Welcome to the ONDIS Inc third quarter 2026 Earnings and Business Update conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two Before we begin, the company would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect ONDIS's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking statements. These risk factors are discussed in ONDIS's periodic SEC filings and in the earnings press release issued today, which are both available on the company's website. ONDAs undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances, except as required by law. During this call, ONDAs will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued today, Please note, this event is being recorded. I would now like to turn the conference over to Eric Brock, Chairman and CEO. Please go ahead.

Thank you, Operator, and good morning, everyone. We appreciate you joining us today and your continued interest in Ondas. I'm pleased to be joined this morning by key members of our leadership team. Neil Laird, our Chief Financial Officer, and I will take you through the formal presentation this morning. Patrick Huston, ONDAS COO and General Counsel, Oshri Lugassy, Co-CEO of ONDAS Autonomous Systems, Meir Kliner, President of OAS, and Ryan Hartman, CEO of ONDAS Sentinel, also joined us today and will be available during the Q&A. We have a lot to cover today, so we will dive right in. Let's turn to today's agenda. I'll begin with a high-level review of our third quarter performance and the continued execution of our core plus strategic growth plan. We will also share important context on Regna AI, the new initiative designed to capitalize on our growing expertise in building valuable software tools, leveraging sovereign AI capabilities on behalf of US and allied defense ecosystem. Neil will then review our third quarter financial results, balance sheet, and the investments we are making to support the significant growth we expect for Q4 and throughout 2027. We will then provide a growth and operational update, including commercial momentum, major customer programs, expansion across our four strategic market segments, and the continued scaling of our global operating platform. Thank you for joining us. We are laser focused on rapidly scaling production and deployment capabilities to capitalize on accelerating demand for our solutions. Thank you so much for joining us today. The acquisitions of Design and CyberHawk strengthened our position in U.S. defense and critical infrastructure, adding important technologies, services, customer relationships, and growth opportunities. Insignito, Autopia, and Caribou Labs added advanced acoustic sensing, resilient communications, remote operations, and navigation capabilities for GPS-denied environments. The acquisition of GATE, together with the pending acquisitions of STEM-A and Iran, is accelerating the expansion of our supply chain and production capacity. STEM-A adds airframe engineering and manufacturing, GATE adds mission-critical electronic fusing and safe and armed technologies, and Iran will add multidisciplinary engineering and high-volume manufacturing capabilities. By integrating these assets, we are addressing supply chain bottlenecks, reducing reliance on third parties, and improving product performance, cost, margins, and delivery. We are focused on building the industrial capacity required to deliver for customers at scale and capture this market opportunity for our investors. Execution of our core and strategic growth plan is translating directly into results. Third quarter revenue reached a record $167.5 million, more than 16 times the prior year period and nearly double Q2. We expect another significant sequential increase in Q4 with revenue above $250 million. We are raising our full year 2026 target to at least $550 million and introducing a 2027 target of at least $1.1 billion. That outlook reflects broad-based growth across our core businesses, backlog conversion, and emerging platforms moving into scale deployment. Order momentum remains strong. Backlog reached approximately $835 million at September 30th, Up 36% sequentially and more than 12 times the Q4 2025 level, providing meaningful visibility across aerial security, persistent intelligence, precision strike, and autonomous ground systems. We continue to invest in the infrastructure needed to convert that demand into revenue. Q3 included approximately $37 million of discretionary growth investment across corporate development, Andes Capital, Regna AI, and the operating capabilities required to scale production, deployment, field support, and sustainment. Importantly, Growth OPEX is moderating as revenue and gross profit scale supporting meaningful operating leverage. With approximately $820 million in cash, cash equivalents, restricted cash, and short-term investments at quarter end, we remain well capitalized to execute. Taken together, these results show that our strategy is working. And position ONDAs for continued growth through Q4 and into 2027. This chart provides a simple visual of the transformation underway in our financial performance. As we have highlighted in the past, we believe this is what the early stages of an S curve adoption cycle should look like. Technology adoption curves are generally not linear. Once platforms are validated, customer requirements are established, and programs move from development and testing into scale deployment, revenue can accelerate rapidly. Our strategy is designed around that dynamic. We are not only expanding the technology portfolio, we are building the production, supply chain, deployment, field support, and sustaining capabilities required to support this growth at scale. Importantly, the growth shown here is not simply the result of acquisitions. Our underlying businesses are also expanding rapidly within the Ondas platform. As the next slide demonstrates, strong organic growth remains a major driver of our financial model and the economic value we are creating. Organic growth at Andes was 64% in Q3 on an apples-to-apples basis with the prior year. We believe very few companies in our sector are growing at this rate. Importantly, we expect organic growth to accelerate further in Q4, reaching at least 75% year-over-year on a pro forma basis based on our guidance. Simply put, our model is working. The model begins with strong, mission-ready technology platforms in markets with very significant customer demand. That technology and demand are supported by the operating platform Andis is building, providing working capital, global customer relationships, expanded sales capabilities, production resources, supply chain support, and field services. On the right, we show some recent key acquisitions that are growing faster now that they have the benefits of being integrated into the broader ONDOS platform. Centrix continues to benefit from strong demand for its cyber over RF counter UAS systems, with Q3 pro forma revenue up more than 3.5x year over year. We now expect to achieve our original 2027 bookings target in 2026, supported by strong counter drone demand and new distribution channels. 4M generated nearly 3x its prior year Q3 revenue and is positioned to outperform our original 2026 model by 2.3x, reflecting improved customer access, Operating Support, and Andes' International Reach. Meanwhile, Rotron converted strong Q2 order growth into 250% year-over-year revenue growth in Q3, and Mistral began producing and shipping against the LUSIDIQ, driving 136% organic growth in Q3. We expect this momentum to continue into Q4 and 2027. This performance is not isolated to one company or market segment. As the data continues to show, Ondas is seeing strong organic growth across multiple businesses, increasingly validating both our operating platform thesis and our execution. We are excited to share some details around Regna AI, our new sovereign artificial intelligence company founded by Ondas in response to one of the most important opportunities in defense technology. That is bringing advanced AI directly into mission-critical operations. Regna AI develops mission specialized AI models that governments and defense partners can own, control, and securely deploy. These models transform sensitive operational data into actionable intelligence, supporting ISR, threat detection, counter UAS, and autonomous mission orchestration. Our approach combines NVIDIA's open-weight model ecosystem, providing the AI foundation along with Palantir's software platforms, which enable secure integration, training, and deployment. To this, Andas brings the operational advantage with deployed defense systems and mission expertise around multi-domain ISR, autonomy, sensor fusion, and command and control. Our target customers include the US Department of War, allied governments, and defense companies seeking sovereign AI capabilities that operate securely across classified environments, sovereign clouds, and the tactical edge. We believe Regna AI can be a significant value creator for Onda's investors. First, Regna AI creates an opportunity to turn a development cost center into a valuable business by leveraging investments Andaz is already making in Sovereign AI. As Regna AI attracts customers and external support as a standalone company, we believe our ownership can become an important source of long-term value for Andaz shareholders. Second, Regna AI expands the commercial opportunity beyond Andaz's own platforms. These capabilities can serve governments, defense companies and other technology providers, opening new software and services revenue opportunities. External customer revenue and dedicated growth capital could support a broader development program without relying exclusively on ONDAs to fund it. Third, Regna AI strengthens the core ONDAs portfolio. Our deployed systems and mission expertise provide a practical foundation for development while Regna AI's mission specialized models can advance intelligence, autonomy, and Command and Control across our ISR, Counter UAS and Unmanned Systems. The objective is to create value in both directions, a growing AI business and more capable, differentiated ONDAZ solutions. Ultimately, we believe the future of defense belongs to companies that combine intelligent software with autonomous physical systems. Regna AI positions ONDAZ to lead in both and creates another powerful engine for long-term shareholder value. This concludes my introductory comments, and I will now hand the call over to Neil, who will review our third quarter financial performance and balance sheet.

