Quarterly report [Sections 13 or 15(d)]

Segment Information

v3.26.3
Segment Information
 9 Months Ended
Sep. 30, 2026
Segment Information [Abstract]  
SEGMENT INFORMATION

NOTE 13 – SEGMENT INFORMATION

During the nine months ended September 30, 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. All prior period segment information has been recast to conform to the current period presentation of a single reportable segment.

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) before provision for income taxes 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 financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2025.

The following table presents segment information for the three and nine months ended September 30, 2026 and 2025:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

(dollars in thousands)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Revenues, net

 

$

167,489

 

 

$

10,098

 

 

$

301,383

 

 

$

20,620

 

Cost of goods sold

 

 

130,989

 

 

 

7,494

 

 

 

205,581

 

 

 

13,195

 

Gross profit

 

 

36,500

 

 

 

2,604

 

 

 

95,802

 

 

 

7,425

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administration

 

 

124,649

 

 

 

10,595

 

 

 

294,485

 

 

 

22,583

 

Sales and marketing

 

 

36,673

 

 

 

3,000

 

 

 

68,049

 

 

 

7,696

 

Research and development

 

 

61,594

 

 

 

4,513

 

 

 

106,066

 

 

 

12,209

 

Change in fair value of contingent consideration

 

 

3,090

 

 

 

-

 

 

 

22,323

 

 

 

-

 

Total operating expenses

 

 

226,006

 

 

 

18,108

 

 

 

490,923

 

 

 

42,488

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(615

)

 

 

(444

)

 

 

(1,993

)

 

 

(5,873

)

Other income (expense), net

 

 

133,696

 

 

 

8,774

 

 

 

583,439

 

 

 

8,875

 

Total other income (expense), net

 

 

133,081

 

 

 

8,330

 

 

 

581,446

 

 

 

3,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment operating profit (loss)

 

 

(56,425

)

 

 

(7,174

)

 

 

186,325

 

 

 

(32,061

)

Reconciliation of profit or loss adjustments and reconciling items

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Income (loss) before provision for income taxes

 

$

(56,425

)

 

$

(7,174

)

 

$

186,325

 

 

$

(32,061

)

 

The above table includes depreciation expense of $2.6 million and $0.2 million for the three months ended September 30, 2026 and 2025, respectively, and amortization expense of intangible and right-of-use assets of $36.5 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively. The above table includes depreciation expense of $4.2 million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively, and amortization expense of intangible and right-of-use assets of $61.1 million and $2.7 million for the nine months ended September 30, 2026 and 2025, respectively.