Actelis Networks (ASNS -2.15%), a networking solutions provider specializing in hybrid fiber and secure communications for government and industrial markets, reported its second quarter results on August 14, 2025. The Q2 2025 report revealed that GAAP revenue of $0.94 million and GAAP earnings per share of $(0.21) both fell short of analyst estimates. GAAP revenue reached $0.94 million, below the $1.00 million GAAP estimate, and the GAAP net loss per share was $(0.21) versus an anticipated GAAP loss of $(0.16). The period was marked by a significant year-over-year contraction in both top-line results and gross margin, with losses deepening. Despite these challenges, the company cited initial wins in new markets, restructuring plans, and capital raises aimed at improving operational efficiency and future growth potential.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.21) | $(0.16) | $(0.01) | N/A |
| Revenue (GAAP) | $0.94 million | $1.00 million | $3.43 million | (72.6%) |
| Gross Margin | 32% | 57% | (25) pp | |
| Operating Expenses | $2.08 million | N/A | N/A | |
| Non-GAAP Adjusted EBITDA | $(1.71 million) | $0.01 million | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
About Actelis Networks and Key Business Drivers
Actelis Networks delivers hybrid networking platforms that combine fiber, copper, and coaxial technologies for secure, high-speed data transmission. Its solutions are widely used in government, military, transportation, and multi-dwelling unit (MDU) settings, where high reliability and data security are critical.
Recently, the company has focused on expanding its presence in the federal government and MDU markets, while developing products with strong cybersecurity features, such as its MetaShield cyber-aware networking line. Key success factors include executing on high-opportunity contracts, broadening the customer base, and maintaining technological differentiation. Strategic partnerships and certifications like FIPS 140-2 are important to winning public sector work, while ongoing research and development investment aims to keep Actelis ahead in a rapidly changing industry.
Quarterly Performance and Notable Developments
The quarter was defined by steep declines in both revenue and profitability (GAAP), with GAAP revenue dropped 72.4% compared to the same quarter last year. The drop was tied to lumpy contract timing—especially the non-recurrence of high-margin software and services renewals, which last occurred in 2024 and typically happen every two years. Despite this, GAAP revenue improved 31% sequentially compared to Q1 2025. However, GAAP revenue was 5.9% below analyst expectations, leaving the company short of consensus estimates on a GAAP basis.
Gross margin was 32% for the quarter, sharply down from the prior year's 57% gross margin. The decline was due to the prior-year software and services renewal not repeating, as well as a volume decline that increased fixed indirect costs as a percentage of revenues. Lower sales volumes further reduced the company's operating leverage, amplifying the decline in overall profitability. The GAAP net loss widened to $(1.9) million, while Adjusted EBITDA—a non-GAAP measure of earnings before interest, taxes, depreciation, amortization, and certain other items—dropped to $(1.7) million, compared to a positive result in the prior year period.
On the commercial front, Actelis reported initial traction in its target verticals. Notable wins included an order for GigaLine MDU networking solutions—these are products that bring high-speed, secure connectivity to multi-unit residential buildings—from a major U.S. telecommunications carrier. It also secured pilot contracts for infrastructure upgrades in both U.S. counties and in international markets such as Japan and the Nordic region. Federal sector engagement included new orders with U.S. defense contractors for advanced networking solutions tailored to military bases. However, these victories have yet to deliver material uplift to current revenues, with management emphasizing that much of the delayed pipeline is now expected to convert in the following quarter.
The period saw the launch of a restructuring plan targeting 15% to 20% in cost savings over six to nine months, with the reduction benchmarked to Q2 2025 levels, with an emphasis on automation, artificial intelligence-driven lead generation, and increased offshoring. Operating expenses stood at $2.08 million. The company also strengthened its sales approach, hiring executives with backgrounds in large telecommunications and defense markets to lead growth initiatives in the Americas. Meanwhile, investment in product development rose as Actelis continued to enhance the capabilities of its hybrid networking solutions and cyber protection features.
Financial Health and Risk Factors
The company's cash reserve at period end stood at $393,000 (GAAP), down significantly from $1.97 million (GAAP) as of December 31, 2024, even after raising approximately $1.35 million during and just after the quarter. There was a heavy net outflow of cash from operations, with $3.2 million (GAAP) used in the first half of 2025. Shareholder equity (GAAP) fell to $1.0 million, reflecting ongoing losses. Management introduced a new policy to invest a portion of its cash reserves in cryptocurrencies, aiming to boost returns and flexibility, though this move adds risk given the company's already fragile balance sheet.
Customer concentration remains a structural challenge. No updated figure was available for the period, but management previously disclosed that the top ten customers accounted for approximately 74% of revenue in FY2024. This leaves Actelis exposed to any customer reductions or shifts. Trade receivables fell from $1.62 million at December 31, 2024, to $0.94 million at June 30, 2025. The company's focus remains on cost control, capital raising, and risk mitigation as it pursues higher-margin and recurring-revenue streams.
Looking Ahead
Looking forward, management did not provide detailed quantitative guidance for the next quarter or the remainder of the fiscal year. Leadership indicated that deferred orders in the federal and military verticals should materialize in the coming period, and that the company will pursue further operational efficiencies through the planned restructuring. The intent is to achieve sustainable growth and profitability by driving sales in federal, MDU, and intelligent transportation solutions, while reducing the burn rate through automation and outsourcing.
The outlook remains uncertain. No new dividend was declared, and Actelis Networks does not currently pay a dividend. Investors are likely to watch management's ability to convert its sales pipeline into real revenue, stem the cash outflow, and achieve the promised cost reductions. Balancing innovation, customer diversification, and liquidity will be critical priorities in the coming quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