Thank you, Eric. The third quarter showed record revenue and represented another important step forward in demonstrating the scalability of our financial model. Revenue increased to approximately $167.5 million, up 100% sequentially and more than 16 times the prior year period. Importantly, this wasn't simply acquisition driven. On a pro forma organic basis, assuming our current portfolio had been owned in both periods, revenue grew approximately 64% year over year, reflecting strong execution across our underlying businesses. Combined with approximately $214 million of new orders during the quarter and $507 million in the first nine months of the year, We believe these results demonstrate that customer demand remains exceptionally strong across our platform. Gross profit was $36.5 million, while adjusted gross margin, which excludes the non-cash items of stock-based compensation expense, amortization of acquisition-related intangible assets, qualifying acquisition-related employee costs, and inventory step-up was 34.8%, As we previously communicated, we expected gross margin to decline sequentially in Q3, reflecting a higher concentration of revenue from lower margin precision strike programs, including the LUS program at Mistral. Gross margin saw some modest further pressure from temporary factors, including production inefficiencies associated with scaling the LUS program, as well as further swings in mix. Operating expenses increased to approximately $226 million from $199 million in the prior quarter. To better understand the business, we encourage investors to look at our underlying adjusted cash operating expenses, which amounted to approximately $119 million, up from $88.8 million in the prior quarter. This includes normal operating expenses as well as discretionary growth investments to support the continued transformational growth curve we expect over the coming quarters and years. The third quarter saw a moderation in the growth of OPEX despite the addition of large acquisitions such as design. In the third quarter, we continue to invest for growth with R&D expense of $61.6 million up $30 million, sequentially driving future product innovation and integration. Adjusted EBITDA showed a loss of $59.7 million, increasing $13.4 million sequentially. Our OPEX was roughly in line with our expectations, and this higher loss was the result of our temporary gross margin impacts. We expect gross margins to remain in the mid-30% range in the Q4 period due to continued mix of lower margin revenue. That said, we expect a rebound to historical trends in 2027 As Eric will outline later in more detail in our outlook section, we believe the combination of higher revenue and improving gross margin and more modest OPEX growth will help us show meaningful operating leverage in future periods. Indeed, we expect a significant reduction in adjusted EBITDA losses in Q4 and a steady improvement going forward. We have pulled forward our expectation for adjusted EBITDA break-even on a company-wide basis to Q3 2027 from our prior assumption of Q4 2027 based on our expectations for revenue, gross profit and expense growth. To conclude, we believe we are executing well against our long-term business plan. Although adjusted EBITDA declined in the third quarter, we expect a significant improvement in the fourth quarter and believe we remain ahead of plan on our path to company-wide profitability in 2027. Turning to the balance sheet, which remains strong and provides us with significant advantages, we ended the quarter with approximately $820 million in cash, cash equivalents, restricted cash, and short-term investments, Thank you for watching. They support key partners, enhance access to critical technologies, improve supply chain efficiency and we believe will generate attractive returns over time. During the third quarter, we deployed approximately $431 million of cash to complete key acquisitions which have added significant scale, technology capabilities, talent and growth opportunities and are important elements for our near-term and long-term growth outlook. Our balance sheet allows us to invest aggressively in our operating platform and support larger customer opportunities. As an example, we saw inventory grow to $111 million from $59 million sequentially, again to support our growing business. Last quarter we highlighted that our confidence that the trajectory of the business has never been stronger. Our performance in Q3 only enhanced that conviction. Our focus now turns to capitalizing on the tremendous growth opportunities ahead of us, made possible by the exceptional work our team has done throughout the year to build the foundation, capabilities, and market position needed to capture them. Looking ahead to Q4 and 2027, we expect substantial growth to continue with meaningful operating leverage emerging as we scale the business. With that, I'll turn it back to Eric.

