ONDS - Earnings call transcript Q4 2023

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Operator

Welcome to the Ondas Holdings, Inc. Fourth Quarter and Full Year 2023 Conference Call. [Operator Instructions] 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 risks factors are discussed in Ondas's periodic SEC filings and in the earnings press release issued today, which are both available on the company's website.

to events update required or obligation to forward-looking by no future reflect circumstances, undertakes revise any or statements law. Ondas except as

financial non-GAAP measures are shown call, These section today, principles. with measures substitute A earlier at this Ondas is is is the refer of in most accounting certain During non-GAAP directly supplement our of a financial which This superior for to, a Relations issued GAAP will release measures performance generally the accepted to, website. GAAP. with press non-GAAP of available the prepared not accordance non-GAAP information measures reconciliation in as as to accordance our as to provided financial measures. Investor not comparable in prepared or

with these on note, this believes non-GAAP information trends our investors recorded. being provide measures business. valuable of management event Please underlying the However, is

presentation CEO. Eric like would to Brock, turn over ahead. and the Chairman go I to now Please

Eric Brock

to by of leadership Curelaru, serve good his key to including operator, joined am our after appreciate thank Yishay I be Ondas who our to members our CFO, spending time in conference company. to call. your in duty get everyone welcoming to our with morning. to you're interest Well, I started the and We team, by returned January for happy quarterly called today being you, and country. us want .

business of drone outlook our Kliner, subsidiary; America CEO both and Tim Founder hear Meir will our President the who and we addition, for on businesses. provide In Tenne, updates and Meir is and and Airobotics is Autonomous of the will of from plan who Robotics. Ondas Tim CEO the Systems

first in Chief the is activity. XX by today will managing investor Simpson, direct the joined provide customer quarterly for help service he at CEO Ondas This are Operating call business the for of Networks is our and by Ondas Networks. years and update Guy we leading of is Guy He and Ondas addition, much has instrumental attending, Networks. last Officer President facing our the and been the development business In

to provide I agenda. review some some for high-level review for with call and of highlighting then positioned call and will I recent the fourth and we quarter year XXXX Now We'll Yishay in start the financial a to announcements brief success XXXX then are will let's turn the results. XXXX. of our a hand full comments how

Tenne will a then in Guy, Meir Ondas floor call questions. business and commentary open We the will around current activity, wrap OES business ask for will to Networks and where the for our investor units update we provide I provide business then

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I February Board, this are in to which want is we to highlight years welcome for ahead. announcement even and together Ondas. I the secured shareholders, on exactly and the closely more what $X.X In quarters Joe investor our also As Ondas, want we short, that are of Onda. financing. to XX new single Joe's excited work at in million aligned we great our largest directly incentives the with news is

provides led in As business was the we support by is announced, Charles second that year. funding in a & the capital Potomac Networks QX leading $XX growth additional after led has investment million CNP and This plan. last to our investment originally Ondas

of holding the company drone We American Robotics which under the Holdings Ondas under known the is and hold OAH acquisition a platforms. operational our financial and will in scale we around on new a January as Ondas believe as of Autonomous also operations, our established we Systems business unit. formation Airobotics announced We technology XXXX. operate Airobotics we after structure OAH. is embarked integration provide OAF OAH Bringing to many benefits the Economist continuation world-class business umbrella corporate the closing globally drone the this

a We'll in Ondas. the breakout this year more later for was discuss in call. XXXX detail

was of record XXX prior full revenues our sevenfold from orders Siemens ahead initial Ondas increase megahertz included the was by year. was the At revenue generated driven of For QX, with growth the million, the adoption inventory we expectations. in $XX.X year, which above million from curve. of which to This prior expected a market feed $X Networks,

XXX driving provide with the Ondas. further the engaged we final the we progress megahertz Guy railroads stage systems in will are we believe complex the megahertz which of in commercial XX ramp standard, the of build-out have for was versus launch I a our in cycle [indiscernible] later customers. detail customers. adoption order expectations, on Class allow order We are with to the the nonetheless which prior regarding field made more will integration While the substantial process delayed XXX

new in and beyond we [indiscernible] our growing, around awareness and we of new only beyond with Ondas an the confidence opportunities in areas, urgency Despite opportunity is megahertz technology the ACCS the the passenger Networks, out sectors network sluggish stems to FCC upgrades significant megahertz to new XXX generating growing global This activity the integration many other for foresee rail migration XXX see such transit. across with orders sector more and proving even rail and the and in deadlines rail finish in engage network, At the of building demand scalable into the creating network. is megahertz. rail as increase from This XXX visibility vendors. our

Our shared Ondas' growth Airobotics a Autonomous of market particularly to goal had impressive the revenues a increase year the exceptional This the for of XXXX. the massive was we ahead an with fleet closing there infrastructure by the adoption use with Systems in is by relative of base business in million in million security time also fleet public had driving acquisition. initial operations unit drive adoption we Optimus. driven at for revenue $X where This OES to safety being are represented to the being $X drone kicking Dubai, and case supported $X build-out XXXX. revenue million our

