Ondas Inc. (NASDAQ: ONDS) reported second-quarter 2026 revenue of $83.77 million, significantly beating the analyst estimate of $67.97 million. The revenue figure represents a more than 13-fold increase from $6.27 million in the same period last year and a 67% sequential rise. On a pro forma organic basis, revenue grew 85% year over year.

Despite the strong top-line performance, the company reported a GAAP loss of 19 cents per share, which was wider than the 5-cent loss analysts had expected. Ondas shares fell 7.57% to $9.035 following the results, reflecting investor concern over the profitability miss despite the revenue beat and raised outlook.

Profitability And Margin Outlook

Gross profit rose to $36.1 million, resulting in a GAAP gross margin of 43.1%. Adjusted gross profit was $42.3 million, with an adjusted gross margin of 50.4%. However, the adjusted EBITDA loss widened to $50.6 million as the company invested ahead of expected growth in the second half of the fiscal year.

Operating expenses totaled $199.1 million, including $105.8 million in noncash expenses primarily related to stock-based compensation, contingent consideration remeasurement, and amortization. Management noted some pressure on gross margins in the second half due to product mix and excess capacity at acquired businesses but maintained its longer-term gross-margin target of more than 50%.

Orders And Backlog Climb

Ondas captured approximately $175 million in orders during the second quarter and an additional $105 million through August 10. Backlog stood at about $613 million as of June 30. Pro forma backlog, including DZYNE Technologies and Cyberhawk, reached $757 million, up 65% sequentially.

The pro forma backlog breakdown includes:

• $300 million in precision strike
• $258 million in ISR and persistent intelligence
• $100 million in aerial security
• $99 million in autonomous ground systems

Defense Programs Gain Momentum

Precision strike generated more than $34 million in second-quarter orders. A $52.9 million Lethal Unmanned Strike order in July pushed aggregate orders under the U.S. Army’s $982 million IDIQ contract above $240 million. Management expects this program to contribute materially in the second half, though quarterly delivery timing remains difficult to predict due to supply-chain challenges.

Other awards included an $18.8 million ULTRA order, a $9 million IonStrike integration order, and a $4.8 million U.S. Navy SOUTHCOM contract. CEO Eric Brock stated that demand for counter-drone and precision-strike systems is likely to remain strong for the foreseeable future, citing recent conflicts that have highlighted a shortage of these technologies.

Guidance And Financial Position

Ondas raised its 2026 revenue outlook to $525 million to $550 million, above the previous analyst estimate of $509.25 million. The company expects third-quarter revenue of $140 million to $155 million. Management believes portfolio growth of 30% to 40% into 2027 is sustainable and suggested the company could exit 2026 at roughly a $1 billion annualized revenue run rate.

As of June 30, Ondas held about $1.4 billion in cash, cash equivalents, restricted cash, and short-term investments. Total debt stood at $6.4 million. The company subsequently used about $325 million to close its DZYNE and Cyberhawk acquisitions.

What the Numbers Show

The divergence between the revenue beat and the widened loss highlights the capital-intensive nature of Ondas’ current expansion phase. While top-line growth is accelerating—evidenced by the 13-fold year-over-year revenue increase—the $199.1 million in operating expenses, largely driven by noncash items and integration costs, suppressed near-term profitability. The robust backlog of $757 million provides visibility for future revenue, supporting the management’s confidence in hitting the raised FY26 guidance despite margin pressures.

Ondas reported a pro-forma backlog of $757 million as of June 30, 2026, reflecting the inclusion of the DZYNE and Cyberhawk acquisitions. The firm also disclosed cash and equivalents totaling $1.4 billion for the quarter.

The reported backlog stood at approximately $613 million as of June 30, 2026. The pro-forma figure accounts for the DZYNE and Cyberhawk acquisitions, both of which closed in Q3 2026.

What the Numbers Show

The divergence between the reported backlog ($613 million) and the pro-forma backlog ($757 million) highlights the immediate impact of recent M&A activity on Ondas' order visibility. The $144 million difference represents the backlog contributed by the DZYNE and Cyberhawk deals, which officially closed in the subsequent quarter (Q3 2026). This suggests that while current operational backlog is stable, future revenue streams are significantly bolstered by these strategic additions.

Financial Position

The strong cash position of $1.4 billion provides substantial liquidity relative to the reported backlog, indicating a robust balance sheet capable of supporting ongoing operations and potential further integration costs from the recent acquisitions.