Thank you, Neil. As Neil noted, adjusted cash operating expense increased to approximately $119 million in the third quarter, driven by two principal factors. First, our strategic M&A program added new businesses to the Ondas platform. These companies bring operating costs, but they also contribute meaningful revenue and gross profit, established customer relationships, contracted backlog, and expanding pipelines. We believe these additions materially strengthen Ondas' earnings power and long-term growth potential and should be viewed as investments in scale, not incremental overhead. Second, we continued investing in the growth platform at both Ondas Inc. and across our operating businesses. At ONDIS Inc, in addition to our underlying finance, accounting, and governance expenses, we invested $27.6 million in growth OPEX related to corporate development, ONDIS capital, ecosystem, and partner initiatives, and the broader operating platform, including our work with Palantir and initial investments in Regna AI. In aggregate, the investment in growth OPEX at the Andes Inc level was slightly lower than in the second quarter. At the operating platform level, growth OPEX for OAS leadership and infrastructure totaled $9.5 million, up from $6 million as we continued building the leadership and capabilities required to scale. In total, we classify approximately $37 million in Q3 OPEX related to growth initiatives. These are deliberate, front-loaded investments designed to integrate acquisitions efficiently, expand our global commercial reach, scale supply chain and production, and provide the field support, sustainment and services a much larger business requires. We are building the operating platform not for the Andas of today, but for the significantly larger company we expect Andas to become. Apart from planned investment in Regna AI, we expect GrowthOpex to continue to moderate in the fourth quarter and into 2027. Because much of this spending is discretionary, rising revenue and gross profit should create meaningful operating leverage as we scale. Let's now turn to our growth and operational update. I will review the continued expansion of our multi-domain platform, recent contract awards, and the strong demand developing across our four strategic market segments. We will also discuss the progress we are making to scale Ultra and Ion Strike, expand our supply chain and production capacity, and build the global operating infrastructure required to deliver for customers at scale. Andes has built a deep differentiated solutions portfolio across the four strategic market segments shown here. Aerial security, ISR and persistent intelligence, precision strike, and autonomous ground systems. In aerial security, we provide technologies to detect, identify, track, and defeat threats across the full counter drone kill chain. Our ISR and persistent intelligence portfolio provides multi-layer surveillance from the stratosphere through long endurance airborne platforms and down to the tactical edge. In Precision Strike, we are delivering affordable, autonomous, launched effects aligned with the growing demand for scalable, mission-ready mass. And in autonomous ground systems, our portfolio includes robotic ground platforms supporting demining, engineering, logistics, border security, and operations in contested environments. Supporting all four segments is an expanding portfolio of AI-enabled software and command and control capabilities, the unified command core connecting sensing, decision-making, autonomous operations, and mission execution across domains. Across these four segments, we are increasingly focused on integrating our technologies and solutions while investing in internal development to expand our capabilities, enhance our offerings, and create new opportunities for growth. Each of these four segments addresses significant global markets, supporting a strong, sustainable, organic growth trajectory with opportunities for outsized growth that could meaningfully accelerate our business beyond the core. We continue to show solid order activity, highlighted by some of the key awards we have received since June 30th, shown on this slide. This order activity is diversified across all four target market segments, aerial security, ISR and persistent intelligence, precision strike, and autonomous ground systems. It also reflects a growing, increasingly diverse set of customers, geographies and mission requirements. Our newly acquired businesses are contributing important contract wins as we expand their access to customer relationships, partners and sales channels across ONDAs. Examples include U.S. Department of War activity involving ULTRA, Drone Buster, and Ion Strike, together with significant orders for GATE and BRON. These wins demonstrate the breadth of demand across both complete systems and mission-critical components. We are demonstrating increasing leverage from our expanded sales organization, customer access, partner network, and commercial infrastructure. We are pleased with our progress and remain focused on achieving even greater results. Our focus is sustaining and accelerating this order capture through the remainder of 2026 and beyond. Here we highlight our backlog, as well as the global nature of our current and future revenue outlook. Our backlog now stands at $835 million and is up 36% sequentially, reflecting both newly acquired businesses in the quarter and strong organic order capture across the Ondas portfolio. Our backlog is diversified across both market segments and geographies, providing meaningful revenue visibility and reducing dependence on any single product, customer, program, or region. That said... We have made it a point to grow the U.S. business given the large, long-term domestic opportunity. And that focus is paying off as we highlight here that the U.S. represented more than 50% of total revenue in Q3. We expect to see a growing contribution from the U.S. However, it's worth highlighting that our customer base is more diversified globally than many peers, which provides stability during uncertain budget periods in the U.S. It's also important to highlight that Andes' backlog consists of customer orders and awarded programs, rather than the broader unfunded opportunity pipeline. Our immediate priority is execution, delivering against this backlog, supporting customers, and converting a meaningful portion of these orders into revenue during the fourth quarter of 2026. At the same time, we remain focused on replenishing and expanding the backlog organically through continued pipeline conversion. Despite a large revenue outlook for Q4, we continue to expect our backlog to grow as we exit 2026. Let me now highlight two particularly significant growth opportunities that have emerged from our design acquisition. Of course, I am talking about the Ultra and Ion Strike platforms, both of which are seeing advancements in customer activities. Ultra is a low-cost, long-endurance intelligence, surveillance, and reconnaissance, or ISR, platform that we believe is exceptionally well-positioned to address a growing and urgent military requirement. Recent conflicts have exposed the vulnerability and high cost of traditional unmanned ISR platforms, with significant aircraft losses reinforcing the need for more affordable, attributable alternatives. At the same time, the growing need to operate across greater distances is placing additional pressure on legacy ISR solutions. Ultra addresses these challenges with approximately three times the flight endurance at just one-fifth the cost of traditional platforms. Again, three times the flight endurance at one-fifth the cost. This is compelling, particularly when higher-cost legacy systems are seeing survivability issues that are driving the requirement for mixed fleet operations. Increased endurance means fewer aircraft are needed to maintain the same level of persistent surveillance. Combined with significantly lower acquisition and operating costs, Ultra offers a fundamentally more attractive economic model. To put that into perspective, at the bottom here on slide 18, we illustrate the economics of maintaining a combat air patrol or CAP using legacy MQ-9 aircraft versus Ultra. A traditional MQ-9 CAP requires nearly $200 million in upfront investment with annual operating costs exceeding $50 million. Ultra can provide comparable ISR coverage for approximately $25 million upfront and $23 million in annual operating costs. These are extraordinary economic advantages, particularly as the Department of War looks to rapidly replenish and expand ISR capacity while addressing the operational vulnerabilities of legacy systems. For Andes, this represents a potentially transformative opportunity. We are already seeing demand signals for dozens of ultra aircraft with the potential to scale into a substantial installed base supporting what we believe could ultimately become a $1 billion annual recurring service revenue opportunity. Given the significant opportunity ahead of us, we are taking decisive steps to scale production to meet anticipated demand. Here we highlight our recently announced definitive agreement to acquire Steme, the German manufacturer of Ultras Airframe and a critical component of the platform. Bringing STEMA in-house will give us greater control over our supply chain, production capacity, and the pace of expansion, positioning us to execute against what we believe is a substantial long-term growth opportunity. Importantly, this vertical integration also provides an opportunity to further enhance Ultra's already attractive margin profile by capturing more of the value within the manufacturing process. StemA's existing European manufacturing facility is currently operating at just 25% capacity utilization, providing room to increase production within our existing footprint. In addition, StemA's type-certified aircraft and established manufacturing