Q1 2025 Ondas Holdings Inc Earnings and Business Update Call
Operator: Welcome to the Ondas Holdings, Inc. first quarter 2025 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press two, excuse me, star, then two.
We don't come to the Office Holdings, Inc. First quarter 2025 conference call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the snarky followed by zero.
After todays presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on your telephone keypad to withdraw your question. Please press two sorry excuse me Star then two.
Operator: Before we begin, the company would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Ondas' best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking statements. These risk factors are discussed in Ondas' periodic SEC filings and in the earnings press release issued today, which are both available on the company's website. Ondas undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances, except as required by law.
Before we begin the company would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect on this our best current judgment they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by it.
These forward looking statements.
These risk factors are discussed in August is periodic SEC filings and in the earnings press release issued today, which are both available on the company's website.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances, except as required by law.
Operator: During this call, Ondas will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today, which is available at the Investor Relations section of our website. This non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. However, management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business.
During this call on this well refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles.
A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today, which is available at the Investor Relations section of our website.
This non-GAAP information is provided as a supplement to not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP.
However management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business.
Operator: Please note, this event is being recorded.
Speaker Change: Please note. This event is being recorded I would now like to turn the conference over to Eric Brock Chairman and CEO. Please go ahead. Thank you operator and good morning.
Eric Brock: I would now like to turn the conference over to Eric Brock, Chairman and CEO. Please go ahead. Thank you, Operator, and good morning. I want to get started by welcoming you to our quarterly conference call. We appreciate you joining us today and for your continued interest in Ondas. I'm happy to be joined today by key members of our leadership team, including Neil Laird, our interim CFO, Oshie Lagasse, the co-CEO of Ondas Autonomous Systems, and Marcus Nadelman, the CEO of Ondas Network.
Speaker Change: Let me get started by welcoming you to our quarterly conference call. We appreciate you joining us today and for your continued interest in Argos.
Speaker Change: I'm happy to be joined today by key members of our leadership team, including Neil <unk>, our interim CFO or Sheila gassy, the cosi eurobond as autonomous systems in markets not only the CEO of on dust networks.
Speaker Change: Yeah.
Eric Brock: So let's now turn to the agenda.
Speaker Change: So, let's now turn to the agenda I will begin with a review of our key highlights from the first quarter of 2025.
Eric Brock: I will begin with a review of our key highlights from the first quarter of 2025.
Neil Laird: I will then hand the call to Neil for a financial review of our Q1 2025 results.
Speaker Change: I will then hand, the call to Neil for financial review of our Q1 2025 results.
Eric Brock: We will then provide a business update for our OAS and Ondas Networks business units where I will ask Oshree and Marcus to provide commentary around current business activity and the progress we are making on our business I will then provide an outlook for the remainder of 2025, where we continue to anticipate a record year of revenue growth, primarily driven by OAS.
Speaker Change: We will then provide a business update for OAS and honest networks business units, where I will ask Oh, Sri and markets to provide commentary around current business activity and the progress we're making on our business plans.
Speaker Change: I will then provide an outlook for the remainder of 2025, where we continue to anticipate a record year of revenue growth primarily driven by Oems.
Eric Brock: We will then wrap the call and open the floor for investor questions.
Speaker Change: We will then wrap the call and open the floor for investor questions.
Eric Brock: Let me start by saying we have a very positive story to tell. As you're well aware, we have worked extremely hard over a long period of time to build the exceptional capabilities represented by our technology platforms across both OAS and Ondas Networks. Not only that, we have also worked to both demonstrate their value to our customers and begin to drive adoption in the large critical markets we are addressing. These efforts are beginning to pay dividends in very tangible ways, indeed, in ways that you as investors can measure.
Speaker Change: Let me start by saying, we have a very positive story to tell today as you're well aware we have worked extremely hard over a long period of time to build the exceptional capabilities represented by our technology platforms across both OIS and dust networks.
Speaker Change: Not only that we have also worked to both demonstrate their value to our customers and begin to drive adoption in the large critical markets we are addressing.
Speaker Change: These efforts are beginning to pay dividends in very tangible ways in these in ways that you as investors can measure.
Eric Brock: With this backdrop, Ondas entered 2025 with strong momentum, especially with Ondas Autonomous Systems. We put up a strong quarter from both a growth and operational standpoint, further accelerating our multi-year growth plan, which is also being supported by the by growing global tailwinds in demand for our autonomous drone platforms. As we will outline, we are expanding existing customer programs and securing new programs with new customers across the world. In Q1, we generated $4.2 million in revenue, primarily driven by execution against the $10 million backlog we began 2025 with. We also secured more than $9 million of additional orders year to date, further growing our backlog to $16.8 million.
Speaker Change: With this backdrop and as enter 2025 with strong momentum, especially with Amdocs autonomous systems.
Speaker Change: We put up a strong quarter from both a growth and operational standpoint further accelerating our multiyear growth plan, which is also being supported by the by growing global tailwind and demand for our autonomous drone platforms. As we will outline we are expanding existing customer programs and secure.
Speaker Change: <unk>, new programs with new customers across the world.
Speaker Change: In Q1, we generated $4 2 million in revenue, primarily driven by execution against the $10 million backlogs, we began 2025 with.
Speaker Change: We also secured more than $9 million of additional orders year to date further growing our backlog to $16 $8 million.
Eric Brock: In addition, we have strong visibility on a number of additional orders for both Iron Drone and Optimus. that are likely to further increase our backlog by the end of the second quarter as well as during the second half of 2025. With this momentum in a growing order pipeline, we are reaffirming our full year revenue goal of at least $25 million for 2025, with at least $20 million to be generated by our OAS business unit. OAS continues to deliver against existing customer programs while expanding its presence with new defense and homeless security customers across Europe, the Middle East, and the U.S.
Speaker Change: In addition, we have strong visibility on a number of additional orders for both iron drone an optimist.
Speaker Change: And are likely to further increase our backlog by ended the second quarter as well as during the second half of 2025.
Speaker Change: With this momentum and a growing order pipeline, we are reaffirming our full year revenue goal of at least $25 million for 2025 with at least $20 million to be generated by our Oes business unit.
Speaker Change: <unk> continues to deliver against existing customer programs, while expanding its presence with new defense and homeland security customers across Europe, the middle East and the U S.
Eric Brock: Notably, our Iron Drone Raider system is now operational in a live combat environment with a leading military customer, further demonstrating its status as a best-in-class, low-collateral, counter-UAS platform. The Iron Drone demonstration team, which we launched in February, has been successfully engaging customers, and these marketing activities are generating significant new demand, supported by the Iron Drone's real-world combat readiness. We're actively investing behind the Iron Drone expansion to support the scaling of this platform with customers.
Speaker Change: Notably our R&M drone radar system is now operational in a live combat environment with a leading military customer further demonstrating its status as a best in class low collateral counter UAS platform.
Speaker Change: The iron drone demonstration team, which we launched in February has been successfully engaging customers and these marketing activities are generating significant new demand supported by the irons rooms real world combat readiness.
Speaker Change: We are actively investing behind investing behind the iron Jerome expansion to support the scaling of this platform to customers.
Eric Brock: As we talk further about specific customers, orders and backlog, I want to take a moment to remind our investors that certain customer activities at OAS can be sensitive or even classified in nature. This is obviously true for many of our defense and homeless security customers. But this can also be the case with certain commercial customers as well. As a result, we need to be sensitive to this while being as transparent as possible on our business development progress, understanding this constraint.
Speaker Change: As we talk further about specific customers orders and backlog I wanted to take a moment to remind our investors that certain customer activities, Oh, yes can be sensitive or even classified in nature. This is obviously true for many of our defense and homeland security customers.
Speaker Change: It can also be the case with certain commercial customers as well.
Speaker Change: As a result, we need to be sensitive to this while being as transparent as possible on our business development progress understanding this constraint.
Eric Brock: With that said, I am happy to report today that we are announcing our third customer for Iron Drone with a $1.7 million order. This is a governmental customer that will deploy Iron Drone for border security. This newly announced customer today for Iron Drone is in addition to the initial order from a European governmental entity in NATO member country we announced a few weeks ago, whereby the Iron Drone Raider is being deployed to protect critical locations. These new customers are demonstrating the global opportunity for Iron Drone as we pursue our strategy to establish a platform as a category leader for low kinetic CUS CUAS Threat Mitigation.
Speaker Change: With that said I am happy to report today that we are announcing our third customer fire drone with a $1.7 million order. This is a governmental customer that will deploy iron drone for border security.
Speaker Change: This newly announced customer today for Iron grown is in addition to the initial order from a European governmental entity and NATO member country, We announced a few weeks ago, whereby the iron Jerome later is being deployed to protect critical locations.
Speaker Change: These new customers are demonstrating the global opportunity for iron drone as we pursue our strategy to establish a platform as a category leader for low kinetics.
Speaker Change: S C.
Speaker Change: C U E S threat mitigation.
Eric Brock: These new customers also mean we have met our initial goal of adding two new military or homeless security customers in 2025, in addition to our initial military customer, we secured in the second half of 2024. With proper execution, we will be able to expand these new iron drone customer programs with future orders. I want to add that with our new customer goal met for 2025, we now also expect to add even more military and homeland security customers this year beyond these initial two.
Speaker Change: These new customers also mean, we have met our initial goal of adding two new military or whole new security customers. In 2025. In addition to our initial military customer we secured in the second half of 'twenty 'twenty four with proper execution, we will be able to expand these new iron drove customer programs with future orders.
Speaker Change: I want to add that with our new customer goal for 2025, we now also expect to add even more military homeland security customers. This year.
Speaker Change: These initial too.
