Ondas Holdings stories a decline in revenues in comparison with final 12 months By Investing.com

Ondas Holdings Inc. (ONDS) reported a difficult begin to the primary quarter of 2024 however stays optimistic about its future development prospects, in line with CEO Eric Brock and CFO Yishay Curelaru in the course of the firm’s earnings name. Regardless of a decline in revenues to $625,000 from $2.6 million in the identical interval final 12 months, the corporate highlighted strategic partnerships and technological developments in its FullMAX and Optimus Methods. Working losses and adjusted EBITDA improved year-over-year, and the corporate maintained a money place of $14.6 million as of March 31, 2024. American Robotics, a subsidiary of Ondas, showcased progress in autonomous drone operations and anticipates income development within the latter half of 2024.

Key Takeaways

• Q1 2024 income fell to $625,000 from $2.6 million in Q1 2023.
• Gross revenue was damaging, however working bills decreased.
• Working loss improved by 28%, and adjusted EBITDA loss narrowed by 24% year-over-year.
• Money and money equivalents stood at $14.6 million, with extra financing of $8.6 million.
• Landmark offers and partnerships have been achieved, together with an upgraded PTC (NASDAQ:) knowledge radio contract and a primary industrial order for the iron-drone platform.
• American Robotics superior in autonomous drone operations and expects elevated demand in protection and industrial sectors.
• The corporate is contemplating a possible spin-off of its drone enterprise and anticipates important demand for its Optimus and Raider platforms in 2025.

Firm Outlook

• Ondas Networks made progress with the 900 megahertz improve, attaining integration targets.
• Ondas Autonomous Methods enhanced operational and monetary flexibility.
• The Optimus System is predicted to generate greater income resulting from buyer engagement and fleet adoption.
• Important demand for each Optimus and Raider platforms is anticipated in 2025.

Bearish Highlights

• Q1 2024 marked a disappointing begin with decreased income.
• Gross revenue was damaging resulting from challenges akin to prolonged timelines with railroads and interruptions from the Gaza battle.

Bullish Highlights

• Strategic partnerships, akin to with HHLA Sky, intention to drive world adoption of Optimus Methods.
• The corporate secured a landmark deal to offer an upgraded PTC knowledge radio for a key Northeast Hall passenger railroad.
• American Robotics accomplished a proof-of-value program and shaped partnerships to reinforce operations.

Misses

• The corporate didn’t present particular income combine forecasts or disclose the common promoting value of their counter-drones.
• No particular particulars or timelines got for the potential spin-off of the drone business enterprise.

Q&A Highlights

• Discussions with buyers a couple of potential spin-off of the drone enterprise are ongoing.
• The corporate plans to supply the Raider system in Israel, with a view to increase manufacturing globally.
• Optimus and Raider platforms are anticipated to see important demand, significantly from the homeland safety and protection sectors.

As Ondas Holdings Inc. navigates by a difficult quarter, the corporate is waiting for the second half of 2024 with a give attention to technological adoption and strategic partnerships to drive development. The corporate’s dedication to equitizing excellent convertible notes and securing preliminary orders for his or her 900 megahertz merchandise underlines their technique to enhance monetary stability and market place. With the drone business’s speedy development, Ondas’s emphasis on autonomous techniques and counter-drone applied sciences positions it to capitalize on rising alternatives inside the sector.

InvestingPro Insights

Ondas Holdings Inc. (ONDS) has skilled important inventory value volatility and a considerable decline over the previous three months, with analysts not anticipating profitability this 12 months. Regardless of these challenges, the corporate’s management stays centered on long-term development and technological developments.

InvestingPro Information metrics reveal a market capitalization of $54.03 million, indicating the corporate’s comparatively small dimension available in the market. The income development for the final twelve months as of This autumn 2023 stands at a powerful 638.14%, which is a vibrant spot amidst the corporate’s monetary state of affairs. Nonetheless, the working revenue margin for a similar interval is deeply damaging at -243.63%, highlighting the corporate’s battle to handle its bills in relation to its income.

An InvestingPro Tip price noting is that whereas Ondas is rapidly burning by money, analysts are anticipating gross sales development within the present 12 months, which can supply some optimism for potential buyers trying on the firm’s future prospects. The corporate’s short-term obligations additionally exceed its liquid belongings, which could possibly be some extent of concern for its monetary well being within the fast future.

For readers concerned about a deeper evaluation, there are an extra 9 InvestingPro Suggestions obtainable at https://www.investing.com/professional/ONDS. The following pointers can present additional insights into Ondas Holdings Inc.’s monetary well being and market efficiency. To entry these helpful insights, use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Professional and Professional+ subscription.