processes provide a strong foundation to accelerate production in the U.S., where we intend to establish up to 345,000 square feet of additional manufacturing capacity. We believe we are well capitalized to support this expansion, though may consider opportunities to access non-dilutive sources of capital to help fund an accelerated production ramp. Together, these initiatives position us to scale ultra-production to as many as 10 aircraft per month by 2028, supporting what we believe could become one of the most significant growth opportunities in our portfolio. Let's turn to Ion Strike, our cost-effective kinetic counter UAS interceptor designed to address one of the most urgent requirements in global defense. We continue to advance Ion Strike with U.S. government customers, building on the important development and validation work completed with the U.S. Air Force. The market requirement is clear. Adversaries are industrializing the production of increasingly capable Shahead-type drones, creating demand for defensive systems that can be deployed in very large quantities. As we have discussed previously, we are pursuing initial commercial orders and can now share that we have submitted a response to a $45 million sole-source RFP, reflecting progress toward operational use and scale deployment. Thank you for joining us. Thank you for joining us. Cost parity is critical here, as is the ability to produce at scale. We are now preparing our production base for rapid scale. We expect to reach hundreds of units per month early in 2027 and to expand toward thousands of units per month beginning in late 2027. We are also developing IonStrike as a family of interceptors and precision strike systems that can address multiple missions, launch configurations, and operational environments, and we look forward to sharing more details on this roadmap over time. As IonStrike moves from integration into fielded deployment, we believe it can become a meaningful growth platform for ONDAs and address a multi-billion dollar annual market opportunity. Our focus is execution, completing customer integration, converting proposals into production orders, and building the capacity required to meet global demand at scale. We have also continued to strengthen the ONDIS platform through a series of targeted acquisitions that add important enabling technologies across our major market segments. This slide highlights four of those additions. I want to focus first on gate and brawn technologies, which establish a strong position for ONDAs in the fast-growing electronic safe and armed devices, or ESADs, and advanced electronic fusing for precision weapons, missiles, and interceptors. These are highly specialized, safety-critical components, and qualified production capacity is increasingly constrained across the global precision strike supply chain. Gate brings proven engineering, established customer relationships, and a scalable international production footprint, including NATO-based non-ITAR manufacturing through Braun in Poland. Strategically, this acquisition does more than just add an attractive standalone business. With GATE, Ondas is now a leading supplier of high-quality and, importantly, low-cost ESAD and kinetic systems. This also ensures we have access to a critical component in a supply-constrained kinetic package and offers significant gross margin capture for Ondas' precision strike and interceptor platforms. The other acquisitions shown here are also important building blocks. Caribou Labs adds resilient positioning, navigation, and communications capabilities for GNSS denied and contested environments. Insignido adds an AI-enabled acoustic sensing layer that can identify and track drones by their unique signatures, further strengthening our counter-UAS detection architecture. And Autopia adds proven teleoperation and autonomy software that we believe can accelerate the autonomy path for Onda's unmanned ground vehicles and heavy combat machinery portfolio. We expect to share more about each of these capabilities in the coming quarters as we integrate them across the portfolio and convert their technology advantages into larger customer solutions and new revenue opportunities. Before turning to the outlook, I want to highlight that we have established the Andas Land Systems Division within OAS to bring five companies together under one strategy with a clear focus on autonomous ground vehicles. The purpose is straightforward, to put unmanned systems at the first point of contact, reducing personnel exposure while helping customers carry out demanding ground missions. This is our bots before boots vision and practice. By combining our capabilities in robotics, Thank you for watching. This also positions us to compete for larger multi-year defense programs. We can bring a broader portfolio to each opportunity with one coordinated team accountable for delivery. We are currently tracking approximately $3.25 billion of identified unweighted potential pipeline opportunities for land systems through 2031. We are building this division to turn these opportunities into awarded programs and sustain growth. Let's now turn to our outlook for the fourth quarter in 2027. As we highlighted earlier, we expect a strong finish to a transformational year. We are targeting full year 2026 revenue of at least $550 million, including more than $250 million in the fourth quarter. We also expect order momentum to remain strong and to exit the year with backlog above the $835 million reported at September 30th, providing substantial visibility into 2027. That growth is supported by major programs already underway, including Mistral's Lethal Unmanned Strike program, Indo-Earth's combat engineering vehicles, and continued global demand across our counter-UAS portfolio. Indeed, we see organic growth continuing to be robust and expect at least 75% organic year-over-year growth on a same-store basis for Q4 higher than the 64% we saw in Q3. Looking to 2027, we expect Ultra and Ion Strike to become increasingly material contributors as customers advance and production scales. We are also focused on expanding recurring and repeat revenue across the platform through software, services, sustainment and longer duration customer programs. Against that backdrop, we are initiating a 2027 revenue target of at least $1.1 billion. That outlook does not include potential acquisitions and assumes organic growth of more than 40%. As revenue and gross profit scale, we expect meaningful operating leverage. As mentioned, we continue to expect the operating platform to achieve adjusted EBITDA profitability in the fourth quarter of 2026. We are also pulling forward the profitability timeline for On2Sync and now expect company-wide adjusted EBITDA profitability in the third quarter of 2027, one quarter earlier than our previous target. Let me wrap up our prepared remarks before we open the call for questions. We are seeing very strong demand across US and allied defense and security markets. The capabilities represented across the ONDIS portfolio are rapidly moving from development and evaluation into operational adoption. Indeed, they are increasingly essential to the modern mission. Our adversaries are innovating, deploying, and industrializing autonomous aerial and ground systems, precision effects, sensing, and mission software at scale. The United States and its allies cannot cede that advantage, and we do not believe they will. Despite the political tensions we see in Washington, across Europe, and in other allied capitals, we believe the need to invest in these capabilities has broad and durable support across aisles in Congress. This is a structural multi-year demand cycle supported by operational urgency and increasingly resilient procurement priorities. ONDIS has been built specifically for this adoption curve. We have assembled a differentiated portfolio of software-enabled capabilities across aerial security, persistent intelligence, precision strike, autonomous ground systems, and AI-enabled command and control. We continue to deepen and integrate those capabilities while expanding the supply chain, manufacturing, field support, and sustainment infrastructure required to deliver reliably at scale. These investments strengthen our position with customers and support the much larger company we are building. We also believe the platform company model is required for our industry to scale. Customers need integrated, mission-ready systems that can be delivered and supported across the operational lifecycle. Thank you for joining us. This includes software, services and sustainment, as well as mission critical components designed into customer platforms that generate repeat orders and are difficult to substitute. Together, these revenue streams provide greater visibility, durability and predictability as our business scales. Our focus continues to be on execution, converting backlog, delivering on major programs, scaling production, integrating our technologies and demonstrating the profitable growth our platform model can generate. In closing, I want to restate the three main takeaways from today's call, which we mentioned at the outset of our call. First, Andas is establishing a scaled global business with a strong foundation for sustained long-term organic growth. Second, we have multiple opportunities to drive outsized growth, including Ultra, Ion Strike, Regna AI, and others, with the potential to meaningfully accelerate our growth trajectory. And thirdly, we are laser focused on rapidly scaling production and deployment capabilities to capitalize on accelerating demand for our solutions. We believe Ondas is positioned to become a global leader in autonomous defense and security technologies and to create substantial long-term value for our customers and shareholders. Thank you again for joining us today. Operator, we will now open the call for questions.

