Ondas Networks Boards Rail Veteran to Propel dot16 Standard Adoption in North America

What happened

Ondas Holdings announced that Brent Laing, a veteran rail executive with deep industry ties, has joined Ondas Networks as an independent board member to accelerate the adoption of the IEEE 802.16t (dot16) protocol in North American rail. This appointment follows the recent selection of dot16 by the Association of American Railroads as the upgrade path for legacy networks, potentially bolstering Ondas' strategic alignment with critical rail standards. However, the DeepValue report underscores that Ondas remains a micro-scale, structurally loss-making enterprise, with nine-month 2025 revenue of only ~$20.6M and operating losses of ~$35M, heavily reliant on equity issuance for funding. While Laing's expertise could enhance credibility and help secure future rail contracts, the core challenges of converting pilots into multi-year deployments and achieving operating leverage persist. Thus, this move represents a modest de-risking of the rail adoption narrative but does not address the fundamental financial instability or binary risk profile.

Implication

The recruitment of Brent Laing may improve Ondas' ability to navigate rail standards and potentially secure contracts, aligning with the AAR's endorsement of dot16. Yet, investors must contextualize this against Ondas' Networks segment, which generated a mere ~$0.5M in revenue over nine months, while operating expenses soared and cash burn remained high. The company's history of aggressive equity issuance and negative free cash flow implies that any rail wins must be substantial to offset ongoing capital needs and competitive pressures from larger RAN vendors. Without visible multi-year contracts or a clear path to profitability, the investment thesis remains binary, hinging on execution success that is far from assured. Therefore, while this news is a positive step, it does not justify a shift from the 'WAIT' rating until tangible revenue growth or contract disclosures emerge.

Thesis delta

The core investment thesis that Ondas is a binary bet on rail and autonomy execution remains unchanged, as Laing's appointment only marginally reduces execution risk in the rail segment without impacting financial fundamentals. However, it underscores the ongoing focus on converting standards alignment into commercial deals, which is a key watch item from the DeepValue report. No material shift in the thesis is warranted until evidence of operating leverage or secured backlog materializes to counterbalance the persistent losses and dilution.