Phase Space AI

Financial Model Notes

Ondas [ONDS]

Ondas Inc. [ONDS] — Financial Model Notes

Every figure used in this memo, with its filing provenance and derivation. Nothing here is estimated unless the row says so.

Sources: XBRL companyfacts for CIK 0001646188 (fetched 2026-07-29); the primary HTML of the FY2025 10-K (2026-03-30), the Q1-2026 10-Q (2026-05-15) and the 8-K of 2026-07-06; Alpaca SIP daily bars; Alpaca options snapshots.

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1. Revenue — quarterly build and the TTM window

us-gaap:Revenues, USD.

TTM to 2026-03-31 = 6,273 + 10,098 + 30,111 + 50,122 = $96,604,000. The screen's $96,605,000 differs by $1k of rounding. Correct; no quarter-skip defect.

This TTM excludes High Point (acquired 2026-07-02, revenue undisclosed).

1.1 Disaggregation, Q1-2026 (10-Q)

Product 76.6% of revenue; point-in-time 80.9%; non-US 93.4%; development revenue only 4.9%.

1.2 The organic split — company-disclosed, then derived

Company-disclosed (Q1-2026 10-Q MD&A): of the $45,874k year-on-year increase, $34,700k was generated by companies acquired since 2025-03-31, including $15,800k from Sentry CS Ltd. The organic increase was $11,400k at Airobotics — $7,900k product and $3,500k service from the Optimus System and Iron Drone Raider.

Q1-2026 reported revenue                                50,122
less acquired-company revenue growth (disclosed)       (34,700)
= Q1-2026 organic revenue                               15,422        [derived from a disclosed input]

TTM organic estimate:
  Q2-2025    6,273   pre-acquisition; INCLUDES Ondas Networks
  Q3-2025   10,098   pre-acquisition; INCLUDES Ondas Networks
  Q4-2025   30,111   less SPO / Insight / Sentrycs / Robo-Team contribution  ->  ~10,000-12,000   [ESTIMATE]
  Q1-2026   15,422   EXCLUDES Ondas Networks (deconsolidated in the quarter)
  = approximately  $42,000  ± several million                                  [ESTIMATE]

Two caveats, both stated rather than buried. (i) The Q4-2025 line is an estimate — Ondas does not disaggregate acquired revenue by quarter. The valuation is therefore run at $20m / $42m / $60m to bracket it (ONDS_Valuation.md §3.4). (ii) The comparison is not like-for-like: Q2–Q3 2025 include Ondas Networks and Q1-2026 does not. Consequently the organic growth rate is not computable from the disclosure at all, which is why ONDS_Research.md §7 scores the revenue-acceleration sub-test INDETERMINATE rather than assigning a number.

1.3 Contract liabilities — the acquired order book

Acquired share of additions: 14,253 / (14,253 + 4,892) = 74.5% in Q1-2026; 7,374 / 16,916 = 43.6% in FY2025.

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2. Income statement

Non-operating share of Q1-2026 pre-tax income: 404,166 / 361,495 = 111.8%. The warrant remeasurement alone is 389,548 / 361,250 = 107.8% of net income.

G&A composition of the +$37.4m increase (10-Q): +$11.5m SBC, +$8.4m software, +$7.7m professional fees of which $5.8m is acquisition legal / accounting / due diligence, +$7.1m from acquired companies of which $2.8m is acquired-asset amortisation.

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3. Balance sheet, 2026-03-31 (10-Q, $000)

Comparatives at 2025-12-31: cash 550,744; ST investments 21,750; goodwill 251,809; intangibles 136,890; warrant liability 489,434; total assets 1,132,841; shares 380,763,481.

Goodwill + intangibles = $694,352k = 28.5% of total assets, all on preliminary purchase-price allocations.

Accumulated deficit: $(368,387) at 2025-12-31 → $(5,438) at 2026-03-31 — a $362.9m improvement produced entirely by the warrant mark and the deconsolidation gain.