Eric Brock: The Optimist drone fleet in the UAE for DFR use continues to expand under the DroneBox program, with new deployments supporting public safety missions in urban environments. We expect additional growth in 2025 for Optimus, including with existing customers, as well as new customers, including those in the United States, where we are pursuing important business.
Speaker Change: The optimist strongly the UAE for D. D. F. R. US continues to expand under the drone box from program with new deployments supporting public safety mission in urban environments.
Speaker Change: We expect additional growth in 2025 for optimists, including with existing customers as well as new customers, including those in the United States. We are where we are pursuing important business.
Eric Brock: As Ambus Networks, we made meaningful progress, which included the selection of DOT 16 by the Association of American Railroads. or the AAR as a communications protocol standard for the next generation head of train, end of train, or NGHE system. This validates our long-term strategic efforts and positions us for commercial adoption for rail networks across the 900 MHz, 220 MHz, and 450 MHz frequency bands. In addition, the 802.16t standard for which we created the design in critical software-based intellectual property was formally ratified by the IEEE committee last week. Recall that the AAR and its railroad members were actively involved in designing the requirements for the DOT 16T standard.
Speaker Change: And I Miss networks, we made meaningful progress, which included the selection of <unk> 16 by the association of American railroads.
Speaker Change: Or the E R. As the communications protocol standard for the next generation head of train and their train or <unk> system.
Speaker Change: This validates our long term strategic efforts and positions us for commercial adoption for rail networks across the 900 megahertz 220 megahertz in 400 450 megahertz frequency bands.
Speaker Change: In addition, the 802016 T standard for which we created the design in critical software based intellectual property was formally ratified by the accurately committee last week.
Speaker Change: Recall that the E R and its railroad members were actively involved in designing the requirements for the <unk> 16 standard.
Eric Brock: This is another marker of success for Ondas and was especially gratifying given the rigorous work of our team and the leadership we have displayed to drive this new standard on behalf of our customers and the rail vendor ecosystem. Lastly, while the 900 MHz deployments remain slow, we are seeing encouraging signs with key customers actively running small-scale critical live network deployments. And we are also integrating new IP-based applications, which we believe will result in additional system sales over time. Of course, Marcus will share more details later in the call.
Speaker Change: This is a another marker of success for our das and was especially gratifying given the rigorous work of our team and the leadership we have displayed to drive this new standard on behalf of our customers and the rail vendor ecosystem.
Speaker Change: Lastly, while the 900 megahertz deployments remains slow.
Speaker Change: We are seeing encouraging signs with key customers actively running small scale critical live network deployments and we are also integrating new IP based applications, which we believe will result in additional sales system sales over time.
Speaker Change: Of course markets will share more details later in the call.
Eric Brock: Overall, we are executing well against our strategy, expanding our production and service capabilities to scale with demand, deepening customer relationships, and positioning Ondas for sustained growth throughout 2025 and into 2026.
Speaker Change: Overall, we are executing well against our strategy expanding our production and service capabilities to scale with demand deepening customer relationships and positioning us for sustained growth throughout 2025 and into 2026.
Neil Laird: I will now hand the call to Neil to provide a detailed financial update. Neil. Thank you, Eric. As I get started, I want to remind our investors that our financial statements reflect the early stage of platform adoption for both Ondas Networks and OAS. We expect significant operating leverage as revenues grow, though today's revenue levels do not yet cover our operating expenditures. For Ondas Networks, revenues will fluctuate from quarter to quarter, given the uncertainty around the timing of customer activity in front of the targeted commercial rollouts in the 900 MHz network and the development programs underway with Siemens and MXV rail.
Speaker Change: I will now hand, the call to Neil to provide a detailed financial update Neil.
Neil: Thank you Eric.
Neil: How do I get started I want to remind our investors that off.
Neil: Financial statements reflect the early stage of platform adoption for both of them best networks and OIS, we expect significant operating leverage as revenues grow though today's revenue levels do not forget to cover our operating expenses.
Ron: Ron back from networks revenues will fluctuate from quarter to quarter, given the uncertainty around the timing of customer activity in front of the targeted commercial rollouts in the 900 megahertz network.
Ron: Element programs underway with Siemens and Amex leeway.
Neil Laird: Similarly, revenues at OIS are expected to vary from quarter to quarter and to normalize into a more predictable pattern as we grow our customer base and more of those customers enter fleet programs and recurring service.
Ron: Similarly revenue that OIS are expected to vary from quarter to quarter and to normalize into a more predictable pattern as we grow our customer base are more of those customers that the fleet programs and recurring service agreements.
Neil Laird: Revenues increased over 500% to $4.2 million in Q1 2025 from $0.6 million in Q1 2024. Revenues from Ondas Networks were $0.2 million, relatively flat compared to $0.3 million from Q1 2024, and were primarily the result of extended timelines related to 900 MHz field deployments with the Class 1 Railroad. OAS revenues were $4.0 million, an increase of over 600% from Q1 of 2024. This increase reflects the shipment of products and services from the $14.4 million orders primarily related to the two new programs secured with a military customer in the third quarter of 2024. We also recognize revenues from additional deployments in the United Arab Emirates.
Ron: Revenues increased over 500% to $4 2 million in Q1 2025 from zero point $6 million in Q1, 'twenty 'twenty four.
Ron: Revenues from our best networks with zero point $2 million relatively flat compared to zero point $3 million from Q1 2020 full I work for.
Ron: Really the result of extended time lines related to 900 megahertz field deployments with the class one railroads.
Ron: Oh, we have revenues were $4.0 million, an increase of over 600% from Q1 of 'twenty 'twenty four.
Ron: This increase reflects the shift with the products and services from the $14 4 million dollar orders.
Ron: Not really related to the two new programs secured with a military customer in the third quarter of 2020 fold. We also recognized revenues from additional deployments in the United Arab Emirates.
Neil Laird: Growth profit was $1.5 million, representing a 35% gross margin in Q1 2025. as compared to a $0.4 million gross loss in Q1 of 2024. The increase in gross margins year-over-year results from increased higher margin product revenues at OAS compared to lower margin service and subscription revenue in Q1 2024. Gross margins can be volatile on a quarter-to-quarter basis due to revenue levels that reflect the early stages of platform adoption, certain fixed service costs reflected in our cost of goods sold, and shifts in revenue mix between product, development, and services. Operating expenses increased to $11.8 million for Q1 of 2025, as compared to $8.7 million in Q1 of 2024.
Ron: Gross profit was $1 $5 million, representing a 35% gross margin in Q1 2025.
Ron: As compared to a zero point $4 million gross loss in Q1 of 2024, the increase in gross margins year over year results from increased higher margin product revenues that Oh, well, yes, compared to lower margin service and subscription revenue in Q1 2024.
Ron: Gross margins can be volatile on a quarter to quarter basis due to revenue levels that reflect the early stages of platform adoption certain fixed service costs reflected in our cost of goods sold a shift in revenue mix between product development and services revenue.
Ron: Operating expenses increased to $11 $8 million for Q1 of 2025 as compared to $8 $7 million in Q1 of 2020 full cash operating expenses were $9.0 million in Q1, 2025 compared to $7 $3 million in Q1.
Neil Laird: Cash operating expenses were $9.0 million in Q1 2025, compared to $7.3 million in Q1 2024. The increase in cash operating expense was the result of investments in headcount and programs at OAS to support the business growth we discussed above. Operating expenses also increased because of additional stock compensation. The operating loss was $10.3 million for Q1 2025, as compared to $9.1 million for Q1 2024. Adjusted EBITDA loss was $7.5 million for Q1 2025, improving slightly from the $7.7 million loss in Q1 of 2024.
Ron: <unk> 20 for the.
Ron: The increase in cash operating expense was the result of investments in headcount and programs.
Ron: Yes to support the business growth we discussed above.
Operating expenses also increased because of additional stock compensation expense.
Ron: The operating loss was $10 $3 million for Q1, 2025, as compared to $9 $1 million for Q1 2024, adjusted EBITDA loss was $7 $5 million for Q1, 2025, improving slightly from the $7 7 million dollar loss in Q.
Ron: One of 2024.
Neil Laird: So now let's turn to the cash flow state. We held cash of $25.4 million as of March 31, 2025, compared to $30 million as of December 31, 2024, and $14.6 million as of March 31, 2024. The increase from March 2024 reflects the financing received during the last 12 months that's cash used in operations. Cash used in operations during Q1 of 2025 decreased slightly to $6.7 million, compared to $7.5 million for Q1 2024, as we saw improved cash collections from the orders received and shipped in 2024 and early 2025. We also received cash from financing activities of $2.3 million.
Ron: So now, let's turn to the cash flow statement.
Ron: We held cash of $25 $4 million as of March 31st 2025, compared to $30 million as of December 31st 2024, and $14 $6 million as of March 31st 2024, the increase for March.
Ron: 2024 reflects the financing received during the last 12 months, that's cash used in operations.
Ron: Cash used in operations during Q1 of 2025 decreased slightly to $6 $7 million compared to $7 $5 million for Q1 2024, as we saw improved cash collections from the orders received and shipped in 2024 and early 2025.
Ron: We also received cash from financing activities of $2 $3 million, including proceeds from warrant exercises government grants and other financing.
Neil Laird: including proceeds from warrants exercises, government grants, and other finance. We expect cash utilization to continue to improve in 2025. Improved cash efficiency comes from operating expense leverage at our OAS business unit, given our expectation of increased revenue and gross profit over the course of 2025. The company expects to fund its operations from the cash on hand of $25.4 million as of March 31, 2025, gross profits generated from revenue growth, potential prepayments from customers for purchase orders, potential proceeds from warrants issued and outstanding and additional funds if needed that the company may seek through equity or debt offerings and or borrowings under existing notes, additional notes payable, lines of credit or other sources.
