely.
Thank you Tim.
So let me talk about what you mean by the Federated rail out of the mission critical Iot lab and remind you that this is connected to the work on the 900 megahertz network. So recall that our full Max software defined wireless platform is a new paradigm, we are bringing bandwidth, but we're also bringing flexibility that the railroads in these industrial.
Markets have never had before.
It relates to the railroads in certain high traffic errors.
Multiple rails, operator, we'd like to point, the Chicago as sort of the poster child for that right all the rails come in they terminate their traffic there.
Of course that creates logistical and operational issues because there's there is on the network in particular.
Because there's a lot of demand for data capacity.
And the legacy network, which is going to be retired the legacy 900 bed. The rails had historically had a carve out that spectrum into small tiny inefficient network that each individual rail would operate obviously compromising the capacity for the system. We can bring a shared network provide more capacity and then our software can.
Allocate or manage that traffic to maximize throughput and guarantee a much higher level of quality of service. So that's what the railroads for you can think of it is planning additional planning activity related to the network adoption.
I'd also highlight that.
The rail labs gonna be evergreen right. This is gonna be a lab that we establish and given the flexibility of the network. The railroads are always going to be testing sort of looking to see how to optimize traffic, but also how to add new applications. Because we have the will give you the capacity to do just that.
So that's that's the rail lab.
As we discussed on our last call we've been working with the rails and the 900 in the field for a long time the shared element. The lab was was taken up by the wireless cause committee under they are to the senior most operating group for the rails and Thats, where we see the support for the <unk>.
So as Stuart mentioned.
In his comments, we expect the purchase order for the formal work on the lab in the fourth quarter.
And as the association of American railroads have they indoor.
Endorse your full Max network.
Did anything publicly or formerly.
They haven't formally done that and they won't until they're ready to.
Give us the initial purchase order.
So I'd say that let me just build on that Tim the work on the 900 megahertz with the class one rails continues to be very good and collaborative and of course team as his arm in arm and arm with us as we navigate the process.
And then as I mentioned, we have sort of we have gone through this process, where the wireless Comms Committee has essentially taken us up the hill and I think the fact that the senior most operating committee of the rail Association that has endorsed the lab. That's a very good sign quite a bit of validation for what we're doing.
I would also add as you think about what we're doing on 900. It really shows the complexity of the process right, where we're adopting a new mission critical network, which is of significant size. Its 900 megahertz system.
So getting these rails all organized under that.
Centralized coordinated.
Operating groups is sort of what the advantage it through now.
And to purchase order will not be from multiple railroad companies or you know.
Do you expect individual once for each each row.
And.
Secondly, if you get the purchase order in the fourth quarter when do you start recognizing revenue.
Okay. So I'll take that the second part of the question last so we would recognize revenue in the fourth quarter. We can set that lab up pretty quick when in fact, we've already have the basic structure is outlined in the equipment ready.
And then in terms of the order.
It's unclear exactly sort of what budgets coming from we do believe it's going to be.
Supported at the.
At the industry level and in fact, we think the.
Participation amongst the class one rails will be much wider than we thought initially.
I'll remind you that most of the work in the field has been led by BNS FCC PSX. They continued to be very active but the labs also an opportunity to bring the others into the fold.
But ultimately it'll be purchase order with each individual rail company correct.
Yeah.
Ultimately.
On the on the deployment it will be where we're at.
Where the order comps what budget.
It remains to be seen.
And so just to be clear. This purchase order is it coming from the lab or is it coming from the individual rail companies here.
Well. This is the purchase order we're talking about is for the M. The Federated Network lab.
So we have a sense of how large it could be or.
A large purchase orders in the fourth quarter could be broadly speaking.
Yeah, we're not able to share that information.
Okay, Great and do you have a sense of how large you know how much the rails have to spend now too.
To vacate and upgrade the 900 megahertz spectrum.
Higher level sense of the timing when they have to spend that.