Full transcript – Ondas (ONDS) Q1 2024:

Operator: Welcome to the Ondas Holdings Inc. First Quarter 2024 Convention Name. All individuals shall be in listen-only mode. [Operator Instructions] Earlier than we start, the Firm wish to remind you that this name could comprise forward-looking statements. Whereas these forward-looking statements replicate Ondas’ greatest present judgment, they’re topic to dangers and uncertainties that would trigger precise outcomes to vary materially from these implied by these forward-looking statements. These danger elements are mentioned in Ondas’ periodic SEC filings and within the earnings press launch issued at the moment, that are each obtainable on the Firm’s web site. Ondas undertakes no obligation to revise or replace any forward-looking statements to replicate future occasions or circumstances, besides as required by legislation. Throughout this name, Ondas will seek advice from sure non-GAAP monetary measures. These non-GAAP measures are usually not ready in accordance with Typically Accepted Accounting Ideas. A reconciliation of the non-GAAP monetary measures to essentially the most instantly comparable GAAP measures is proven in our press launch issued earlier at the moment, which is offered on the Investor Relations part of our web site. This non-GAAP info is offered as a complement to, not as an alternative choice to as superior to, measures of economic efficiency ready in accordance with GAAP. Nonetheless, administration believes these non-GAAP measures present buyers with helpful info on the underlying developments of our enterprise. Please notice this occasion is being recorded. I’d now like to show the presentation over to Eric Brock, Chairman and CEO. Please go forward.

Eric Brock: Thanks, operator, and good morning. I need to get began by welcoming everybody to our quarterly convention name. We respect the time you are spending with us and to your curiosity in our firm. I am pleased to be joined at the moment by key members of our management crew, together with our CFO, Yishay Curelaru, Man Simpson, the President and Chief Working Officer of Ondas Networks, Meir Kliner, President of Ondas Autonomous Methods, and the Founder and CEO of our Airobotics subsidiary; and Tim Tenne, CEO of American Robotics. Now let’s flip to the agenda. We’ll begin the decision with some transient feedback highlighting current enterprise developments at each Ondas Networks and Ondas Autonomous Methods enterprise models. I’ll then hand the decision to Yishay for a monetary evaluation of our first quarter 2024 outcomes. We’ll then present a enterprise replace for Ondas Networks and our OAS enterprise models the place I’ll ask Man, Meir and Tim to offer a commentary round present enterprise exercise. Then we’ll wrap the decision and open the ground for investor questions. I count on at the moment’s name to be on the shorter aspect given we have now shared an in depth replace on our final investor name simply six weeks in the past once we delivered our annual outcomes for 2023. That investor name lined fairly a little bit of exercise from Q1. Even so, we have now been productive within the final six weeks and as we’ll talk about, we have now superior our key enterprise priorities at each Ondas Networks and OAS enterprise models. Earlier than we dig into that, I need to begin by acknowledging the disappointing begin to 2024 from a income perspective. As we talked about on our name on April 1st, we count on a great 12 months from a development perspective. Nonetheless, our income shall be closely weighted to the second half of 2024 given headwinds we face to start out the 12 months specifically the prolonged timelines with the Class I railroads to deploy our know-how in upgrading the legacy 900 megahertz community, in addition to the interruptions with our OAS enterprise unit associated to the Gaza battle. Recall with the Gaza battle, the manufacturing of Optimus Methods was negatively impacted, which created a bottleneck in advancing advertising and marketing exercise. Nonetheless, we’re optimistic concerning the adoption cycle forward for our three know-how platforms, which embody after all Ondas Networks FullMAX dot16 compliant software-defined community platform, in addition to OAS’ Optimus System in iron-drone radar. The worth of our dot16 know-how was additional confirmed with the order we introduced at the moment to offer an upgraded 220 megahertz PTC knowledge radio for a key Northeast Hall passenger railroad. The client specs for this upgraded PTC knowledge radio required compatibility with the IEEE 802.16 wi-fi commonplace, which after all gives the shopper the flexibleness to have interaction a wi-fi community improve roadmap throughout that Northeast Hall. This can be a landmark deal and we’re very excited to open the passenger rail market and increase our serviceable addressable market or SAM to that very giant 220 megahertz community. We’re additionally enthusiastic about final week’s replace the place we highlighted the primary industrial order for our iron-drone platform. Iron-Drone Raider is a house run product with what we believed our marketing-leading efficiency specs. We have now labored intently with our buyer in protection companions so as to add much more functionality to the Raider and we sit up for sharing these particulars on the Raider specs and know-how enhancements at a later time. We count on to obtain extra orders for the Iron-Drone platform within the present months as we put together for quantity manufacturing and expanded advertising and marketing to different protection & safety prospects globally. These new orders for Ondas Networks and our OAS enterprise unit show the market management and the dear innovation we’re bringing to guard and safe provision of important companies and operation of important infrastructure belongings. At Ondas Networks, all indicators proceed to assist a serious development alternative beginning with the 900 megahertz community the place exercise continues to advance. On the 900 megahertz program, we have now made extra progress on the techniques integration effort we described on our final name. Man will present extra particulars, however I’m pleased to share upfront that we have now now accomplished the combination and backwards compatibility on the legacy 900 megahertz community with two railroads together with a Class I railroad in Chicago and with a smaller neighborhood rail system within the Southwest. Our progress was validated when our distribution accomplice obtained an order in early Might for a system-wide deployment on behalf of that dedicated railroad There’s nonetheless extra work in Chicago which is said to demonstrating the ultimate migration to the brand new 900 megahertz frequency band and that migration is being deliberate now. As we moved into 2024, we’re seeing broadening alternatives at OAS. With geopolitical complicated rising as evidenced by the tensions within the Ukraine, Center East and Taiwan, the necessity to defend and safe important infrastructure belongings and companies is a big focus from governments, protection and Homeland Safety officers, in addition to for operators of important know-how in industrial belongings. These tailwind are robust and strengthening and profit our Optimus and Iron-Drone platforms. Along with our milestone order for Iron-Drone we proceed to advance the shopper advertising and marketing exercise on our Optimus system. Our advertising and marketing efforts within the US and Europe including to a sturdy pipeline of engaging buyer actions whereas our efforts within the Center East continues to carry out properly. Meir and Tim will share extra particulars in a while the decision. And as Meir and Tim will talk about, the Optimus System stock availability is bettering. This may allow extra buyer exercise right here within the US and internationally and permits us to have interaction a rising and maturing buyer pipeline. I need to spotlight the partnership we signed final week with HHLA Sky, a drone companies unit of HHLA, the most important terminal operator on the Port of Hamburg in Germany, which is Europe’s third largest seaport. This is a vital relationship to the Ondas Autonomous Methods enterprise unit with HHLA Sky, we’re bringing a capability to drive free adoption of Optimus Methods and construct scalable aerial safety and knowledge intelligence applications the worldwide terminal operators the place our buyer pipeline is rising. I’d add that we consider HHLA Sky will even present entry throughout authorities and industrial markets in a big German drone market. So to wrap up the introduction, the weak first half income belies the worth we’re constructing with prospects throughout our know-how platforms. The order for the 220 megahertz PTC knowledge radio is a large sign of broad adoption of dot16 throughout world rail markets and the strategic worth of our FullMax connectivity platform. Additional, the commercialization of the Iron-Drone Raider transitions that platform to income technology and solidifies our OAS enterprise unit as an essential participant in a quick rising marketplace for Autonomous Methods offering safety and intelligence to important markets akin to protection, safety, public security and significant infrastructure operations in a world that is requiring increasingly of this experience. I’ll now hear the decision to Yishay to offer the detailed Q1 monetary replace. Yishay?

