Good day, welcome to the Ondas Holdings Inc. Virtual Investor Event. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Before we begin, the company would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Ondas's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking statements. These risk factors are discussed in Ondas's periodic FCC filings and in the earnings press release issued today, which are both available on the company's website.
Ondas undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances except as required by law. Please note, this event is being recorded. I would now like to turn the presentation over to Eric Brock, Chairman and CEO. Please go ahead, sir.
Well, thank you, operator. I want to get started by welcoming everyone to today's investor update. We appreciate the time you're spending with us and for your interest in Ondas. The purpose of our gathering is to share an outlook for 2023 for Ondas Holdings and our business units. We will try to be succinct and to the point. We do have a lot to cover. I estimate our presentation may take about 45 minutes or so before a Q&A period. Today, our management team will lay out the progress we made in 2022 and share the business plan for 2023 and beyond. I believe this is the year that Ondas makes the important transition from development to commercial success. Of course, this entails Ondas generating meaningful revenue growth and that we begin to monetize the substantial investments we have made in our technology platforms.
In addition to the outlook, our presentation will also describe the integration of American Robotics and Airobotics now that we have closed the acquisition. As we begin, I want to reiterate that we are grateful for the support of our investors. We remain fully committed to delivering the results you expect and deserve, I'm optimistic that 2023 is going to be a very good year for our company. We're blessed with a talented team at Ondas up and down the organization, which I always like to emphasize. Of course, that includes members of our leadership team who are responsible and accountable for executing our business and driving growth across the company. To that point, we're joined today by familiar faces, including Derek Reisfield, our CFO, Stewart Kantor, the founder and President of Ondas Networks, Reese Mozer, founder and CEO of American Robotics.
I wanna highlight this morning's announcement that Reese is taking an expanded role as President of Ondas Holdings, where he will support me and Derek in managing the development of our business units. Now that the deal is closed, executives from Airobotics will join our calls. Meir Kliner, founder and CEO of Airobotics, who is pictured here, he was slated to join us from Israel. He's unable to be here today. He suffered a back injury this morning that required treatment. He will be okay. These things happen. We're gonna be joined instead by Yishay Curelaru, Airobotics CFO, who will stand in for Meir. We didn't have time to include Yishay's picture in this deck.
Before we move on, I wanna highlight that Meir was appointed president of a newly formed business unit, Ondas Autonomous Systems, and will be responsible for executing the business plan for our drone operations. Meir is a strong and experienced leader, and I'm thrilled to partner with both him and Yishay as we grow our company. We'll share many more details about the autonomous systems plan today. Let's cover the agenda. First, I will provide a recap of our business and financial performance for 2022 and share with you a high-level summary of the financial outlook for the coming year. We will then hand the call to Stewart to cover the Ondas Networks business plan and outlook for 2023. Stewart's gonna be joined by Guy Simpson, the Chief Operating Officer of Ondas Networks, and Martin Paget, our VP of Industry Solutions.
The presentation will shift to focus on the drone platforms in our new business unit, Ondas Autonomous Systems, where we will lay out the integration plan and the business plan as well as financial outlook. I will end the formal presentation with some closing commentary about the consolidated outlook before we take questions. I'm gonna now turn to recap our corporate performance for 2022. Let me not mince words. We missed our targets last year, and we were disappointed by that, and I know you were as well. While we worked extremely hard in advance of all our customers, but simply our timeline slipped. We make no excuses. We always want to drive business faster and bigger. The reality is that when you're bringing new technology platforms, particularly mission-critical technologies to industrial markets, it takes time. Moving big companies for our customers, that's difficult.
Nonetheless, we did make tremendous progress last year, no doubt about it. We advanced our technology, IP, and field operations while getting deeper engagement with customers. We finished the year with the largest backlog in the company's history as commercial orders and platform adoption began. In the railroads, despite bookings being pushed out, I don't believe we lost a single dime of revenue. We continue to be confident that our FullMAX wireless platform will be the platform of choice for the North American rails, starting with the Greenfield 900 MHz network. As evidenced, we received the initial volume order from Siemens for over $5 million. That order is targeted for specific identified Class I rail customer demand and signals that the 900 MHz network adoption cycle is beginning.
