Ondas Holdings Inc. (ONDS) had a heck of a Thursday. Shares shot up 26.5% after the company reported first-quarter results that blew past Wall Street estimates and raised its outlook for the rest of 2026. But Friday morning, the stock is giving back a little of those gains, down about 3% in premarket trading. That's not unusual — after a move like that, some profit-taking is almost expected.

So what got investors so excited? Let's dig into the numbers.

Q1 Revenue: From $4.2 Million to $50.1 Million

Ondas, which focuses on autonomous systems and defense technology, posted first-quarter revenue of $50.1 million. That's up from just $4.2 million in the same quarter last year and ahead of the $39.4 million analysts were looking for. It also came in 25% above the high end of the company's own guidance. Sequentially, revenue rose 66%.

Gross profit climbed to $24.7 million, and gross margin expanded to 49% from 35% a year earlier. That's a big improvement in profitability at the gross level.

But the company is still investing heavily in growth. Adjusted EBITDA loss widened to $10.9 million from $7.5 million a year ago. Net income, however, swung to a gain of $361.2 million from a loss of $14.1 million, thanks largely to non-cash gains from warrant liability revaluation and the deconsolidation of Ondas Networks.

Ondas ended the quarter with a hefty cash pile: about $1.48 billion in cash, restricted cash, and short-term investments.

Backlog and Defense Demand Are Booming

Total backlog rose to roughly $457 million, boosted by the acquisitions of Worldview and Mistral. The company's subsidiary, Ondas Autonomous Systems, is seeing strong growth across its units. Aerobotics revenue jumped about 260% year over year, driven by demand for its Iron Drone and Optimus systems.

Centrix, another subsidiary, secured $36 million in orders through April 1 — that's already more than its full-year 2025 revenue of $30 million. Meanwhile, 4M Defense won $80 million in tenders and received $25.8 million in initial orders, compared with just $8 million in revenue during all of 2025.

Ondas also disclosed a global opportunity pipeline valued at about $4.3 billion across more than 45 strategic programs worldwide. That's a lot of potential business.

Acquisitions and the Palantir Partnership

The company highlighted its recent acquisitions of Worldview and Mistral, as well as its partnership with Palantir Technologies Inc. (PLTR), to strengthen its capabilities in multi-domain ISR (intelligence, surveillance, and reconnaissance), artificial intelligence, and autonomous systems.

During the quarter, Ondas launched Iron Wave, a multi-layer robotic defense platform that combines aerial defense systems, autonomous robotics, AI-enabled command systems, and unmanned ground vehicles for military applications.

Management sees more than $1.6 billion in strategic opportunities tied to U.S. border security, autonomous strike platforms, demining robotics, and NATO-related defense programs.

2026 Outlook: Revenue Over $390 Million

Ondas raised its full-year 2026 revenue outlook to more than $390 million, above the $377.7 million analysts were expecting. That would represent roughly 670% year-over-year growth from 2025 levels.

The company said adjusted EBITDA losses are expected to peak in the second quarter before improving later in 2026. It also pulled forward its expectation for Ondas Autonomous Systems to reach adjusted EBITDA profitability to the first quarter of 2027, from the third quarter of 2027.

And here's a number that might make you do a double-take: Ondas says its balance sheet could support more than $4.2 billion in merger-and-acquisition activity, potentially adding $1 billion to $1.8 billion in annualized revenue over time. That's a lot of firepower for a company that just reported $50 million in quarterly revenue.

Stock Pulls Back After the Rally

After Thursday's 26.5% surge, Ondas shares were down 3.03% at $10.87 in premarket trading Friday. That's a modest pullback, and the stock is still up massively from where it was a few days ago.

For investors, the key question is whether Ondas can execute on its massive opportunity pipeline and turn those backlog numbers into actual revenue and, eventually, profits. The company is clearly in growth mode, and the market seems to like what it sees — at least for now.