No. So all indications are historically positioned to deliver on this 900 megahertz network, but of course. The question is timing Tim We can't give you a precise date for the commercial P O and when that starts we're working closely with the rails and we're earning the business, but the purchase order is going to come when they are ready so.
We'll be sure to notify our investors as soon as we can.
Okay, great great great.
Any sense on how large you know now you've been studying this and it sounds like more rails and any sense how much they have to spend with you guys to upgrade the network ultimately.
Well, we think the network is in the hundreds of millions of dollars of potential market and I don't have anything to add beyond what we've talked previously.
In terms of market great Great and then just lastly, I'm just curious on the drones what kind of.
What kind of concrete industry do it with the drones essentially to improve off of our operations just out of curiosity at a high level, what they are using it for.
Sure reached would you like to take that.
Yeah sure can you just repeat which industry you were asking the question about.
Sorry, I think you said you want a very large contract in the mining industry that was more focused on aggregates and concrete. Just curious you know were just some examples of what they would do to improve productivity.
Yes sure absolutely.
So the initial use cases around the stockpile.
Dallas is in management, so it's about having a.
Daily representation of exactly what you have in Europe, Stockholm yard your facility.
To optimize things like supply chain management and logistics.
Where where materials are being moved to and from.
So it's really just about having up to date accurate information about.
How much if any of these materials you actually have.
I see thank you.
Thanks, guys. Good luck.
And our next question today comes from Microsoft and see them. Please go ahead.
Great Good morning.
Thanks, Thanks for taking the question.
I guess on the American robotics and Michelle.
Our winter stockpile in the Fortune 100 company can you talk about the.
Rollout with these two customers.
The process there do they start with trials like.
Commercial over time, just how does how would that work with these two.
Yes for sure.
The short answer is yes, so typically with.
With industrial customers and sales process that we see is starting out with <unk>.
Miles in the single digit units and then after reaching some sort of success criteria. After you know.
Call it three to six months that transitions into larger commercial appointments.
And so with any of these customers including stock.
Stockpiling in the Fortune 100 oil and gas company part of our initial discussions with them is what does what's the scale look like.
Since we received that FAA approval in January we received a lot of inbound interest.
Frankly more more than we can handle so one of our task right now is qualifying.
Who is worthy of being in this first wave of customers and who has the biggest potential to <unk>.
Convert to hundreds of units.
One of the reasons, we selected those two companies that we've referenced publicly.
Is because they have the ability to scale too.
Eventually hundreds of units.
Culturally here near term.
That makes sense.
And then are you finding that customers are willing to pay you under a kind of a SaaS model or just some of these guys wanted to just kind of by the system outright.
Yes, it's a great question.
On the whole most.
<unk>.
Are interested and accept the the SaaS based model, there's a couple of industries that based on there.
Kind of historical accounting practices may prefer to shifted more to a capex model.
We're working with them again in the in the in the lens of making sure that that that fits with our scaling our business plan and.
We don't want to change too many things for everybody, but they represent a large a large potential order of hundreds of units and we're willing to work with the with that customer.
Okay, and then any you're doing a lot of investing in American robotics kind of across the board you mentioned software hardware as well what would be the next big kind of technology update you'd like to see.
Part of your platform.
Yeah, I mean, I'd say, it's a little bit more on the operations side of things, but technology related.
Big focus right now is.
Scaling up field operations things like installation maintenance design.
Design for manufacture.
We want to make sure that the process of building and installing and servicing hundreds of units is as efficient and.
It goes well for our customers. So there are some technology elements around that that we're investing in again to make sure that our.
Our customers have to have the best possible experience.
Uh huh.
Then just shifting to the rail opportunity for a second.
Assuming the lab order comes in in the fourth quarter.
What would be the next step after that.
You know do they kind of deploy in testing for a couple of quarters and then and then we get commercial.
Orders after that.
Mike I'll ask Stuart to fill in but the the lab work is around the element of the shared system right as I described earlier.
If you think about the 900 megahertz or the rail footprint also.
Theres most of the territory is solely operated and on track and we think Thats, where the initial build out is going to take place.