Yishay Curelaru: Thanks, Eric. As I get began, I need to remind our buyers that the figures we’re about to debate embody the inclusion of Airobotics monetary efficient from January twenty third 2023, following our profitable acquisition. This strategic transfer has considerably augmented our operational effectiveness and income streams, elevated our market presence and enhancing our shareholder worth. Additional, regardless of the added scale from the addition of Airobotics, as you will notice working anticipated each money and non-cash OpEx are down quarter-over-quarter reflecting an excessive give attention to OpEx effectivity. That may proceed. Turning to the Q1 ‘24 outcomes. We had a sluggish begin to the 12 months. Within the first quarter of ’24, revenues decreased to $625,000 in comparison with $2.6 million in Q1 ’23. The lower in revenues was primarily a results of prolonged timelines at Ondas Networks associated to the 900 megahertz actions with the Class I railroad and provide chain disruption linked to the Gaza Conflict at our Alvarez enterprise unit. For Ondas Community, revenues will fluctuate on quarter-to-quarter given the uncertainty round timing of buyer exercise in entrance of the focused industrial rollout within the 900 megahertz community. And growth applications underway with Siemens and MxV rail. Equally, revenues at OAS are anticipated to fluctuate from quarter-to-quarter and to normalize into extra predictable sample as we develop our buyer base and extra of these prospects enter flick applications and recurring service agreements in the US and internationally. Gross revenue decreased to damaging $400,000 for Q1, 24 as in comparison with $1 million for Q1 ‘23. Gross margin was damaging for Q1 ‘24 as in comparison with 39.6% for Q1 ‘23. The disappointing gross margin efficiency is primarily resulting from sub-scale operations given the low income recorded within the quarter relative to recurring value of companies offered, in addition to product growth prices overrun on sometimes low margin growth initiatives. Gross margin might be volatility on quarter-to-quarter foundation resulting from low income degree and shifts in quarter combine between merchandise, growth, and companies income. Please notice that we’re concentrating on greater gross margins at Ondas Community on new growth applications such because the PTC knowledge radio introduced at the moment. Working bills decreased to %8.7 million for Q1 ’24 as in comparison with $13.7 million in Q1 ‘23. The sharp drop in working bills was primarily resulting from controls on money exercise and decreased R&D exercise each in Networks and OAS. This lower in working bills emphasizes the continuing profit from the restructuring of our Ondas Autonomous System enterprise unit in reference to the combination of American Robotics and Airobotics after the Airobotics acquisition closed in January 23. The corporate narrowed working loss to $9.1 million for Q1 ‘24 as in comparison with $12.6 million for Q1 ’23. Though income decreased, our working loss improved 28% year-over-year and was largely pushed by robust expense management and decrease non-cash fees. Adjusted EBITDA loss narrowed 24% year-over-year to $7.7 million for Q1 ‘24 as in comparison with $10.2 million for Q1 ’23. Now let’s flip to the money movement assertion. We had money and money equivalents of $14.6 million as of most thirty first ’24, as in comparison with $14.2 million as of March thirty first 2023. Q1 money offered by financing included extra gross financing totaling $8.6 million. Money utilized in operations throughout Q1 ‘24 decreased by $5.3 million resulting from primarily the restructuring of our Ondas Autonomous System enterprise unit. We count on money utilization to enhance considerably s we transfer ahead into 2024. Improved money efficiencies come from working bills leveraged at each corporations as we focus spending on driving buyer adoption and development in revenues and gross income. As famous, we ended Q1 with $14.6 million in money. In February, we introduced an $8.6 million capital increase by the gross sales of Ondas Holdings widespread inventory and Ondas Networks most popular inventory in a financing led by Charles & Potomac Capital. As of most thirty first 2024, we had $27.4 million in convertible notes excellent. I need to spotlight that the convertible notes have maturities in April 2025 and July 2025, which implies we have now a while to handle the amortization and create situations to equitize the notes underneath extra favorable situation. It’s our goal to equitize these notes as quickly as we will through the use of shares to retire the notes both through month-to-month amortization or to see these notes convert totally to fairness previous to maturity. I’ll now hand over the decision again to Eric.

