Actelis Networks Reports Second Quarter 2025 Financial Results and Operational Update

Rhea-AI Summary

Actelis Networks (NASDAQ: ASNS) reported Q2 2025 financial results showing mixed performance. Revenue reached $0.94 million, a 31% sequential increase from Q1, though down from $3.4 million in Q2 2024. The company posted a net loss of $1.9 million with gross margin declining to 32% from 57% year-over-year.

Key developments include securing a breakthrough order from a major US telecommunications carrier for GigaLine MDU solutions, strengthening sales leadership with the appointment of Mark DeVol as Chief Revenue Officer for the Americas, and implementing a strategic restructuring plan targeting 15-20% cost reduction. The company also announced a new cryptocurrency treasury management strategy and maintained low debt levels while raising $1.35 million in Q2.

The company faces temporary margin pressures but expects improvements through restructuring initiatives over the next 6-9 months, focusing on automation, AI integration, and operational efficiency.

Positive

• 31% sequential revenue growth from Q1 to Q2 2025
• Secured first major US telecommunications carrier customer for MDU solutions
• Successfully raised $1.35 million while maintaining low debt levels
• Strategic restructuring plan targeting 15-20% cost reduction
• Strengthened sales leadership with experienced executives in Federal/Military markets

Negative

• Revenue declined to $0.94M in Q2 2025 from $3.4M in Q2 2024
• Gross margin compressed to 32% from 57% year-over-year
• Net loss increased to $1.9M from $78,000 in Q2 2024
• Operating loss of $1.77M compared to operating profit of $66,000 in Q2 2024
• Adjusted EBITDA loss of $1.7M versus profit of $11,000 in Q2 2024

Insights

Financial Analyst

Actelis reports concerning 72% YoY revenue decline with restructuring plan amid strategic shift to higher-value markets.

Actelis Networks' Q2 2025 results reveal significant financial challenges, with revenue dropping to just $941,000 from $3.4 million in Q2 2024 - a concerning 72% year-over-year decline. While management highlights a 31% sequential growth from Q1, this comes after an extremely weak first quarter. The company posted a net loss of $1.9 million compared to a much smaller $78,000 loss in the year-ago period.

Particularly troubling is the severe gross margin compression to 32% from 57% a year earlier, indicating potential pricing pressure and scale issues affecting profitability. Operating expenses remained essentially flat at $2.08 million, but with the revenue decline, these now represent an unsustainable percentage of sales.

The revenue deterioration stems primarily from two factors: a non-recurring software/services renewal that boosted 2024 results (not renewable until 2027) and significant delays in expected Federal/Military contracts. Management appears to be pivoting toward three key verticals: Federal/Military, ITS/IoT, and MDU (Multi-Dwelling Unit) markets.

In response to these challenges, Actelis is implementing a restructuring plan targeting 15-20% cost reductions over 6-9 months through automation, AI integration, and staff changes. The company raised $1.35 million in Q2 to strengthen its balance sheet while maintaining low debt levels.

Two notable strategic developments bear watching: 1) New leadership appointments focused on Federal/Military sales, suggesting a pivot toward government contracts, and 2) A board-approved cryptocurrency treasury management strategy - an unusual and potentially risky move for a small public company facing operational challenges.

The Q3 guidance is vague but critical, with management stating delayed Federal/Military contracts are "expected in Q3" - the timing and scale of these potential deals will likely determine the company's near-term trajectory.

FREMONT, Calif., Aug. 14, 2025 (GLOBE NEWSWIRE) -- Actelis Networks, Inc. (NASDAQ: ASNS) ("Actelis" or the "Company"), a market leader in cyber-hardened, rapid deployment networking solutions for IoT and broadband applications, today reported financial results for the second quarter ended June 30, 2025.

"We navigated a dynamic market environment in the second quarter, while laying the groundwork for improved growth ahead, primarily in our Federal and Military verticals where we are awaiting sizeable business that was delayed in Q2 and is expected in Q3. In addition, we have accelerated and expanded our MDU market penetration efforts in more countries and more verticals,”, said Tuvia Barlev, Chairman and CEO of Actelis. “We grew 31% in revenues sequentially vs. Q1 and we are executing multiple comprehensive growth initiatives. We secured several major wins that validate our long-term strategy, including our first major US telecommunications carrier customer for MDU solutions. We strengthened our sales leadership and focus on the US market and especially on the Federal/Military and Local Government markets with our new hire of Chief Revenue Officer for the Americas, Mark DeVol, and Director of US Federal Sales Jason Chasse.