In addition, the industry engagement and roadmap intentions of the AAR continue to be demonstrated by our expanding relationship with MxV Rail. We're gonna discuss some MxV Rail activity in greater detail today. On the drone side, American Robotics advanced with customers in industrial markets with a particular focus on oil and gas. We demonstrated the reliability and value of our system and impressed customers with our vision and expertise as we solidified a leading position in the huge commercial drone markets. Our customers engaged us to integrate valuable payloads in the specific scalable data solutions they are looking for in order to begin fleet deployments. This is valuable experience and evidence of our strong position in the marketplace. Of course, the acquisition of Airobotics is a game changer for Ondas, and I would say for the broader drone sector as well.
Combining the two leading autonomous platforms is a home run financially and strategically, and that has become even more evident since we announced the deal in July of last year. In the last three months, Airobotics has landed two high-profile customers with the intent to build citywide drone infrastructure for public safety and smart city use cases. These initial customers have communicated demand for nearly 50 units over the next few years. We see demand expanding with these customers into other countries, in region and globally. Despite the ramp for commercial activity being pushed to the right, we believe our opportunity is as good as ever, as the volume orders and fleet deployments we see today quite clearly signal that our technology platforms have been validated and are poised for significant penetration in the large markets we are attacking.
As I mentioned, while we advanced the ball strategically, we had a disappointing year financially. Quite simply, 2022 was an investment year, which we believe will pay dividends in 2023 and beyond. On a preliminary unaudited basis, revenue for 2022 was approximately $2.1 million, and our adjusted EBITDA loss came in at around $40 million. The loss represents elevated spending for product development and field activity with customers, in addition to high professional and administrative costs at the holding company due to the funding and M&A transactions last year. I wanna highlight that we ended the year with a large cash balance of nearly $30 million as a result of the convertible note offering in Q4 last year. Of course, we're gonna provide full audited financial statements when we issue our 10-K in March.
We expect 2023 to be a breakout year. We have invested significant time and energy in addition to investor capital, to position our technology platforms for widescale adoption, and now we believe we will monetize those investments. We wanna be careful as we outline our financial targets for 2023. We understand the need to earn credibility by building appropriate expectations. We believe our targets are supported by an existing backlog of approximately $13 million across Ondas Networks and Ondas Autonomous Systems and our reasonable expectations of additional orders in both networks and the drone business. In addition to revenue growth, we expect cash utilization to improve dramatically in 2023 with a sharply lower adjusted EBITDA loss. We believe Ondas Networks will demonstrate significant operating leverage as commercial revenue growth begins. We expect this to drive expanding operating margins.
Similarly, we believe revenue growth and the efficient combination of AR and Airobotics under the Ondas Autonomous Systems segment will reduce the cash burn for the drone platforms. The potential for S-curve adoption cycles we see in the large markets we target provides the opportunity to improve our profitability at a rapid pace in the next several years, starting in 2023. At the consolidated level, we expect to generate between $26 million and $30 million of revenue for 2023. Based on customer backlog and identified rail demand, we expect Ondas Networks to generate between $18 million and $22 million in revenue. For the drone platforms, we expect to deliver around $8 million of revenue, with a large percentage of that already booked. We see additional orders building with existing customers and new customers during the year.
Our inventory of Optimus systems is tight relative to demand. We're gonna discuss our manufacturing plans for Optimus during this presentation. We believe market acceptance of our FullMAX wireless connectivity platform and our Optimus system should lead to rapid market penetration and support high growth rates in the coming years. For 2024, we expect revenue growth of at least 100% for both segments as the 900 MHz network rollout broadens with more rail customers, and we see fleet expansion of Optimus urban infrastructure. Adjusted EBITDA loss is expected to drop with Ondas Networks profitability improving significantly due to revenue growth driving higher operating margins. We believe the Ondas Autonomous Systems adjusted EBITDA loss will represent the bulk of the loss for the year, though we expect this will also improve significantly in 2024 as customers expand fleets.
I'm gonna provide more details around cash flow later in the presentation. Now that we have provided a recap and a high-level outlook for the year, I wanna transition to a deeper dive into the business unit and share our more detailed segment business plans. We will start with Ondas Networks and then move on to Ondas Autonomous Systems. I'm gonna now hand the presentation to Stewart Kantor, founder and president of Ondas Networks, to share the networks outlook. Stewart?
