Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the Ondas Holdings First Quarter 2023 Earnings and Business Update Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be opportunity to ask questions. Please note that this event is being recorded.

the to turn to like conference Mr. over I'd of Brock, Chairman CEO and Eric Ondas. sir. go Please ahead,

Eric Brock

the operator, to and you, Mozer. by first We our Derek us to start morning. Reisfield; interest your today welcoming our spending in appreciate by and call. CFO, for investor I'm Thank Reese quarter good joined everyone our and happy President, I Company. you're with be time want to our

of Ondas addition of the President In will Founder Founder the both, hear Ondas President and Kantor, Stewart Networks; of we from Systems. and Kliner, Meir and Airobotics Autonomous

we performance rest the discuss for Today, XXXX. review to quarter outlook our plan our of and strategic and first completed financial progress the for recently

Now to let's turn agenda. the

the developments performance company Derek review I over will first industry and for the recent driving will first call financial quarter business We call then comments today's start entering specific and to a for with quarter. outlook our some the XXXX. the hand about of brief

Our discussion of will around on commentary performance expenses. operating our financial the streamlining include

activity. As the business financial position and and our will Meir liquidity a transition and update we commentary for of provide update Stewart Networks and current Then around business will Ondas OAS units, I business where an XXXX. sheet our and balance for provide discuss will our ask outlook review, of part I to provide

then and for call open questions. the We wrap floor will the investor

shipments exceeds at of on of a as operationally in revenues great Ondas, to reflects first $X.X XXXX entered start This XXXX. secured backlog the XXXX's the all by off which we highlighted million is the of revenue. quarter, beginning record

deliver to on business sides both of production and drive from course, shipments to have and on Of do backlog orders a new more customers. the we lot current installations

a have the network. rail Association announce wireless we saw IEEE that highlight they technology as or milestone Regarding with American In for Networks. we selected the of industry to formally to megahertz critical cleared the XXX the March, a platform Ondas we Railroads want customer activity, AAR XXX.XX new

we in emphasize by timelines, since and rail rail as These publicly to I the September band deployment We freight as significant of both plans. megahertz from as as Ondas the including the XXXX announcements international vendor with developments though deadline well timeline the out business. well ecosystem in the other this which the of along further believe with substantially development to a Class megahertz is across that increase want X XXXX. more network, supporting well also the customer and build for opportunities increased Greenfield addition, April technology catalyst deadlines Legacy key Stewart FCC by choice as include XXX formalization the a AAR as in dates, the In and announcements rails Siemens new the activity confirmed markets requirement to are share transit with these the the megahertz from AAR, around we both XXX going expect have in with huge XXX details AAR to passenger retire both is communication Rail the vendors. seen engagements MxV Networks

from Airobotics have Optimus is as partners the adoption along OAS, fleet customers UAE. fleet orders executes At commercial the to outlined we moving in System previously and

Dhabi. urban infrastructure drone Dubai have of in now deployments both citywide begun Abu We and

in significant and safety, markets. seeing and have the Optimus System are interest we gas, markets activity marketing U.S. in other public oil and addition, In government advanced of

detail as well. more We this will in discuss

of Ondas and the has fleet clearly from once of to again drone rest I the is System Optimus highlight deployment groundbreaking the for the want activity nothing of separated pack. the short industry

in defining systems an achievement lead unparalleled is unmanned and we UAS setting demonstrates urban the in a autonomous have Flying markets. densely populated these

we expectations deployments, of customer future customers fleet share and execute Meir believe systems of growth. and some the installation will we operation behalf going these accelerate. around details on adoption initial to around is As

