Ondas Boosts Annual Revenue Forecast Amid Rising Losses from Executive Compensation
The American-Israeli defense company Ondas, which recently recruited former Mossad chief Dedi Barnea, is beginning to generate significant revenues but continues to report heavy losses. Following an extensive acquisition spree of Israeli defense firms and hiring their executives, Ondas reported second-quarter revenues of $84 million, a 14-fold increase from $6 million in the same quarter last year. This marks nearly a 70% rise compared to $50 million in the first quarter of 2024. During the quarter, Ondas secured new orders worth $175 million, with an additional $105 million in orders added since the start of the third quarter, bringing its order backlog to $613 million. Consequently, the company raised its full-year revenue forecast to between $525 million and $550 million.
Ondas, valued at $5.5 billion, now trades at a revenue multiple of about 10, which is high but more reasonable than before. The company expects accelerated growth of 76% in the second quarter, projecting revenues between $140 million and $155 million. Once a nearly inactive American firm, Ondas has aggressively acquired 15 Israeli defense companies over the past two years, including drone manufacturer Aerobotics and Omnisis, purchased for $200 million in May. The company also recently won a Ministry of Defense tender to supply attack drones, despite the contract initially being awarded to two Israeli startups, Kela and Izatop. These moves are led by Oshri Logsi, former IDF chief engineer and Rafael marketing VP.
Ondas’ stock price has doubled in the past year, reflecting its expansion and capital raises. The company ended the quarter with $1.4 billion in cash, enabling further acquisitions and recruitment of senior Israeli defense officials who leave government roles for lucrative compensation packages. However, these executive compensations have significantly increased operating expenses, which nearly tripled to $199 million in the quarter, including $67 million in stock-based pay. As a result, Ondas’ operating loss deepened to $163 million, compared to $43 million in the previous quarter, with a net loss of $90 million partially offset by financing income from its large cash reserves. The company anticipates a notable reduction in expenses in the third quarter. Ondas is also expanding its workforce, adding 560 employees in the last quarter, including 155 engineers.