Ron: We expect cash utilization to continue to improve in 2025 improved cash efficiency comes from operating expense leverage of our OAS business unit given that.
Ron: Our expectation of increased revenue and gross profit over the course of 2025.
Ron: The company expects to fund its operations from our cash on hand of $25 $4 million as of March 31st 2025, gross profits generated from revenue growth potential prepayments from customers to purchase orders potential proceeds from warrants issued in outstanding and additional funds if needed but the cut.
Ron: You may seek through equity or debt offerings, and our borrowings under existing notes additional notes payable lines of credits or other sources.
Neil Laird: Turning to the balance sheet. Again, we held cash of $25.4 million as of March the 31st, 2025, compared to $30 million as of December the 31st, 2024. As of March the 31st, 2025, Ondas Holdings had $25.4 million in convertible debt. down from 44.6 million as of the end of 2024, reflecting a significant conversion of our outstanding convertible notes into equity. We're pleased to say that during the second quarter today, we have seen further debt reduction. via conversion of convertible notes to equity and our outstanding balances on the convertible notes as of today have been reduced to $20.6 million.
Ron: Turning to the balance sheet.
Ron: Again, we held cash of $25 $4 million as of March 31st 2025.
Ron: That's a $30 million as of December 31st 2024.
Ron: As of March.
Ron: 31st 2025 armed us holding at $25 $4 million in convertible debt outstanding down from $44 6 million as of the end of 2024, reflecting a significant conversion of our outstanding convertible notes into equity.
Ron: We're pleased to say that during the second quarter to date, we have seen further debt reduction.
Ron: Our conversion of convertible notes to equity and our outstanding balances on the convertible notes as of that they have been reduced to $26 million. This.
Neil Laird: This debt reduction included conversion of notes that were due to mature at the end of April. Of course, we plan to support the conversion of these remaining notes to equity before maturity.
Ron: This debt reduction included conversion of notes that would do to mature at the end of April.
Ron: Of course, we plan to support the conversion of these remaining notes to equity before maturity.
Eric Brock: And I will now hand the call back to Eric.
Eric Brock: I will now hand, the call back to Eric.
Eric Brock: Thank you, Neil. While the debt conversions Neil highlighted added more shares to the share count than we would have liked, the reduction in debt at the holding company is a significant positive, in my opinion.
Eric Brock: Thank you Neil.
Speaker Change: While the debt conversions, Neil highlighted added more shares to the share count than we would've liked the reduction reduction in debt at the holding company is a significant positive in my opinion with.
Eric Brock: With that context, I thought it would be helpful to spend a few minutes here to dig a bit more into our cap table. As you are aware, significant funding of our growth plan has come from the raising of capital through convertible notes. Since October 2022, we have raised $70 million in cash, which represented 80.5 million in convertible notes due when including original issue discount or OID. This $80.5 million includes the $34.5 million of notes that were invested at the end of 2024, just last December. While these notes have fixed conversion prices, they also have a feature that allows for monthly amortization, whereby they can be converted into shares at a conversion price calculated using a discount to a VWAP measure if the VWAP is below the fixed conversion price.
Speaker Change: With that context, I thought it would be helpful to spend a few minutes here to dig a bit more into our cap table.
Speaker Change: As you are aware significant funding of our growth plan has come from the raising of capital through convertible notes. Since October 2022, we have raised $70 million in cash, which represented $85 million in convertible notes due when including original issue discount or OID. This 80.
Speaker Change: $5 million includes the $34 $5 million of notes that were invested at the end of 2024 just last December.
Speaker Change: These notes have fixed conversion prices. They also have a feature that allows for monthly amortization, whereby they can be converted into shares at a conversion price calculated using a discount to <unk> measure if the V work is below the fixed conversion price.
Eric Brock: While the terms of the notes are fully disclosed in our SEC filings, we are providing some additional context to help investors calculate the potential additional shares to be issued to satisfy the balance of the outstanding convertible notes.
Speaker Change: Well it turned out the notes are fully disclosed in our SEC filings, which are providing some additional context to help investors calculate the potential additional shares to be issued to satisfy the balance of the outstanding convertible notes.
Eric Brock: But first, let's discuss the increase in share count from 93.2 million to 137.4 million during the first five months of 2025 year to date. Note that the bulk of the shares as we show here are related to the conversion of the convertible notes, which includes unamortized discounts and accrued interest. The average conversion price for these additional shares was approximately $0.68. The low conversion price was unfortunate in a function of a significant decline in our share price, despite what we believe is a significantly improving company fundamental. It is management's view that market-related factors exacerbated pressure on our shares and resulted in Ondas issuing more shares due to the conversion than we may have otherwise.
Speaker Change: First let's discuss the increased share count from $93 2 million to 130 to $137 4 million.
Speaker Change: During the first five months of 2025 year to date.
Speaker Change: Note that the bulk of this year's as we show here are related to the conversion of the convertible notes, which includes unamortized discounts in accrued interest.
Speaker Change: The average conversion price for these additional shares was approximately 68 cents.
Speaker Change: The little conversion price was unfortunate and a function of the significant decline in our share price. Despite what we believe is a significantly improving company fundamentals.
Speaker Change: It is management's view that market related factors exacerbated pressure on our shares and resulted in a non us issuing more shares due to the conversion than we may have otherwise.
Eric Brock: Going forward, we anticipate the conversion of the remaining $23.8 million of outstanding notes, which includes unamortized discounts in accrued interest, into additional shares.
Speaker Change: Going forward, we anticipate the conversion and the conversion of the remaining $23 8 million of outstanding notes, which includes unamortized discounts in accrued interest into additional shares.
Eric Brock: We have shared the maturities and conversion prices here on this slide for your information. The best outcome, of course, is for the shares to appreciate above the fixed conversion price. If this happens, we will issue another 18.7 million shares, as depicted here, to eliminate the debt.
Speaker Change: We have shared the maturities and conversion prices here on this slide for your information.
Speaker Change: First outcome of course is for the shares to accretion appreciate above the fixed conversion price. If this happens we will issue another $18 7 million shares as depicted here to eliminate the debt.
Eric Brock: Of course, if the shares are below the fixed conversion prices, the incremental shares issued upon conversion using a conversion price calculated with a discount VWAP method would result in more shares being issued above the $18.7 million described within For more information visit www.vwap.com We encourage investors to perform their own analysis, and we are merely sharing this perspective to provide additional tools to help you make your own assessment.
Speaker Change: Of course, if the shares are below the fixed conversion prices the incremental shares issued upon conversion using a conversion price calculated with a discount. The walk method would result in more shares being issued above the $18 7 million described within.
Speaker Change: We encourage investors to perform their own analysis, and we are merely assign sharing this perspective to provide additional tools to help you make your own assessments.
Eric Brock: Now we will transition to a review of our business units and ask Oshree and Marcus to share updates on business development activity and operations at Ondas Networks and OAS. As a reminder, both Oshri and Marquis took the reins as CEOs of their respective business units during the first quarter of 2025. Both are highly experienced and bring exceptional and relevant talents to their leadership positions.
Speaker Change: Now we will transition to a review of our business units and ASP, Oh, Sri and markets to share updates on business development activity and operations and other networks and OIS.
Speaker Change: As a reminder, both oaktree and Marcus took the raise the Ceos of their respective business units. During the first quarter of 2025, both are highly experienced and bring exceptional and relevant talents to their leadership positions I am pleased with their performance and believe they will be highly successful driving growth for our company.
Eric Brock: I am pleased with their performance and believe they will be highly successful, driving growth for our company.
Speaker Change: These.
Marcus Nadelman: Marcus will now provide an update on our business activity in the Outlook for Ondas Networks. Marcus. Thank you, Eric.
Markus: Markus will now provide an update on our business activity and the outlook for on dust networks markets.
Thank you Eric.
Marcus Nadelman: 2025 has been an exciting year so far for Ondas Networks, and I'm happy to join the call and update our investors on some important developments. On April 11th, the Association of American Railroads Wireless Communications Committee announced that DOT16 has been selected as the communications protocol for all future head-of-train and end-of-train devices. This is not only an important milestone in the development of the NGHE 4.0 specifications, but also a significant endorsement of 802.16 technology in the railroad operating environment. The Wireless Communications Committee made its decision after a rigorous technical evaluation and competitive technology comparison at the AAR's MXV Research Facility in Colorado.
Speaker Change: 2025 has been an exciting year, so far for on those networks and I'm happy to join the call and update our investors on some important developments.
Speaker Change: On April 11th the Association of American Railroads Wireless Communications Committee announced that Dr. <unk> has been selected as the communications protocol for all future ahead of train and endocrine devices.
Speaker Change: This is not only an important milestone in the development of the MGH a 4.0 specification.
Speaker Change: But also a significant endorsement of $802 16 technology and the railroad operating environment.
Speaker Change: Wireless Communications Committee made its decision after a rigorous technical evaluation and competitive technology comparison at D. A R. It makes me research facility in Colorado.
Marcus Nadelman: We were pleased to see that our capabilities performed as strongly as they did as the industry continues to see the DOT16 technology platform and Ondas as the leading capability to upgrade private wireless networks in the railroad.
Speaker Change: We were pleased to see that our capabilities preferred performed as strongly as they did as the industry continues to see the dark 16th technology platform and honestly, the leading capability to upgrade private wireless networks in the railroad sector.
Speaker Change: Yeah.
Marcus Nadelman: I would like to take this opportunity to thank both the Ondas and MXV technical teams who put a lot of time and energy into getting us to this point. with the NGHE Communications Protocol selected. The remaining NGHE 4.0 specifications shall be finalized. This effort is being led by MXV, and we expect that the full specifications will be complete by the end of this year. In anticipation of the final specifications, which primarily relate to end-of-train device functionality. We are proactively engaging with head-of-train and end-of-train device manufacturers to be in a position to commercialize next-generation head-of-train devices in early 2026.