“We are adopting a plan to restructure the company, with increased focus on the more valuable and fast-growing markets and geographies, contributing to profitable growth while building a more efficient, AI-enabled, automated organization. We will elaborate further on this plan here and in the next few weeks.  With the significant deals in our pipeline, our new sales leadership talent and focus, the progress we are making in the MDU markets with customers and partners, and the restructuring of the company towards efficiency and growth, we are positioned for sustainable growth. "

Second Quarter and First Half 2025 Financial Highlights:

• Sequential Revenue Growth: Revenues reached $0.94 million in Q2 2025, representing a 31% sequential increase from Q1 2025. For the first half of 2025, revenue was $1.7 million compared to $4.16 million in the prior year period. The decline is associated with a software and services renewal last year, which occurs every two years, and will be up for renewal in 2027, as well as a large deal to the City of Washington D.C. last year, while 2025 revenues are more backend loaded.
• Gross Margin: Gross margin was 32% in Q2 2025 compared to 57% in Q2 2024, with First half 2025 gross margin at 33% versus 52% in the prior year period. The temporary margin compression reflects the prior year software and services renewal not repeatable until 2027, and volume decline impacting fixed indirect costs as a percentage of revenues, while direct margin largely stayed the same.
• Disciplined Cost Management: Operating expenses of $2.08 million in Q2 2025 versus $2.04 million in Q2 2024 (excluding other income) represent a 2% decrease when adjusted for $70,000 in foreign exchange headwinds, demonstrating continued expense discipline despite currency volatility.
• Liquidity Position: Successfully raised approximately $1.35 million during Q2 2025, including $1 million on June 30 closed on July 2, while keeping debt extremely low, strengthening the balance sheet.
• Loss Per Share: Net loss per share for Q2-2025 was $(0.21) compared to $(0.01) in the prior year period, due primarily to lower revenues. Net loss per share decreased 16% to $(0.43) for the first half of 2025 compared to $(0.51) in the corresponding 2024 period, reflecting continued progress toward profitability.

Recent Business and Operational Highlights:

• Q2 2025 Commercial Wins and International Expansion: Secured breakthrough order from significant US telecommunications carrier for GigaLine MDU solutions, marking first deployment with carrier of this scale. Secured follow-on transportation orders from major Mid-Atlantic county, Orange County California, and City of Eugene Oregon for intelligent transportation infrastructure upgrades. Continued international expansion with orders from Nordic municipality and Japanese infrastructure projects, demonstrating global validation of hybrid-fiber technology across diverse markets. Recent post-quarter wins include orders from multi-national European telecom group for mobile backhaul applications and leading UK tier 2 carrier for enterprise connectivity.
• Sales and Marketing new leadership in the Americas: We hired Mark DeVol to be our new Chief Revenue Officer for the Americas. Mark brings vast and relevant experience with his prior leadership with a focus on Federal and Military markets with Ericsson, Nokia, Marconi, Verizon and Oceus. Mark’s positive influence over revenue growth in the Americas across all three verticals we are focused on – Federal/Military, ITS/IoT and MDU are expected to be significant and impactful to our transformation plans.
• Federal Market Leadership and Momentum: Appointed Jason Chasse as Director of Federal Sales in June 2025, bringing 30+ years of specialized experience across DoD, NATO, Intelligence agencies, and prior Army Intelligence Corps service. This hire will accelerate our federal growth leveraging the Company's DoDIN Approved Products List status and JITC/NIST FIPS certifications, our demonstrated strong traction and expanding pipeline of opportunities across various DoD branches, particularly Air Force, supported by military veteran consulting and proven deployments.
• Operational Restructuring: We are adopting a strategic restructuring plan focused on growth enablement while targeting 15-20% cost reduction compared to Q2 2025 levels. It is focused on enabling top-line growth and will take a 6-9 months to complete, encompassing automation, functional structure and personnel changes, AI integration, offshoring, and outsourcing. AI deployment planned for lead generation and sales processes to accelerate market capture, as well as enhancement of operational efficiency across software development, testing, marketing, and administrative functions.
• Enhanced Treasury Strategy: Board approved cryptocurrency treasury management strategy in August 2025, authorizing strategic allocation to established digital assets as part of enhanced capital allocation framework for long-term shareholder value creation.

