Drone Maker Ondas Raises Full-Year Outlook

Ondas Inc. (NASDAQ:ONDS) stock fell Thursday despite reporting better-than-expected third-quarter results and raising its full-year revenue forecast.

The defense technology company reported strong revenue growth and a record backlog. However, widening losses and shrinking margins weighed on its profitability outlook.

Ondas Revenue Surges, Losses Deepen

Ondas reported third-quarter revenue of $167.5 million, more than 16 times the $10.1 million reported a year earlier. Revenue nearly doubled sequentially and beat analysts’ estimate of $148.04 million.

Pro forma organic revenue grew 64% year over year.

The company posted a loss of 10 cents per share, narrower than analysts’ expected loss of 14 cents.

However, adjusted gross margin fell to 34.8% from 50.4% in the previous quarter. An unfavorable product mix and production inefficiencies pressured margins.

The adjusted EBITDA loss widened to $59.7 million as Ondas increased spending to support future growth.

Management expects fourth-quarter gross margins to remain near third-quarter levels.

Defense Orders Drive Record Backlog

Ondas secured about $214 million in third-quarter orders, supported by demand for Sentinel, ULTRA, IonStrike and counter-drone systems.

Backlog climbed 36% sequentially to $835 million as of Sept. 30.

Chairman and CEO Eric Brock highlighted expanding U.S. defense programs, sovereign AI capabilities and strategic acquisitions.

Ondas also launched Regna AI, which uses NVIDIA Corporation’s (NASDAQ:NVDA) Nemotron models and Palantir Technologies Inc.’s (NASDAQ:PLTR) integration platforms.

The company ended September with $820.3 million in cash and short-term investments, including restricted cash. Total debt stood at $6.1 million.

Ondas Raises Revenue Forecast

Ondas raised its 2026 revenue forecast to at least $550 million, up from its previous range of $525 million to $550 million. The revised outlook exceeds analysts’ estimate of $536.47 million.

Management expects fourth-quarter revenue to exceed $250 million, with pro forma organic growth of at least 75%.

For 2027, Ondas forecasts revenue of at least $1.1 billion, excluding future acquisitions.

The company expects its operating platforms to achieve adjusted EBITDA profitability in the fourth quarter. It also moved up its company-wide adjusted EBITDA profitability goal to the third quarter of 2027.

ONDS Price Action: Ondas shares were down 6.46% at $5.36 at the time of publication on Thursday, according to Benzinga Pro data.

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