So and OAS to cash on units cost move the wrap beginning growth business a we move expected as with efficiency, significantly basis burn to both year. revenue on and Networks our up Ondas introduction, focus now the scale quarterly the will cash controls through in we and a believe lower are we

to the for going to I'm Derek now over review. hand Derek? the financial call

Derek Reisfield

Eric. Thanks,

reflect to investment Networks and commercial started, within remind our for Systems units. As larger continue statements Autonomous get our I investors Ondas rollouts want our and I that Ondas financial preparation to business

not revenues are yet grow, revenue covering though expect today's expenses. operating as operating We our levels leverage significant

generated Revenues $XXX,XXX installations of product generated of have first the XXXX. for quarter XXXX. primarily increase growth for totaled of and significant for a higher at This units approximately revenue and business presented OAS the million Networks first Optimus was Networks and the of Revenue quarter been periods in by Ondas the Ondas both of $X.X OAS. was from the shipments result Systems

quarter a the XXXX in was nearly of profit XXXX. $X ten-fold period first approximately same the from increase million, Gross in

termination the quarter as Operating in compared the was primarily at the certain expenses to million The one-time of $XX.X as operating reduction first expenses development Airobotics with Autonomous to prior $XX programs costs with professional increase as associated increased related year. well acquisitions. million XXXX Ondas in Systems, force in of approximately in fees due the and to

come down elevated to these in expect the We second quarter. expenses

first Non-cash $XXX,XXX in from the for XXXX, million compensation prior first and XXXX, $X.X expenses first from of $X.X amortization the of expenses quarter totaled quarter stock-based prior approximately year. decrease to was of in year. the slight in million approximately Depreciation increased a the $X.X up million XXXX; the quarter approximately

about equal costs were with elevated $XX.X to in line again to and expenses the reflected operating expenses, expectations million, American non-cash due which approximately Robotics Excluding at were restructuring.

the of loss operating first XXXX an of first realized non-cash quarter $XX.X for aforementioned compared and quarter expenses. non-reoccurring for includes company The million $XX XXXX. of as million loss to approximately the This the

$XX the first The previously $XX.X net and the XXXX. XXXX compared of of a discussed. loss million realized to of in million quarter higher of loss first The non-cash the loss for non-reoccurring quarter included some company a costs as

related non-cash of the mostly expense, of to Discount million which OID treatment was $X.X incurred or of interest accounting we addition, note. Original Issue the convertible the In

EBITDA million We a of generated as compared loss $XX.X to for the first EBITDA $X.X expenses excluding in quarter million XXXX. non-cash quarter, the loss these an first of

as operating quarter on first quarter. the Before of $XX.X elevated decline want approximately in second balance to of in million more expect emphasize from we $X see of OpEx incur to the than the turning to sheet, quarterly in $X beginning the million expenses lower to spending cash benefit a which I is basis at a that QX, of expect we the XXXX, million such, full OAS

cash. to Now, ended We let's balance million $XX.X turn the with quarter first sheet. the in

elevated expenses in included the quarter reduction cash described, costs termination to certain the and related in force As were programs. development of and

and equity maintain carrying million. Outside cash both note. with That position. $X.X amortizes amounts connection due to in used long-term Airobotics of of a on That amortization note value approximately $XX.X we repay of in million XXXX. matures also convertible net a debt had notes, $XX outstanding and cash million debt January closing the the for new a on minimal convertible convertible monthly and in for the debt a basis We payments October

investments equity position technology Of our substantial in reflects course, platforms. the our made

I back will now hand Eric. the to call

Eric Brock

Derek. you, thank Well,

have begins monetize to XXXX in know, we development. the be believe we our Ondas year the that you made investments will substantial As business

That We $XX included million to OAS full-year growth expect $XX and our outlook and to is revenue target revenue million. that at $X from to generate reaffirming outlook Networks. million targets for million revenue the for $XX our Ondas $XX are at XXXX Recall significant XXXX February. approximately million of for revenue

Our customers. visibility Visibility is expected backlog entered XXXX improving on revenue demand and and details. from will by $XX the outlook we share customer supported ordering is and additional noticeably Stewart with by more Meir into million plans

tracking revenue at temporarily. which plans to want note due Ondas low this to chain, Networks, tightness that supply component the are we constrain in of end I the primarily may that range production to is and certain currently

production. the the ramping challenges we We are alleviate with working to deal of supply up near-term complexity our as

significantly in in OAS expected cash QX. cash leverage to from Networks and expect improve with gross operating comes utilization We and Improved expense revenue beginning at Ondas both profit. efficiency growth

be which we announced cost business QX established from in when the restructuring we the QX reflects the In OAS will savings quarter, addition, full first unit. the