"We continue to strengthen our financial foundation through disciplined operational capital management," said Yoav Efron, Deputy CEO and CFO of Actelis. "We continue to keep our debt very low , I’m looking forward to seeing the restructuring plan we are starting to enable faster growth, and the associated 15-20% cost reduction will create sustainable operational leverage towards breaking even. Despite temporary margin pressures from the sales delays we maintained disciplined expense management resulting in operating costs essentially flat year-over-year when adjusted for currency impacts. The significant reduction in interest expenses reflects our improved debt situation and our new cryptocurrency treasury strategy may open additional financial flexibility. As we execute our restructuring plan over the next 6-9 months, we expect to emerge as a more efficient, scalable organization positioned to see significant growth in our target verticals."

Fiscal Second Quarter and First Half 2025 Financial Results:

Revenues for the three months ended June 30, 2025, amounted to $941,000, compared to $3.4 million for the three months ended June 30, 2024. For the first half of 2025, revenues totaled $1.7 million, compared to $4.2 million in the same period in 2024. The decrease was primarily due to a decline in revenue from North America and the Europe, Middle East, and Africa (EMEA) region.

Cost of revenues for the three months ended June 30, 2025, amounted to $636,000 compared to $1.5 million for the three months ended June 30, 2024. For the first half of 2025, the cost of revenues was $1.1 million, compared to $2 million for the first half of 2024. The decrease was primarily attributable to the decline in sales.

Gross profit for the three months ended June 30, 2025, amounted to $305,000 compared to $1.94 million for the three months ended June 30, 2024. For the first half of 2025, gross profit is $556,000 compared to $2.16 million in the first half of 2024. The decrease was primarily due to increased indirect costs.

Research and development expenses for the three months ended June 30, 2025, amounted to $675,000 compared to $603,000 for the three months ended June 30, 2024. For the first half of 2025, R&D expenses were $1.36 million, compared to $1.25 million in the same period last year. The increase was primarily driven by a rise in the utilization of professional services for our GL900 product line and exchange rate differences.

Sales and marketing expenses for the three months ended June 30, 2025, amounted to $700,000 compared to $647,000 for the three months ended June 30, 2024. For the first half of 2025, these expenses totaled $1.37 million compared to $1.28 million in the first half of 2024. The increase was primarily due to payroll expenses and engaging consultants to expand market reach in different countries in Europe and Asia.

General and administrative expenses for the three months ended June 30, 2025, amounted to $703,000 compared to $790,000 for the three months ended June 30, 2024. For the first half of 2025, G&A expenses were $1.42 million, compared to $1.61 million for the same period last year. The decrease was mainly due to cost reduction measures taken.

Operating loss for the three months ended June 30, 2025, was $1.77 million, compared to an operating profit of $66,000 for the three months ended June 30, 2024. For the first half of 2025, the operating loss was $3.6 million compared to $1.8 million in the first half of 2024. The increase is due to the decline in sales, while operating expenditures remained consistent. The effects of exchange rate fluctuations and increased vacation expenses have contributed to the increase in operating loss.

Financial expenses and interest expenses for the three months ended June 30, 2025, were $128,000 (including $22,000 interest expenses) compared to $144,000 (including $137,000 interest expenses) for the three months ended June 30, 2024. For the first half of 2025, financial expenses and interest expenses were $176,000 (including $56,000 interest expenses), compared to $259,000 (including $344,000 interest expenses) for the first half of 2024. The decrease is mainly due to repayment of loans, reducing interest expenses and other bank-related charges.

Net loss for the three months ended June 30, 2025, was $1.9 million, compared to net loss of $78,000 for the three months ended June 30, 2024. For the first half of 2025, the net loss was $3.8 million, compared to a net loss of $2 million in the first half of 2024. The increase in net loss is due to lower sales and exchange rate effects.

Adjusted EBITDA loss, a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the three months ended June 30, 2025, was $1.7 million, compared to profit of $11,000 for the three months ended June 30, 2024. For the first half of 2025, non-GAAP EBITDA loss was $3.5 million compared to $1.8 million in the year ago period.