Speaker Change: I would like to take this opportunity to thank both of you on this and it makes me technical teams, who put a lot of time and energy into getting us to this point.
Speaker Change: With the NGA G Communications protocol selected.
Speaker Change: The remaining <unk> 4.0 specification that will be finalized.
Speaker Change: This effort is being led by <unk> and we expect that the full specifications will be complete by the end of this year.
Speaker Change: In anticipation of the final specifications, which primarily primarily related to end of training device functionality we are.
Speaker Change: Actively engaging with head of training and the training device manufacturers to be in a position to commercialize next generation head of train devices early 'twenty or 'twenty six and then train devices. Shortly thereafter.
Marcus Nadelman: and end-of-train devices shortly thereafter.
Speaker Change: Yeah.
Marcus Nadelman: Last week, the Institute of Electrical and Electronics Engineers, or IEEE, formally ratified 80216T, the latest iteration of the DOT16 standard. Securing the DOT 16 standard was a multi-year process that took a tremendous amount of energy and talent from many people at Ondas and throughout the ecosystem. Further, this standard has been tailored to the unique requirements of private industrial wireless networks, particularly for the needs of the Class 1 railroads who collectively operate continent-wide wireless networks supporting critical operating and safety systems. Enabling the Efficient and Safe Operations of Training.
Speaker Change: Last week.
Speaker Change: The truth of electrical and electronics engineers or I Tripoli formally ratified it was $2 16 key there.
Speaker Change: The latest iteration of the <unk> 16 standard.
Speaker Change: Securing the <unk> 16 standard was a multi year process that took a tremendous amount of energy and talent for many people on that and throughout the ecosystem.
Speaker Change: Further this standard has been tailored to unique requirements with private industrial wireless networks, particularly for the needs of the class one railroads, who collectively operate continent wide wireless networks supporting critical operating safety systems, enabling the efficient and safe operations of trains.
Marcus Nadelman: I would like to use this opportunity to thank the Ondas Network engineering team, as well as many of our Class 1 partners who contributed to the development of this standard. DOT16T represents a significant improvement in throughput and latency, which further underscores the benefits to be gained by converting legacy narrowband networks to DOT16 general purpose networks. The ratification of DOT16P solidifies DOT16's role in NGHE and the 900 MHz transition, and more importantly, it opens the door to addressing the capacity issues that Class I's face in other networks, including, of course, the strategically important 220 MHz and 116 MHz networks.
Speaker Change: I would like to use this opportunity to thank beyond this network engineering team as well as many of our aircrafts when partners who contributed to the development of the standard.
Speaker Change: Yeah.
Speaker Change: Dr. <unk> T represents a significant improvement in throughput and latency, which further underscores the benefits to be gained by converting legacy narrowband networks. Two dropped 16 general purpose networks.
Speaker Change: The ratification of car T.
Speaker Change: It's probably a toxic things roll in N G H E and the 900 megahertz transition and more importantly, it opens the door to addressing the capacity issues the class ones facing other networks, including of course, the strategically important 220 megahertz and 116 megahertz networks.
Marcus Nadelman: We continue to work closely with our partners in the railroad industry on delivering existing projects, as well as on developing solutions for longstanding needs. I am pleased that certain 900 megahertz deployments are proceeding as expected. Demonstrating continued progress on what we believe will ultimately be wide-scale adoption of DOT16 in this greenfield network. Metra, Chicago's Regional Transit Authority, placed a follow-on order for 900 MHz equipment with our partner Siemens to ensure system-wide coverage. Metro's plans call for system-wide deployment to be completed in September 2025. We have also been working closely with customers on 900 MHz applications, including the integration of PTC messaging currently hosted on the 220 MHz band.
Speaker Change: We continue to work closely with our partners in the railroad industry on delivering existing projects as well as on developing solutions for lung scanning needs.
Speaker Change: I am pleased that certain 900 megahertz deployments are proceeding as expected demonstrating continued progress on what we believe will ultimately be wide scale adoption of <unk> 16, and this greenfield network.
Speaker Change: Chicago Regional Transit authority placed an order a follow on order for 900 megahertz equipment with our partner Siemens to ensure system wide coverage.
Speaker Change: Metro plans call for system wide deployment to be completed in September 2025.
Speaker Change: We have also been working closely with customers on 900 megahertz applications, including the integration of PTC messaging currently hosted on the 220 megahertz band.
Marcus Nadelman: This will allow railroads to use 900 megahertz as either a primary or secondary network for CTC and PTC operations. This testing is proceeding well, and we expect our partner Siemens to receive an additional order from a Class 1 railroad to equip an entire subdivision with 900 MHz equipment. A subdivision-wide deployment opens the door to division and network-wide deployments on this Class I, as well as others for the same use case. With another Class 1, we are developing additional specific use cases for 900 MHz equipment in dark territory operations. Once fully demonstrated, we expect these use cases to be relevant to other Class 1 operations.
Speaker Change: This is one of our railroads to use 900 megahertz.
Speaker Change: Their primary or secondary network for CTC and PTC operations.
Speaker Change: This testing is proceeding well and we expect our partner Siemens to receive an additional conditional order for a crash from a class one railroad to equip an entire subdivision with 900 megahertz equipment.
Speaker Change: Our sub division wide deployment opens the door to division and network wide deployments and this crash one as well as others.
Speaker Change: For the same use case.
Speaker Change: Yeah.
Speaker Change: With another crash one we are developing additional specific use cases for 900 megahertz equipment and dark territory territory operations.
Speaker Change: Once fully demonstrated we expect these use cases to be rather than to other crashed on operators.
Marcus Nadelman: In the 220 MHz spectrum, we continue to execute on the PTC data radio on behalf of Amtrak. We expect to start delivering PTC radios in early Q3. Once the Amtrak work is complete, we expect a rollout to other operators in the Northeast Corridor. As data-intensive IoT solutions are becoming more prominent on Class 1 railroads, the need for data transmission increases significantly. Ondas Networks is engaging with several Class Ones on solving long-standing data transmission needs. Our work on DOT16 and our industrial wireless communications capabilities and expertise put us in an excellent position to partner with our customers and rail vendors to develop solutions with long-term viability.
Speaker Change: And the 200 Kramer megahertz spectrum, we continue to execute on the PTC beta radio on behalf of Amtrak.
Speaker Change: We expect to start delivering PTC radios in early Q3.
Speaker Change: Once the Amtrak work is complete we expect a rollout to other operators in the northeast corridor.
Speaker Change: As data intensive Iot solutions are becoming more prominent on class one railroads the need for data transmission increases significantly on the networks, we are engaging with several class ones on solving longstanding data transmission needs.
Speaker Change: Our work on <unk>, 16, and our industrial wireless communications capabilities and expertise put us in excellent position to partner with our customers and rail vendors to develop solutions with long long term profitability.
Marcus Nadelman: We will keep the investor community informed as we commercialize these efforts.
Speaker Change: We'll keep the investor community informed as we commercialize these efforts.
Eric Brock: I will now hand the call back to Eric. Thank you, Marcus.
Speaker Change: I will now hand, the call back to Eric.
Speaker Change: Thank you Markus I will now ask <unk> to take the floor and provide a business update for OAS business unit Oshie. Please proceed.
Oshri Lagasse: I will now ask Osheri Lagasse to take the floor and provide a business update for our OAS business unit. Osheri, please proceed. Thank you, Eric. Ondas Autonomous System entered 2025 maintaining strong momentum, particularly in the defense and homeland security sector. We generated $4 million in revenues and secured over $9 million in orders year to date. We have been working closely together to accelerate the building of OAS into a leading provider of next generation defense and security technology platforms. Our core focus is delivering tactical solutions based on software-defined autonomous aerial systems. are supported by our big engineering capabilities and our ability to operate across both U.S.
Speaker Change: Thank you Eric.
Speaker Change: Carnival system F 'twenty 'twenty for us maintaining strong momentum, particularly in the defense and homeland security sector, we generated $4 million or else you know revenues and.
Speaker Change: Yo over $9 million in.
Speaker Change: And although here today.
Speaker Change: Been working closely together to celebrate the building of OAS into a leading provider.
Speaker Change: A next generation defense and security technology platforms. Our core focus is delivering practical solutions based on software defined autonomous aerial systems supported by our deep.
Speaker Change: Engineering capabilities.
Speaker Change: Our ability to operate across both U S and Allied defense ecosystems, why I will elaborate on our go to market progress in the following slides.
Oshri Lagasse: and allied defense ecosystems. While I will elaborate on our go-to-market progress in the following slides, I want to highlight that our strategy is demonstrating success that is evidenced by the ongoing business development growth we have demonstrated so far in 2025. In January, we received an order from a major defense company for the integration of new applications into the Iron Drone Raiders. This includes testing and development of features designed to counter ground-based threats. This will be a new use case for the Iron Drone platform and we will have more to say on this at a later date.
Speaker Change: I want to highlight that our strategy is.
Speaker Change: Demonstrating success, but is evidenced by the ongoing business development growth. We have demonstrated so far in 2025 generally we received an order from a major defense company.
Speaker Change: The integration of new applications into the iron throne radar system.
Speaker Change: This includes testing or developmental features designed to counter Brown base correct.
Speaker Change: So it would be.
Speaker Change: Use case, Rhode Island touched on and we will have more to say on this.
Speaker Change: Baked.