We truly believe the is our operations Optimus automated System urban scaled environments seeing platform globally. only large-scale deployment in in

are of we proud course, this. Of very

move are with United States seeing into at marketing OAF traction. we gain XXXX, As broadening beginning efforts positive opportunities we to in the

talent of leadership Robotics his Tenne service CEO the with growing and and We proven defense, Tim of and addition through as sectors. team customer government commercial is have American team strengthened the Tim

and We Tim inventory and here enable Optimus improve and it will related engage believe in is delays availability This the QX discuss, activity after additional will allow beyond. will improving Gaza System inventory us and growing internationally, availability customer customer to the maturing the in will As conflict. Meir the to U.S. a pipeline.

work in American wrapped its demo States, with the value proof of up United the division. has Robotics MassDOT Aeronautics In

solutions. very a government the infrastructure, with We believe will and this are our industrial safety, program, anticipate the to about we capabilities market are the the critical follow-on quite sectors prospects excited was continue and We on activities. successful for focus We there. the and and central Commonwealth be public drive UAS believe working that and

increase the and last [RFPs a ] quarter, sectors our same noticed with we In leadership large offerings. from these leads that have and align inbound in

are to overview, To Iron the I excited Drone want prospects Radar for about highlight the that we very up System. wrap the

an a valuable deliver threat Meir the responding in urgent and more security This defense and launching and As perform in hostile missioning cases an system from of to aircraft this about to to and forces we Radar world. UAS radar opportunity this November to defense Israel drones. multiple clearly other opportunity, we incredible friendly The are is by protect need for rapidly to solution we ability in morning. capabilities. very autonomously Tim share meets our multiple counter Iron on unmanned the high-speed requirements disclosed are Drone use the around XXXX, will excited

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

Yishay Curelaru

Eric. Thanks,

increased from and value. effective about continue. acquisition. revenue addition move of that operating are investors I January the despite encompass on our efficiency reflecting started, augmented the following inclusion the will expenses effectiveness will want remind robotics, extreme are XXXX, OpEx our significantly see, you we get Airobotics As . This our stream, scale Further, our shareholder presence of financial year-over-year, enhancing down market that I to discuss added operational XX, strategic has successful to an from and focus as the figures

the compared to of QX the strong $X finish fourth XXXX, results. year. million Turning to QX a In $X.X in XXXX increased We quarter to had revenues the to XXXX. million

of At compared by governmental more primarily Ondas Optimus of development build-out XXXX Siemens periods. the revenue higher year product increase were fourth a Dubai. to at by sales quarter were sales of OES was fleets continued product result to by Revenues customers than revenue tenfold in revenues System in and in driven driven Networks Our prior projects. development and a primarily our

quarter-to-quarter programs and development networks Networks, our of and of with megahertz predictable around customers expected customer commercial grow revenues at revenues timing services in Ondas' MxV. will agreements we recurring the normalize the the quarter-to-quarter States in rollout and customer given internationally. for Similarly, front and targeted United those underway into [indiscernible] from XXX rollout and the of base and activity For pattern their fluctuate fleet a to Siemens are from the and the programs uncertainty vary as to more more

to compared lower Operating decreased XXXX. $X.X expenses Gross revenues million to QX QX profit to decreased approximately remained mix. compared variable million XXXX. percentage for margin to XXXX in as of in 'XX QX increased a result of profit as compared to $XX.X term Gross QX $X.X product and QX million for for QX to the a XXXX XX% for for $XX.X XXXX as near million XX%

XXXX to million noncash section The cash and costs in which in decreased impairment and outlined exclude expenses was sharp $XX.X supplemental the operating operating of goodwill of expenses Recurring XXXX R&D XX% activity. cash primarily nonrecurring drop operating recurring in sharp in of market due and due million charge controls recognition million expenses, decrease QX in QX strong decline of table The from in despite revenues. expenses decline of $XX.X cost a in this $X.X the XXXX, addition was robotics in XXXX. to

demonstrates growth the businesses leverage we years. expected revenue drive and in This the operating quarters across have as we coming

nonrecurring P&L, $XX.X million QX will when operating driven XXXX improvement discuss the costs review to loss charges, Operating and in as as is We for narrowed it a The we full by million noncash compared company low noncash year [indiscernible] and $XX.X loss expense moment. mentioned. was QX to for XXXX. the controls

to Adjusted compared million as EBITDA loss [indiscernible] QX $X million for XXXX. for XXXX QX [indiscernible]

XX.X% to fiscal $XX.X and growth Gross revenues. Gross XXXX, that results. a services XX% of Autonomous XXXX versus a units strong for primarily Ondas to XXXX. XXXX. compared million to Ondas both to product the of as as year in grew Turning during record mix full profit System, in was the larger low-margin which for year-over-year were increased for both posted margins due compared sales year Revenue by sixfold million, The business are and Networks only recognized revenue dramatic at XX% XXXX, level was $X.X revenues XXXX. increase proportion of

for as narrowed for noncash component was decrease depreciation, certain impairment $XX.X assets. charges charge of expenses of $XX.X well are was including XXXX of largest stock-based operational in million amortization, which goodwill expenses, compensation compared in XXXX. expenses to operating as expenses to due recognized impairment sharply to of as million, approximately the noncash Included Operating The $XX.X onetime million a XXXX. in

