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Strategic focus on growing deal pipeline and high-margin wins drive gross margin expansion to 35% while maintaining stable revenues and disciplined cost management across growing global customer base

FREMONT, Calif., May 13, 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 first quarter ended March 31, 2025.

"Our first quarter results are driven by both the continued execution of our focus on growing our pipeline for the remainder of the year, particularly in Federal, Military, our Multi-Dwelling Units business and in Intelligent Transportation, as well as on delivering improved margins and operational efficiency while working on the expansion of our presence in those key markets," said Tuvia Barlev, Chairman and CEO of Actelis. "We're particularly encouraged by our growing global footprint with this quarter seeing new orders from across the Nordic region, Hungary as well as others from the US, UK and Japan. These new orders validate the value proposition of our cyber-hardened, rapid deployment networking solutions and solidifies new business relationships we have established with major partners, integrators and distributors operating globally in NA, Europe, and Japan. Our ability to provide immediate fiber-grade connectivity over existing infrastructure, combined with our industry-leading security capabilities, continues to resonate strongly with customers seeking rapid, cost-effective solutions, enabling modernization and security for mission critical operations. We are properly focused on our growth areas and are geared towards an exciting year ahead."

First Quarter 2025 Financial Highlights:

• Stable Revenues: Revenues were flat vs. the first three months ending March 31, 2024 at $0.72 million. Typically a lighter quarter seasonally, driven by the focus on growing the pipeline in advance of the remainder of the year.
• Better Gross Margin: Gross margin improved to 35% for the first quarter ended March 31, 2025, compared to 30% for the first quarter ended March 31, 2024, reflecting higher gross margin across Federal and Military, higher US regional revenue weight, while maintaining operating cost discipline.
• Operating expenses: 2.06 million for the three months ended March 31, 2025, 1.5% lower than $2.09 million for the three months ended March 31, 2024, reflecting the consistent efforts to reduce expenses.
• Reduced Operating Loss: Operating loss improved to $1.81 million for the first quarter ended March 31, 2025, compared to $1.87 million in the year-ago period or a 3% improvement, driven by enhanced gross margins and continued expense control measures.
• Strengthened Balance Sheet: The Company successfully improved its capital position during the quarter, bolstering shareholders' equity to $2.61 million, maintaining compliance with Nasdaq listing requirements.
• Improved Net Loss Per Share: Net loss per share decreased to $(0.22) for the first quarter ended March 31, 2025, compared to $(0.50) in the year-ago period, a 56% improvement.

Recent Business and Operational Highlights:

• Continued focus on our three main business areas of Federal and Military, Multi-Dwelling Units (MDU) and Intelligent Transportation Systems (ITS). Attention is particularly given to growing the pipeline in advance of the remainder of the year.
• Global partners signed-up: Engaged with multi-billion Dollar partners - one global reseller and distributor, one multi-national pan European integrator and one Asian based multi-national large manufacturer and distributor to the transportation industry, generating opportunities for our ITS markets.
• Progressed in resource strengthening: In our target verticals鈥� sales and marketing, as well as in executing our off-shore, outsource strategy for better and lower cost operations, impacting R&D and G&A.
• Military wins: Received new orders to deliver advanced GigaLine 800 (GL800) networking solution to help multi-billion dollar federal contractor modernize and cyber-harden military bases鈥� operations for barracks, information centers, and other base-wide installations.
• Nordic Municipal Expansion: Secured a new order to help modernize the communications infrastructure for a major city in the Nordic region, the second largest city in a prominent Nordic country with over 300,000 residents.
• Hungarian Utility Project: Received a follow-on order from a Hungarian utility provider to support the continued modernization of its communications network, building upon the Company's previously announced engagement.
• Japanese Market Growth: Received a new order to supply advanced networking technology to support critical infrastructure modernization in Japan through a leading Japanese distributor and developer of communications equipment.
• Continued Military veteran consulting helps attract significant attention and build pipeline of opportunities in various DoD arms, particularly in the Air-Force
• Pan-European sales presence expanding: MDU, ITS large pipeline opportunities progressing with agents deployed in various countries (Italy, Germany, France, UK, Finland, Italy and Poland)
• Multi Dwelling Unit products completing successful trials and starting initial deployments with multiple carriers, ISP, and developers in multiple countries.