XXXX We of target expect the first second tightening cash operating OpEx $XX look expenses in million forward. the versus to be quarter our approximately and will million efficiencies for $X we going so for are even more we of quarter,

clear, year. managing loss we EBITDA company original through focus a than and we very improve expected so we on are outlined, was we expenses, to From move As above our we To tracking a in the as growth plan we doing. be to tightly bit here, the higher are which bit expect revenue target. profitability delivering we QX,

XXXX. that commitment and a quarterly Networks move flow profit we costs. through of we XXXX, the similarly expect improve OAS expectation as on The we for gross given targets to bottom tightly the line to operating basis structurally second and EBITDA for be reiterate control levels is the to half XXXX, by profitable point, cash revenue of to the end and to To growth continue our by of Ondas positive achieve

to want the balance on touch also I sheet.

our to capital we raise and variety strategies of confident believe are potential additional in a have We we and ability sources to pursue.

have investors have to as interest certain are supporting Firstly, non-dilutive ATM, access also Further, well. a which financial we do the other be equity to both source strategic in believe strategies can we financing and There capital. of pursue Ondas.

the in level customer help payments expect example, be a believe we rail we to For capital. for need Siemens growing working from to to tool significant respond of can inventory given manage that orders, deadlines the down

it way are and of plan, believe from stage capital remains a unfortunately we Nonetheless, high are for credit growth believe we contributed order today. rewarded this have of funding shareholders. the will early likely value will optimal we sufficient business our as nature to work. believe we in for access this book execute business to that with our funding fund to hard an growing the be creating cost most We difficult our we will Similarly, our we and in expect. available seek lines tremendous we to we a environment market in investors for this Ondas has capital Net-net, execute

important current behind megahertz the share and field us updates Meir with to in Stewart anticipate. recent with ask on Now we review who platform regarding the customers drivers acceptance achieved XXX focus status on with accelerating we activity update Kantor the transition We'll partners. the start the the on will order pattern business with and will and on milestones to industry we Stewart? and and unit have rails Kliner Stewart AAR the

Stewart Kantor

Eric. you, Thank Great.

received we in deliver XXXX to shipments second production XXXX, sequential volume start We're ramping at to strong in expect the half XXXX began growth generated as off of Siemens the We are meet quarter order and million for a quarter-over-quarter to Networks. in backlog. fulfill revenue to to to and our track We we target. in $X.X Ondas the the

also with and installations BNSF. our a BNSF Florida, the of critical field Airlink Siemens live in The XXX new deploying in platform. megahertz platform for number is in in of deployments traffic, customers at field other live rail a megahertz ATCS deployments deployment Venus legacy CSX upgrade identified locations case. systems Commercial now has led now CSX our and deploying CSX's and initial now the we use of CSX. first application. is BNSF happening interlocking is Venus deployment operating for locations Minnesota XXX Northern they carrying are expansion with is by as expect

the standard As the quarter the that March milestone. be the in platform critical a rail Greenfield first a resulted planning for achievement significant This XXX will around IEEE commercial Railroads XXX.XX megahertz of XXX activity integration. The Derek the band. a by sector announced formally Class mentioned, for industrial and marked megahertz American increase broadband was has across wireless major in was the in Association X

we in system in will in pipeline. increasing discuss this customer customer are intentions dotXX-compliant visibility accelerated have detail We purchasing and moment, but say, a our seeing greater around suffice to

the announcement on network IEEE within confirming committee would Ondas In an Siemens. that made the the standardize March XXXX, and megahertz communications technology promoted Greenfield XXX industry AAR wireless by XXX.XX the

network channels return spectrum megahertz to In the X XXX rails XXXX. are the megahertz the The required AAR key the XXX to Class FCC addition, publicly confirmed the around by September and deadlines retire legacy migration.