With the with the shared element come again in parallel sort of somewhere in the process. So.
So we still target with Siemens the accs deployment to 900 and the initial commercial deployments with the rails and like I said, it's likely going to be in the soul solely operated territories to start.
Stuart would you talk a little bit about the lab, how long that'll be in place I think I think that's right. So the.
As Eric mentioned, the Federated concept is where they are.
Our intermodal over the Iraq.
Whereas the connect.
As we mentioned both being assessed and <unk> have their existing test networks out.
Yes.
<unk> deployed and those continue to progress.
And so I would say that the orders will be coming from.
The unusual railroads.
They're not necessarily linked to the laptop. So the lab timing is really the intermodal.
So I.
I think we need you just have to stay tuned for as we make progress with the individual rails too with his team and support.
We mentioned that.
<unk> has been formally launch in.
September with Siemens and the rails are understanding the value of that product, where both supports the legacy platform and allows for the transition to the greenfield at the same time. So all those things are coming together, where the inventory individual rails are understanding the value and then also.
The intermodal or where they connect component so I would say theyre not completely linked.
On.
As gating items there are independent.
And that would go for the a T S. Yes product two it sounds like.
Correct.
Yes.
Okay. Thanks, a lot.
Hello, Ladies and gentlemen, as a reminder, if you'd like to ask a question. Please press Star then one today's next question comes from Coram Williams box with Forte Capital Group. Please go ahead.
Good morning, gentlemen, and congratulations on all your developments. So I have two questions. One is in the way of projections at what point will we begin to have clarity on future growth and the second question is regarding contract. So I'm sure there's competitive natures that play in here, but at any point, where we are we going to know the names.
These fortune 100 companies that both companies are getting contracts on.
Alright, Thank you Carter.
To answer the last question is yes.
At the appropriate time, we'll be able to share more details on customers.
And named names there is certain.
Competitive reasons.
And business reasons, we chose not to on the recent oil and gas customer.
I would also add that we have equivalent sized customers in the pipeline in the oil and gas.
And then as it relates to guidance I mean, we're investing to scale in two.
Really huge markets. It's a mission critical Iot private industrial networks market markets via on dust networks and of course commercial drones V America robotics add.
On dust networks will work with large customers I'm really large networks and given we don't have clarity on the timing of purchase orders, we're working towards its prudent not to put that stake in the ground. However, we're extremely confident in the opportunity.
In the 900 in other rail networks, we've talked about in the past, including $1.60, and $4.50. So.
So as a as we see the inflection in and get the purchase orders will be building backlog in that business on dust networks will be much more predictable.
Robotics has best in class technology platform. They have these FAA approvals that allow for faster deployment than anyone else in the industry and we're putting the team in place to scale. These initial purchase orders are for a handful of scout systems and.
And we're working to position those customers for fleet deployments and as we sort of go through that process that business is going to get a lot more predictable as well so.
So that's that's the answer I think at the moment not providing the guidance for that for Q3, it's a prudent step.
Yeah.
Okay, great. Thank you so much.
And ladies and gentlemen. This concludes the question and answer session I would like to turn the conference back over to the management team for any final remarks.
Yes.
Alright, well, thank you operator, and I appreciate everyone joining us on our call. This morning, I'd like to close by reminding our investors that we're bringing tremendous value to the commercial and government markets. We're targeting we're leveraging not one but two best in class disruptive technology platforms and of course, that's on Das network software base full Mac's mission.
Wireless network and that's with American Robotics Scoff system, the only fully autonomous drone approved to operate beyond visual line of sight with no human onsite.
The markets were targeting are well into the billions of dollars in size in Argos has made and continues to make the investments needed to pull them through to orders or revenue.
Tracking towards in the substantial customer of pipeline opportunities we are focused upon.
We expect a very active second half of 2021 and a strong finish to what is clearly a transformational year for Argos numeric robotics, we will keep you informed on the critical business development milestones as we achieve them. Thanks again for joining us this morning and have a great day.
And ladies and gentlemen. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines never wonderful day.