Ondas (ONDS) 9 Aug 222022 Q2 Earnings call transcript

Good day, and welcome to the Ondas Holdings' Second Quarter 2022 Earnings and Business Update Conference Call. [Operator Instructions] Please note that today's event is being recorded. At this time I would like to turn the conference over to Eric Brock, Chairman and CEO. Please go ahead.

Good morning. welcome our to call. pleasure a you conference to It's Robotics our joined the Networks; I'm American be by and and Stewart Mozer, Ondas happy to of today Kantor, CEO. President Founder Reese Founder and to Derek for to conflicts, participate want international is call. today's and Reisfield, note scheduling a to I in due travel in CFO President unable that I will place. handle the his financial review in staking at leadership call to emphasizing that strengthen. are track start positions on base technology to to by in in Ondas going infrastructure the I'm is and continues critical services out we business markets Ondas rails Networks continues to make network. advances with the on Class XXX I the megahertz

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balance due international earlier, our will financial mentioned travel, to I I sheet unable the As Derek to and position. recent is attend present so call, results

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million described expenses and Networks. acquisition lumpy XXXX. historically approximately as $XXX,XXX expenses second to year. of have volatile for quarter to $X.X company in months of Stock-based during compared to quarter. X, included an second million August American occurred second XXXX million higher XXXX. $X.X American million benefit as of million quarter development the the and first spending we due amortization are in increased As sales mix The approximately the QX compared of million of Is XXXX. quarter margins second Noncash for compensation compared to realized American the from operating for the to not for $X.X noncash to prior of Depreciation increased The in can quarter primarily operating for quarterly ended QX quarter from be by important totaled of acquisition results. the increase The gross on $X.X June Robotics Robotics. note expenses was the to customer a American XXXX That of increase on in sales, basis. gross of prior is expenses in as Therefore, expenses larger the increased approximately calls, of the expenses X related $X.X million in in to Robotics margins comparable product $X.X prior and quarter XX, for Ondas that XXXX this nature Robotics The bulk XXXX second $XX.X of both the quarter XXXX. $XX.X the Operating due to of the year. the a equipment the second reflect loss programs our million XXXX.

the noncash and noted, both activity As development last losses. and in included Robotics cash increase the in year's addition were year-over-year of business biggest driver expenses, operating not related results were the expenses the increase the operating in of which to American

half XXXX. of XXXX for for XXXX. Robotics half XXXX. as for half compared of that The AR will for an $X.X for lower of increase half same the the million first as operations $X.X was due months of last offset to development approximately Gross first compared to increased compared network Ondas the XX.X% Siemens, by in totaled half American of basis in approximately the customers both XXXX. revenue was expenses operating network first for amortization year. XX% to approximately of loss on as move year with was X expenses approximately statement approximately first the decreased million to revenue first included $X.X company in Noncash as $X.X profit primarily million XXXX half first compensation $X of million as XX.X% result the were $XXX,XXX or XXXX. The business again the profit not nationwide are XXXX. systems The $XX.X expenses compared X for the increased half deployment lower rail half on XXXX. $XXX,XXX activity compared product a by loss $X.X to as to first Revenues Networks. of operating for first XXXX to half the of and XXXX expenses XXXX. to the increase of half million XXXX Gross million Stock-based The $X.X Let's was I $X of at to XXXX. months for for primarily the highlight an half sales compared million for decline $X percentage spending of initial million first due Operating compared as in of first the first charges approximately the half half first that of approximately the million recognized of the to first first half first first to of product the for a prior to XXXX operating were $XX.X in of $XXX,XXX the the was development a that realized the year. million and depreciation first for this of from to million, the half of of for of and was

increase operating XXXX in increase and the to year-over-year were losses. Robotics of both quarter the of American biggest noted, As the activity cash addition included expenses and business in operating in of first related the noncash drivers not were expenses, the development which

let's decline $XX XXXX. of turn compared $XX cash at the Ondas to in The sheet ended The million product and was Robotics balance company cash building XXXX to a cash cash approximately Networks million the well due flow and primarily equivalents business Scout as research, as March systems. statement. end related American maintained of of as in half strong with the in to and the has development first to spending Now

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balance Now let's to the sheet. turn

the healthy described, end a million of $XX quarter. cash have at As balance the of recent we most

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Eric. Thank you, Great.