Oshri Lagasse: Recently we have secured two initial multi-million dollar orders for the Iron Drone Raider from major customers. At the end of Q1, OAS secured a $3.2 million purchase order from a governmental entity in the UAE to expand its Optimus Prime network infrastructure. We support the ongoing development of autonomous aerial services under the UAE's DroneVox program. Enabling Rapid Response, Public Safety and Emergency Operations in Urban Environments. Since then, we have added two new Homeland Security customers for our Iron Drone platform. In April, we announced we had secured a $3.4 million order from a European defense contractor to deploy Iron Drone on behalf of a NATO member country to protect critical locations.
Speaker Change: Recently, we have secured two initial multi million, though not all of those.
Speaker Change: There are long drawn radar.
Speaker Change: Major customers.
Speaker Change: At the end of Q1 O S T O.
Speaker Change: 3.2 million dollar purchase order from a governmental entity in the UAE.
Speaker Change: Friends.
Tim: Tim will strong network infrastructure.
Tim: He supports the ongoing development of autonomous.
Speaker Change: Thanos aerial services, although they only he's drawing books program in that.
Tim: I believe Cid response public safety.
Speaker Change: And the management see operations in over and above all labs.
Speaker Change: Is there we have added two new homeland security customer as well.
Speaker Change: Iran drawn platform.
Speaker Change: In Africa, we announced we had secured a $3 4 million build out there.
Speaker Change: European Defense contracts Tor, two Hello, Airan drawn on behalf of Nashville member country protect critical locations and as Erik highlighted in his opening remarks, but very weird and mouse that we secure non U S government customer.
Oshri Lagasse: And as Eric highlighted in his opening remarks, today we announced that we secured non-U.S. governmental customer for Iron Drones related to border security. These two new Iron Drone customers are important milestones demonstrating the strong market position for Iron Drones in the global market. We are pursuing an opportunity to position the radar as the market leader for the low-kinetic counter-UAS. As part of our U.S. expansion efforts, we formed a strategic partnership with Palantir Technologies, which began with the integration of their Foundry AI platform to support the scaling of OAS supply chain production and failed operations. We expect this relationship to expand and drive AI, enable product innovation around advanced Autonomy Capabilities as well as Business Development Opportunities.
Speaker Change: Our island drawn related to border security.
Speaker Change: So in the U R runs on customer how important milestones demonstrating the strong market position for iron ore in the local markets.
Speaker Change: We are pursuing and the.
Speaker Change: Opportunities to position the radar as the market leader for the low kinetic counter UAS.
Speaker Change: <unk> capabilities.
Speaker Change: Our U S expansion efforts, we formed a strategic partnership with pilot technologies, which began with the integration of the boundary.
Speaker Change: I flashed all the support.
Speaker Change: <unk>, Oh, yes supply chain production and sales operations.
Speaker Change: We expect this relationship to expand and drive AI enabled product innovation around advanced.
Speaker Change: I'll start on the capabilities as well as business development opportunities.
Oshri Lagasse: We also announced a strategic partnership with Volatus Aerospace to enhance border surveillance and situational awareness through the use of our autonomous aerial systems, where we are together targeting specific market opportunities and split programs. The new customers and industry partners we have announced highlight OAS's growth potential in global defense and security markets. They reflect our strategic advantages, enabling us to work closely with government agencies, security forces, and the defense and security ecosystem to deploy mission-critical solutions where they are needed most.
Speaker Change: We also announced.
Speaker Change: <unk> partnership with molasses aerospace to enhance border, so wheelhouse and situational awareness.
Speaker Change: The use of our autonomous aerial systems, well, we are together targeting specific market opportunities and split programs to new customers and industry partners.
Speaker Change: Hi, Larry.
Speaker Change: Yes, its growth potential in mobile defense and security markets Flex I was lethargic advantages.
Speaker Change: That brings us to work closely with government agencies security forces.
Speaker Change: Bass and security ecosystem could deploy mission critical solutions, where they are needed most.
Oshri Lagasse: I'd like to take a moment to revisit our go-to-market strategy as we continue advancing the expansion of OAS across global defense and security markets. Ondas offers functional, field-proven, and highly reliable software-defined drone solutions built to meet the most rigorous and complex operational requirements. These built-for-purpose systems are in demand across both security-related government applications and high-value civil and commercial use cases. According to recent industry research, these markets represent a multi-billion dollar opportunity and are expected to continue growing significantly over the coming decade. As we evaluate the global defense and security market for our Optimus and Iron Drone-based solutions, we see significant upside, even under conservative assumptions, with limited disruption, focus on specific applications, and targeted customers.
Speaker Change: I'd like to take a moment to review.
Speaker Change: Our go to market strategy.
Speaker Change: As we continue advancing the expansion of our <unk> across the global defense and security markets.
Speaker Change: Almost all sales function loyalty program and highly reliable software defined drilling solutions built to meet the most rigorous and complex operation a requirement.
Speaker Change: <unk> built.
Speaker Change: Our systems are in demand across both the community there.
Speaker Change: Ron meant applications and high volume you see here.
Speaker Change: And commercial use cases.
Speaker Change: Thanks to recent industry research these market right.
Speaker Change: Chris that's a multibillion dollar opportunity and are expected to continue growing significantly over the coming decade, and we evaluate the global defense and security market well I'm all set I.
Speaker Change: I went wrong based solutions, we see significant upside.
Speaker Change: Silva P assumptions with.
Speaker Change: The structure and focus on specific applications.
Speaker Change: The customers.
Speaker Change: The combined total addressable market for both T sensitive too.
Oshri Lagasse: combined total addressable market for both systems, specific to JustDefense and HLS markets, represents a multi-billion dollar opportunity. particularly in areas like border protection and safeguarding of military assets. We are seeing strong global demand for Iron Drone Radar as nations seek multilayered kinetic counter-UAS solutions. Our system stands out as combat-ready and built for real-world deployment. In 2025, we are scaling global demos where I don't know at all. targeting major defense and HLS customers across Europe and other key regions, which is leading to more and more customer and partner pipeline activity. We are also building partnerships to support localization, integration, and go-to-market execution, especially in the U.S.
Speaker Change: Defense and H unless markets represents and mostly billion dollar post unity.
Speaker Change: Well, particularly in areas like border protection and safeguarding of monetary assets.
Speaker Change: We're seeing strong global demand.
Speaker Change: It's on the radar.
Speaker Change: <unk> multi layer kinetic counter UAS solutions.
Speaker Change: <unk> stands out it's.
Speaker Change: Combat-ready and renewables deployment.
Speaker Change: And finally 25, we are scaling global demos right.
Speaker Change: Peoples targeting major SaaS and HOS customized across Europe, and other key regions, which is leading to more and more customer.
Speaker Change: Pipeline activity.
Speaker Change: We are also building partnerships to support localization integration and go to market execution, especially in the U S and Europe.
Oshri Lagasse: and Europe. Finally, we are advancing U.S.-based manufacturing claims to align with defense procurement priorities and strengthen our supply chain.
Speaker Change: Yeah, we are assessing the U S based manufacturing claims to align with defense procurements priorities and strengthened our supply chain.
Oshri Lagasse: In conclusion, OAS is executing with urgency and discipline. Thank you very much. Thank you, Oshree.
Speaker Change: In conclusion.
Speaker Change: S is executing with urgency and.
Speaker Change: It's a clean.
Speaker Change: Appearing customer building scale and advancing strategic partnerships that support our long term growth objectives, I am confident in our trajectory.
Excited about the opportunities ahead in 2025 and beyond.
Speaker Change: Thank you Audrey and short the growth model for OAS, Firstly capture programs of record and then expand those programs in parallel we use that experience and market validation to add new customers via new programs and then expand those in a similar manner.
Eric Brock: In short, the growth model for OAS is to firstly capture programs of record, and then expand those programs. In parallel, we use that experience and market validation to add new customers via new programs, and then expand those in a similar manner. The net result, a growing customer and program base with expansion that generates recurring business activity across more and more customers and programs. We believe this growth curve will be significant and look forward to delivering on this expansion over the course of 2025 and then again in 2026.
Speaker Change: The net result, a growing customer and program base with expansion that generates recurring business activity across more and more customers and programs.
Speaker Change: We believe this growth curve will be significant and look forward to delivering on this expansion over the course of 2025 and then again in 2026.
Eric Brock: So let's dig into the outlook. As I said at the outset, this is an exciting time for Ondas. We are executing against a clearly defined multi-year growth Our strong start to 2025 confirms that the foundational work we've done across OAS and Ondas Networks is converting into measurable business momentum. We continue to believe 2025 will see accelerated growth, leveraging the business momentum we have created over the last several quarters. Our key objectives at OAS continue to include driving growth through the expansion of our ongoing Optimist and Iron Drone programs with our current military and public safety customers, ensuring successful deployments and further customer adoption.
Speaker Change: So let's dig into the outlook as I said at the outset. This is an exciting time for Argos, we are executing against a clearly defined multiyear growth plan. Our strong start to 2025 confirms that the foundational work we've done across OAS and honest networks is converting into measurable business momentum.
Speaker Change: We continue to believe 2025, we'll see accelerated growth leveraging the business momentum we have created over the last several quarters.
Speaker Change: Our key objectives that Oems continue to include driving growth through the expansion of our ongoing optimists and iron drone programs with our current military and public safety customers, ensuring successful deployments and further customer adoption.
Eric Brock: We also plan to expand new customer programs, particularly in the defense and homeland security sectors, and aim to secure additional military customers through both government to government channels in direct marketing. Indeed, our last call we said we wanted to capture at least two new defense or homeless security customers this year. And we have now done that with the recent Iron Drone customer announcement. We now believe we can add more of these customers via programs this year and have increased our goal from 2 to 4 new military or homeland security customers for the full year 2025.
Speaker Change: We also plan to expand new customer programs, particularly in the defense and homeland security sectors and aim to secure additional military customers through both government and government channels in direct marketing.
