Ondas Holdings Inc. (ONDS) Misses Q1 EPS by 2c, Revenues Miss; Offers 2Q Revenues Guidance Below Consensus
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Ondas Holdings Inc. (NASDAQ: ONDS) reported Q1 EPS of ($0.12), $0.02 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $1.16 million versus the consensus estimate of $1.21 million.
Revenues for the first quarter of 2021 were approximately $1.2 million, an increase of $1.0 million compared to the same period in 2020. Gross profit was approximately $0.6 million in the first quarter of 2021, an increase of approximately $0.6 million compared to the same period in 2020. The increases in revenue and gross profit were driven primarily by Ondas’ joint development programs with Siemens in the North American Rail Market and the continued system commercialization effort with strategic partner AURA for their nationwide UAS navigation network.
Operating expenses were approximately $3.5 million in the first quarter of 2021, an increase of approximately $1.1 million compared to the same period in 2020. The increase was primarily due to non-cash stock-based compensation expense of approximately $1.3 million.
The Company realized an operating loss of approximately $2.9 million in the first quarter of 2021 with higher revenue and gross profit offset by higher operating expenses. Net loss was approximately $3.1 million in the first quarter of 2021, an increase of approximately $0.3 million compared to the same period in 2020.
The Company held cash and cash equivalents of approximately $24.0 million as of March 31, 2021, compared to approximately $26.1 million as of December 31, 2020.
“During the first quarter of 2021, Ondas continued to realize business development progress across the Company’s three primary large, high-priority areas for 2021, which include: 1) the multiple network opportunities with the Class 1 Freight Rail operators beginning with the 900 MHz network, 2) our partnership with Siemens Mobility to drive platform adoption with the Class 1 Freight Rail operators both domestically and internationally, and 3) the UAS / Drone C2 network we are developing in partnership with AURA Network Systems (“AURA”). We believe our first quarter 2021 performance including new product development agreements from both Siemens and AURA is indicative of the growing and substantial pipeline for Ondas,” said Eric Brock, Ondas’ Chairman and CEO.
“Ondas started the year strongly, with continued progress on our key areas of business focus, all of which advanced nicely in the first quarter,” said Brock. “We started a second product development agreement with Siemens, demonstrating the breadth of our opportunity across global Rail markets,” Brock continued. “In addition, AURA and Ondas are building momentum on AURA’s wireless platform and ecosystem development with Ondas positioned as the prime contractor for the commercialization of the first nationwide UAS network using the exclusive 450 MHz air to ground frequency band. In addition, our work on the 900 MHz network for the Class I Rails continues to move forward with the pending MC-IoT Rail lab marking an important step towards commercial rollout.”
Ondas Holdings Inc. sees Q2 2021 revenue of $1-1.5 million, versus the consensus of $2.36 million.
Ongoing investments in market expansion and deeper penetration of select verticals are expected to continue supporting bookings and revenue growth in 2021, as Ondas advances its long-term strategy to drive commercial adoption of its proprietary technology across multiple markets. The Company continues to work closely with Class 1 Rails and its strategic rail partner Siemens to advance the adoption of Ondas’ FullMAX platform in the 900 MHz network, greenfield spectrum. We expect to receive a purchase order from the Class 1 Rails related to the MC-IoT Rail lab by the end of the second quarter of 2021, an important step on the roadmap to commercial adoption. Currently, the Company anticipates that initial commercial bookings from the Rails will commence in the second half of 2021.
In addition, commercialization efforts with AURA, the Company’s drone partner continue to progress. AURA achieved a major milestone in January 2021 in which the FCC approved a waiver to use the 450 MHz air to ground band for UAS. We expect to complete the current project focused on optimizing our FullMAX network equipment for testing and demonstration network purposes in the second quarter of 2021. Planning for the next phase of FAA commercialization technical development is continuing in parallel with AURA which we expect will result in additional purchase orders in the second quarter of 2021. In addition to the ongoing network development work, we expect initial equipment orders from AURA for testing and network expansion for AURA’s UAS customers and ecosystem partners during the year.
Ondas intends to continue pursuing additional bookings and deployments of its proprietary technology in security and other addressable markets throughout 2021.
Bookings and revenue growth can fluctuate from quarter-to-quarter given timing of development activity in front of the targeted commercial rollout for the Rail 900 MHz network. As such, at this time, we are only providing financial guidance for the second quarter of 2021. For the second quarter of 2021, the Company expects revenue between $1.0 and $1.5 million generated primarily from current backlog. Operating expenses are expected to be between $2.5 and $3.0 million on a cash basis for the second quarter of 2021, excluding non-cash expenses such as stock-based compensation.
For earnings history and earnings-related data on Ondas Holdings Inc. (ONDS) click here.
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