Eric Brock: Thanks, Yishay. Now we’ll transition to a evaluation of our enterprise models and ask Man Simpson and Meir Kliner to share updates on current exercise within the discipline with prospects and business companions. We will even ask Tim Tenne to share feedback relating to American Robotics and drill down a bit into the outlook for OAS in the US. As I hand the decision to Man, I need to reiterate that I’ve confidence in our means to develop an essential enterprise at Ondas Networks as we deploy wi-fi know-how that’s critically helpful for the rail prospects and the big industrial distributors in rising MC-IoT know-how ecosystem. We consider industrial deployments on 900 megahertz will start quickly actually this 12 months and that the chance in 900 megahertz, in addition to with the opposite non-public networks for the Class I rails along with world rail markets stays substantial. Man, please proceed.

Man Simpson: Thanks, Eric. I am pleased to be right here this morning and to share an Ondas Networks replace for our buyers. As acknowledged earlier within the name, we offered a really detailed standing replace on the 900 megahertz improve exercise just lately. And so my feedback at the moment will give attention to our incremental progress and outlook. I’m pleased to share that we have now achieved the techniques integration targets for our Airlink ATCS merchandise and demonstrated backwards compatibility within the stay legacy 900 megahertz community of a Class I railroad in Chicago. Our subsequent step with this railroad is to advance the migration of the put in Airlink techniques to the brand new 900 megahertz frequency band and what we consider we have now the best plan to just do that. This effort is at present being deliberate with the shopper and we count on to finish this migration effort within the second quarter. As well as, we have now accomplished a second techniques integration with a commuter railroad within the Southwest. Our distribution accomplice has already obtained an order on behalf of this buyer signaling their confidence in our means to improve the legacy 900 megahertz community. And let me spotlight, that is the primary system-wide industrial order within the 900 megahertz community. This can be a important milestone validating the progress we’re making with this essential community. Moreover, we’re beginning the now well-proven techniques integration course of with the Midwest commuter railroad. As we advisable, they’ve bought gear to ascertain a number of labs during which they are going to consider Airlink merchandise and dot16 know-how for numerous functions. The opposite Class I rails proceed to carefully monitor our progress. Success in Chicago is predicted to result in additional engagement with Class I rails on planning and timelines for their very own 900 megahertz networks. We, together with the rail prospects and Siemens have realized so much by these preliminary integration actions and we consider we have now created scalable processes that may be deployed in different areas throughout all railroad operations. We need to take a second and spotlight some current public statements by the AAR (NYSE:) relating to plans for the 900 megahertz community and a few key takeaways. On Might 2nd, the AAR submitted a remark letter to the FCC in response to regulatory filings associated to a 900 megahertz spectrum licenses. On this remark letter, the AAR made some robust statements associated to the worth of the brand new 900 megahertz spectrum and the networks for prepare operations. Additionally the AAR acknowledged that the 900 megahertz frequency band was important, extremely helpful and that the 900 megahertz community was a key part of the business’s next-generation community plans. Moreover, they signaled the important function that dot16 wi-fi know-how will play within the 900 megahertz build-out, whereas additionally referencing the opposite non-public license spectrum bands. I remind our buyers that the railroads at present function 4 Mission Crucial non-public networks throughout the 160, 220, 450 and 900 megahertz frequency bands. We consider the AAR’s reference to future progressive applied sciences and – throughout the complete suite of spectrum bands, highlights the chance for Ondas and its dot16 platforms to assist community upgrades throughout the entire legacy networks operated by the railroads. We’ll proceed to work laborious to comprehend this huge market alternative and assist the AAR’s necessities. Let’s flip now to the key announcement we made at the moment relating to the 220 megahertz PTC knowledge radio. Ondas Networks has entered into an settlement with our distribution accomplice to offer an upgraded on locomotive radio for a key Northeast hall passenger railroad. This radio shall be backwards appropriate with the legacy 220 megahertz community and hosts constructive prepare management, a important security software. Importantly, this new radio will exchange a discontinued legacy radio and is designed for adoption throughout the Northeast hall, the place a monitor is shared by different passenger transit and even freight railroad operators. The brand new 220 knowledge radio will supply an improve cross to dot16, which was a particular requirement of the rail buyer. I need to know that this venture has already began and we’re on monitor to ship manufacturing radios within the first quarter of 2025. One remaining notice on the 220 megahertz program. This win represents a brand new rail market, passenger and transit, a brand new non-public community 220 megahertz and a brand new software, constructive prepare management. Briefly, it expands our service addressable market or SAM within the rail sector. As well as, our work with the AAR and particularly with MxV Rail continues the purpose to increase it engagement relating to new networks and functions. For instance, work with the Class I railroads on advancing the commercialization of our base station controller to offer dynamic frequency useful resource administration and on new use instances for 900 megahertz. Together with CTC over ITCM to offer the required redundancy for the 220 megahertz PTC security community. Now I’ll hand the decision again to Eric. Eric?