Speaker Change: Indeed on our last call. We said we wanted to capture at least two new defense or homeland security customers. This year and we have now done that with the recent iron drove customer announcements.
Speaker Change: We now believe we can add more of these customers via programs. This year and have increased our goal from two to four new military or homeland security customers for the full year 2025.
Eric Brock: Growing our partner ecosystem will be critical to support not just global sales and marketing, but also field support and sustainment, as well as supply chain and production activity. localizing our business with the support of partners is integral. And we are seeing growing engagement from large defense and homeland security vendors interested in working with Ondas in our OAS business unit. We expect to establish at least two new important partner relationships in 2025 to add to the Palantir Technologies and Volatus Aerospace partnerships we announced earlier this year. On the financial side, the maturing of our technology platforms and operational plans is driving meaningful results for our revenue and growth outlook.
Speaker Change: Growing our partner ecosystem will be critical to support not just global sales and marketing, but also it will support and sustainment as well as supply chain and production activities.
Speaker Change: Localizing our business with the support of partners is integral and we are seeing growing engagement from large defense and homeland security vendors interested working with Argos and our OAS business unit.
Speaker Change: We expect to establish at least two new important important partner relationships in 2025 to add to the talented technologies Atlantis Aerospace partnerships, we announced earlier this year.
Speaker Change: On the financial side, the maturing of our technology platforms and operational plans is driving meaningful results for our revenue growth outlook. The financial metrics, we share here reflect both business units with the bulk of the growth of course being driven by OIS in 2025.
Eric Brock: The financial metrics we share here reflect both business units with the bulk of the growth, of course, being driven by OAS and 2025. As these targets demonstrate, we are clearly making the transition to building a healthy and growing company and driving a path to profitability, firstly at OAS, with Ondas Network's profitability still leveraged to the launch of a network build out by the Class 1 Railroad. We are reaffirming our target for at least $25 million in revenues for 2025, led by OAS, which is expected to deliver at least $20 million in sales this year. The visibility on this Growth Outlook is increasingly supported by a grown backlog, which now stands at $16.8 million, including both business units, and an expanding and maturing customer pipeline.
Speaker Change: As these targets demonstrate we are clearly, making the transition to building a healthy and growing company and driving a path to profitability, Firstly I OAS with IMS networks profitability still leveraged some launch of a network build out by the class one railroads, we are reaffirming our target for at least $25 million in revenues for 2025.
Speaker Change: Led by Oems, which is expected to deliver at least $20 million in sales this year.
Speaker Change: The visibility on this graph growth is increasingly supported by a growing backlog, which now stands at $16 $8 million, including both business units in the expanding and maturing customer pipeline.
Eric Brock: We expect the backlog to grow further in 2025 beyond these levels with new orders, while also growing our revenues as described. We expect this growth to be sustained or even accelerated into 2026. Quite clearly, we believe we are demonstrating a transition to a strong and sustained growth period, which will leverage the significant investments we have made in developing our technology platforms and end markets. To sum it up, we're executing our vision to scale Ondas and I continue to believe 2025 will be a breakout year.
Speaker Change: We expect the backlog to grow further in 2025 beyond these levels with new orders, while also growing our revenues as described we expect this growth to be sustained or even accelerated into 2026 quite.
Speaker Change: Quite clearly we believe we are demonstrating a transition to a strong and sustained growth period, which will leverage the significant investments. We have made in developing our technology platforms and end markets to sum it up we're executing on our vision to scale Argos and I continue to believe 2025 will be a breakout year.
Eric Brock: Before we wrap up, I have some final comments to share.
Speaker Change: Before we wrap up I have some final comments to share firstly as we announced this morning, Joe Pablo will be stepping down from beyond US board as he takes on new responsibilities connected to his nomination to the U S Ambassador to the kingdom of the Netherlands.
Eric Brock: Firstly, as we announced this morning, Joe Popolo will be stepping down from the Ondas Board as he takes on new responsibilities connected to his nomination to be the U.S. Ambassador to the Kingdom of the Netherlands. On behalf of our board, our team, and our shareholders, I want to thank Joe for his dedicated service and exceptional leadership during a pivotal time in Ondas' growth. Joe brought valuable perspective to the boardroom, guidance to our leadership team and played an important role in helping direct our strategy as we scaled our operations and pursued major market opportunities. While Joe will be missed, I expect his successors at the Charles and Potomac Group to remain important and engaged investors in Ondas, and we are excited for the impact he will make on behalf of the citizens of the United States.
Speaker Change: On behalf of our board our team and our shareholders I want to thank Joe for his dedicated service and exceptional leadership during a pivotal time in <unk> growth.
Speaker Change: Joe brought valuable perspective to the boardroom guidance to our leadership team and played an important role in helping direct our strategy as we scaled our operations and pursued major market opportunities.
Speaker Change: While Joe will be missed I expect his successors at Charles and Potomac group to remain important and engaged investors in <unk> and we are excited for the impacts you won't make on behalf of the citizens of the United States.
Eric Brock: We're proud of his appointment and wish him great success in this important role serving our country. Joe, thank you again from all of us at IAM.
Speaker Change: We're proud of his appointment and wish him great success in this important role serving our country.
Speaker Change: Thank you again from all of Us at Argos.
Eric Brock: Secondly, I want to provide some context into our filing for a $225 million shelf registration. We believe having a shelf registration registration statement on file is part of a responsible corporate financial strategy. And while $225 million is certainly large relative to our market capitalization, I do not believe it is large relative to the opportunities we have in front of us in the coming years. We continue to believe that there are billions of dollars of market capitalization available for companies like Ondas focused on capitalizing on the emerging investment cycle we are seeing in defense and security markets globally.
Speaker Change: Secondly, I want to provide some context into our filing for $225 million shelf registration.
Speaker Change: We believe having a shelf registration registration statement on file is part of me responsible corporate financial strategy.
Speaker Change: And while $225 million is certainly large relative to our market capitalization I do not believe it is large relative to the opportunities we have in front of us in the coming years.
Speaker Change: We continue to believe that there are billions of dollars of market capitalization capitalization available for companies like <unk> focused on capitalizing on the emerging investment cycle, we are see in defense and security markets globally.
Eric Brock: So the self-registration statement gives us the required flexibility to invest behind this investment cycle as we grow a large and important company. I want to be very clear, we will be sensitive to our cost of capital, which of course is the inverse to our stock. While the share price is low, we need to be extremely sensitive to that, and we will be. As I consider our outlook and the performance I expect our team to deliver, I believe that as we execute upon our growth plan, we will be rewarded by investors with a higher share price.
Speaker Change: So the self registration statement gives us the required flexibility to invest behind this investment cycle as we grow a large and important company.
Speaker Change: I want to be very clear, we will be sensitive to our cost of capital which of course is the inverse to our stock price.
Speaker Change: Well the share price is low we need to be extremely sensitive to that and we will be at.
Speaker Change: As I consider our outlook and the performance I expect our team to deliver I believe that as we execute upon our growth plan, we will be rewarded by investors with a higher share price.
Eric Brock: This will also come with a mandate to both accelerate our growth plan and participate further in industry consolidation. I believe capitalizing on the organic and strategic growth opportunities ahead will support compounded growth and shareholder value in the coming years. We will be deliberate here, but first things first, of course, we need to deliver on our plan and earn the right from investors to invest more in our business. It is our intention to maintain a healthy balance sheet and prudently invest behind the opportunities we have created. And we will use shareholder value accretion as a critical litmus test for all of our corporate corporate financial strategy.
Speaker Change: This will also come with a mandate to both accelerate our growth plan and participate further industry consolidation.
Speaker Change: I believe capitalizing on the organic and strategic growth opportunities ahead will support compounded growth and shareholder value in the coming years.
Speaker Change: We will be deliberate here, but first things first of course, we need to deliver on our plan and earn the right from investors to invest more in our business.
Speaker Change: It is our intention to maintain a healthy balance sheet and prudently invest behind the opportunities we have created.
Speaker Change: We will use shareholder value accretion as a critical litmus test for all of our corporate corporate financial strategies.
Eric Brock: With that said, I want to wrap the call by highlighting our intention to host a second OAS-focused Investor Day, likely in the second half of June. At this event, we want to provide a detailed update on our business plan and financial outlook. As you know, we have made significant progress since our last OAS-focused Investor Day in September 2024. We have advanced and matured our technology platforms, added customers and partners, and increased our pipeline of opportunity. This Investor Day will be a good opportunity to mark to market our plan and provide some context on our multi-year outlook and the expanding opportunity set at Onda.
Speaker Change: With that said I want to wrap the call by highlighting our intention to host a second OAS focused investor day likely in the second half of June at this event, we want to provide a detailed update on our business plan and financial outlook.
Speaker Change: As you know we have made significant progress since our last OAS focused investor day in September 2024, we have advanced and matured our technology platforms added customers and partners and increased our pipeline of opportunity.
Speaker Change: This investor day will be a good opportunity to mark to market, our plan and provide some context on our multiyear outlook and Ian the expanding opportunity set at Argos.
Operator: So stay tuned for details.
Speaker Change: So stay tuned for details.
Operator: Operator. We will now move to take investor questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question. Please press star then 2. At this time, we will pause momentarily to assemble our roster.
Speaker Change: Operator, we will now move to take investor questions.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you like anything that speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Maxwell McAlis: The first question is from Maxwell McAlis with Lake Street Capital Markets. Please go ahead. Unknown Speaker Hey guys, thanks for taking my question and solid quarter, especially there on the drone side. Hey, I want to dig in on the drone side real quick here. When we think about follow on orders from some of these customers over the past, let's say a couple months, we talk follow on orders here, are you are you typically seeing a bump in those follow on orders in terms of size? Yes, Max, so firstly, thank you for the question. And thanks for joining the call.