favor and And the Railway AREMA's standard. as April requiring is in network. votes of the American XXX megahertz AAR ratify the railroaders and substantially rail the Greenfield FCC of the the Engineering Maintenance-of-Way the subsequent out megahertz known to happened dotXX addition, by XXX wireless new the be of announcement, over April In and XXXX. for AREMA band at built ratification cast the XXX.XX end the moved members that as standard selection Association vendors of to include XX% with by also vote the

have to higher. the we As deployment have increase a rail and result begin plans. orders significant of and we believe these customer We seen moving announcements, closer activity we discussions in significant move expecting a been are to ramp that order around will

number adoption. are a additional we believe driving are of There events trigger that

mentioned the we previously, rail use chain facing to forcing technology alternative look vacate. now -- supply are require As authorized and have issues key standardized and suppliers rails for need Other have XXX.XX significant organizations the the of rail recognized and equipment to solutions. the

and are critical XXX applications age the are to new to Certain security as megahertz. interference deteriorating issues constraints legacy technologies XXX the in of lack frequencies now such modern required robust megahertz Other capacity band and move creating PTC and protocols. are protocols to due

recent which additional the home megahertz the a in Midwest good derailment Greenfield need detectors, the XXX in defect Furthermore, fueling is the band. have for

And offer capacity a the lastly, transit and agencies application legacy and significant U.S. end life of are our radio facing where issues internationally radios upgrade. in

to these growth a we at believe of are lead point. inflection combined All us that

Now, call Eric? I'll back hand the to Eric.

Eric Brock

Stewart. you, Well, thank

and now the the I'll ask with Autonomous customers progress Ondas insight floor Kliner update rest Meir? provide and outlook of on Systems Meir the XXXX. to for into at take some us

Meir Kliner

Eric. you, Thank

with related Dubai had Police. of a great fleet the deployments delivered to start largely $X.X quarter, We in Autonomous Ondas XXXX the to at million first We revenue Systems.

We on in Dhabi SkyGo, Grant announced relationship in Abu the also we January. a with advanced activity new

We have first Dhabi Abu SkyGo now with in the installed locations. critical infrastructure system at

QX smart plans. and translate We venture to joint performance into look to soon are operations and forward applications SkyGo We cities meeting the the our installation expect more details revenue. sharing SkyGo our around

United and In States. parallel, we marketing customers been hard the qualifying working have in

bring and one infrastructure as to into the is the Optimus excited are opportunity to U.S. substantial. We adaption fleet believe drive

and on details plan soon more expect Optimus and delivered fall share to contracts finalized. the the are customer deployments as expect We customer national our is U.S. in inventory

Lastly, to market we interest. UAS solution a customer lot Iron I are in March, that and Drone receiving want to you the the we introduced of counter remind

first On the quarter the first combined strategic side, you as were Ondas business American unit. the the well under Systems was Airobotics and OAS, aware, Robotics where Autonomous

our operational advances acquisition, one American have counted the closed completed Iron vision OAS integration benefit in to solutions. now The of the Airobotics computer set and AI created drone have We we adds on of Drone which capabilities, from has combination efficiency. autonomous leveraging technology Robotics and significant

development have We strong research OAS places a globally. in on operations solutions to the to streamlined a deliver single platform, which and position customers system, and optimal

regulatory from relationships. sharing and ecosystem are further We technologies, benefiting customer approvals, pipelines,

want also that the I striking relationship to strongly. SkyGo highlight is

in smart installations services. to provide advanced have we mentioned, data Abu As city Dhabi aerial

forward venture and We emerge. provide details look with expect services sharing into to enter joint more they as a SkyGo these to to

expanded technological Police. AI This collaboration with also Police relationship and Summit our upgrades. March, the At announced development for capabilities further expanded technology calls an around other we World the in Dubai

As Police demonstration. successful intent Drone to part Dubai purchase also of after system, Iron agreement, this the expressed the a came system this

the are of drones the is on we understood, As Iron working solution threat customers. to widely additional hostile geographies Drone and distributing

important this expect infrastructure the through continue installations in we up to urban drone as XXXX scale partnership. with Dubai We and grow to move orders we and