to ensure the best sound quality. Once again, that is star and then one to join the question queue.

Our first question today comes from Trevor Walsh from Citizens.

Please go ahead with your question.

Great. Good morning, all. Thanks for taking the questions. I wanted to talk a little bit about Altra, if I could. Eric, can you maybe unpack that $1 billion recurring revenue? Hey Trevor, thank you for the question and it's an important one. I want to ask Ryan to unpack that for us.

Thanks, Trevor. I appreciate the question. So if you look at just the global demand for combat air patrols or combat lines with the U.S. Air Force and our allied partners, there's approximately 110 combat air patrols that are deployed globally. And so what we see and what we're experiencing today is an increase in what is what we would call a mixed fleet of systems for combat air patrols. You saw Secretary Mink mention in a speech recently that they deployed both Reapers and Ultras to great effect. and what he's talking about is that mixed fleet for a combat air patrol and so in seeing that mixed fleet we're seeing that there is operational utility of having both Reapers and Ultras in support of a combat air patrol and so for ONDOS you know the the The ongoing annual cost of a combat air patrol or the revenue for a combat air patrol is 23 million. So if you just extend that to less than half of the global combat air patrols, that gets us to a billion in sustained revenue on an annualized basis, not inclusive of the acquisition cost of the platform.

Great.

Yeah, Trevor, that's a U.S. number.

Perfect. Yeah, that makes sense. I appreciate the explanation. If I can just do one quick follow-up. I kind of understand that the gross margin kind of outlook is kind of the pressure there is extending into Q4 and potentially into Q7, and it sounds like that's really more a mix. type of outcome that, you know, somewhat out of your control because obviously you want to just sell what you can get out the door. But I'm just trying to bridge or marry you pulling forward the EBIT, adjusted EBIT outlook a quarter forward next year. Should we expect gross margins to significantly kind of get back or abate the pressures there and get back to that 40 plus percent range? to kind of meet that adjusted EBITDA goal. Is that sort of the best way to think about it, or as far as the timing of both sort of coming together, or am I missing something there?

Yeah, good question. So you're right, there's a combination of mix for sure, but some inefficiencies as we are ramping programs and driving scale. We think both will improve to the upside moving into and through 2027. and we do have that longer term target, I'd say over the next 12 to 24 months to get that into the 45 to 50% range. So as it relates to the expectations around profitability and EBITDA positive on a consolidated level, we're just getting increased visibility around around the revenue ramp and the gross profit ramp vis-a-vis our operating expenses. So we think we're on track.

Terrific. Thanks all for the questions. I'll hop back in the queue.

Our next question comes from Austin Bollig from Needham & Company. Please go ahead with your question.

Hey, guys. Thanks for taking the question, and congrats on the solid quarter and strong outlook. Maybe just one on that $1.1 billion guide with backlog expecting to grow in Q4. Do you guys expect the majority of that to get filled in 27? And if that's true, it leaves like roughly a few hundred million dollars to hit that target. So the $1.1 billion feels conservative. So I'm curious on if you could lay out potential upside scenarios and what that might look like.