Airobotics investment of impairment leasehold office $X.X and of is connected create XXXX. and reduction right-of-use and in of equity order and XXXX. in of related charge An recognized was to integration was assets of As Robotics million cash million long-term the our impairment subleases to investment in This space noncash outlined additional to savings. impairment here, [indiscernible] improvement $X.X American an in additional

shift exclude XXXX. of As noncash million expenses, earlier, expenses $XX.X charges Recurring mentioned and charge XXXX. impairment $XX.X spending was noncash expenses the decline operating of totaled which offset expenses million growth $XX platform The in cash XXXX. a million XXXX, and million costs In sales in adoption OpEx businesses. R&D million This by versus and the recognized reflects in was was goodwill $XX.X $XX.X recurring and total, and in in in increased XXXX bulk totaled a driving in operating in impairment focus revenue marketing in nonrecurring reduction cash XX% which costs. our across

for a charge. company loss to net an million as Net Operating $XX.X including million for a in operating XXXX. the million million as to as $XX.X the $XX.X realized loss $XX.X compared The XXXX. was million approximately loss $X.X in of loss decreased operating aforementioned decrease compared in XXXX a goodwill impairment loss expenses, of result of primarily XXXX of

for million to nonrecurring noncash XXXX narrowed adjusted costs, $XX.X loss compared XXXX. for as $XX.X approximately and the company's Excluding million EBITDA to

to $XX million million turn million net December cash repay of expenses Networks at to previously as XXXX, in proceeds use cured a operating and decline compared the debt raised to Holdings in December the by was quarter third statement. The announced XX, primarily as cash flow $XX of result in cash XX, $X.X XXXX. We of early Ondas of XXXX. in Ondas first of million of cash held in financing is of $XX.X This let's the as XXXX. half the cash supported Now and from used

in and in as ongoing drive during business operation platform the Cash reflects used XXXX across investment Ondas adoption networks OAS. we

comes efficiency expenses in and customer operating driving margin at focus leverage through adoption and revenues utilization cash to companies on growth both XXXX. cash as We significantly we we Improved from profit. as move expect gross spending and improve gross

stock the February, had cash. company an Proforma capital of million As $X.X noted, of announced Capital. we Potomac of preferred stock through and the cash Charles net common sales in financing In million Networks by would XXXX. led Ondas million ended the have financing year expenses, Ondas and Holding as with $XX XX, of this we in & raise transaction December $XX.X

the convertible conditions want July XXXX, December convertible means some million in of we to equitize notes maturities As outstanding. April manage 'XX times we shares as equity see these either notes conditions. by entirely or under to retire more notes our have the in the notes notes and the 'XX, as is objective to to monthly equitize to maturity. have prior can $XX.X via favorable amortization create convert using had soon It to to amortization highlight these to which we that I notes and

over hand back call now will the I to Eric.

Eric Brock

Yishay. you, Thank

a and Meir review in Now on updates activity recent we to Guy customers field and and units partners. will of with our Simpson share as the industry [indiscernible] transition business Kliner

OAF share Tim States. drill We the Robotics and down Tenne will have to also bit for United outlook regarding comments into a the in American

Before Guy, to couple I Networks. to want a hand the Ondas floor on provide important I updates of

a change no Networks. made have company. is Ondas the with we Firstly, leadership Stewart longer on Kantor

new President as appointed been has at Simpson a Ondas Guy addition, In Networks.

the from COO in his spanned the and I an Ondas technical and had solution on ramp being customer-related field the as him critical our of engineering call, Guy As out standpoint our capacity team parallel, teams in leadership I while growing of front leading operations to activities. Networks. to spearheading most on a from also has long production beginning has tenure internal manage mentioned relied at our

company to targeting the scale move happy on path responsibility we the super and growth we company. have the am this driving chain while to I a added the present benefit charting and be as to of management and is the extensively, Guy are profitability. to focused to purpose on rely We revenue him of The assume order align forward

wireless innovative, networks. developing mission-critical world-class Ondas technology for at work exceptional done have We

the our I other to to commercial to for private XXX customers an to towards Now global the addition believe and delivering at it's inflection scale. soon at in in these networks is intensively markets focus energies substantial. rail time remains believe Class in the solutions business deployments megahertz field We will opportunity begin megahertz the our of that XXX rails We point.

call Guy, over I handing am now the you. to

Guy Simpson

have to a XXX% XXXX capacity, compared Eric. Ondas for by At revenues marked with here opportunity be Networks Ondas its shipments supported generated in you, our Thank $X.X led making work by in record during to customers. pleasure production we Networks, a and million investments increase the to XXXX. represented It's investors. This increase also for which to significantly was with XXXX volumes shipment revenues production year. and the product

transit with and fully for further be XXX engaged rails continue prepare our megahertz. Class to X large deployments We large-scale to the -- commercial customers at Siemens,

dotXX of a the additional road work we AAR for beyond networks our on and development rail products networks number with including our Furthermore, map megahertz. and continue XXX a future customers ongoing development market, for a we program well Siemens with activity of the will the be Railways XXXX. a Internationally, that completed as have radio as for in locomotive European new Indian

several America and passenger have activity the in we ongoing Lastly, soon. rail with sharing markets new on passenger the and these in markets. particularly We business development anticipate international side transit activities rails North

in program sharing and Class an As time our have the on some the some on and while factual to pursue the XXX take network X investors that XXX to path know, context long-term of Siemens and to megahertz opportunity related megahertz our network. we provide work engaged I ahead. update the railroads upgrade with a want

work new in first network AAR safety development modern build network for the with First, new the return, vacate the FCC legacy the FCC XXX the Ondas the as to use build channels. Class spectrum known a in megahertz X for agreed new provided XXXX. operational railroads and engaged railroads has -- have XXX greenfield modern to on megahertz In to the A-Block cases.