We OAS in continue the to expect business strong unit. growth

million We of year which enter backlog, deliver this $X.X will the with year. we

XXXX customers XXXX as orders provide existing continue. citywide new believe deployments fleet We will for and

we mentioned, customers development. of U.S. We been has to to are the Optimus initial And excited bring as qualification positive

and partnership as government announce move XXXX. well new customers in to and initial as public to markets through as expect we in gas new and oil customers the safety We

reliability U.S. finding unique to to of a for to which the the the that of industrial system are the batteries, Optimus a in customers. data addition payloads proven of We the swap These strong and which and U.S. wide end municipal to users, value the selling System, capabilities customers and perform points provide are the infrastructure multipurpose capabilities include variety Optimus ability as with sets. allow

tailoring markets in and payloads markets solutions, in to additional of new described we environments. gas connectivity, we and urban industrial stages implemented of have XG specific have integrating required oil wireless are we advanced previously, and As entering the

adding customer and Optimus technologies are the we on to and integrated preferences. are capabilities TDLs OGI these Specifically, based System, being

Similarly, FAA. capabilities edge are This we integrating System the business TASA Optimus urban technology the the with to the operations, enable Optimus will detect-and-avoid as certification with Optimus as support complex well System type and the environments. to System operate in cutting advancing

building remind an are to System. we Israel, want additional manufacturing that Optimus in I XX Lastly, partner via contract our you

units expect install year XX with delivery systems later of by in least initial We the being to of ready the end at QX.

going formal hand Eric, remarks. the you my completes This call to now. to I'm back

Eric Brock

you, Meir. Thank

to is of for to Let's think the in couple investors, a significant want closing to are wrap investments our committed remarks up questions. delivering monetize down we before made platform with this shifting we management I the reiterate path well have and we technologies. to

Networks are wireless that a Class we've Ondas valuable safety technology for We with excited rails. particularly X put a create the and now recognized adopted to being in hard critical next-generation networks as work is

the greater megahertz this can't and to customers. step XXX This pleased XXX a the particularly megahertz. than the XXX.XX formally migration for it We over next technology are be with will build platform expected milestone AAR as to understated select as to energy momentum has think provided our We take beyond. see conversations initial

Siemens busy coming in scaling customers. the years be will and very with We the rail

a off start. Optimus of to deployments great fleet Similarly, are

continued to these launched cities, performance expansion drone initial our with fleet these in lead operating to strong are customers major have initial customers. expected infrastructure Our installations urban with

in opportunity reinforce with United the success the helps States. platform we the here Optimus have The

and sharing to initial forward U.S. partners are and the look As available. Meir we more we progressing in in shared, details when customers qualifying

revenue units great management as shaping across is we on up expect to year the tight the and deliver a on our We profitability and move drive to value shareholder growth will a this demonstrate for focus we Again, be business as year. expense improve ability our to efficiency plan through Ondas.

that said, With if see questions. let's any Operator? there are

Operator

Thank question-and-answer begin We'll session. [Operator now Instructions]. you. the

ahead. will Northland First Latimore, Mike go Markets. Capital question Please from be

Mike Latimore

Good growth the rapid Yes. in the morning. on here. quarter Congrats

Eric Brock

Mike. Thanks

Mike Latimore

coming from are other from of demand In BNSF terms into it expanding that orders interest in customers do rail new the two CSX potential be seem the guess and Class -- industry, or Xs the I is to or of highlighted you've you expecting here level? the the does terms

Eric Brock

platform. Mike the Yes. it's Thank the is, be CSX orders for we from those deploying validation you, by Xs. this during course additional and really beyond and CSX, driven across question. although we're But that and with it going announcement is expanding being are seeing the And the megahertz XXX be answer broaden and BNSF to rails the we And well. year the will as BNSF the the expect Class of by AAR

And coming formal quickly. these that of pretty are then So announcement deadlines, now is important. course which

lot sector. So really a activity of the we're seeing across

Mike Latimore

think of sort Yes. that mid-XXXX here. date was view key a And there's I the been always

I is So in guess, can you this clarify of what terms new announcement?