Great. Thank you, Eric. Today I'm joined also by Guy Simpson, our Chief Operating Officer, and Martin Paget, our VP of Industry Solutions for Ondas Networks, both key team members who are helping to drive the success of our network business. I'll begin with an update on our progress and strategic wins over the last year. I'll turn the presentation over to Guy, who will discuss our current plans with a focus on 2023. Martin will provide an overview of the addressable market in rail, which will outline the substantial growth potential for our network business. Eric will give an overview of the financial outlook for this for 2023 and beyond. 2022 was a pivotal year for Ondas Networks as we secured our first volume order for the 900 MHz network from Siemens for the Class I rails.
Siemens provided this order after the completion of qualification activity with two of the Class I, BNSF and CSX. In the background to this qualification process, we delivered the rail lab to MxV Rail, the Association of American Railroads Technology Subsidiary, along with securing new development orders for additional functionality to be delivered to the rails. As we sit here today in mid-February, we have a backlog of approximately $7.4 million. Through our activity with Siemens, we have active engagements with six of the Class I rails in North America and one of the largest railroads in the world, Indian Railways, for a multi-year delivery program of locomotive radios for onboard telemetry applications. Also in 2022, we received our first order for 160 MHz radios. This is a bridge to the next major network in rail.
With Siemens help, we are now actively pursuing new opportunities in the passenger and transit rail markets. Outside of the rail industry, we made significant progress in the Homeland Security market with Israel Aerospace's ELTA Division, supporting critical communications for their integrated coastal surveillance system in the Caribbean and now in India. We believe this market has substantial growth potential over the next few years, with the ability to scale 40 harbor-based systems in the Indian market alone. Wrapping around all of this success is our continued progress in the ongoing standardization of our FullMAX radio system within IEEE's 802.16 working group. With the draft of the next version, 802.16t, now being finalized with direct input from the AAR. I'll now turn the presentation over to Guy Simpson to discuss our current plans for 2023. Guy?
Thank you, Stewart. I'm Guy Simpson, the COO of Ondas Networks. I've been with the company for more than 10 years, and I joined after many years of experience in the wireless communications industry, including tenure at Bell Labs. As COO, I have the responsibility of moving our technology from R&D to manufacturing, deployment, and support in the field. As Stewart mentioned, 2023 was a pivotal year for us, driven by the completion of qualification by two of our major rail customers and the receipt of a volume order from Siemens in August. Specifically, my team has been actively involved in supporting the AAR, MxV Rail, and rail customers throughout the qualification process. MxV has now ordered new development programs to support rail applications, including support for peer-to-peer communications and at the end of 2022, the Network Controller.
This new product will allow the rails to optimize the allocation of frequency and capacity to maximize the efficient use of frequencies. We believe the Network Controller will be a valuable enhancement for the railroads to significantly improve spectrum utilization. We also have a new development program underway with Siemens to support locomotive applications in Europe. We expect this development activity to wrap up in 2023, with deployments beginning in 2024. As Stewart also mentioned, with Siemens assistance, we are making inroads into the passenger and transit markets. We expect these customers to become an important part of the business in the future. To that end, my team has now trained Siemens' own application engineering team to help support additional rail activity in Canada and the USA. As you can see, our current backlog is $7.4 million.
Our focus is on timely deliveries to Siemens, who will then deliver to the railroads. Siemens and Ondas jointly market our products to railroads through a variety of industry engagements and direct interaction with the staff responsible for approving and procuring solutions. Each installation requires a site survey and changes to the equipment plans for that site, which Siemens is equipped to support with the help of the Ondas team. Siemens maintains a stock of our equipment and will work with each customer on delivery, either directly to the railroad for them to install themselves, in the case of a field upgrade, or as part of a fully integrated equipment case built at the Siemens facility as part of a complete Siemens package. Siemens typically negotiates multi-year long-term purchase agreements with railroads for equipment supply.
We work tightly with the Siemens commercial team to forecast demand and to match that to production lead times in order to meet customer demand. Our goal is to clear this backlog as quickly as possible and to make sure that we can meet the future production requirements of Siemens. This includes delivering on a suite of jointly developed product and rebranded catalog products.