Siemens the the XXXX, the the opportunity migration XXX from and XXX signed April network. legacy in XXXX, we with megahertz the to spectrum. upgrade megahertz address Also, this ATCS application to order April vacate FCC a formal XXX partnership In megahertz legacy to issued for rails a

for Siemens clear, So And years. let's deeply we be have Ondas been have than and on this project X a lot. engaged more accomplished

communications have lab testing as megahertz Siemens, of extensive with the FullMAX selection network. and for disparate is the railroads field a efforts the new the of But news strength of AAR The that systems elements a dotXX significant multiple WCC encompassing scalable joint and based the the Since on then, and and with integration, takes a development work work. legacy significant After or course, huge many our is And the AAR's Ondas XXX complexity complex. processes with is XXXX. business, straight good railroad by customers was product team. groups, is often principally Systems This reason have platform train of This announced operating seen. CNS technology Committee, signaling Wireless Communications in our March handling expertise. rarely we end-to-end railroads. why line, field announced you as value integration in developing in selection it is the worked the

let's where We network. and stages XXX So closer complex and of the precisely the are the we systems the connected megahertz describe take believe integration final look upgrading to a are ahead. we process outlook in

you'll heard new work to the If the me an listening of the systems you've Siemens is have modern that repeat been and group times. The closely, operations understand. on integration concept with is integration railroads term legacy technologies. focused train Ondas This important and systems many

So isn't just -- what the do we a megahertz event. upgrade mean XXX communications first, a network by system

same the technologies The network, that to the application This control applications. backwards been on all way complementary with simultaneously. first that at starting integration a the and are communications new train least introducing advanced has Ondas the ATCS requires Siemens the network technology application for the ATCS Siemens and dotXX upgrading rail running of X is megahertz decades. The or XXX systems rail wayside office means compatibility within operations. application back and the and at ATCS other many new system

both technology move to Some that that hard done are are work customers the technology would well and believe good well. committed can forward, be more issues The to news as and more the needs effort the is customers lines time the Andes we carefully is impact years Understandably, effort. doing upgraded and Siemens of XX than and close be we minor than as are even this other must old validating we like. this to integration as systems as learning we tangential we integration

Class whom will orders well leading we our smaller are from systems initial commercial X as acceptance also with this final currently come Upon X as customer, rail believe we engaged. from railroad

field signal process Class to integration then Siemens has are work other the I XXX and been once expect time advance them we megahertz Importantly, tracking railroads Anderson own our closely lines validated. network activity and this planning systems objectives, their with their and

the while are these engagement. not are after deadlines, deadlines, believe do that Of we the are reluctant to discuss course, motivating rails, they publicly ours, we FCC all, deadlines increased

is increased will will expand network service the success technology. on be believe further build been deployment order in and We nearly planning book on We marketing us, capability for XXX production megahertz designed to becoming the and the to behind the of ATCS and and work cycle good build-outs. field, wider have programs dotXX increasingly the is order training hard integration model delivery with expanded and backlog waiting the look our railroads and we XXXX systems use and visible. upgrades more a drive XXXX build year, with in established we

summarize at So the outlook Networks. let succinctly to Ondas me try

systems We this has the upgrade are megahertz The cycle been for like the integration of to close. the systems feel will year universally we drive hard and orders, deployment task We XXX start feedback of backlog, positive. network railroads. on delivery customer

are close. We very

production orders have forward continue aggressively customers' to on stated our the we new and As to have needs. previously, now we move capabilities meet securing

technology. Ondas are Siemens our deployment parallel, In and our services adoption scale dotXX advancing of to support capability and wireless wide

broadening been XXXX seeing working customers since This across passenger now rail operators. transit Class X of the engagement the a with are have deepening we includes industry. advance, a and and we also and As rail we

geographic demand also relationships. in markets is More for generally, new and and increasing ecosystem/vendor develop an new new and there networks rail products to new

expect more announcements soon this this and here front. have some We outlined of on

attention we costs on operating towards we spending pay to levels drive as we profitability. close will As grow,

on to our focusing OpEx revenue supporting and increasingly are a We dollars profitability. driving path

Eric. the call now to Eric? I'll hand back

Eric Brock

update I from Thank the at the to here. into insight us now you, Autonomous and OAS and Systems customers the with and take developments on progress will Guy. recent floor at ask Ondas Kliner Meir? Meir . provide outlook

Meir Kliner

you, Thank Ondas systems. autonomous for year was Eric. pivotal a XXXX

our able our been for in our the achieve to outlined offer critical to and operations. they road map expanding goals autonomous have We enable drones vision solutions fully transformative for our

team worked the past years to bring point. to Ondas has X this Our out over

XXXX Ondas X concluding System implementing market to as record a We capable of drone high in feed critical currently for the position strong are and in Optimum very most with We revenues Drone and holds the Raider in team form and a and drone validate operations. civil very with technologies the infrastructure Iron believe a military promising market promising the them market the system. and that

potential the XXXX, Transportation U.S., trusted of for the operations the System response security has the disruptive Optimum in During current In significant the in the UAE, operations proven ongoing our Department to made Dubai, of System demonstrating of Optimus capabilities we its Massachusetts its technology and value and demonstrating have stakeholders. worldwide. progress emergency surveillance

that signifies working continue completely the and our a complex mature technology such to team stage. our autonomous FAA Our has This reached not FAA, one environments in metropolitan first make type it an and operation drone milestone data by but very X certification. allows capturing on only also such to in the received as advanced Optimus box in the with certification airworthiness areas, cities a has achieve