Eric Brock

dynamics Nothing's shift. a is of kind new, so but the here

the So gotten we've our been the biggest behalf of the And within work as sector. working we've been -- effort of adoption really on with which is the effort our does the AAR, to on specifically this the part has point. up until Comms the platform Committee progressing Wireless AAR

but losing have these railroads who the it. the and be networks have it's going a that actually the that, the to to surprise announcement network reinforces not to replace Now, they the just deadlines, they're that use folks

with guys internally happening, to And bit, comes is run they've work hey, now, reinforced, a about a of So deadlines been who we platform's that operate signaling the think switching expand across this generated the folks, that this the been announcement you so on those the on validated little railroads, lot crossings happening. technology, railroads, are and trains, telling our who is has and locomotive about the if the and WCC, the the guys just formal activity. when that think

we've here been from again Siemens I into building is highlight this, groups Siemens is thing those another fits been operations able really train we've folks how building, into The plug support relationships referred I'd the by to. to networking that the And enhanced this. being

all. no, So that's a is at not the And dynamic. this surprise

there's which does to of sort seem really, not now urgency -- be a taken a surprised here an However, about. the this step there we've increased we're next and

Mike Latimore

Can technologies? any other dotXX provide company

Eric Brock

are the have Today, vendors no the qualified vendor. And majority created if dotXX. other we and Siemens of the of most as vast the there's around and IT know, critical critical, Ondas, you

So financial likely do, start as grow a some and very railroads in compensate market possible technology making spending that it's vendor and for lot our they to this comes money, be license of it's see and they'll very we the manner. when these or us arrangements

Mike Latimore

the then All the guess last to and Dubai What place right. more orders? system the or on see Great. side in of autonomous -- And things. does customers they I need do just before what Dhabi Abu

Eric Brock

Dubai. Meir the now if this the but add systems adoption I'll system fleet testing obviously, they've year. And as we well had they wants So we're or two year. of entire this previously at coming for into operating ask shared, But he had an to anything, been into

And to of XXXX. And into to don't their they're said by ultimately, budgeting They're they've do have the going that they they're going see that cover going plans. have that just anything. to So they've XX systems said to sort city. XX,

for there's that's moving we and year. And underway as be SkyGo. those and with of installations I'll -- initial to we're then through what for on on SkyGo let So additional share else -- kind orders would that we units well we have the worked he Meir thinks triggers be expect anything the deployed the

Meir Kliner

we SkyGo. also now Eric. we're the in right the deployment Dhabi face in with deployment specific agree, testing mentioned and Eric the targeting in and not Right of as I the Abu relationship are Yes, now the Dubai

Operator

Please Oppenheimer. Thank Horan you. And the Timothy question next go of ahead. from will come

Timothy Horan

guys. Thanks,

us And and receive you to to that how to you've spent more you think mid-XXXX and you substantially update be be For like the much little the much give mid be you when substantially now or need network when XXX Thanks. you'll orders complete? on network you complete? just bookings can what clear, date a -- are maybe now is the has received? in guys? think And between be megahertz, really has the revenue How to bit with where

Eric Brock

Okay.

So the the retire out the that deadline by a the to the is railroads, XXXX. we well legacy to course, the in substantial have band, network for legacy come Then when spectrum they've Greenfield But that build radio new expect of losing September activity they network, requirement the provided for FCC April of that to XXXX. they're advance.

We've up the initial the the Siemens they you're of for customers is for we XXXX be see chain on just year And going two new to up not broadening yet. is see provide going get for there. the is sized year, outlook of going Tim, in going going first think really we we're as the the start you're customers. to and last that the to as We're opportunity. half, through a second significant tuned XXXX I build our think But I customers these over to need and expectation said call. million beyond activities inventory well to into the When to that network $XXX conference to supply migration sort gave what fact,

into through do XXXX. is we order we're think build going continue the So moving to as to

Timothy Horan

to end like the mean, and was back FCC I take I given different up the largely why is but of it before confused from? date? XXXX why of be of XXXX I doesn't guess the the they tested the running and if to -- have kind network And dates have

