Quarterly report [Sections 13 or 15(d)]

Segment Information

v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Information [Abstract]  
SEGMENT INFORMATION

NOTE 14 – SEGMENT INFORMATION

 

During the three months ended March 31, 2026, the Company deconsolidated Ondas Networks, which was previously included in the Company’s consolidated financial statements. As a result of the deconsolidation, Ondas Networks is no longer a reportable segment, and the Company evaluated its segment reporting structure for the current period in accordance with ASC 280, Segment Reporting. Following the deconsolidation, the Company operates in one operating and reportable segment, which is focused on developing and providing advanced defense, security, and communications technologies for critical infrastructure and government customers. The prior period has been recast to confirm to the current period presentation.

 

The Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”) and is responsible for assessing operating performance and allocating resources. The Company’s organizational structure is based primarily on functional lines, with department heads and shared service functions reporting either directly to the CODM or to direct reports of the CODM. The CODM reviews financial information on a consolidated basis and uses net income (loss) as the primary measure of operating performance and for purposes of making operating decisions. Accordingly, the Company has determined that it has a single operating segment.

 

In assessing performance, the CODM reviews significant operating expense categories reflected in net income (loss), including research and development, sales and marketing, and general and administrative expenses, each of which is separately disclosed in the condensed consolidated statements of operations. In addition, the CODM reviews certain significant expense items that impact operating results, including stock-based compensation, as well as other significant charges or credits that may occur during the period and are discussed elsewhere in the notes to the condensed consolidated financial statements.

 

The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. The accounting policies of the Company’s operating segment are the same as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

 

The following table presents segment information for three months ended March 31, 2026 and 2025:

 

    Three months
ended
March 31,
2026		     Three months
ended
March 31,
2025		  
(dollars in thousands)   Total     Total  
Product revenue   $ 38,368     $ 3,224  
Service and subscription revenue     9,323       809  
Development revenue     2,431       215  
Revenue, net     50,122       4,248  
Cost of goods sold     25,464       2,760  
Gross profit (loss)     24,658       1,488  
Operating expenses:                
General and administration     43,316       5,909  
Sales and marketing     10,494       2,430  
Research and development     13,519       3,459  
Total other income     404,166       (3,826 )
Segment operating profit (loss)     361,495       (14,136 )
Reconciliation of profit or loss adjustments and reconciling items    
-
      
-
  
Income (loss) before provision for income taxes   $ 361,495     $ (14,136 )

 

The above table includes depreciation expense of $669 thousand and $181 thousand for the three months ended March 31, 2026 and 2025, respectively, and amortization expense of intangible and right-of-use assets of $6.0 million and $1.3 million for the three month periods ended March 31, 2026 and 2025, respectively.