Our remote global security, potential monitoring infrastructure vast. and services is market in critical protection

have safety scalable. and emergency be our continue large departments construction will focusing and ports plan, on models We market our response Data-as-a-Service and penetration projects transportation terminal as via serving executing to operations, Drone public business proven and

strong customers. indications value of demonstrated receiving are the with our shared infrastructure one We of

network. This The have impact our Dubai. of drone systems urban growth our reflected city-wide customers our our full-scale network revenues an delivered we is a a deploy in and to intention governmental as of customer its to additional world's continuation stating XXXX first is in

reducing dramatic security response safety from public probably Optimum capabilities. During receive groups XXXX and and network time, drones. and to demonstration smart U.S. recently, the with network the on it's our XX customer, a effect System coverage from of in and Its Optimus of drone fleets creating markets a major highlighted network international deployed the areas, impact seconds minutes it X of network Optimus as synergy

customers infrastructure leveraging will and the keep shared X XXXX We additional was for use deployment to cases the infrastructure Radar and UAE our multiple year from expansion and our in models and system. export significant [indiscernible] for and with on footprint Iron UAE. working industrial operational opportunities focusing civil customers targeting a our local

most to We for and of one system prominent the challenging hosted become have enhanced posed acquired by solutions of the ones. some most the problems

a help the from Israeli have received this We grant enhancement. Authority to Innovation support

in a difficulty collateral manner we small are and neutralizing As in in effectively timely and the impact the Israel conflict the minimal with growing them escalate, witnessing Ukraine and of damage. autonomous drone, damage detecting cause they

urgent in and We defense have worldwide. the Israel of forces responded to and security requirements

are plan. address the to a marketing in We promising planning this significant global player we domain. become enhancing to in entering Israel, rapidly are this a develop all technology integrating aspects and initially and After market

in market capture sensitive entities and conversation that position civil we distribution for this infrastructure as the worldwide critical industrial also and includes in and to defense partnerships security explore integration public already are U.S. the large and We market locations. protection with of system

market reorganization advantage Robotics been core the to made Ondas [indiscernible] U.S. has fruitful. the American integrating program, our has significant in XXXX, of progress during leverage aiming also

update provide are American business the Robotics. CEO Tim of now Robotics we to Tenne, hand will advances an to the American making at I on call

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on have quarter to was Thank defense, XXXX shared mature significant focusing X, the and you, within sectors we infrastructure Since Meir. customer our X pipeline, commercial continued a for consolidate year opportunities quarter and the and build States. United Robotics. government for throughout American models and fleet

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programs to part plan customers XXXX. during launch governmental go-to-market our our penetration advance marketing more of efforts with and planning additional as are We to

utilities to trusted Our and ports terminals, pipeline most unique offering some them of oil and challenging missions. public rail, includes departments and infrastructure our gas safety, of remote monitoring transportation, the solutions of and problems

our business operational arrivals with experts lean capabilities Optimus X. team a and effective advancing during and are and inventory We proving expecting quarter of the

be for inventory, of new new more to Optimus System and support able will the sites. installations increased With programs we

of service with Together in is operate arrival we new customers. and the commercial ability the consistently and will location a impact. unfettered sight, center systems, line proximity a customer of demonstrations experience are type of new that to Optimus our building and drone these government defense, world-class allows at to these Maryland beyond close FAA for With our huge and the demonstrations visual of make products certification

Our FAA professionalism in the autonomy receive program systems waiver working a detail. more Department were of sight based in and shortly like to solution with in enable team's adoption and I the ingenuity an line will our which of that for customers, highlight proof-of-concept important with this would accomplished I'll upon our the to discuss Transportation. beyond quarter, achievements Mass of visual coordination proven

by applications, System. program, multitude rail American a this emergency of Robotics of our assets During and and critical mapping other and cases, automated Optimus survey inspection use demonstrated Autonomous response including surveillance

our and integrate partners is enable technological critical together continuous and unique complex missions We System drone delivering an ecosystem the continued build effective of have to which Optimus features limitations. the to for without with of access airspace,

louded FAA-certified concert aviation that This size the of having of approval scalable which visual by proven patented UAS framework rapid sight safety line end-to-end with was the This earlier, supports achievement a remote UAS in operations. of from MassDOT experience the unrivaled respect allows the in remarkable of transportation for truly enabled and and and leadership solution our the system regulatory customer that opportunities beyond a assumptions the [indiscernible] waiver States validates departments with worldwide an was further of mentioned As establishing data the United industry. to in further solidifying in requirements. automated program and our

efforts. continuing United are supporting and the We expansion States, locations explore throughout deployment validate additional to our

the refocus As of the are important believe to mentioned especially clients into markets, radar and to defense and security budgets. solution an for government excited system previously, UAS given and radar introduce defense U.S. the the capability and is we

resilience partnerships framework. are this to add continue sensitive autonomous quarter our network evaluate and enable strategy to announced Both this we Finally, that and framework. were central which and

to will now call Meir. the back I hand

Meir Kliner

Thank you, Tim.

