Ondas Q3 Sales Rose 16x; New Add-Backs Cut EBITDA Loss $17M

Ondas, a maker of autonomous systems and defence technologies, reported third-quarter revenue of $167.5 million on 12 November, more than 16 times the $10.1 million of a year earlier. Its results release, filed with the SEC as an exhibit to a Form 8-K, also added three new items to its adjusted EBITDA reconciliation this quarter. Together they total $17.1 million, by our arithmetic.

Adjusted EBITDA was a loss of $59.7 million. Backlog rose 36% in the quarter to $835 million, and Ondas raised its 2026 revenue target to at least $550 million. Wall St Engine’s results card on X put the revenue estimate at $148 million and the adjusted EBITDA estimate at a loss of $39.8 million.

Business Pill · Backlog

An evergreen Business Engineer explainer on backlog: revenue that is signed but not yet earned. It teaches the general idea only and does not discuss Ondas.

The New Add-Backs

The release says that beginning with the period ended 30 September the company “further revised the definition of Adjusted EBITDA to exclude acquisition related inventory fair value step ups, qualifying acquisition related employee costs and qualifying acquisition integration costs”. In the third quarter those lines were $9.6 million, $7.3 million and $0.2 million.

Without those three lines, third-quarter adjusted EBITDA would have been a loss of about $76.8 million, by our arithmetic. The second-quarter release of 13 August reported an adjusted EBITDA loss of $50.6 million. On that like-for-like basis the loss widened about 52% in the quarter, by our arithmetic, against about 29% on the figures in the new release.

The new release shows the second quarter at a loss of $46.2 million, with $4.4 million of qualifying acquisition-related employee costs added back in that column. That is the gap to the $50.6 million in the August release, by our arithmetic. The release says the revisions “did not affect previously reported non-GAAP measures”.

Where the Revenue Came From

Revenue roughly doubled from $83.8 million in the second quarter. On a pro forma organic basis, assuming the current businesses were owned in both periods, revenue rose 64% from a year earlier, the company says. It credits “strong performance across the Company’s portfolio, particularly C-UAS systems”, meaning counter-drone systems.

Gross margin fell to 21.8% from 43.1% in the second quarter. The release ties the drop to higher amortization of capitalized intellectual property, the step-up in acquired inventory under purchase accounting and “inefficiencies in the early stages of ramping large programs”. Adjusted gross margin was 34.8%, against 50.4%.

New orders were $214 million. The release highlights $100 million of bookings at Ondas Sentinel, its U.S. defence platform, anchored by $53.7 million of ULTRA follow-on orders, and $21.7 million of IonStrike orders. Backlog of $835 million is about 5.0 times third-quarter revenue, by our arithmetic. Other defence-autonomy companies we covered this month raised private money, among them drone maker UFORCE and Shield AI.

Losses, Warrants and the Balance Sheet

Operating expenses were $226.0 million, including $57.8 million of stock-based compensation, $25.3 million of amortization and $14.1 million of acquisition-related cash expenses. The operating loss was $189.5 million. Other income of $133.1 million included $125.1 million of non-cash gains on warrants, and the net loss was $64.7 million.

Over nine months, other income of $581.4 million exceeded the $395.1 million operating loss, and Ondas reported nine-month net income of $206.9 million while adjusted EBITDA was a loss of $116.8 million. The warrant liability stood at $918.6 million on 30 September, against $489.4 million at the end of 2025.

Goodwill of $1.50 billion and intangible assets of $1.03 billion made up about 63% of total assets of $4.03 billion, by our arithmetic, after six acquisitions including DZYNE Technologies. Cash, restricted cash and short-term investments were $820.3 million. Shares outstanding were 590.2 million, up about 55% from 380.8 million at the end of 2025, by our arithmetic.

The Guidance

Ondas targets 2026 revenue of at least $550 million, up from $525 million to $550 million, and more than $250 million in the fourth quarter. It issued a 2027 revenue target of at least $1.1 billion, excluding additional acquisitions, which it says is 100% growth and more than 40% organic growth.

The company expects adjusted EBITDA profitability at the operating-platform level in the fourth quarter and now expects company-wide adjusted EBITDA profitability by the third quarter of 2027, one quarter earlier than before. It also formed Regna AI, which the release says will use NVIDIA’s Nemotron open-weight models and Palantir’s platforms for sovereign AI customers.

The Structural Read

As we read the two releases together, the like-for-like comparison is the August figure of $50.6 million against about $76.8 million for the third quarter on the same definition, a loss about 52% wider, by our arithmetic.

As we read the order book, backlog of $835 million is about 5.0 times third-quarter revenue, by our arithmetic, and the company says it expects backlog to grow again in the fourth quarter.

Three Implications

FOR SHAREHOLDERS Shares outstanding rose about 55% since the end of 2025, by our arithmetic, and the warrant liability stood at $918.6 million on 30 September.

FOR DEFENCE CUSTOMERS The release lists $53.7 million of ULTRA follow-on orders, $21.7 million of IonStrike orders and a U.S. Army follow-on task order under the Lethal Unmanned Systems IDIQ.

FOR THE 2027 TARGET Ondas targets at least $1.1 billion of 2027 revenue, excluding additional acquisitions, and company-wide adjusted EBITDA profitability by the third quarter of 2027.

What Is Not Established

The release does not give a cash flow statement, break revenue down by acquired business, or say how much of the fourth-quarter target is already in backlog. It does not reconcile the $46.2 million second-quarter figure with the $50.6 million in the August release beyond the revised definitions. The Form 10-Q was not on EDGAR when we checked at 13:50 UTC, so the risk factors could not be compared. We did not contact the company.

The Bottom Line

Ondas reported $167.5 million of third-quarter revenue and an $835 million backlog. Three add-backs new this quarter totalled $17.1 million, by our arithmetic; on the definition in the August release the adjusted EBITDA loss would have been about $76.8 million, up about 52% in the quarter, by our arithmetic, rather than the reported $59.7 million.