Benzinga | May 17, 2021 02:22PM EDT

Ondas Acquires Drone Developer American Robotics For $70.6M, Reports Q1 Earnings

* Proprietary software-based wireless broadband technology developer Ondas Holdings Inc (NASDAQ: ONDS) inked an agreement to acquire fully-automated commercial drone system developer American Robotics for $70.6 million.

* The deal will be financed via a mixture of cash and equity securities. Ondas had extended a loan of $2 million to American Robotics on Apr. 22, 2021.

* FAA has only approved American Robotics to operate its drones beyond-visual-line-of-sight (BVLOS) without a human operator on the ground.

* This acquisition will integrate the technology platforms of the two companies and increase automation, data collection, and AI-powered analytics in industrial markets.

* The drone is the ultimate data-gathering edge device for mission-critical operations, solving a huge pain-point for Ondas' industrial and government customers and ecosystem partners, Ondas Chair and CEO Eric Brock said. American Robotics' full-stack IP portfolio is a complete system enabling Ondas to turn these pain-points into growth opportunities fueled by more rich data collection, Brock added.

* American Robotics CEO Reese Mozer saw substantial customer demand and was ready to deliver systems across an impressive pipeline of blue-chip industrial customers in addition to new customer relationships via Ondas.

* Ondas held $24 million in cash and equivalents as of Mar. 31, 2020.

* Separately, Ondas reported first-quarter FY21 revenue growth of 482% year-on-year to $1.165 million, beating the analyst consensus of $1.21 million.

* The gross margin expanded 4,280 basis points to 52.3%.

* Operating loss rose 23.6% Y/Y to $(2.9) million, and net loss rose 11.8% Y/Y to $(3.1) million.

* EPS loss of $(0.12) missed the analyst consensus of $(0.10) loss.

* The company used $3.1 million in operating cash flow.

* Guidance: Ondas sees a Q2 revenue outlook of $1 million - $1.5 million, below the analyst consensus of $2.36 million.

* Price action: ONDS shares traded higher by 14.2% at $6.95 on the last check Monday.