Eric Brock: Thanks, Man. I’ll now ask Meir Kliner to take the ground and replace us on progress at Ondas Autonomous Methods and supply perception into current developments at OAS and the outlook from right here. Meir?

Meir Kliner: Thanks, Eric. Within the first quarter, we introduced the formation of Ondas Autonomous Holding Inc, OAH. This newly shaped one holding firm is meant to reinforce our operational and monetary flexibility as we scale our one enterprise worldwide. OAH will leverage our market-leading autonomous drone platforms, the Optimus System and the Iron-Drone Raider, by driving centered and scalable working fashions focused in the direction of offering complete space of safety and knowledge options for particular business verticals. After all, these preliminary vertical markets the place we’re demonstrating scalable go to market success together with public security and emergency response, important infrastructure, development venture administration and datacenters. Our buyer pipeline has expanded considerably in current months. As our investments in our companies group in each US and Europe, which embody partnerships like we introduced final week with HHLA Sky and C-Astral Aerospace start to mature. Our means to satisfy this rising demand visibility has improved with Optimus System manufacturing now catching up after the dislocation from the Gaza Conflict. On manufacturing, we count on to obtain supply of the 15 techniques at present being produced by Q3 2024. We’re planning to increase manufacturing behind these techniques. Throughout Q1, Airobotics secured an expanded companies settlement to assist the rising fleet of our Optimus Methods within the UAE and Israel. Moreover, Airobotics continued its growth within the United Arab Emirates, the place an area governmental entity is deploying the world’s first drone community infrastructure for public security and different public companies. This initiative is predicted to proceed aiming to realize a fleet of greater than 20 techniques by the tip of 2025. As we proceed to assist this community growth, we see a rising potential for expanded industrial use instances within the UAE and we hope to have extra to say on this later this 12 months. Within the counter-drone area, we have now efficiently accomplished the pressing works to tailor the Iron-Drone Raider system for sure navy necessities. This achievement is clear in our current announcement of preliminary buy order for main protection firm. We consider the system specs for the raider are best-in-class and even disruptive as in comparison with different techniques available in the market. The unimaginable effort and accomplishments by our crew positions Ondas very properly in a fast-growing market. Whereas Tim Tenne will present an replace on US enterprise exercise, I need to spotlight our enterprise growth actions in Europe, the place we have now established a advertising and marketing effort that features the formation of latest partnerships that assist leverage the native market experience of those three raiders. We consider the market potential in Europe is critical the place we will carry our huge expertise and credibility in defending and monitoring important belongings to key prospects in transportation, development, and plenty of different important operations. I need to end my ready remarks by highlighting that we’re working Airobotics and American robotics in a full synergy successfully bringing to the desk the core benefits of OAH. Collectively, we’re leveraging world-class know-how with confirmed worth and reliability, which we’re combining with scalable options concentrating on at focus vertical markets and use instances. I’ll now hand the decision over to Tim Tenne, CEO of American Robotics to offer an replace on the enterprise achievements we’re making at American Robotics.

Tim Tenne: Thanks, Meir. Through the first quarter, we efficiently accomplished a proof-of-value program with the Mass Division of Transportation Aeronautical division, which included flawless demonstrations of the Optimus System and our newly positioned Kestrel Detect-and-avoid answer on the Massachusetts Maritime Academy. These demonstrations showcased our means to function the Optimus System constantly with distant operations past visible line of sights. This demonstration is continuous to drive a maturing pipeline inside the protection, federal date and industrial segments, which positions us properly for profitable gross sales and deployments. We have now additionally expanded our ecosystem round discipline operations and know-how infrastructure, through new partnerships at American Robotics. For instance, we secured a partnership with Senhive, a number one supplier of inexpensive passive detection system for drones, also referred to as a counter unmanned plane system in addition to extra functionality for monitoring, taking part in non-cooperative air site visitors Moreover, we have now partnered with ResilienX, a pacesetter and knowledge high quality assurance and real-time aviation security administration techniques for extremely automated and autonomous techniques. Collectively, these partnerships will help Ondas in elevating autonomous drone operations by superior integration of airspace security and administration techniques. American Robotics engaged within the Inexperienced UAS program to certify compliance with the best ranges of cyber safety and provide chain necessities of the US Nationwide Protection Authorization Act. The Inexperienced UAS program is run by the Affiliation for Uncrewed Car Methods Worldwide in partnership with the US Division of Protection and plenty of state governments with the aim of enhancing the nation’s UAS know-how base. American Robotics expects to finish the Inexperienced UAS qualification throughout quarter three. We count on to be accomplished on the construct out of our new demonstration, coaching and operations heart to be launched at our Baltimore County Maryland headquarters in June. We sit up for sharing extra detailed info with everybody quickly. We’re seeing an elevated demand for the deployment of the Optimus System with potential prospects in each authorities and industrial segments. Lastly, American Robotics is advancing its go to market plans and US protection and safety markets with each Optimus and Iron-Drone. We anticipate new alternatives that can come into impact in the course of the second half of 2024 and I sit up for protecting our buyers knowledgeable on these actions. I’ll now hand the decision again to Eric.

