Nasdaq:ASNS
ACTELIS NETWORKS INC
A provider of advanced networking equipment and services focused on enhancing global communication reliability and security.
Key Metrics
Investment Thesis
Bull Case
Investors might consider this stock if they believe the recent revenue recovery trend will persist and that the company can leverage its R&D investments to improve profitability within the next fiscal cycle. The ability to secure financing proceeds ($774k revolver draws) indicates ongoing market confidence and access to capital despite current losses.
Bear Case
The sustained negative net income and declining revenue in 2023 suggest structural challenges that have not yet been resolved by the recent uptick in sales. With a retained earnings deficit of -$44.1M and operating profit remaining deeply negative at -$3.8M, the path to breakeven appears uncertain without significant cost restructuring.
About ACTELIS NETWORKS INC
Actelis Networks Inc. specializes in delivering secure, high-performance connectivity solutions across global networks, serving industries requiring low-latency data transmission and robust network infrastructure.
Analysis
Management Discussion
While revenue rebounded to $7.8M in the latest period, the company continues to report a net loss of $-4.4M driven by substantial general and administrative costs ($3.2M) and marketing expenses ($2.6M). The cash flow from operations remains negative at -$6.5M, though financing activities provided $3.1M in liquidity, highlighting reliance on capital markets rather than organic cash generation.
Industry Overview
The telecommunications equipment industry is highly competitive, characterized by rapid technological shifts and pressure on margins as service providers seek cost-effective solutions for 5G and secure data transmission networks.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $8.8M | $5.6M | $7.8M |
| Cost of Revenue | $4.7M | $3.7M | $3.5M |
| Gross Profit | $4.1M | $1.9M | $4.3M |
| Operating Expenses | $10.2M | $9.3M | $8.0M |
| Operating Income | $-6.1M | $-7.4M | $-3.8M |
| R&D | — | $2.7M | $2.4M |
| G&A | $4.2M | $3.5M | $3.2M |
| Marketing | $3.3M | $3.0M | $2.6M |
| Stock-Based Comp | $220.0K | $377.0K | $337.0K |
| Depreciation | $23.0K | $27.0K | $26.0K |
| Other OpEx | $2.8M | $0 | $-163.0K |
| Non-Operating Income | $0 | $7.4M | $2.3M |
| Interest Expense | $830.0K | $295.0K | $-91.0K |
| Pre-Tax Income | $-6.1M | $82.0K | $-1.4M |
| Income Tax | $4.9M | $6.4M | $2.9M |
| Continuing Ops | $-11.0M | $-6.3M | $-4.4M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-11.0M | $-6.3M | $-4.4M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-11.0M | $-6.3M | $-4.4M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $10.9M | $5.9M | $6.9M |
| Cash & Equivalents | $3.9M | $620.0K | $2.0M |
| Marketable Securities | $1.6M | $197.0K | — |
| Accounts Receivable | — | — | $1.6M |
| Inventory | $1.2M | $2.5M | $2.4M |
| Prepaid Expenses | $678.0K | $340.0K | $584.0K |
| Other Current Assets | $3.5M | $2.2M | $300.0K |
| Long-Term Assets | $3.9M | $5.3M | $1.3M |
| PP&E (Net) | $80.0K | $61.0K | $38.0K |
| Operating Leases | $726.0K | $918.0K | $410.0K |
| LT Investments | $12.0K | — | $86.0K |
| Other LT Assets | $3.1M | $4.3M | $788.0K |
| Total Assets | $14.8M | $11.2M | $8.2M |
| Current Liabilities | $6.2M | $6.9M | $4.6M |
| Current Debt | $553.0K | $1.3M | — |
| Current Leases | $682.0K | $498.0K | $415.0K |
| Deferred Revenue | — | — | $246.0K |
| Other Current Liab | $3.8M | $4.1M | $3.2M |
| Long-Term Liabilities | $5.4M | $3.9M | $657.0K |
| Long-Term Debt | — | $3.2M | $150.0K |
| LT Operating Leases | $237.0K | $405.0K | $6.0K |
| Other LT Liab | $5.1M | $364.0K | $-365.0K |
| Total Liabilities | $11.6M | $10.8M | $5.2M |
| Shareholders' Equity | $3.3M | $229.0K | $2.8M |
| Paid-In Capital | $36.7M | — | $46.8M |
| Retained Earnings | $-33.4M | $-39.7M | $-44.1M |
| Total L&E | $14.8M | $11.2M | $8.2M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-11.0M | $-6.3M | $-4.4M |
| Non-Cash Adjustments | $-270.0K | $1.2M | $-1.7M |
| Working Capital Changes | $3.5M | $-1.5M | $-447.0K |
| Cash from Operations | $-7.8M | $-6.6M | $-6.5M |
| Capital Expenditures | — | $9.0K | $1.0K |
| Cash from Investing | $-4.0M | $3.8M | $197.0K |
| Debt Repayments | $1.2M | $769.0K | $193.0K |
| Share Buybacks | — | $50.0K | — |
| Cash from Financing | $15.3M | $3.8M | $3.1M |
| FX Effect | $-72.0K | $231.0K | $11.0K |
| Net Change in Cash | $3.5M | $1.2M | $-3.2M |
| Beginning Cash | $795.0K | $4.3M | $5.5M |
| Ending Cash | $4.3M | $5.5M | $2.3M |
Frequently Asked Questions
How does ACTELIS NETWORKS INC make money?
The company generates revenue primarily through the sale of specialized networking hardware and software licenses, with significant operating expenses allocated to research and development ($2.4M) and marketing ($2.6M), indicating a product-led growth strategy in competitive telecommunications markets.
What are the main risks for ASNS?
1. Persistent net losses over the last three years (-$11.0M in 2022, -$6.3M in 2023, -$4.4M in 2024) raising sustainability concerns. 2. Volatile revenue stream with a significant decline from $8.8M in 2022 to $5.6M in 2023 before partial recovery. 3. High operating expenses ($8.0M) exceeding gross profit ($4.3M), resulting in negative operating margins.
What is ASNS's competitive advantage?
1. Specialized low-latency network technology for critical infrastructure applications. 2. Strong cash flow from financing activities ($3.1M) suggesting access to capital despite operating losses. 3. Efficient management of current assets relative to liabilities with a healthy working capital position.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.