pleased in are momentum the to and forward continuing this looking in with growth XXXX. We XXXX

and to the fleet the orders into UAE, additional continue customer in secure for our grow in engagement expand will deployments our revenue and international markets. We other U.S.

are activities. planning marketing our where Europe, teams business initial start already in operations begun We some development have to

We business DOT's development to public U.S., optimistic to accelerate the markets. critical Robotics ability leveraging industrial our are penetrate in and safety for footprint American

ecosystem with full to development, services and data partners continue platforms, with We integration. on provide working spectrum will

capability We focused on production in XXXX. scaling our

HX We forward building are and to to Radar. believe we demand. launched order new on system expected and new news to the look expanding XX satisfy delivering more X we for inventory, production Iron this year, XXXX orders about preparing and optimal Iron X sharing We

production parallel with capabilities we partners customers as are establishing formalize work orders. We in and to

significant generate and to well mentioned positioned before, As momentum we are maintain we XXXX. growth in believe I

have to our decided As announced, we business. to up Holdings scale create Autonomous we drone Ondas have

Eric will with you that to great back next I talk forward meet. to time you out going and now. Eric, this initiative, call formal to my hand sharing we the the look This remarks. about completes I'm

Eric Brock

Thank you, Tim. Meir and

. This and moment integration XXXX. Before the will of Airobotics and corporate we provide announced around umbrella we company. financial is Autonomous an embarked want technology Bringing we our as as to holding world-class after call, continuation drone the many acquisition Robotics intermediate the scale the platform. wrap closing essentially or on a I globally January business operational OAH of the the in discuss OAS and benefits under take up a OAH Ondas American establishment Airobotics recently Holdings,

a From illustrate owned controlled structure the subsidiary by and is The control consolidated OAH this wholly in nothing has are benefits Holdings. public Ondas corporate of company, As a new we multifold. here, basis, changed.

our A structure. OAH are focused in drone large, best-in-class and The solutions billions benefits to Firstly, with aerial rapidly a We significant solution. corporate on market and the the structure service are valuation development and of we data many markets company operational of opportunities the expect growing. with pure-play flexibility global also realize is financial appropriate we autonomous significant. entirely The dollars. delivery corporate measure security dynamic

massive, market. large, independent doing fast-growing capital our and clean dramatically. to so, a exceptional an out take a profitable opportunity Having have position will cost We in a of lower business sheet in dominant a grow balance

climate are a We difficult companies. in drone financial for

have to partners. We our technology best-in-class chiefly proven and platform customers our advantages competitive are many that matter advantages These road map. and

during Our have focused will and and, Day expanded on received. strong business amplified by sheet, course, think our we well then OAH will of regulatory capabilities which balance an an will out watch. just lay Investor incredibly we to be be plan team. talented QX, a That We plan, advantage

the the call and Let's outlook. wrap now summarize

formal We aren't guidance giving today.

full We have confidence of in lot the a outlook. year

secure right close. orders and quite will Ondas we systems Guy megahertz to now, need bit. conservative on volume XXX given the there, still ability However, pipeline integration discussed. visibility want And to be At to Networks, a is as that effort, complete we initial secure order. improves It from we

as opportunity The big Networks at Ondas ever. remains as

the increase million. We you market, will technology private addressable for rail beyond on customers DotXX poised opportunities Remember, the new our XXX. the XXX is all network or with see SAM, networks. TAM to $XXX network us wireless serviceable continue see And and private to this megahertz be at year

continued At growth will tuned. with existing we OAS, stay see So customers.

year the we drive fleet prospect Importantly, accelerate significant of that growth and this have adding to adoption new our multiple see potential curve. customers

and in do our explosive we Iron In for be segment when and it's all done. a growth, expect major very see Drone drone hitting to catalyst is will XXXX believe said a addition, In market year valuation. a we spot good be the we Raider short, sweet a

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

Operator

today first from The comes Instructions] Ladenburg Mattson question [Operator with Glenn Thalmann.

Glenn Mattson

a, inventory of perhaps, factor the inventory perhaps couple in And you just growth. that guys as of space you a a Can mentioned of I drone So the you terms would of gating as now know, don't availability you in times, and talk that throughout about the year? itself when expect you versus think that how have That shift backlog kind alleviate line inventory to backlog what problem time to guess, I be helpful. now?

Eric Brock

more Yes, I'll Meir and then details. to I'll a ask this, Glenn. provide answer few

to in Gaza, us. chain of So year production pushed conflict completion building out and communicated sequence the of The for we of timing supply to really the of that builds throw the systems last in and deliveries half. the to capability of trying some off events did as were sort systems in course, investors the we second and delivering and

we're relieve So where the seeing delivered point itself. We've had some at units that recently. we're

We And that. maybe can to detail little up. a more on give Meir, pick expect bit you that

Meir Kliner

Sure.

right the mentioned, in the X new supplier. got time manufacturing So the And every in are we as we from now, you phase. are We weeks. of line system

we're I So in think good it. shape about

Glenn Mattson

their long of on the that doesn't and a the they just government, perhaps. the that perhaps ramp another of I railroad doesn't other railroads on of And it side, I [indiscernible] the path. Class how coming maybe be that they were start the you guess faster expected, if the network little I if get just but has appear, urgency ramp if one the down you some urgency a to what sensing thing. this not a deadlines plan guess, to terms by it sense [indiscernible] appear -- and goes of in meet of some for slower the is up guidelines and in hard deployments the ask I sense what set with the are kind side, Can could been by, be than year to as a perhaps Can of the meet would those able X you're Class little deadlines give

Eric Brock

yes. Sure.