Eric Brock: Let’s wrap a name now and summarize the outlook and supply context for the place we’re. We will proceed to carry off and offering a proper outlook for 2024. We need to be conservative given we nonetheless have to safe that preliminary 900 megahertz order. We do consider order and income visibility will enhance within the second half. We proceed to work laborious within the current AAR public remark suggests the railroads are intending to construct out the $900 megahertz community and it additionally means that they are going to have some urgency. For OAS, buyer engagement, conversations and negotiations and orders, in addition to discipline trials proceed to construct and the supply of Optimus Methods will assist assist a restoration in income development. The varied distribution partnerships we have now secured, such because the HHLA Sky announcement final week are additionally anticipated so as to add to our income within the second half. Lastly, Iron-Drone shall be accretive to the income outlook, now that has been formally launched and accepted by an important reference buyer. So the outlook stays constructive for Ondas. I perceive could also be annoyed with our uneven efficiency from a monetary and operational standpoint. We share your frustrations, particularly giving our perception that we have now created extraordinarily helpful know-how platforms in very giant excessive development end-markets. We’re persevering with to work laborious to ship this to you. We’re engaged on enterprise plans and funding methods, which embody capital methods at our OAH enterprise unit, which we consider will speed up the execution of its marketing strategy. My confidence stays excessive. We’re doing superb issues for our prospects and companions and it’s our job to guarantee that we, which means our buyers and our crew shall be rewarded. It is not straightforward for positive, however we stay 100% dedicated and we’ll work laborious to ship for you. With that mentioned, let’s have a look at if there are any questions. Operator?

Operator: [Operator Instructions] The primary query comes from Tim Horan with Oppenheimer. Please go forward.

Tim Horan: Hello guys. Hello Eric. It is nice that the rails sort of reaffirm to the FCC assembly the sort of deadline to clear the spectrum. Are you able to simply give us somewhat bit extra coloration on how a lot you assume they should spend to satisfy the intent in that letter? And only a tough replace while you consider income begin coming in?

Eric Brock: Okay. So, by way of sizing, we nonetheless take a look at the TAM as what we have shared with you usually previously. I do – I’d level to particular numbers that the AAR used of their remark letter. I believe that is a pleasant quantity that they’ve used by way of dimension. Nonetheless, I believe it does seek advice from legacy gear. So, it isn’t essentially apples-to-apples. After which, by way of timing, as we have been discussing within the final couple of calls, we’re very lively throughout the board with the AAR and particularly in Chicago and that exercise is being watched very carefully. We do consider that that we are going to have success there and that can result in industrial orders and additional engagement with different railroads on their plans for upgrading the legacy networks?

Tim Horan: So, is there any change in – it has been a couple of years I believe because you upgraded the TAM. Is there any change in your pricing technique or scope of the work in anyway? And do you assume you may I suppose, you might have a greatest guess on when the revenues would possibly begin coming in at this level. It looks as if it’s a number of the agency orders now that revenues are most likely extra like subsequent 12 months? [Indiscernible]

Eric Brock: Yeah, so, I do not need to make any commitments by way of timelines, as a result of we do want the visibility. I do would refer once more and Man lined this within the AAR assertion that they are anticipating to satisfy the deadlines to maneuver up the legacy community. And as a reminder, these are September 2025. As well as, there’s a build-out requirement. The railroads have to point out substantial protection to the FCC and that deadline is April 2026. So the preliminary deadlines lower than 18 months away and April 2026 is about two years. And really lower than two years. So we’re going to get busy. And I suppose, that’s all I can let you know, Tim. I do need to maintain off on placing stakes within the floor on the income aspect till we get orders. I’ll add if orders come, that we have now constructed a little bit of stock. So we might be responsive. However there you go.

Tim Horan: Nice. And might you then, perhaps simply replace us in your liquidity state of affairs, do you assume it’s worthwhile to increase extra capital at this level A? And B, are you able to simply remind us what your absolutely diluted shares excellent at the moment are on a completely diluted foundation?

Eric Brock: Oh gee, I haven’t got that in entrance of me on the share account. I’ll should get again to you.

Tim Horan: Okay.

Eric Brock: However on the liquidity aspect, we do count on to lift capital. And I’ve mentioned that on the final name six weeks in the past and we pointed particularly to some exercise with OAH. So I might like to only go away it at that.

Tim Horan: Okay. So do you assume this money burn price is sort of good for one more quarter or two or will there be any adjustments to the money burn?

Eric Brock: Yeah, I believe you may see our money OpEx at these ranges after which on the income aspect, we’ll drive or I might say perhaps these ranges are perhaps barely decrease after which we glance into the second half the place gross revenue technology is selecting up with income and we wish to have that drive the money utilization down.

Tim Horan: Thanks.