About Actelis Networks, Inc.
Actelis Networks, Inc. (NASDAQ: ASNS) is a market leader in hybrid fiber-copper, cyber-hardened networking solutions for rapid deployment in wide-area IoT applications, including government, ITS, military, utility, rail, telecom, and campus networks. Actelis’ innovative portfolio offers fiber-grade performance with the flexibility and cost-efficiency of hybrid fiber-copper networks. Through its “Cyber Aware Networking” initiative, Actelis also provides AI-based cyber monitoring and protection for all edge devices, enhancing network security and resilience. For more information, please visit www.actelis.com.

Use of Non-GAAP Financial Information
Non-GAAP Adjusted EBITDA, and backlog of open orders are non-GAAP financial measures. In addition to reporting financial results in accordance with GAAP, we provide non-GAAP operating results adjusted for certain items, including: financial expenses, which are interest, financial instrument fair value adjustments, exchange rate differences of assets and liabilities, stock based compensation expenses, depreciation and amortization expense, tax expense, and impact of development expenses ahead of product launch. We adjust for the items listed above and show non-GAAP financial measures in all periods presented, unless the impact is clearly immaterial to our financial statements.

Cautionary Statement Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov.

Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Actelis is not responsible for the contents of third-party websites.

Contact

Arx | Capital Markets & IR
North American Equities Desk
actelis@arxadvisory.com

 ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
( U. S. dollars in thousands except for share and per share amounts)
(UNAUDITED)

		June 30, 2025				December 31, 2024
Assets
CURRENT ASSETS:
Cash and cash equivalents			393				1,967
Restricted cash equivalents			302				300
Restricted bank deposits			71				-
Trade receivables, net of allowance for credit losses of $168 as of June 30, 2025, and December 31, 2024.			943				1,616
Inventories			2,519				2,436
Prepaid expenses and other current assets, net of allowance for doubtful debts of $181 as of June 30, 2025, and December 31, 2024.			600				584
TOTAL CURRENT ASSETS			4,828				6,903
NON-CURRENT ASSETS:
Property and equipment, net			33				38
Prepaid expenses and other			534				492
Restricted bank deposits			30				91
Severance pay fund			223				205
Operating lease right of use assets			241				410
Long-term deposits			93				86
TOTAL NON-CURRENT ASSETS			1,154				1,322
TOTAL ASSETS			5,982				8,225

F-3

ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(UNAUDITED)
(U. S. dollars in thousands)

		June 30, 2025				December 31, 2024
Liabilities, Mezzanine Equity and shareholders’ equity
CURRENT LIABILITIES:
Credit line			236				774
Short-term loan			305				-
Trade payables			1,020				982
Deferred revenues			325				246
Employee and employee-related obligations			858				688
Accrued royalties			731				673
Current maturities of operating lease liabilities			229				415
Other current liabilities			535				805
TOTAL CURRENT LIABILITIES			4,239				4,583
NON-CURRENT LIABILITIES:
Long-term loan			150				150
Deferred revenues			74				92
Accrued severance			250				229
Other long-term liabilities			17				186
TOTAL NON-CURRENT LIABILITIES			491				657
TOTAL LIABILITIES			4,730				5,240
COMMITMENTS AND CONTINGENCIES (Note 5)
MEZZANINE EQUITY
Redeemable convertible preferred stock - $0.0001 par value, 10,000,000 authorized as of June 30, 2025 and December 31, 2024. None issued and outstanding as of June 30, 2025 and December 31, 2024.			-				-
WARRANTS TO PLACEMENT AGENT			228				228
SHAREHOLDERS’ EQUITY:
Common stock, $0.0001 par value: 30,000,000 shares authorized: 9,540,221 and 7,623,159  shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.			1				1
Non-voting common stock, $0.0001 par value: 2,803,774 shares authorized as of June 30, 2025, and December 31, 2024, None issued and outstanding as of June 30, 2025 and December 31, 2024.			-				-
Additional paid-in capital			48,846				46,818
Accumulated deficit			(47,823	)			(44,062	)
TOTAL SHAREHOLDERS’ EQUITY			1,024				2,757
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY			5,982				8,225

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

F-4

ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(U. S. dollars in thousands)