Maxwell Mccanless: The first question is from Maxwell Mccanless with Lake Street Capital markets. Please go ahead.
Maxwell Mccanless: Hey, guys. Thanks for taking my question and Saul corner, especially there on the drone side, Hey wanted to dig in on the drone side real quick here. When we think about follow on orders from some of these customers over the past, let's say couple of months. We talk follow on orders here are you typically seeing a bump in those follow on orders in <unk>.
Maxwell Mccanless: Of our size.
Speaker Change: Yeah, I'd say its very at Max So firstly, thank you for the question and thanks for joining the call.
Eric Brock: So yes, the initial orders are often pilot programs in nature. We work to install and operate the system. And as we do that, we're in parallel making plans for significant expansions, I would say. So that's the model we use. If you go back to last year, you would see similar activity with our initial military customer. And of course, that led to larger sales in the second half. And we think even there, we're going to see expansion. So the short answer is yes, these programs have significant upsides. Awesome.
Speaker Change: So yes. The initial orders are often a pilot programs in nature.
Speaker Change: We work to install and operate the system and as we do that we're in parallel making plans for a significant expansion I would say so.
Speaker Change: So that's the model we use if you go back to last year. You saw you would see similar activity with our initial military customer and of course that led to larger.
Speaker Change: Sales in the second half.
Speaker Change: You've been there we're gonna see expansion. So so the short answer is yes. The these programs have significant upside.
Eric Brock: And then when we look to that NATO customer, the European customer, are you having further discussions with other countries around that area? Yes, absolutely. And I'll give some context on Europe. You know, there's, there's been a significant shift in, in policies on defense spending. And of course, that's wrapped up into a larger geopolitical story. And we see ourselves as major beneficiaries. And I would say specifically as it relates to drone activities and counter UAS activities, I remind our investors that Europe is really on the doorstep of Ukraine, Russia, and the threats we see in Europe are, you know, real, and they're taken seriously.
Speaker Change: Awesome and then when we look to that NATO customer their European customer or are you having further discussions with other.
Speaker Change: Countries around that area.
Speaker Change: Yes, absolutely.
Speaker Change: And I'll give some context on Europe.
Speaker Change: There's theres been a significant shift in and policies.
Speaker Change: On defense spending.
Speaker Change: And of course, that's wrapped up into a larger geopolitical story.
Speaker Change: And we see ourselves as a major beneficiaries and I would say specifically as it relates to a drone activities and counter UAS activities I remind our investors that our Europe is really on the doorstep of.
Speaker Change: Ukraine, Russia and this is a threat.
Speaker Change: We see in Europe are real and they take them seriously so.
Eric Brock: So they're preparing. So I do expect a significant investment cycle. And I think our platforms, and I'll highlight Iron Drone, because that's where we're making our initial step, are significantly differentiated and valuable, and we're getting a great reception.
Speaker Change: They are preparing so I do expect a significant investment cycle and I think our platforms are in Ohio, I diner drone, because that's where we're making our initial step.
Speaker Change: Are significantly differentiated and valuable here, we're getting a great reception.
Unknown Attendee: All righty, thanks for taking my question guys, great quarter. on Facebook.
Speaker Change: Alrighty, Thanks for taking my question guys great quarter.
Matt: Thanks, Matt.
Glenn Mattson: The next question is from Glenn Mattson with Lautenberg. Please go ahead. Hi, yeah, thanks for taking the questions. Good quarter, nice progress on Iron Drone for sure. Optimus also seems to be doing a little better. You talked about additional growth in 2025 for Optimus, existing and new, including USA. Can you just give us a some background and color on what kind of opportunities you're pursuing in that in that side of the drone So I'd say if you look out into the rest of the year, we do have existing customers that will expand programs. And I'll highlight the initial military customer in that program we captured last year, as well, of course, as we're doing in the UAE.
Speaker Change: The next question is from Glenn Mattson with Ladenburg. Please go ahead.
Glenn Mattson: Hi, yes, thanks for taking the questions good quarter nice progress on iron drunk for sure Optimists also seems to be doing a little better.
Speaker Change: Talks about additional growth in 2025, we're optimistic existing and new including USA can you just give us a.
Speaker Change: Some background and color on what kind of opportunities you're pursuing in that.
Speaker Change: And that side of the drone business.
Speaker Change: So, let's say if you look out into the rest of the year, we do have existing customers that will expand programs at all I'll highlight the initial military customer in that program.
Speaker Change: We captured last year as well of course is what we're doing in the UAE we.
Eric Brock: We did announce on our March call that we had secured our first customer for Optimus in the United States. We're not able to give details on that just yet, but I do expect us to be able to do so in the coming months. And then beyond that, we're targeting those markets, right? It's public safety, it's security, homeland security and defense, and the protection of critical infrastructure assets. And I think I'd leave it at that, Glenn, but it's really a significant opportunity and we're maturing that pipeline. Yeah, maybe in the US when you when you're going after public safety or critical infrastructure is that what budgetary dollars is that coming from?
Speaker Change: We did announce on our March call that we had secured our first customer for optimist in the United States.
Speaker Change: We're not able to give details on that just yet, but I do expect us to be able to do so.
Speaker Change: In the coming months.
Speaker Change: And then beyond that we're targeting are those markets right. Its public safety, it's a security homeland security and defense.
Speaker Change: And in.
Speaker Change: It protects our critical infrastructure assets.
Speaker Change: And I think I'd leave it at that Gwen, but it's it's really a significant opportunity and we're maturing that pipeline.
Speaker Change: Maybe in the U S.
Gwen: When you are.
Speaker Change: When you're going after public safety or critical infrastructure.
Speaker Change: What budgetary dollars is that coming from is it federal money or is that state is it you know.
Eric Brock: Is it is it federal money or is it state is it you know, state or local or how do you It's really both, and it depends on where we're going. So what we're seeing in public safety is there are more and more dollars available for what we call the drone as first responder programs. So I do see us benefiting from that. What you'll see is that's typically going to be funded by state and local governments, and oftentimes it's special departments in these organizations that are funding innovation and new technology deployments to modernize infrastructure. And of course, on the federal side, we see quite a bit of that.
Speaker Change: State or local or how do you.
Speaker Change: Sure.
Speaker Change: It's really both and it depends on where we're going so there what we're seeing in public safety as there are more and more dollars available.
Speaker Change: Or what we call the drone is first responder.
Speaker Change: Programs.
Speaker Change: I do see us.
Speaker Change: Benefiting from that what Youll see is that's typically going to be funded by state and local governments and often time at times its a special department.
Speaker Change: Apartments, and these are organizations that are funding our innovation.
Speaker Change: And new technology deployments to modernize infrastructure.
Speaker Change: And of course on the federal side, we see quite a bit of that and we do believe we can think about and this is true certainly in the United States D O D or homeland security spending, but also globally are that not only are budgets, increasing significantly the mix shift towards autonomous systems and capabilities that we're bringing to the table.
Eric Brock: And we do believe, if you think about, and this is true, certainly in the United States, DOD, Homeland Security spending, but also globally, that not only are budgets increasing significantly, the mixed shift towards autonomous systems and capabilities that we're bringing to the table is very, very significant. So the demand and funding environment is improving really every day. Last one for me, the President of the Middle East signing a lot of defense. Related Deals for U.S. Defense Tech and stuff like that. Is there, do you view that as an opportunity for you guys? Is there a way, you know, you obviously have some Middle East business already.
Speaker Change: Very very a significant so so the demand in funding environment is improving really every day.
Speaker Change: Last one for me the precedent in the Middle East signing a lot of defense related deals for U S Defense Tech and stuff like that is there a is that do you view that as an opportunity for you guys is there a way you know you obviously have some middle east business already so.
Unknown Attendee: So, you know, what's your ability to get yourself into that mix with that, with those talks? Yeah, I absolutely believe we can be part of those conversations. But I guess I'd have to leave it at that point. We do have active marketing efforts in all the major regions of the world. Great. Thanks, Eric. Again, if you have a question, please press star then one.
Speaker Change:
Speaker Change: What's your ability to get to get yourself into that mix with that with those but those talks.
Speaker Change: Yeah, I, absolutely believe we can be part of those conversations.
Speaker Change: But I guess I'd have to leave it at that point, we do have active marketing efforts and all the major regions of the court of law.
Speaker Change: World.
Speaker Change: Great. Thanks, Eric.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Again, if you have a question. Please press Star then one.
Matthew Galinko: The next question is from Matthew Galinko with Maxim Group. Please go ahead. Hey, thanks for taking my question and congrats on the quarter and the progression.
Speaker Change: The next question is from Matthew can linker with Maxim Group. Please go ahead.
Speaker Change: Hey, Thanks for taking my question and congrats on the quarter and the.
Speaker Change: Progression of orders on the DRAM side.
Eric Brock: Um, can you maybe touch on the with the margin profile is of the more recent orders for iron. Sure. You know, I'm going to defer getting as specific as I think you'd like me to get at this moment. And I say that largely for competitive reasons. You know, you should think of our systems as having both Optimus and Iron Drone margins north of 50%. And I would say that Iron Drone margins are better than Optimus. I'd also add that initial orders, you know, we've got quite a bit of pricing power. But at the same time, you know, we're, we're being, you know, very deliberate about building the business.
Speaker Change: Can you maybe touch on the.
Speaker Change: Maybe what the margin profile is of the more recent orders for iron drone and what you have in the pipeline.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: I'm going to defer getting as specific as I think you're likely to get at this moment.
Speaker Change: And I say that largely for competitive reasons, Yeah, you should think of our systems as having both after the same drone.
Speaker Change: Margins north of 50%.