3.1 Net cash — the corrected build

Debt verification, as instructed. Checked LongTermDebt, LongTermDebtCurrent, LongTermDebtNoncurrent, ConvertibleDebtNoncurrent, ConvertibleDebtCurrent, ConvertibleNotesPayable, ConvertibleNotesPayableCurrent, NotesPayable, NotesPayableCurrent, OtherLongTermDebt, ShortTermBorrowings. The screen's empty debt list is wrong: at 2026-03-31 the balance sheet carries notes payable ($243 + $188), convertible notes ($528 + $3,410), and a government grant liability ($1,870 + $1,586). XBRL also carries ConvertibleDebt $10,000 at 2026-02-27 and NotesPayable $10,400 at 2026-03-31 — the latter is the note receivable from the deconsolidated Ondas Networks, i.e. an asset from the parent's perspective, and is not included as debt here.

  1,026,003  cash and cash equivalents
     11,081  restricted cash, current
    447,842  short-term investments   [VERIFIED as a distinct balance-sheet line]
  ---------
  1,484,926
       (243) notes payable, current
       (188) notes payable, non-current
       (528) convertible note payable, current
     (3,410) convertible notes payable, non-current
     (1,870) government grant liability, current
     (1,586) government grant liability, non-current
    (39,621) accrued purchase and contingent consideration, current
    (88,481) accrued purchase and contingent consideration, non-current
  ---------
  1,349,000  ~= $1,352.5m on reported roundings   <- net cash at 2026-03-31
   (200,000) High Point cash consideration, 2026-07-02
  ---------
  1,152,500  net cash used throughout this memo

The $1,058,990 warrant liability is deliberately excluded — it is share-settled and belongs in EV or in the share count, never in net debt. Double-counting it in both places is the error to avoid, and ONDS_Valuation.md §1 keeps constructions (c) and (d) separate for exactly that reason.

Restricted cash note: the FY2025 10-K states that $37.6m of restricted cash relates to the Sentrycs acquisition escrow, whereas the current-asset restricted-cash line at 2026-03-31 is $11,081k. The difference is not reconcilable from the aggregated data available here and is flagged rather than reconciled; at $11.1m in a $1.48bn cash balance it changes nothing.

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4. Share count — the full record

Fully diluted:

  535,762,648  outstanding, post-High-Point Immediate Shares
 + 44,999,998  High Point Locked-Up Shares (2027-01-04)
 +195,527,101  warrants to purchase common stock       [anti-dilutive at 2026-03-31]
 +109,456,221  contingently issuable shares            [anti-dilutive at 2026-03-31]
 +    654,350  options to purchase common stock        [anti-dilutive at 2026-03-31]
 ------------
  886,400,318  fully diluted  --  EXCEEDS the 800,000,000 authorised

That last line is a hard arithmetic fact with a governance consequence: the fully diluted claim exceeds the authorised share capital, so a further authorised-share increase is required before all outstanding claims can be settled in stock.

4.1 EPS cross-check — and a defect in the control itself

Naive:  361,659 / 445,089 (basic WA, 000) = $0.8126   vs filed basic $0.58   ✗  40% HIGH

The control is wrong here, not the filing. Ondas uses the two-class method; the participating securities are the warrants issued in the October 2025 and January 2026 offerings.

   361,659  net income attributable to Ondas Inc. stockholders
  (103,924) LESS net income attributable to participating securities
  --------
   257,735  net income attributable to common stockholders - basic
  / 445,089  weighted-average basic shares (000)
  =  $0.579  -> filed $0.58  OK
Diluted: 257,735 / 461,706 = $0.558 -> filed $0.56  OK

Recorded for the calibration file: net income ÷ shares ≈ filed EPS produces a FALSE POSITIVE on any issuer with participating securities under the two-class method. On ONDS the naive control fails by 40% while the filing is correct. The control needs a guard: where NetIncomeLossAvailableToCommonStockholdersBasic exists and differs from NetIncomeLoss, the former is the numerator. And the gap is itself the finding — $103.9m, 28.7% of the quarter's earnings, was allocated away from common holders to warrant holders.