Yoav Efron, Deputy CEO and CFO of Actelis remarked: "We continue to strengthen our financial position through disciplined cost and expense management and strategic capital deployment. Our efforts to optimize operations are yielding results as seen in our improved margins and reduced expenses while effectively doing more in the market. We significantly decreased interest expenses as a result of becoming nearly debt free. We continue to focus on growing our recurring revenues and driving further margin expansion through our software and services as well as more profitable verticals鈥� focus.鈥�

Fiscal First Quarter 2025 Financial Results:

Revenues for the three months ended March 31, 2025, amounted to $721,000, compared to $726,000 for the three months ended March 31, 2024. The slight decrease was primarily due to a 31% decline in revenues from the Europe, Middle East, and Africa (EMEA) region. This was partially offset by a 23% increase in revenues from North America and growth in market size within the Asia-Pacific region.

Cost of revenues for the three months ended March 31, 2025, amounted to $470,000 compared to $506,000 for the three months ended March 31, 2024. The decrease was primarily attributable to the change in regional mix of revenue with an increase in North America revenues, which are more profitable, and a decrease in Europe, Middle East and Africa revenues which are less profitable.

Gross profit for the three months ended March 31, 2025, amounted to $251,000 or 35% of revenue, compared to $220,000, or 30% of revenue for the three months ended March 31, 2024. The increase was primarily due to improved regional revenue mix and efficient cost management.

Research and development expenses for the three months ended March 31, 2025, amounted to $681,000 compared to $647,000 for the three months ended March 31, 2024. The increase was primarily driven by a rise in the utilization of professional services.

Sales and marketing expenses for the three months ended March 31, 2025, amounted to $666,000 compared to $627,000 for the three months ended March 31, 2024. The increase was primarily by engaging consultants in the different regions.

General and administrative expenses for the three months ended March 31, 2025, amounted to $716,000 compared to $817,000 for the three months ended March 31, 2024. The decrease was mainly due to cost reduction measures taken.

Operating loss for the three months ended March 31, 2025, was $1.81 million, compared to an operating loss of $1.87 million for the three months ended March 31, 2024.

Financial expenses and interest expenses for the three months ended March 31, 2025, were $48,000 (including $34,000 interest expenses) compared to $115,000 (including $207,000 interest expenses) for the three months ended March 31, 2024. The decrease is mainly due to repayment of loans, reducing interest expense and other bank-related charges.

Net loss for the three months ended March 31, 2025, was $1.86 million, compared to net loss of $1.99 million for the three months ended March 31, 2024.

Adjusted EBITDA loss, a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the three months ended March 31, 2025, was $1.69 million, compared to $1.79 million in the comparable 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鈥� innovative portfolio offers fiber-grade performance with the flexibility and cost-efficiency of hybrid fiber-copper networks. Through its 鈥淐yber Aware Networking鈥� initiative, Actelis also provides AI-based cyber monitoring and protection for all edge devices, enhancing network security and resilience. For more information, please visit听.

Use of Non-GAAP Financial Information
Non-GAAP Adjusted EBITDA, and backlog of open orders are听non-GAAP financial measures. In addition to reporting financial results in accordance with GAAP, we provide听non-GAAP operating results adjusted for certain items,听including:听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听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 鈥渇orward-looking statements鈥� within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Words such as 鈥渆xpects,鈥� 鈥渁nticipates,鈥� 鈥渋ntends,鈥� 鈥減lans,鈥� 鈥渂elieves,鈥� 鈥渟eeks,鈥� 鈥渆stimates鈥� 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鈥檚 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鈥檚 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鈥檚 filings with the Securities and Exchange Commission (SEC), including the Company鈥檚 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鈥檚 web site at听.

Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to听reflect听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听drawn听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.

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-Financial Tables to Follow-

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

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听听听听

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

听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)

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

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ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND SHAREHOLDERS鈥� EQUITY
(UNAUDITED)
U.S. dollars in thousands (except number of shares)

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

F-6

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

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

F-7

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

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

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Non-GAAP Financial Measures