Speaker Change: And I would say that iron drone margins are better than optimists.
Speaker Change: I'd also add that initial orders.
Speaker Change: We've got a quite a bit of pricing power.
Speaker Change: But at the same time, we're where we're being very deliberate about building your business.
Eric Brock: So, you know, let me let me leave it at that, Matt. Sure. Yeah, I And then.
Speaker Change: So yeah, let me, let me leave it at that Matt.
Speaker Change: Okay.
Speaker Change: Sure Yeah I appreciate that.
Speaker Change: And then.
Speaker Change:
Eric Brock: I don't think there would be a call this year if we didn't talk about tariff rules. Yeah, yeah, it's a good question. And last call, when we talked about this, it was still early, and a lot's happened. And I said, I didn't expect a big impact from tariffs. And that's largely because we're very careful to source away from China. We design our platforms to be NDA compliant. And of course, the focus on China in this trade war has been so acute. I would say, as we sit here today, that the magnitude of the tariffs that have been announced on China was massive, it appears to be less massive, you know, given recent reports.
Speaker Change: You know I don't think it would be a call. This year, if we didn't talk about tariffs for us Ken.
Speaker Change: If you can express to the supply chain and you try to scale production.
Speaker Change: Yeah, Yeah. It's a good question last call when we talked about this it was it was still early and there what's happened and as I said I didn't expect a big impact from tariffs and that's largely because we're very careful to source away from China, We design our platforms to be NDA compliant.
Speaker Change: And of course the focus.
Speaker Change: On China, and the trade wars that so acute.
Speaker Change: Yeah, I would say as we sit here today that the magnitude of the tariffs that have been announced that China was massive it it appears to be less massive given recent the reports.
Eric Brock: However, you know, it's still significant.
Speaker Change: However, there's still significant but we also saw Israel get hit with the tariffs. So the question that I think we have to ask as well the supply chain in the U S and Europe inflate or deflate.
Eric Brock: But we also saw Israel get hit with the tariffs. So, you know, the question that I think we have to ask is, will the supply chain in the US and Europe inflate or deflate as a result? Or, you know, put another way, what are the direct or indirect impacts? So, you know, it's really hard to quantify. I do think from Israel, we will see a bit of a bump, unless things normalize, which is what, you know, I believe will happen. But if they do, if we do stay with a 17% tariff there, you know, we'll probably see some impact.
Speaker Change: As a result.
Speaker Change: Or put another way what are the direct or indirect impacts.
Speaker Change: So.
Speaker Change: It's really hard to quantify I do think from Israel, we will see a bit of a bump unless things normalize which is what I believe will happen.
Speaker Change: But if they do we do stay with a 17% tariff there.
Speaker Change: We'll probably.
Eric Brock: At the same time, we are active, and we made this comment today on the call, with our plans, we're advancing plans, I would say, to move production to the United States. So, you know, net-net, I think it's too early to say. But I do, I would think that for us, the direct and indirect impacts are going to be manageable.
Speaker Change: See some impact.
Speaker Change: At the same time, we are active when we made this a comment today on the call with our plans. We are advancing players I would say to move production in the United States. So net net I think it's too early to say, but I do I would think that for us the direct and indirect impacts are going to be manageable.
Mike Latimore: Perfect. Thank you. Sure. The next question is from Mike Latimore with Northland Capital Markets. Please go ahead. Good morning.
Speaker Change: Perfect. Thank you.
Speaker Change: Sure.
Speaker Change: The next question is from Mike Latimore with Northland Capital markets. Please go ahead.
Mike Latimore: Good morning.
Eric Brock: As you look at the pipeline for OAS, how does it roughly break out between, you know, expansion opportunities with current customers and new logos? There's significant expansion opportunities with new logos, and that's the case in really the regions of the world that we've identified. So, you know, I do expect our core customers to grow with us this year and next year. But then we're going to be layering on new programs, new customers. And that's sort of where we get to that S-curve I've referred to in the past. And by the way, I'll say, you know, let me just be very, very clear.
Mike Latimore: If you look at the pipeline for OE loss, how does that roughly break out between.
Mike Latimore: Expansion opportunities with current customers.
Mike Latimore: New logos.
Mike Latimore: Yeah.
Mike Latimore: There are significant expansion opportunities with new logos and that's the case and Oh you know.
Mike Latimore: Really the regions of the world that we've identified.
Mike Latimore: So I do expect our core customers to grow with us this year and next year.
Mike Latimore: But the but then we're gonna be layering on new programs new customers.
Mike Latimore: That's sort of where we get to that S curve I referred to in the past Oh and by the way I'll say.
Mike Latimore: Just be very very clear none of this is easy it's not easy at all.
Eric Brock: None of this is easy. It's not easy at all. But nothing's harder than getting your first customer. And of course, the second customer is not easy. But after that, when you demonstrate performance, you demonstrate leadership and capabilities. And we're hitting this market that is massive today, but unpenetrated because these capabilities like Iron Drone and Optimus are just emerging as scalable. So I expect a significant new customer program growth in 2025, 2026 and beyond. So new customers will be a bigger driver than expansions in car customers. In 25, it's going to be both. In 26, it'll be both as well.
Mike Latimore: But nothing is harder than getting your first customer.
Mike Latimore: And of course, the second customer is not easy, but after that when you demonstrate performance.
Mike Latimore: Demonstrate leadership and capabilities and we're hitting this market that is massive today.
Mike Latimore: On penetrated because these capabilities like iron drone and optimistic just emerging as scalable.
Mike Latimore: So I expect a significant new customer program growth.
Mike Latimore: 25, 2026 and beyond.
Mike Latimore: So what are you seeing new customers will be a bigger driver than expansions in current customers.
Mike Latimore: And 25, but its going to be both in 'twenty six.
Mike Latimore: It'll be both as well.
Eric Brock: Okay, I got it. I can't get more specific on that, but you know, let me think about that for the investor day because we were doing some analysis. And then the, I mean, it just sounds like there's, you know, kind of broad based demand here. But in terms of the, you mentioned the potential for prepayments on some contracts. Can you elaborate a little bit on that? How prevalent might that be? I think, you know, that's a comment that's more specific to Ondas Networks, but both OAS and Ondas Networks, we do have, we've highlighted this before, a relationship with Clear that helps fund purchase orders.
Mike Latimore: Okay.
Mike Latimore:
Mike Latimore: Yeah.
Mike Latimore: Can't get more specific on that but let me know.
Mike Latimore: When you think about that for the Investor day, because we were doing some analysis.
Mike Latimore: Sure.
Mike Latimore: And then the.
Mike Latimore: I mean, it sounds like there's kind of a broad based demand here, but.
Mike Latimore: In terms of the you mentioned the potential for prepayments on some contracts.
Speaker Change: Can you elaborate a little bit on that how prevalent and Mike Ludwig.
Speaker Change: Oh I think that's a comment that's more specific to on dust networks.
Speaker Change: But both OE Exelon Das networks, we do have we've highlighted before our relationship with clear that.
Speaker Change: It helps our fund purchase orders and so there is some working capital.
Eric Brock: And, you know, so there is some working capital facilities that we can we can access. So it's going to be a combination of both. Okay, that's the more than that works out.
Speaker Change: Facilities that we can we can access.
Speaker Change: So there's going to be a combination of both.
Speaker Change: Okay somewhere in the networks.
Eric Brock: Okay.
Speaker Change: And then.
Eric Brock: And then in terms of manufacturing capacity for Optimus and Iron Drone, you know, like, how many can you build per month presently? And where does that capacity go by year end? So, I don't have specifics on the monthly that we can share, and I'll highlight that we're not a low-end or small-grown commodity player, right? We're making higher-end systems. So, what I'll say is that we have ample capacity to hit our plans in Israel. That's largely what I've been talking about OAS, of course, and that's where we're producing the systems today. And then, as we're moving through this year, we're going to build the capacity in the United States.
Speaker Change: In terms of manufacturing capacity for optimist and iron throne.
Speaker Change: How many can you build per month, presently and where does that capacity go by yearend.
Speaker Change: So I don't have specifics on the monthly.
Speaker Change: So that we can share and I'll I'll highlight that we're not a low.
Speaker Change: And or small drone commodity play right, we're making higher end systems.
Speaker Change: So what I'll say is that we have ample capacity to hit our plans in Israel, that's largely what they're talking about OAS of course.
Speaker Change: And that's.
Speaker Change: You know where were producing the systems today.
Speaker Change: And then as we're moving through this year, we're going to build the.
Speaker Change: Capacity the United States.
Eric Brock: So, you know, stay tuned on that.
Speaker Change: So stay tuned on that.
Speaker Change: Yeah, Okay. Thank you.
Eric Brock: Okay, thank you. Alright, sure.
Speaker Change: Right sure.
Speaker Change: Okay.
Eric Brock: This concludes our question and answer session. I would now like to turn the conference back over to Eric Brock for any closing remarks. Okay, thank you, operator. As we wrap the call, I want to thank you again for spending time with us today. As we outlined, 2025 is off to a great start, and we look forward to providing more updates this year as we execute our growth plan. And of course, that includes the OAS Investor Day.
Speaker Change: This concludes our question and answer session I would now like to turn the conference back over to Eric Brock for any closing remarks.
Eric Brock: Okay. Thank you operator, as we wrap the call I want to thank you again for spending time with US today as we outlined 2025 is off to a great start and we look forward to providing more updates this year as we execute our growth plan and of course that includes the OAS Investor day.
Eric Brock: So we'll be in touch and hope you have a great day. Thanks again.
Eric Brock: So we'll be in touch and hope you have a great day. Thanks again.
Operator: The conference is now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: You may now disconnect.
Eric Brock: Yeah.
Eric Brock: Yeah.