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5. Capital raised and acquisitions

Also in the record: ProceedsFromIssuanceOfDebt $959,100,000 through 2026-01-31 in XBRL — this is the January 2026 offering tagged under a debt-proceeds concept, not a $959m borrowing. Cross-checked against the balance sheet, which carries $4.4m of total notes and converts. Flagged because a scanner reading that tag literally would conclude Ondas had ~$1bn of debt.

Acquisitions and consideration disclosed: Sentrycs $224.6m ($134.1m cash + $90.6m stock, payable over four dates); Bird Aerosystems $127.9m ($23.5m cash + 10,291,207 shares); High Point ~$200m cash + 84,999,996 shares; 4M $2.4m cash + 801,068 shares + 352,968 shares for the remaining 30%; Indo Earth Moving consolidated as a VIE with a $46.2m loss on acquisition; plus Rotron, Apeiro, SPO (51%), Insight (51%), Robo-Team, World View, and "other individually immaterial" acquisitions totalling $4.8m in equity.

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6. Reverse-DCF mechanics

Implementation identical to assets/reverse_dcf.py:

EV_target   = spot x shares - net_cash            (+ warrant liability in construction (c))
EV_model(g) = revenue0 x (1+g)^5 x terminal_margin x exit_multiple / (1 + wacc)^5
solve g by bisection on [-0.50, +2.00]

Terminal value is 100% of modelled EV — Ondas generates no interim free cash flow — so per criteria.md the reverse DCF is mandatory as the primary long-horizon output.

Construction (b):  EV = 6.80 x 535.762648 - 1,152.5 = 3,643.2 - 1,152.5 = $2,490.7m
Central cell (TM 15%, 18x, WACC 13%, 5y, revenue0 = 96.605):
  (1+g)^5 = 2,490.7 x 1.8424 / (96.605 x 2.70) = 4,588.9 / 260.8 = 17.595
  1+g = 17.595^0.2 = 1.7742   ->   g = 77.4%
  year-5 revenue = 96.605 x 17.595 = $1,699.8m ; EBIT at 15% = $255.0m ;
  exit EV at 18x = $4,589m ; discounted = $2,491m  OK
  implied year-5 EV/sales = 4,589 / 1,700 = 2.70x  vs 25.8x today = 9.6x compression

All grids in ONDS_Valuation.md §3 were produced by this routine. No cell returned "no solution in range" — unlike ASTS, ONDS's price is reachable inside the parameter space, just only at growth rates it has never demonstrated organically.

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7. Market data

Bars from 2021-01-04 (1,398 SIP sessions), split-adjusted.

Option-implied volatility of 102–118% sits BELOW the 122.7% realised — see ONDS_Trade_Construction.md §1.3.

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8. Known gaps, stated rather than filled

1. High Point's revenue and financials are undisclosed. Every multiple in this memo is computed on TTM revenue that excludes it, so all multiples are overstated to the extent High Point carries revenue. Financials due by 8-K amendment ~2026-09-14.
2. Acquired-versus-organic revenue is not disaggregated by quarter. The ~$42m organic TTM estimate carries several million dollars of uncertainty and the organic growth rate is not computable at all.
3. Q3-2025 10-Q primary document did not resolve at the constructed archive URL, so the mention-frequency table in ONDS_Research.md §5 has two periods rather than three.
4. No consensus estimates — Alpha Vantage quota assumed exhausted. Consensus Criteria INDETERMINATE, blocks nothing.
5. No earnings-call transcripts — mention frequency computed on filing text, substitution declared.
6. No growth-matched peer comparator was constructed; the exit multiple is run as a grid and declared UNIDENTIFIED as a point estimate. The screen's exit_multiple_peer_n: 16 at 27.4x is not relied upon.
7. WACC of 13.0% is an assumption, not a beta regression.
8. Restricted-cash reconciliation between the 10-K's $37.6m Sentrycs escrow reference and the $11.081m current-asset line is not resolved.
9. No ONDS_Model.xlsx. Every derivation a workbook would contain is written out above and is reproducible by hand from the filed figures.