Eric Brock

have of work of they because July show say footprint, Well, let's right, the a they don't can't given hey, Class lot of do a XXXX but necessarily up say, and end six Xs does. network. build I XXXX, It you're to in all

why said, platform. deployment activity and we're CSX progress. validate follow All that's work we involved. the a the And tracking and the getting railroads to did were the really around plans were seeing So as more -- the of BNSF rails more lot

Now their they're getting on hands making and plans. the it own

the -- think I right, you’re So

Timothy Horan

Yes. And I -- you know

Eric Brock

that worth at railroads same So And build-out -- it's time, a reason lot it's you the I'll money, the just the say of is, really it. hard the we're as the substantial bargain and spectrum, but they highlighting and I for they mandate to if the legacy the some have radio spectrum, okay, have one, network; but like, a no keep have they talked pushback new got want is build what and we've to. there's to they they retire that value

So the you're this in that's world, seeing real why activity.

-- think the that I the So significant more is date September date. the XXXX more with much

Timothy Horan

But to all if need I'm still network, they spectrum they I the and they retire operations. the retire example. network run completely a their guess just

Eric Brock

Exactly.

Timothy Horan

yes. Yes,

Okay.

business guess kind So saying mean of you it's of I deployment They got keep value the the you the -- have don't with not you the what network. by you new don't versus network spectrum. just deployment. an yes, to coverage, I initial And run I on coverage future initial understand a deployment. a good mean, or with good network have initial either

you the down how to much on what the got So this you if at can shut like you -- with booked point XXX? for where are you give And legacy So us update bookings? have network.

Eric Brock

yes. -- So

aspect going to traffic legacy which be first the ATCS. you station for And off application, to thing XXX is move again, was the heavy talk network So we of as is about migration megahertz we going it coverage with course, outlined -- our coverage. investors they're call do will when described. the initial February that base very be in And we the as that the

seeing Stewart CSX mentioned, applications we're different than like As folks demand from for already ATCS.

had this general purp So else. is Remember a purpose one -- application. that or legacy really handle network proves nothing out that fact that multi do could than ATCS more this can network the only

ATCS, rails deploy So the is then them going to as start is coverage. additional, more the you'll still and network see beyond in ATCS plus bill the endpoints again, be It identifying. to first

So expansion and to wayside They're phase. the crossing. going that's network along that the in identify endpoints the add more

and we're so, -- So for see you'll Siemens orders, of so year. new closely inventory we're we're to orders seeing very -- in terms the through moving -- with as not that building working bringing us and

Timothy Horan

received? Okay. update dollar Can amounts you've us an the give of on you orders

Eric Brock

No. I'm not giving that update right now.

Timothy Horan

you cash much about if a year this And next expect you Okay. know total? can are I in you those mind. talk year year, don't this burn how and moving million parts

Eric Brock

that no, of So precision. not giving I'm level

So operating profit, into hold mentioned, and gross levels course, is in this year. we're And going expenses cash our to think the quarter, what as we to believe significantly revenue million increasingly the of the -- I number as as lower we that's cash for can rest growing I of burn. decline our $X we we're that going those XXXX

Timothy Horan

paid Okay. like lastly, think about upfront Is that upfront you has what or are yes can And customers, sounds with they get for for the it pay of we're that -- they -- equipment. to on talking the willing agree equipment other some of do up kind Siemens so you you or And here?

Eric Brock

not to -- going yes. I'm

So we're new of and these call. Tim, conversation sort orders these for bill, don't on to preparations the for that in have now here want inventory I this

Timothy Horan

you. Thank Okay.

Eric Brock

brief. Competitive

Timothy Horan

Thank you.

Eric Brock

Thanks. Sure.

Operator

Thank you.

of ahead. be Matthew from will Galinko Maxim. Please go question Next

Matthew Galinko

issue doing any particular that, component in prepared Hey, think that that are there on an referenced for taking limitation could the remarks of some your you're see. -- is you my -- work thanks touch in that supply over I any you the that's just you questions. I and think just in go Can through issue comments chain that that, callout what well, as and to

Eric Brock

really us want And all working is more just up highlight the did for our the a, ramp a tightness Matt. it's need this needing what this what of that supply us, component, production And specific here There's it it component the really we qualifying think is to around. production. was is blocking we're I planning just suppliers, make we seeing We really I that starting to beginning initial with And Sure, suppliers. and were a don't you -- of ramp. that describe complexity a tackling just out new now because are it's would it specific seeing call I some do on. Yes.