Awesome, great question, and of course we're still in 2026, so I want to defer getting into some more granular conversation around upside. You know, $1.1 billion is a substantial step forward for us, and we do have quite a bit of visibility, and I think that is going to improve this quarter. because we do see a strong pipeline and are optimistic about the bookings cadence as we're going through the quarter. So we do endeavor to give targets that are conservative, and we're working very hard to establish that and sustain that track record of delivering for our investors. I feel good about the $1.1 billion, and of course we're going to work really hard to put a higher, or to outperform that.

All right, perfect. And then maybe just one more, and on the M&A front, but uniquely enough this morning, a public satellite company announced their first acquisition in the unmanned ground space, and their whole rationale is they believe space is becoming an important layer within this modern warfare domain. I'm just kind of curious, it feels like a natural extension for ONDIS to kind of expand into the space domain. How do you guys view that and like what would that maybe look like?

Yeah, so I think for sure and you know we're in the, we describe our ISR business as multi-domain and of course that starts with the stratosphere for us where we bring unique capabilities. and that goes all the way down through, of course, the ultra platformer, Group 5 long-durance drone, Group 3, 2 and 1, both ISR and Strike. So we do have an interest in the space domain, but I really don't think it's time for us to unpack that and give an outlook as to how we may approach it. I don't feel it's essential to us or that it's a gap, but it would be an opportunity. All right. Thank you, guys.

We'll keep up the great work.

Thank you.

Our next question comes from Jonathan Segment from Stiefel. Please go ahead with your question.

Hey, good morning. Thank you for taking my question. A lot of good news in the quarter. Maybe talk a little bit about the ground vehicle opportunity. Now that it's entering production, can you talk a little bit about what's firmly ordered and the production rate supported in 27, and just, you know, just how do you reserve for any contingencies related to that steep ramp that you have? Thank you.

Okay. Yeah, John, so we've got, you know, quite a bit going on in our land systems business, and as we said today, we've combined that under a single leadership team, and that includes 4M, it includes our robo team in Autopia, Apero, as well as Indoworth. As we're moving into Q4 in the first half of 2027, you're going to see the Indoworth orders and program ship. We think that has a possibility of expanding actually with additional orders. We see 4M continue to deliver on its land clearance activities, and we actually see opportunities there to have more follow-on orders around major cleanup programs that we've announced in Israel. And we think there's generally a strong demand. I'll add that the Iron Wave systems have been deployed and have been well-received, and we're expecting to grow that business into 2027 as well. I don't want to give a specific number on what that looks like for 2027, but I do think it's going to be a big chunk of a mix. And we did share what that looks like in terms of targets in our outlook for the land business.

Thank you. And then I'll ask just one on budgets, just because we're in such a dynamic environment and recognizing there's not a clean answer on some of these things, but just how much of your growth could be dampened if we don't are able to have an extended CR or not be able to pass reconciliation. And then over in Israel, can you give some context on what could change and not change if the US stops supporting funds over there? Thank you.

Okay, so I'll start with the latter on Israel. And then I'll ask Ryan to share more context on the US market and some of those dynamics you're highlighting. So firstly, We have a very strong foundation in Israel. In fact, none of the business we have today has been funded or is expected to be funded by the U.S. government. So we feel like we have a very good position there. And of course, Israel has had an election and they're forming a new government. We think our business there is very strong. We're going to continue to invest in Israel's security. And Israel, like all the markets we're seeing, is undergoing a shift towards unmanned systems, autonomy, robotics. And it's quite clear that Andas is an important part of that market there. So we're going to continue to invest, and I don't see a significant impact on any pullback in funding from the United States to Israel impacting us. I do think that is just opportunity. Ryan, would you share some insight onto the U.S. business and outlook? And I'll highlight before you do that the United States is now about half our business, and I think that's going to continue to be the biggest market for us. So, Ryan? Yeah, thanks, Eric. And, John, thank you for the question.

For the work we're doing currently in the U.S., All of that work is either currently in a 2026 budget, therefore transitioning into a CR at current levels. In addition to that, a lot of the growth that we're seeing is supported by O&M budgets and not new starts. We feel quite confident that we're isolated from a continuing resolution and that an extended CR is not going to impact the growth that we see in front of us. I'll also highlight that in a CR, you know, the offerings that we have, and I'll speak specifically to Ultra, enable the U.S. Air Force to extend the combat air patrols and the combat lines on a global level at a lower cost to the U.S. government. And so we believe that the ONC and budgets will actually go further than they would have otherwise gone in being able to provide that very important capability around the world. And all of our other programs, like I said, are supported with current budgets and O&M.

Thank you very much.

Our next question comes from Tim Horan from Oppenheimer. Please go ahead with your question.

Thanks, guys. On Einstein, going from hundreds to thousands in manufacturing, is that relatively linear, that scale?

Sure. So we're today shipping against or preparing to ship against the orders that we described on the call, Tim, and those are low-rate production. As we're moving into 2027, we have a plan to scale that production, and, of course, we'll do that. The only thing I'd add is

that we have all of the manufacturing footprint that we need to scale it to the levels we're talking about in 2027. We're adding the people resources to be able to support that growth. And we're well aligned with our supply chain to be able to scale at the rates that we're talking about.

Yeah, so we'll spend some more time, Tim, going through the details of the expansion, the capacity expansion for Ion Strike. as we get more visibility into follow-on orders. So stay tuned.

I mean, can you talk about the demand for that qualitatively? I mean, and I guess that the demand is there. You're talking about this being at least a billion-dollar run rate business in a year.

Well, yeah, I mean, the demand is is massive and there's a massive shortage in interceptors and it's a critical requirement. You know, we know that's the case in Ukraine. We know that's the case in the Middle East as well in the case in Europe. So, yeah, I think we're in an environment where we're well positioned. We've got the product that's that's meeting requirements for this next generation Shahed, which is a menace in Ukraine and elsewhere. and I think we're actively working on this capacity expansion because we do expect this to become a significant business for us.