So as Coms AAR, these the express to said circle gave to principally context talk are deadlines. they do meet the to them. back being deadlines. to But as leave rail continue regarding that I to and able in that to I'll emphasize Committee, the again, want on we deadlines. Wireless But some that we this, confidence I'll we And the

the and terms the make In Siemens would of have say, other that's in of demonstrate and the in are Ondas be And network doing that the involved band. systems Glenn, It detail, complex transit in a is done of the the X the one migration simultaneously stretch shared sort new doing sense for typical, program the we with of Guy systems this doesn't particular, as same a and as process, being of ATCS And across to ARR rails and well. is process I all integration to couple great rail this integration we some scalability to WCC how work. rail work.

comfortable close do this with essentially. to is at ironed we're systems with They'll fact railroads ground network. a go have through But start our the install that gone we all process progress to be broader our not other very interaction regular the belief they new on with we we with through and do a themselves, we the with where going you're say, work how So in they modern the and believe this, the that play kinks engagement WCC how looks. validate starting and we're our as get as that technologies out is that the -- zero, process seeing, I'd legacy

can these railroads quickly. I the [indiscernible] other engage fairly fleet, think

Operator

comes with Oppenheimer. Horan question next The from Tim

Timothy Horan

have now cash make you free some enough Or it more flow . you positive? think fundraising? cash need you to do Eric, do to do to

Eric Brock

Tim, company our the some position fundraising -- trying and that I better capital possible. able do to terms think we'll access We've see more on as to we'll we're to. so been

Timothy Horan

sensitive. Any

Eric Brock

amount to going now. not disclose we're Yes, that

at is. what revenue I to kind and think increasingly going about to look growth, driving be you per fund of that's OpEx current can the course, of levels of cash profit we as $X.X we business. million And will OpEx the then, basis quarter gross [indiscernible] need the of --

Timothy Horan

vacate have initially, you at for point, guess that best means best back a XXX when just do to do total? spectrum guess phase this have the have what second to so a absent rails time revenue the and you And guys the the And this you and point, the they line? megahertz, FCC in at

Eric Brock

that addressable But begin will on to is soon XXXX. of the in, put the September cycle in XXX We on a hesitate the then and it. first same. do at look retirement in right to respect the things the And order believe we with call timing, seen the we date I hurdles. as made point XXXX, kick these any legacy pushed requirements numbers market, change the network, still have the remains final first not and this that to we see the We out we build the half but just the bit Yes. here. on clear

do here. for plans we have as lot a that integration So get we entire the on to broad sector. there's And that going urgency the visibility demonstrating believe more we're success on

Timothy Horan

Or more orders? we So Or than 'XX? do should in is you for should still start we taking think actually we XX%? shipments this primarily -- will shipments expect a expect year year to

Eric Brock

I shipments in get think 'XX. going to we're

Timothy Horan

and to finalized? we long -- this that on think one how this is integration, partner do out being then kind prove away for months working the it how the others And system weeks taken systems the the integration? sounds long process you're from that away or And you . of like are

Eric Brock

X for that legacy months. And to on put better the piece the of you're on time, So I would system. some up, the call, I come point things more in say. innocuous the we're doing have And this you're real with of that with X sort one of think as we're this because with What now right, been there's we and very finer integration in But part I not effort field even the close. said is we Class small hesitate there. particular field until there any

of Sometimes, sort you send back. we'll

component wait finish and of you for upgrade an have you of You services get in the then the though. to system, and back

I'd make it's finished. say believe I it don't bulk, to point to we've We we want the may we're vast done done able I have think all, say, until that but

same in But start doesn't it again, the do of the systems WCC be more the I be Siemens to railroads and because sort forms trying our So going I process. with field demonstrated in and integrated. I before, told individual ground and obviously [indiscernible] about customer we've zero the there's path engagement communicating then from the this with the there, at And how it's the we get we'll think people close. think with with you to

Timothy Horan

to X-month X-month do think And a of so remaining to of the X- each you rails, process, a X- of you process for it's for sort them? more more it's think

Eric Brock

And I it's than shorter. Yes, hope that. would it's shorter definitely

railroad I lot will go think second a faster. the

integrate The is to third doing demonstrating also the migrate that. grow really new here band. we're scalable the to the systems will and processes and What faster railroad than integration

Timothy Horan

the it need situation time to period. manufacturing like I so we equipment sounds X-month X- And the like be where a capability -- to with like Do ship have $XXX million meet we you mean, a in to of to within might worth frame do like that?

Eric Brock

to capacity numbers So we need add mentioned. you those hit to

with as obviously, answer. working through XXXX, along that short -- we're a moving believe, do I closely . that do the increases we're to going half we that's So visibility, second and with with manufacturing -- could in our partners.

