Ondas Inc (ONDS) saw its shares climb 9% in midday trading Tuesday, as investors continued to embrace the defense-drone company's aggressive growth strategy. The Nasdaq-listed stock traded near $9.90, with volume surging to over 52 million shares intraday.
The rally followed the closing of Ondas' all-stock acquisition of Israel-based Omnisys Ltd, valued at $196.6 million, and a first-quarter revenue report that dramatically outpaced year-ago figures. The company's first-quarter revenue reached $50.1 million, compared to just $4.3 million in the same period last year, fueled by a series of recent acquisitions.
Ondas is now being viewed by the market not as a small-cap wireless networking play, but as a defense technology consolidator. Management has set a target of at least $390 million in revenue for 2026, supported by a pro forma backlog of $457 million. That backlog represents signed contracts and orders not yet recognized as revenue. Recent deals, including the acquisitions of Mistral Inc and World View Enterprises, both closed in April, have contributed to the growing pipeline.
The Omnisys acquisition, finalized on May 21, was executed through a stock-for-stock transaction. According to a U.S. securities filing, Ondas acquired all outstanding shares of Omnisys, with the majority of the consideration to be paid in stock installments over time. Omnisys develops the Battle Resource Optimization (BRO) software platform, which integrates data from multiple sensors, command systems, and platforms to accelerate asset allocation in multi-domain defense planning. Ondas expects Omnisys to contribute more than $100 million in revenue across 2026 and 2027, with high margins.
Eric Brock, CEO of Ondas, described the Omnisys platform as a "major advancement" for the company's defense systems strategy. Omnisys CEO Ofer Yarden noted that Ondas' global reach and resources will help expand the company's presence in international markets. The acquisition adds to Ondas' growing portfolio of Israeli defense and robotics companies, which already includes Airobotics, Sentrycs, RoboTeam, and INDO. Omnisys, based in Rosh Ha'ayin, employs approximately 185 people in Israel.
Ondas' first-quarter results reflect the impact of its acquisition spree. The company reported $34.7 million in revenue from businesses acquired since March 31, 2025. Sentry CS Ltd contributed $15.8 million, while Airobotics added $11.4 million. Despite the revenue growth, the company posted a gross profit of $24.7 million but recorded an operating loss of $42.7 million, as operating expenses climbed to $67.3 million. Adjusted EBITDA remained negative at $10.9 million.
Needham & Company maintained a Buy rating and $23 price target on Ondas following the Omnisys acquisition, calling it a strategic move to add a software orchestration layer to Ondas' autonomous defense stack. Needham estimates that Omnisys could boost 2026 pro forma revenue by $30 million to $40 million, with additional upside possible in 2027.
Other defense and drone stocks also moved higher Tuesday. AeroVironment added about 5%, Red Cat Holdings gained roughly 5%, and Palantir Technologies, a partner of Ondas, traded slightly higher.
However, concerns about execution remain. Ondas is integrating multiple businesses and funding deals with new shares, and its stock has already seen a significant run-up. Selena Maranjian at Motley Fool cautioned that she is staying away due to valuation, citing a price-to-sales ratio of 36.3 and ongoing losses. For now, the market is betting that Ondas can leverage its backlog, recent acquisitions, and defense contracts to build a larger, software-centric business. The next challenge will be execution: converting orders into revenue while managing integration costs, dilution, and margin pressures.