And just to follow up on the ultra, I'm just trying to understand ultimately what the overall size of the market could be. I mean, do you think many, many more countries would adopt caps like this? And if you're going to be a quarter of the total cost or much, much lower cost, do you think the U.S. would adopt a lot more? Thanks.

We sure do. And Ryan, what would you add to this in terms of the international opportunity?

Yeah, so, you know, everything that we've talked about thus far is specific to the U.S. We see growing demand in the Indo-Pacific region and in the European market. And, you know, global demand, you know, or international demand is about 25 to 30 percent of the overall demand for combat air patrols. So that's a significant portion of what we see. Our focus today is on responding to U.S. Air Force demand. And once that's satisfied and we're at a steady rate with the U.S. Air Force, we'll see steady growth in the international market. Thank you.

Our next question comes... Our next question comes from Michael Lattimore from Northland Capital Markets. Please go ahead with your question.

Great. Thanks, Seth. Congrats on the strong growth here. With regard to Regna AI, can you talk a little bit more about the dynamics around that? What are the sales cycles like there, deployment timelines, and then how do you price it, gross margin, deal size? A little more detail on Regna would be great.

Great question. And Ryan, you've been busy on this call. I'm going to ask you to expand on this.

Yeah, thank you. Great question. So I'll start with the sales cycle. What does that look like? So whenever a customer is deploying sovereign AI, there's really two elements that are important for them to be able to deploy. The first is the hardware layer. And this is whether it be on-prem or air-gapped sovereign AI. And so we work with those customers to establish a sovereign hardware environment and then deploy the sovereign AI models, the open wake models on their hardware. So the sales cycle is pretty straightforward. This is mostly software sales with a little bit of hardware infrastructure. And so we expect sales cycles to be measured in single digit months, in most cases within a quarter. and then you know the overall deployment model is once hardware is is identified or or established for these customers our job is to for deploy engineers to to design the overall model architecture for them and the post training environment and and then separately have the researchers that post train and fine tune the models based on their mission data. The revenue profile is the four deployed engineers plus the researchers and then the compute and storage sales specific to operating their models.

Awesome, great. And then, Eric, you talked about one of the goals is, you know, growing the reoccurring revenue over time. Can you just bracket that a little bit more like in 27? What percent of revenue could that be or longer term?

Yeah, I can't put any more precision on it today. It's the recurring and reoccurring revenue is a small piece of our revenue stream today. but as the installed base grows and we mature to more systems-to-systems and software-driven revenues, I think you can see it grow dramatically. So we'll be sharing more updates on that as we see that dynamic playthrough, but I'm very optimistic about it. All right.

Thank you.

Thank you.

Our next question comes from Clark Jeffries from Piper Sandler. Please go ahead with your question.

Hello. Thank you for taking the question. I was just curious if you could remind us on any significant deliveries that were planned in the ISR segment for the second half of this year. I noticed it's the only category that didn't sequentially grow in the backlog, and it was one of those, well, the target revenue expectation jumped to 27% in that category. Just any color on timing of revenue recognition and backlog to revenue transition in ISR specifically?

I think the ISR business is on plan, and I think the dynamic you're talking about is more of other parts of the business growing faster, perhaps, in terms of orders. As we've highlighted on the call, we're expecting a significant ramp in our ISR, specifically around Ultra, and we do think the worldview of business is looking – we've got significant pipeline opportunities into 2027.

Perfect. And then just, you know, talking about these adjusted EBITDA timelines and the ability to pull it forward here another quarter in terms of the overall corporate number, you know, what's making the most difference there? You know, it seems to be a very bullish tone in terms of the bookings and the growth outlook, but curious, maybe under the hood in terms of any kind of efficiency or operating expense management that you're seeing from any of those Thank you.

The biggest difference is just the revenue gross profit expansion we're seeing in 2027 is significant. We're going from doing over $500 million in revenue this year and we're funding that business so it can be a billion dollars plus next year. So we've made a lot of investments in the last several quarters specifically to scale the business to handle a much bigger revenue stream, not just in 27, but into 2028. I'll also add that as we're given this, the targets around profitability and even top break even, we've been deliberately conservative because we want to get, again, coming back to my earlier statement, it's important for us to deliver a track record of meeting expectations and even exceeding them. So I think we've got a strong momentum in the 2027. We're going to be generating significantly higher levels of revenue and gross profit. And of course, that's what it takes to get the operating leverage. And that's what we've been signaling to bring us into to drive profitability of the business. So it's just that simple. Thank you very much. Thanks, Clark.

Our next question comes from Matthew Galenko from Maxim Group. Please go ahead with your question.

Great, thanks. First question is on, I guess, can you expand a little bit on the funding concept for REGNA and expectations for the timeline to become a material revenue contributor? Sounds like you're not necessarily including it in your early 27 forecast. I just wanted to level set there.

Yeah, sure. So we're not including the REGNA financial outlook in our forecast today. So it would be upside. And as we've outlined or highlighted, Matt, we are pursuing REGNA with financial partners. And I want to hold off on the details until we're able to complete the conversations with those investors. But I highlight that The conversations are advanced. It's with Tier 1 VCs with deep experience in building AI infrastructure and services businesses. And as we secure that funding, we're going to be able to share a lot more about the financial model looking into 2027 and beyond.

Great. Thanks. My follow-up, I guess, is on working capital and inventory. Had a pretty nice build in third quarter and obviously a pretty significant revenue round. for 27. I'm curious if you can maybe go into the working capital dynamics that we could expect to see into the fourth quarter and as you kind of pursue that ramp for 2027. Thanks.

Sure. So, yeah, we are building inventory and capacity in front of this very steep revenue curve. So, we can deliver against that. and I'd expect to see us build inventory during this quarter to support the stronger growth in 2027 as well. And of course, Matt, we're going to switch to another question. We're working very hard on cash conversion cycles. It's a very big focus internally to ensure we're managing our working capital as efficiently as possible.