Operator

Mansbach Group. next Forte Capital question with comes from The Carter

Carter Mansbach

that all all, you made. of congratulations on progress First guys have the

of couple So a questions.

vendors. about with I So think there Eric, say talking you Siemens working that other the for call or the rails? in earlier you're besides to heard other Are vendors I

Eric Brock

answer So yes. is short the

have network, integrated. We there's you and when need I'll technologies we that multiple this be -- that deploy remind to

I'd So highlight. that's thing one

out more a opportunity rail. there market. there's with we is Siemens about getting Secondly, rail we this think global that's have outstanding when an stronger. But And relationship global

share So today. can with I that's what you

Carter Mansbach

question, Second maybe complicated. a little more

regarding the that a said -- you spin-off have So going the you're this call of call, possible to investor business. drone

about Are investors from like? stocks? X clarity. lot questions looks insight you us have in So give it of a where have -- can you coming any no what just we separate of I mean I talking

stock symbols. have So a we give Can anything you are entities separate X separate there we until us call about? actually X where be looking at

Eric Brock

Yes.

is, to answer -- be short may the what that might think we it I that do.

of done. that And have subsidiary of So and market to capital the raised established in OAH or as as IPO. call. We've raise we'll and a could networks a probably share where a we connection capital we we holding we public an the be spinout to businesses. with investor a on where our and/or intermediate what more There's vehicle -- range options as that say, transacted, evaluating, be similar a be it these when way we that be funding we've specific can have that company could drone

Carter Mansbach

sounds have Yes, to be separate will I what will leaner good. like Sounds them lot the accomplishments. and XXXX. look be on side happens forward a it great to the Congratulations in all it drone entities.

Operator

question Northland The comes Capital. with Aditya next from

Aditya Dagaonkar

of should some This domestic? grown Michael versus Could you is expected Aditya international how give much on come color behalf Latimore. from customers of the revenue

Eric Brock

This a good Yes. is question.

traction working that for our do are biggest to half or as the think get to international the be time, that about you deployed. of wherever financial of market drive building Typically, is . A one they little initial probably what with revenue U.S. systems likely And with on our in could and can is think is see context U.S. But you'll very here some year we're us over than think this a building important the markets. multiple world, us scale when course, fleets. more on very customers customers, I expect I you'll you us. one and small handful be customers expectations from systems focused more see models in of we're that the

the deployment. So there, safety public wide we're fleet couple, as Dubai a market with it in of into a in then course started now demonstrated we

expect even see of this we this in of more. more bigger year of number saw we and in do So year last amounts terms systems, we'll

we gives So enough you see and regionally? that now hopefully, growth color

Aditya Dagaonkar

growing the gross range on for from some Could year? expect color margin this you would give also revenue you

Eric Brock

lot of just the I'm as-a-service factors, the what depends to the including system yet. give mix model. not sales on the outright or going either that of That is, guidance a

back in to we I some economics going we we're . unit there hold market think Day. be -- see detail. I our that and the on Investor believe color able a to the is and data-as-a-service So will share of say the share we'll market OAH lot more big

Operator

with Matthew The question comes next from Galinko Maxim Group.

Matthew Galinko

get what Maybe wanted of the ? frame is of to to sort on following in timing U.S. a to deployments that focus that Or starting in path a U.S. event? the something fleet sort some Is deployments maybe fleet be little your could for just work thoughts of XXXX bit firstly, the drones. for us just MassDOT

Eric Brock

I more want going Matt. when to And I that I'm -- to broadly specific not speak to question, don't answer MassDOT.

XXXX, who multiple can a expansion to be going customers engaging do mode. are see year, you'll customers So have who going we believe And we're to in fleet that. that I think we're do just this

the the customers have really that's them technologies. work to capability with qualify intent So the to is they the scale doing we're that these ensure . to and trying

Matthew Galinko

kind frame a bigger Drone And maybe just looked of XXXX Iron then into that budgets focus also where against that looking be of the where stands of where fleet can currently for period are. deployments given and contributor time, can at? you is a traditional you've that kind Is something

Eric Brock

'XX be Israel able believe expand. We really I'll success, to you'll we're seeing as is, in what ask communicated, to we've about the the near customer do on think and think we're Meir I initial in that. -- we see things Sure. hope soon. we're maybe that U.S. as Meir, But look some the provide focused and also context specifics can term and we're to seeing we looks highlighted more excited we market. the capability like share we're on to to rest doing to the engagement like to But the of And through of what you some that bring work 'XX. production to this

Meir Kliner

Israel. Right And here system deployment are to mentioned final we're you as the of what's the the United in going earlier, States. happened expand into in we stage Yes. the now, with

have for I that about will hope really kind we soon and we that believe think the soon, threat. very of solution I . it. months, a couple we word this best of And show the

Operator

our over closing Eric the would concludes to conference This like back question-and-answer session. turn I any Brock remarks. for to

Eric Brock

close for just attending. the by operator. Thank to thanking you, going I'm you call again simply

And will a As have back you we our ahead, and always, a have keeping progress. work hope get lot great look we all . on at it. right I day. informed I of forward to you

Operator

The concluded. Thank attending presentation. now conference for you has today's

You may disconnect. now

Ondas (ONDS) 1 Apr 242023 Q4 Earnings call transcript