Operator: Our subsequent query comes from Glenn Mattson with Ladenburg Thalmann. Please go forward.

Glenn Mattson: Hey guys. Thanks for taking the questions. Yeah, simply are you able to give us a way on the OAH aspect about there’s been, I suppose, somewhat little bit of push-out primarily based on a number of the disruptions you talked about. Simply are you able to give us a way of the scope of what do you are feeling – do you see for that unit versus the place you have been say initially coming into the 12 months?

Eric Brock: Yeah, so, I count on our drone companies to be up year-over-year on income. The explanation for the work in first half weak point is simply clearly the conflict which was disruptive. And we’ve shared that with you. At OAH, there’s pent-up demand and I need to be particular or cautious concerning the specifics on a number of the pipelines, however clearly there’s and naturally that is for aggressive causes. However we’re seeing fairly a little bit of that exercise in public security, the Dubai Police and the UAE Governmental Entity proceed to be very lively and we’re having nice success increasing the fleet there and we expect that continues. They’ve publicly restated once more their intent to construct a citywide infrastructure. And we do see industrial exercise or industrial alternatives within the UAE as properly. That exercise in Dubai is resulting in extra engagement with world safety and legislation enforcement teams. So we’re very inspired by that. $we have now highlighted a number of the demand we’re seeing from ports supreme and particularly a aspect ports we speak about terminal operators, the place we’re sort of constructing particular applications round safety within the aerial intelligence or inspection and the HHLA Sky relationship that we established this quarter is an effective instance of us within the route we’re heading there. Definitely, the departments of transportation and different authorities companies are engaged. So we see fairly a little bit of alternative and I’d additionally add that we have now a brand new income producing platform within the Iron-Drone Raider. We did announce that order final week. We predict extra orders. In order that’s going to assist assist income development this 12 months.

Glenn Mattson: Okay. On Iron-Drone, while you – because the pipeline begins to construct or no matter, is it extra for – are you saying for extra navy functions or is it generally like extra safety and public security kind of issues and what do you assume while you’re while you’re competing towards different drone platforms or no matter on that kind of software, the place do you assume you stand there? What do you see when there’s like a bake off versus you or someone else executed this?

Eric Brock: Yeah, so the preliminary demand right here is clearly going to be for navy use instances and that is the place our first orders will come. And we see – we consider with this buyer that we have now substantial development alternative. Now, I might additionally say we’re seeing fairly a little bit of curiosity from different governments, homeland safety teams and protection teams, as properly. In order that’s the place you are going to see us play. And we really feel particularly for the county us platforms that intercept hostile drones that the specs that we’re bringing to the desk and the reliability that we’re demonstrating that we have now a best-in-class product. So, the marketplace for counter-drone techniques is huge and rising very quickly. So we expect we’re properly positioned there to construct a really good enterprise. And that’s going to be beginning proper now after a whole lot of effort.

Glenn Mattson: Nice. And perhaps a identical query on the Optimus simply while you’re competing for ports and that sort of stuff, is it – are you the sort of go to answer that folks simply have to convert to grow to be a drone operators customers kind factor? Or is there may be there oftentimes there’s two or three rivals going for that enterprise and also you’re having to compete on both options or value or something like that?

Eric Brock: So it is – so, I suppose I will share with you the way I take a look at it’s, the answer we provide from a reliability and performance standpoint, is admittedly unmatched. We are able to present safety, intelligence. We are able to do it 24 hours a day, seven days per week. And that is an extremely helpful answer. We do see fairly a little bit of exercise in these markets utilizing drones, however most of them are piloted single goal. They do not have the persistency. And once more, the intelligence, the vary of options that we will carry from an analytics standpoint. So, as you see, as spending develop with the worth of the drone being realized and integrated into the workflows, I believe that what we’re doing is extraordinarily aggressive. And I believe that we’re going to be serving to drive development in these markets. So I like our place.

Glenn Mattson: Okay nice. Thanks for the colour guys.

Eric Brock: Thanks, Glenn.

Operator: Our subsequent query comes from Carter Mansbach with Forte Capital Group. Please go forward.

Carter Mansbach: Good morning, guys. So, I suppose, congratulations on the $2.8 billion commuter. Is there any method that we will know the title of the corporate that you simply signal this contract with and if not, why?

Eric Brock: What I will say is that, there – let me let me offer you some background on the request for proposal that got here from a pair completely different locations within the Northeast hall together with Amtrak. And people are publicly disclosed RFPs. As a result of the customized engagement we have had is coming with our accomplice Siemens. So this order that for us comes from Siemens. Siemens may be very lively with all of the northeast hall prospects. So, I do not need to say particularly, Carter. But it surely’s a it is a radio for a key northeast hall buyer and we consider that the northeast hall rails which incorporates MBTA, New Jersey Transit, Lengthy Island rail, MTA and Amtrak, in addition to sure straight rail operators like CSX (NASDAQ:). They would be the goal for this radio. And it is essential to additionally perceive that this radio is being developed as a result of the legacy radio is finish of life and has been discontinued.

Carter Mansbach: Okay. That is useful. So, with AAR dialog has been floated about, you guys talked about it, Tim talked about it. So the quantity in that optical or that piece was $69 million. So what piece of that motion could possibly be advised on this?