Our next question comes from Samir Joshi from HC Wainwright. Please go ahead with your question.

Good morning. Thanks for taking my questions. I just wanted to understand the cash spent over the next 12 to 15 months. How should we look at it in terms of acquisition budget versus capital expenditures versus just operating costs?

Sure. So I think I'll start first with investing in the business. We have a significant opportunity to do that. And we've highlighted some of the things we're doing specifically on production capacity and supply chains, and I'm expecting us to continue to have that focus. So you'll probably see CapEx move higher and I'll likely be in a position to give you more details on that as we're in 2027 and certainly by the time we report our acute are our Q4 results, but perhaps before that. And so there is a significant opportunity for us around Altra where we've acquired STEMI to onshore the production capacity in the U.S., which is critically important for the customer, but also in and around Iron Strike where we see as we've discussed on the call, a dramatic opportunity here to really grow a big business and then Iron Strike actually can be a family of systems. So we're exploring that and I'm hopeful that we can share more details probably early in Q1 next year. Otherwise, on the acquisition side, we still continue to see a very strong acquisition pipeline. I think our thesis around building operating platforms or having operating platforms be the right model to scale and deliver these unmanned and autonomous systems to the critical markets where we're focused on. Our customers are showing there's value in this, the partners, the talent are, and of course the investors are. So at the same time, you know, thinking about the cash utilization in our acquisition program more broadly, We are going to be very financially disciplined. The cost of capital matters when we're thinking about acquisitions. They all have to be financially accretive to our investors. And that's the measuring stick, right? They have to be financially accretive. and we don't have to do anything today. We have a complete company. We're operational across four important domains. We now have a global footprint and we have incredible talent. So we have more than enough internal opportunities coming back to that investment I was just referring to a moment ago to drive growth and operating leverage in the business. So I still believe that the core and strategic plan works. but given where we are in this market environment, I think you can expect us to be more moderate and more deliberate in the acquisition program when you're thinking about our use of cash and the use of capital.

Thanks for that. That was a nice detail to have. Just a quick one on 4Q Outlook. I think you beat the Your own guidance and consensus quite handsomely in 3Q, but the 4Q seems to be at the same or similar levels that the 250 plus 255 are on. Was there anything that was pulled from 4Q into 3Q that enabled the beat or is our 4Q guidance just being conservative?

So firstly, we don't pull anything forward, right? When we have customers who provide orders, They need capabilities, and we deliver against our production timelines, and today is better than tomorrow. That's always going to be the case. And then if you're thinking into Q4, we're just giving a target that we think is achievable, if not beatable, and we think it's a strong performance.

Understood. and I just wanted to congratulate them on a really nice presentation. The business is complicated, but it is very well presented. Thank you, Samir.

Our next question comes from Max Michaelis from Lake Street. Please go ahead with your question.

Hey, guys. Congrats on the quarter. Just one for me and it's on Ion Strike. Looking at the rest of the market, I know Anderle, Raytheon, Quantum Systems, Elkhart, products in a similar space. I mean, can you help differentiate the technology at Ion Strike versus these other guys and then maybe help us out where that $50,000 per unit sits compared to the rest of the market?

Yeah, sure. Ryan, I'm going to hand this to you.

Yep, great, Max. Great question. So there's a couple things that differentiate Ion Strike, and I'll get to the The price for the system here. But from a capability point of view, Ion Strike was designed to integrate with current C2 systems. And then in addition to that, it's not a fire and forget system, which is another key differentiator of the system. A customer. can either abort or retarget the system to a higher priority target mid-flight using current command and control systems and targeting systems. From a cost per kill point of view, this is the huge differentiator for Ion Strike. The other systems that you talked about are still systems that are rather exquisite and measured in hundreds of thousands of dollars on a cost per system and therefore a cost per kill basis, whereas Ion Strike was designed from the very beginning to achieve cost parity. against the target set, and in this case, the Shaheed 136 class systems. And so both from a capability point of view and from a price point of view, it's clearly differentiated, and we're seeing that in the demand that continues to grow for Ion Strike.

Okay. Thanks, guys.

And our next question comes from John Hickman from Lattenburg. Please go ahead with your question.

Hey, nice quarter.

Could you, you just talked about all the acquisitions you've been making.

Could you give us some indication of where you are in integrating those all together and to a point that you would be, you know, say you're finished with that?

Yeah, sure. So we've made significant progress, and this is something that we work on every day. The key to getting this operating leverage and profitability is being able to deliver our capabilities to customers efficiently. So we're working really hard on building that operating platform. We've pointed to the investments we've made. Of course, a big part of those investments are firstly in leadership. We've assembled an incredible team. And then also there's the production and delivery capabilities. And we're spending a lot of time sharing with you how we're doing that. And we're going to continue to do that, drive scale in the supply chain, drive scale in the production, drive scale in the field services and sustainment. And that's going to be an ongoing basis. I feel like we're in a really good spot here. We highlighted today that we have created the land services business, so a division or segment, and that's going to be where our ground capabilities are delivered. At the same time, we're also a systems assistance company, so our land groups are working and integrating technologies with other parts of ONDOS, for example, the counter drone systems and the kinetic systems. So I think you should expect us to see, you know, to show you more of that, more of that, you know, organization of the company. And, you know, I'll point to another place, Andas Sentinel, right? We've got Worldview and now Design under Ryan's leadership. We've got an incredible leadership team there, and we're going to market as one Andas. So, again, we've made a tremendous progress there. There's going to be a massive focus for us. Okay, thank you. Appreciate it. All right. Thanks, John. Thank you.

And with that, ladies and gentlemen, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Eric Brock for any closing comments.

Okay, thank you. So it was a great call today. We appreciate all the questions and engagement, and we appreciate you joining us. And thank you for your continued interest in OnDots. We're going to get back to work. and we look forward to updating you on our progress. Operator, we can conclude the call.

And with that, we will conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.