Ondas Holdings Inc. (ONDS) significantly boosted its full-year revenue outlook on Thursday, projecting at least $390 million in 2026 revenue, following a dramatic first-quarter sales surge that propelled the defense-drone company's stock higher. The company reported first-quarter revenue of $50.1 million, a substantial increase from $4.3 million in the same period last year, driven by strong demand for counter-unmanned aircraft systems (counter-UAS) and intelligence, surveillance, and reconnaissance (ISR) technologies.
Shares of Ondas traded near $11.20 early Friday, after a 27% jump on Thursday, outperforming a mixed defense sector. Palantir Technologies (PLTR) rose 2.8%, AeroVironment (AVAV) gained 2.7%, while Karman Holdings slipped 1.9%.
Financial Performance and Backlog
Despite the revenue surge, Ondas posted an operating loss of $42.7 million, with operating expenses climbing to $67.3 million. The adjusted EBITDA loss widened to $10.9 million. Gross profit improved to $24.7 million, lifting the gross margin to 49% from 35% a year earlier. The company's pro forma backlog expanded to $457 million, up from $68.3 million at the end of 2025, reflecting both new orders and contributions from recent acquisitions.
Chairman and CEO Eric Brock highlighted the strong visibility into 2026 targets, citing "powerful demand tailwinds" in counter-UAS and defense robotics. Key platforms include the Sentrycs and Iron Drone systems.
Strategic Moves and Partnerships
Ondas is deepening its involvement in U.S. and allied defense through deals with Mistral and World View. Through Mistral, Ondas joins a U.S. Army loitering-munitions program. The World View partnership provides access to high-altitude balloon systems for persistent ISR, filling a niche between conventional aircraft and satellites.
In March, Palantir announced plans to collaborate with Ondas and World View on AI-driven multi-domain ISR, covering production software, mission planning, and edge operations. Integration could begin as early as the fourth quarter of this year.
Analyst Questions and Caveats
On Thursday's earnings call, analysts pressed management on organic growth, gross margins, Middle East demand, Mistral's defense ties, and software revenue. Stifel's Jonathan Siegmann raised concerns about operating in active conflict zones. Brock acknowledged the challenges but stated, "we're used to working under this pressure."
The company cautioned that gross margins could be lumpy, and adjusted EBITDA losses are expected to remain elevated in the second quarter before improving in the second half of the year. Ondas reported net income of $361.2 million, but that figure includes a $389.5 million non-cash gain from warrant liabilities and a $51.5 million benefit from deconsolidating Ondas Networks, leaving the operating loss unchanged.
A potential share overhang was flagged in a May 13 filing, with roughly 2.8 million shares eligible for resale by holders linked to the Mistral deal. The company will not receive proceeds from those sales, and sellers face trading-volume restrictions.
Ondas is viewed as a fast-growth defense-tech play, but the key challenge remains execution—shipping products, managing integrations, and protecting margins. The company targets adjusted EBITDA profitability across the board by Q1 2028.