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Stewart. Thank you,

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applicable payload As a bonus, are other markets. improved these target to most options also

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this rulemaking XX states. April recognition. this to last of year, a As of our milestone we the total that operation FAA's invited In participate In in year, July to year, result BVLOS achievement, received In expanded we rightly we Aviation national July was the approval additional across for of received were bringing company Committee. catapulted X sites, approval another to X operations. sites permitting BVLOS

purpose White in the were We announce House and Mobility to with and participate setting drones in the invited coming a industry, and taxis priority. this of authorization air national meeting Summit leaders And Air expect government first academic as to weeks. of we historic the of Advanced the new on publicly week, last details

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top perspective Airobotics of raised to the institutional world's like making world significant I'd $XXX million long-term invested Airobotics and date. the the the funded short-term share top companies of in has some Lastly, their company one benefits and on them funded acquisition. and the the best into of to investors, drone-in-a-box from our technology over

the revenue that we not with property new will spend a a opportunities developed markets, different of the to also at of of powerful they Airobotics to simultaneously BVLOS combined portfolio pieces incredibly have With company. product Scout expand opportunities only that this In that enabling enhances the same product As transfer redundant a acquisition, of is that the is is a mature. conduct. of regulatory ours Optimus, missing result, automated thus can but help operation both and collective and complementary intellectual line reduce R&D the this product a expands type words, system can technology lines market other and targeted leaders

expensive, to expects will to we the platform Scout Q&A call part FAA Eric. no significant type company granting application remarks, which doing eventually feat spend this line likely apply time look as has Optimus mass process a of the additional States in AR effort this complicated and prepared my Airobotics the already to system. currently our and Networks aerobatics see secure we to the achieved over certification, And will very certification a system. I currently for and United down opaque, people the of and significantly enables which undergo put the from drone system. flight hand into back Type when the Additionally, yet for certification we generations it on scout are type I the road to I radio discussion. the Scout find technology has as concludes Scout advantageous accelerate And for production with which in drones, This and the to to Ondas and reduce our think for also opportunities is experience forward future

thank you, Reese. Well,

our and some of business let's XXXX. key objectives for summarize turn Now

expect and Ondas orders maintaining to at least are $XX bookings. continue we X in railroads, year at Networks generate from least this our We million goal of will

of initial more the Siemens Importantly, our than bookings volume XX% to goal. is order equal

over participation I broader this larger rail at additional plans the half of and remind expect is and tracking pipeline compensation of bookings second Of significant orders that will course, component we target Networks. are a Ondas XXXX. our a

maintain sales, in platform development In pipeline the our target product with opportunities million for partners additional new have to $X.X existing we in addition and product programs.

have We European Siemens. the with announced already development product

orders key by least America the include securing XX the year. at targets for XX customers Scout systems from of the least and at So Robotics, end

partnering, down end we to that addition, customer our for success also are targeting least by valuable with deployment with of fleet In customers yet XXXX. reorder X comes the complex. develop partnering And to at lastly, solutions are for customers AR,

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to timing Of of for product subject activity and as as course, customer American the Ondas and Scout system Robotics uncertainty. is well program Networks development bookings the

that for closing outlook positioned impressive the become plan a at of to Regarding customer as Airobotics, an we activity provide Airobotics accelerate business we customer details pipeline, narrow. later will additional together. has and plan a conditions to note the believe for opportunity Airobotics and date are we I

balance cash is remains our position and our outlook, continue So healthy want stay reiterate the sheet to To I strong. tuned. that

to We the efficient third we fund mechanism And about $X $X.X again, have OpEx capital and for growth to the of have million million to will today. outlined we an facility expect access quarter. cash incremental ATMs be

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we timed. Our what to solutions customers to opportunities the and that's investing open deliver for seize is the shareholders, and Q&A. time are and do. our win. and call to for to us This we This growing, planning are not please the opportunity is be time are Operator, to

comes question [Operator with Instructions] Northland Today's from Mike Capital. Latimore first

color cycle an Adithya the recession would it is drones? in Could you for of on on Mike Latimore. if that the possible along some Would behalf This sales give effect? have

we new I'll don't you that work and innovation take doing I'll necessarily creating that ask more anything? technologies teams as bottleneck. and the add in creating expand. initial a investment The is But Reese, we're that with who are businesses their opportunities being answer, see field Reese then on make and productive. identifying focused to would long-term for in

with don't we new Yes, think all that saving correct. labor are And them this efficiencies they our back much and about bringing haven't their industries ultimately, is regard. The with flow that's as we that their money target and in critical product production. ones really

So that. not far, of we have seen indication any

space? of those mentioned the way me people there. XX you regarding All had in you Airobotics Could are I acquisition, or right. tell you the R&D then think And over

X/X them. I but say figure, I at don't precise have of a would least

any from or had All And right. bookings Ardenna? trials you have

have don't bookings We to any announce.

of we let when business know is we'll in you there do and quite a secure activity, However, development bit interest business.

this the the are At any Eric conference the session. back like [Operator showing now remarks. turn to question-and-answer this I ends in further closing no time, Instructions] questioners to we would for queue, Brock and over

joining Okay. everyone want thank to I us this for Well, morning.

got on back lot know, you our and at play go work. we've to here we're to Ondas and going a As AR,

staying touch to in chatting forward again look and be will we So soon.

for concluded. attending presentation. The disconnect. Thank you today's you conference has now now And may