Eric Brock: Although I am unable to speak particularly about these numbers, as a result of these are AAR numbers they usually calculate themselves, what I’ll say is that, within the new A band, as they name the brand new 900 megahertz frequency, that we’re so far as we all know, the one radio that is licensed. The one system, wi-fi system that’s licensed by the FCC to function.

Carter Mansbach: Okay. All proper. Final query relating to this spin-off of the drone business enterprise. Can we get any kind of really feel as to what the timeframe is, or since you mentioned it within the final name, I do not perceive that, I believe that buyers don’t perceive how logistically that is going to occur. Are you able to give us any coloration as to how it should occur? And when you are going to be discussing it additional? Thanks.

Eric Brock: I am unable to – I am unable to offer you specifics on that. What I did say – reiterate is that the conversations with buyers are lively. So and I will say, there’s quite a lot of eventualities that would play out at the moment and sooner or later which contain funding and doubtlessly spinning the corporate off right into a separate entity.

Carter Mansbach: Okay. Thanks. Respect it.

Eric Brock: After all.

Operator: Our subsequent query comes from Mike Latimore with Northland Capital. Please go forward.

Aditya Iyer: Hello, that is Aditya on behalf of Mike Latimore. May you give us some coloration on what sort of income combine between Autonomous Methods and Networks may we count on for this 12 months?

Eric Brock: Effectively, I’d say the outlook for the 12 months is our Autonomous Methods enterprise unit will doubtless have greater income than Ondas Networks, however I do not need to forecast the combination.

Aditya Iyer: Bought it. And likewise may you give some coloration on what’s the common promoting value in your counter-drones?

Eric Brock: We’re not disclosing that in the intervening time for aggressive causes.

Aditya Iyer: Alright. Thanks.

Eric Brock: I’ll let you know that we consider it should – that is very helpful product. It is at value factors which can be very aggressive. And I believe decrease than different techniques that we see on the market. And that we will ship it at a really engaging margin.

Aditya Iyer: Bought it. Thanks.

Eric Brock: Positive. Thanks.

Operator: Our subsequent query comes from Matthew Galinko with Maxim Group. Please go forward.

Matthew Galinko: Hey, good morning. Thanks for taking my questions. I am questioning how a lot customized integration work you count on to be required because the Raiders bought to different navy and protection functions.

Eric Brock: A superb query, Matt. I do not assume we essentially have a whole lot of work on the system itself, proper? So the UAE and the docking station. Nonetheless, once we go to different markets, there could also be completely different detect applied sciences and once we speak concerning the detect we’re sometimes speaking about raider techniques or radar techniques, I am sorry. So, if we have now a special radar system, we have to combine into that radar system which is a reasonably simple course of and never essentially very pricey.

Matthew Galinko: Bought it. Okay. After which, I suppose a comply with as much as that’s, simply given a number of the provide chain hiccups you have seen on the Optimus aspect, do you count on or how do you navigate any limitations or ongoing limitations on the subject of scaling up the raider enterprise?

Eric Brock: Yeah, good query. So the present plans are to supply the Raider in Israel. And as we entry prospects globally, we’re prone to produce in different areas, as properly. I will let you know that the complexity with the Raider system is dramatically lower than what we see with the Optimus system. That is not construct supplies in a construct standpoint. So, we expect we have got this present – the orders that we’re monitoring now, we expect we will produce and we’ve recognized the plan to do this. However once more, I do assume I will say this for each Optimus and Raider. We could have plans to construct in different elements of the world. And we’ll add extra specifics to that once we’re prepared to take action.

Matthew Galinko: Nice. And I suppose a remaining query on that thread in simply looking to 2025, I do know you are not giving a 2024 outlook. However relative to the way you see demand on the Autonomous aspect creating on each Optimus and Raider aspect, do you to count on that raider may have pull-through in ‘25 that that outpaces Optimus or is it going to be a extra gradual uptake?

Eric Brock: Nice query. So I consider 2025 for each platforms goes to be important. I believe that I’d say Optimus will nonetheless be bigger from a income standpoint the place we’ll see income pushed is thru current prospects and fleet adoption, however as we’re shifting this 12 months by 2024, you’ll be able to see quite a lot of very important prospects have interaction, which is able to begin to flip into fleets in 2025, as properly. So, there’s a whole lot of pent-up demand for what we’re doing right here with Optimus. Identical time identical factor with Raider. The Raider will increase what the prevailing buyer is our robust perception. However we expect we’re going to have the ability to have interaction different homeland safety and protection teams. And also you add all up given the income fashions, I believe Optimus will most likely nonetheless be a bigger than higher however they’re each sort of develop considerably.

Matthew Galinko: Nice. Thanks.

Operator: [Operator Instructions] This concludes our query any solutions session. I wish to flip the convention again over to Eric Brock for any closing remarks.

Eric Brock: Okay. Thanks, operator. I am simply going to shut a name by merely thanking you once more for attending. We have now a whole lot of work forward and we’ll get proper again at it. And we sit up for protecting you knowledgeable on our progress. I hope you might have an incredible day.

Operator: The convention is now concluded. Thanks to your attending at the moment’s presentation. You could now disconnect.

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