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Actelis Networks Reports Second Quarter 2025 Financial Results and Operational Update

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,鈥�, said Tuvia Barlev, Chairman and CEO of Actelis. 鈥淲e 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.

鈥淲e 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.听 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鈥檚 positive influence over revenue growth in the Americas across all three verticals we are focused on 鈥� 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鈥檓 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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