		Six months ended June 30,								Three months ended June 30,
		2025				2024				2025				2024
REVENUES			1,662				4,157				941				3,431
COST OF REVENUES			1,106				1,994				636				1,488
GROSS PROFIT			556				2,163				305				1,943
OPERATING EXPENSES:
Research and development expenses			1,356				1,250				675				603
Sales and marketing expenses			1,366				1,274				700				647
General and administrative expenses			1,419				1,607				703				790
Other income			-				(163	)			-				(163	)
TOTAL OPERATING EXPENSES			4,141				3,968				2,078				1,877
OPERATING INCOME (LOSS)			(3,585	)			(1,805	)			(1,773	)			66
Interest expense			(56	)			(344	)			(22	)			(137	)
Other Financial income (expense), net			(120	)			85				(106	)			(7	)
NET COMPREHENSIVE LOSS FOR THE PERIOD			(3,761	)			(2,064	)			(1,901	)			(78	)
Net loss per share attributable to common shareholders – basic and diluted			(0.43	)			(0.51	)			(0.21	)			(0.01	)
Weighted average number of common stocks used in computing net loss per share – basic and diluted			8,837,441				4,000,994				9,144,125				4,257,674

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		Six months ended June 30,
		2025				2024
		U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period			(3,761	)			(2,064	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			12				8
Inventories write-downs			92				25
Financial expenses (income)			106				(116	)
Share-based compensation			129				179
Changes in operating assets and liabilities:
Trade receivables			673				(26	)
Net change in operating lease assets and liabilities			(17	)			1
Inventories			(150	)			342
Prepaid expenses and other current assets			(57	)			(150	)
Trade payables			39				(347	)
Deferred revenues			61				(209	)
Other current liabilities			(343	)			14
Other long-term liabilities			(2	)			-
Net cash used in operating activities			(3,218	)			(2,343	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Short term deposits			1				198
Purchase of property and equipment			(5	)			(1	)
Net cash (used in)/provided by investing activities			(4	)			197
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of options							32
Proceeds from issuance common stock			2,100				*
Offering cost from issuance of common stock			(223	)			-
Credit lines with bank, net			(539	)			1,045
Proceeds from Warrant inducement agreement			-				2,999
Underwriting commissions and other offering costs			-				(397	)
Proceeds from short term loans			305				-
Early repayment of long term loan			-				(3,483	)
Repayment of long-term loan			-				(193	)
Net cash provided by financing activities			1,643				3
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS			7				(10	)
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS			(1,572	)			(2,153	)
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD			2,267				5,515
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF THE PERIOD			695				3,362

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

Non-GAAP Financial Measures   

(U.S. dollars in thousands)		Six months Ended June 30, 2025				Six months Ended June 30, 2024				Three months Ended June 30, 2025				Three months Ended June 30, 2024
Revenues		$	1,662			$	4,157			$	941			$	3,431
GAAP net loss			(3,761	)			(2,064	)			(1,901	)			(78	)
Interest Expense			56				344				22				137
Other Financial expenses (income), net			120				(85	)			106				7
Tax Expense			(29	)			32				3				15
Fixed asset depreciation expense			12				8				6				3
Stock based compensation			129				179				50				90
Research and development, capitalization			-				0				-				-
Other one-time costs and expenses			-				(189	)			-				(163	)
Non-GAAP Adjusted EBITDA			(3,473	)			(1,775	)			(1,714	)			11
GAAP net loss margin			(228.05	)%			(49.65	)%			(205.13	)%			(2.27	)%
Adjusted EBITDA margin			(208.98	)%			(42.70	)%			(182.17	)%			0.03	%

FAQ

What were Actelis Networks (ASNS) key financial results for Q2 2025?

Actelis reported revenue of $0.94 million, a net loss of $1.9 million, and gross margin of 32%. While revenue grew 31% sequentially from Q1, it decreased compared to $3.4 million in Q2 2024.

How much cost reduction is Actelis Networks targeting in its restructuring plan?

Actelis is targeting a 15-20% cost reduction compared to Q2 2025 levels through its strategic restructuring plan, which will take 6-9 months to complete.

What major customer win did ASNS announce in Q2 2025?

Actelis secured a breakthrough order from a significant US telecommunications carrier for GigaLine MDU solutions, marking their first deployment with a carrier of this scale.

How much capital did Actelis Networks raise in Q2 2025?

Actelis successfully raised approximately $1.35 million during Q2 2025, including $1 million on June 30 that closed on July 2.

What is Actelis Networks' new treasury management strategy?

In August 2025, the Board approved a cryptocurrency treasury management strategy, authorizing strategic allocation to established digital assets as part of their capital allocation framework.