Ondas Stock Falls 5% Despite Record Revenue and Raised Outlook as Margin Squeeze Overshadows Defense Tech Beat

Ondas Inc. shares fell about 5% on Thursday, even after the autonomous systems and defense technology company reported record third-quarter revenue that beat estimates and raised its full-year outlook.

Ondas stock traded at $5.44 in morning trading, down 30 cents, or 5.15%. About 18.5 million shares changed hands early in the session. The company's market value stood at about $3.2 billion.

The stock had fallen about 3.8% in premarket trading after the results were released.

Record revenue

Ondas reported third-quarter revenue of $167.5 million, more than 16 times the $10.1 million it reported a year earlier. Revenue doubled from $83.8 million in the second quarter. On a pro forma organic basis, revenue rose 64% from a year earlier.

Analysts had expected revenue of about $148.3 million.

The company reported a loss of 10 cents per share, better than the analyst estimate of a 13-cent loss. Net loss was $64.7 million.

Ondas received $214 million in new orders during the quarter. Its backlog rose 36% from the previous quarter to $835 million.

Raised outlook

Ondas raised its 2026 revenue outlook to at least $550 million and said it is targeting fourth-quarter revenue above $250 million.

The company set a 2027 revenue target of at least $1.1 billion. It now expects companywide adjusted EBITDA profitability in the third quarter of 2027, one quarter earlier than previously expected.

Ondas ended the quarter with $820.3 million in cash, cash equivalents, restricted cash and short-term investments.

Margins under pressure

Margins were the main concern for investors. Gross margin fell sharply to 21.8% from 43.1% in the second quarter, which the company attributed to production inefficiencies and rising costs as it ramped up new programs.

Adjusted gross margin was 34.8%, down from 50.4% in the second quarter.

The company's adjusted EBITDA loss widened to $59.7 million from $46.2 million in the previous quarter. Operating loss was $189.5 million, driven largely by $88.1 million of non-cash expenses, including $57.8 million of stock-based compensation.

FourWeekMBA noted that Ondas added three new items to its adjusted EBITDA calculation this quarter. Without them, the adjusted EBITDA loss would have been about $76.8 million.

Rapid growth through acquisitions

Ondas has grown quickly through acquisitions as it expands in defense, security and autonomous systems, including drones. Total stockholders' equity rose to $2.37 billion from $441.8 million.

The company's results also include large non-cash gains from changes in warrant liabilities, which have affected reported earnings.

Broader market weakness

The decline came amid a broader technology selloff after Nvidia CEO Jensen Huang's resignation. Ondas shares are down about 13% over the past year, though the stock remains above its 52-week low of $4.38.

Ondas is based in West Palm Beach, Florida.

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