On August 13, Ondas (NASDAQ:ONDS) held its second-quarter earnings call, and the numbers explain why the stock has been getting attention. Revenue hit $83.8 million, more than thirteen times what the company generated in the same quarter a year earlier. Management didn’t stop at reporting the number. It raised full-year guidance, pointed to a backlog that has grown elevenfold since the start of 2026, and said it now expects to exit the year at a $1 billion annualized revenue run rate. For a company built by stitching together drone and counter-drone technology companies, this was the quarter meant to prove the strategy actually works.
Bull Case: A Revenue Curve Bending Upward
The headline number was revenue of $83.8 million, up 67% sequentially, but the more telling figure is that organic growth, stripping out the effect of acquisitions, ran at approximately 85% year over year. Ondas raised its full-year 2026 revenue target to a range of $525 million to $550 million and guided third-quarter revenue to $140 million to $155 million, which implies roughly 73% sequential growth at the midpoint. If that ramp holds through the fourth quarter, the company expects to finish 2026 at a $1 billion annualized run rate, putting it years ahead of the $1.5 billion target it had set for 2030.
Backlog and demand back up the guidance. Pro forma backlog stood at $757 million on June 30, up 66% sequentially from $457 million at the end of the first quarter, while the two-year strategic pipeline has swelled past $11 billion, more than 2.5 times what it stood in May. New orders kept arriving on top of that: $175 million booked during the quarter itself and roughly $105 million more already captured so far in the third quarter.
The growth isn’t just acquisition math, either. Sentrycs, the counter-drone unit, posted pro forma revenue growth of about 298% year over year, 4M’s demining and land intelligence business grew 258%, and Airobotics rose 112%. Rotron, added through acquisition, booked $34.2 million of orders in a single quarter against the $25 million of full-year 2026 revenue Ondas had underwritten when it bought the company. The balance sheet backs the ambition: cash and short-term investments reached $1.4 billion, up from $616 million at the end of 2025, leaving room to spend $325 million in the third quarter alone on the DZYNE and Cyberhawk acquisitions. Contract wins add further weight, including $240 million of orders under a $982 million U.S. Army unmanned strike contract awarded to Mistral, a $140 million combat engineering vehicle program for INDO Earth, and a new one-way attack system deal with Israel’s Ministry of Defense. The company also added former Mossad Director David Barnea and retired four-star General Charlie Flynn to its leadership and advisory ranks.
Bear Case: The Bill For All That Growth
That growth came at a steep cost in the quarter. Adjusted EBITDA loss was approximately $51 million, cash operating expenses ran to $93 million, and total operating expenses reached $199 million, more than half of it noncash or acquisition-related items like stock compensation, contingent consideration revaluation and intangible amortization, plus $4.4 million in acquisition transaction costs. Roughly $29 million of the spending went to discretionary corporate development, Ondas Capital and partner initiatives, with another $6 million at the operating-company level.
Margins moved the wrong way too. Adjusted gross margin slipped to 50.4% from 51.5% in the prior quarter, and management flagged further gross margin pressure in the second half from product mix and recently acquired excess capacity. Even as it pulled forward its profitability timeline, adjusted EBITDA breakeven for the Autonomous Systems and Sentinel units isn’t expected until the fourth quarter of 2026, and company-wide profitability at Ondas Inc. is not projected until the fourth quarter of 2027. All of this growth is also being financed through a rapid string of acquisitions, World View, Mistral, DZYNE, Cyberhawk and Rotron among them, each one adding cost and integration risk before it has proven it can sustain the returns Ondas is underwriting.
Wall Street Can’t Agree
Hedge fund ownership climbed from 29 funds to 34 in the most recent quarter, pointing to rising institutional conviction. Yet short interest sits at 41.49% of the float, a level that signals heavy organized skepticism rather than routine hedging. As of August 21, the stock trades at 49.51 times forward earnings, a rich multiple for a company still posting sizable GAAP losses. Rising fund ownership against that much short interest captures exactly the disagreement running through this stock right now.
What Happens From Here
Ondas backed up an aggressive growth story with real numbers this quarter: record revenue, an expanding backlog and a pipeline that has more than doubled since May. It also posted a $51 million loss and warned that margins could compress further before the promised leverage shows up. The bulls are betting the guided second-half ramp and the newly pulled-forward profitability targets land on schedule. The bears are watching whether integrating five-plus acquisitions at once, while spending tens of millions on discretionary growth initiatives, can hold together at this pace.
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