Matthew Galinko

do at on position problematic should of inventory the see that, talk that to broadly securing around, there's guess as about around you that production, source be to expect is but resiliency. how guess plan building little part address -- maybe there supply or mean components more supply? bit to to you I it. Got can is a solidifies And second capital question scale just I work we I chain obviously

Eric Brock

Sure. Yes.

So feel any a that do like handful handful at of around Stewart, say we would to if question. our you I'll or I'd and components, we have do a least there's do more that around planning have more that. longer-term arms ask we anecdotes have

Stewart Kantor

to Yes. constantly different substitute We're at looking parts. options

to supply ways faster looking the qualify we're ways. more always looking So the chain alternative parts and bring in is at of to

Matthew Galinko

provide operation could Got update or this it. you And color Thanks. or I might on an you did provide lines? you but have the the apologize those Airobotics for if urban remarks, anything additional in it, mentioned missed prepared U.S. along in

Eric Brock

Yes.

making the So start we're any in gas or and the right government terms qualification oil or process of the here but we We've with acquisition as announcements closed. after are platform specific, about U.S. giving not discussing optimistic. in partners call and started We're actively the customers we Optimus to any in both what today well bringing discussions the customers

should through on into And we're that So we the front. year. this quarter But are building you inventory. remember, moving expect hear to something

expect arrive customers And going we see at and that's QX. inventory to you're the point acquired more as in Airobotics, to inventory probably So some comes is probably the to -- when as begin tight we inventory announcements going around well. to

Operator

Instructions]. Thank you. [Operator

Capital. be of Carter will question go from Forte Please next Mansbach Our ahead.

Carter Mansbach

morning, my for Thanks question. Good taking gentlemen.

the So regarding company. My news hockey the flow. on question congratulations seemingly of a is growth for of stick beginning what is

record are story forward, there to And through do So with quarter is going is My see working me for the value better communicate suffer. flow guys another do part that but guys of question and during shareholder or the being you the be news dichotomy the the Thank continues parcel at growth, foresee flow? you'll last quarter feel there's that news that able quarter. all guys, small has you. no you no in you the to big absolutely where a been news you

Eric Brock

business informative I sharing to you a be substantive you're I as to in it, AAR put to that's until is you the way call. around -- they this it We or this have Carter, to that it and and however, to they we news as to as company release out get on would've do the event, we think didn't really what a AAR's disclose give example. loved as So and press amplify hear industry do tried really we and what try updates. what relates can and saying as I'll tried an the we opportunity

more you. talking I expect As do, Siemens. able with it we as customers relates and we activity more that expect do bigger And to and from getting We're to specific bigger customers I about to orders, plans. be share said

grow. the I doing in is what UAE think to going we're

for example. we're -- more I We expect have And about well. SkyGo, to are moving details as that be to advancing share able as with forward

from short we're is going into a I QX you're moving answer think us the hear So lot as through QX. to do

Carter Mansbach

forward That's from you my question. great to look more for to hear. hearing I guys, taking thanks and

Eric Brock

Sure. Absolutely. Thanks, Carter.

Carter Mansbach

Sure.

Operator

to concludes our Brock closing I'd like question-and-answer Eric session. for call Thank over This remarks. turn you. the Mr. to back

Eric Brock

thank you, to just thanking I Well, attending. call close the once Okay. want by again for operator. you

always, work get of lot and right a ahead have it. to going back at As we're we

Carter, with on to we as great keeping So progress. forward to look we're talked going a -- informed our keep you Have day. just

Operator

you Thank concluded. you. for now Conference is today's presentation. Thank attending

You may now disconnect.

Ondas (ONDS) 15 May 232023 Q1 Earnings call transcript