I'll now turn over the presentation to Martin, who will provide an overview of the addressable rail market for our dot16 technology. Martin?
Thank you, Guy. My name is Martin Paget. I am the VP of Industry Solutions for Ondas Networks. I'm pleased to speak with you today about the market potential for our products in rail. As a brief background, I joined Ondas in 2019. I have over 30 years of experience in the global rail industry, including senior roles at Wabtec, GE Transportation, and the company that has now become Siemens Mobility, Safetran Systems. Over the past few years, we've been highlighting the critical need for greater data capacity in the North American rail industry to address a host of new applications which will lead to improved efficiency and reliability in rail transportation. The four different railroad private networks in North America in this 160 MHz, 220 MHz, 450 MHz, and 900 MHz frequency bands can all be addressed with our technology.
Today, these are application and frequency-specific siloed networks. With Ondas dot16 technology and the support of the Association of American Railroads, we believe these networks will become multipurpose Internet Protocol-based networks, delivering greater capacity, redundancy, and flexibility. Our dot16 technology will allow the railroads to support a large variety of edge remote applications, including crossings, wayside detectors, and interlockings. In addition, we'll support mobile applications for high rail equipment and advanced locomotive-based applications as the industry takes steps towards moving block signalling and automatic train operation. Our current estimate of the addressable market in North America for dot16 technology is approximately $1.35 billion, spent approximately about 40% base stations and 60% towards the edge remotes.
This slide shows our current estimates by frequency, with the 900 MHz build-out the first priority with an addressable market of over $450 million. When we take a look at the 900 MHz opportunity, this is being driven by an FCC deadline of 2025 to vacate the legacy rail ATCS channels in the upper 900 MHz band in exchange for the new greenfield 900 MHz channels. The transition from the old channels has already begun, with the AAR establishing rules for the transition and the completion of qualification by two of the Class Is, BNSF and CSX. BNSF has developed their transition plan for their existing ATCS channels, and CSX has identified applications that require upgrades with products and performance for interlockings to migrate to this network.
On this slide, you can see how we have separated the build-out between upgrade and expansion. The upgrades are expected to take place over the next several years and involves transitioning existing applications such as ATCS, along with adding new MC-IoT applications. The expansion activity allows railroads to take advantage of the increased data capacity and flexibility of our FullMAX wireless platform and adopt additional data-intensive applications which contribute to more efficient and safer train operations, which the AAR and the railroads have identified. These applications will leverage dot16 and our MC-IoT capabilities. Between the initial upgrade and then the ultimate network densification and expansion, this represents a market opportunity of more than $450 million just for the 900 MHz network. The numbers we are sharing here today are focused primarily on the North American market.
We believe the international rail markets beyond our current activity in India offer the potential for substantially larger addressable markets and look forward to sharing those details in the future. I'll now turn the presentation back over to Eric, who can now outline the financial targets. Eric?
All right. Thank you, Martin, and to Stewart and Guy as well. As we described, Ondas Networks is targeting $18 million-$22 million of revenue in 2023. With the Class I railroads getting deeper into deployments on the 900 MHz network and potential for additional networks coming into play, we believe revenue growth should remain high at 100% or more for 2024. This revenue target is supported by existing backlogs and identified rail customer demand, and we expect additional orders from Siemens to fill out our revenue target. Growth in 2024 is a function of more railroads, active and deeper into deployments on 900 MHz in advance of FCC deadlines.
Networks' quarterly cash OpEx is fairly low relative to the large market opportunity we are attacking, and OpEx does not need to flex significantly higher when higher revenues are generated. For example, we do not need to materially increase sales and marketing costs as new railroads begin adoption, as a FullMAX platform sale has already been coordinated through AAR levels. As such, we expect attractive operating leverage to drive adjusted EBITDA margins higher with revenue growth. Based on our plan, we believe Networks could be adjusted EBITDA break even by the end of 2023 on a quarterly basis and nicely profitable on an EBITDA basis for 2024. Now we're gonna shift gears and move on to the Autonomous Systems outlook. As we highlight here, the combination of AR and Airobotics is truly ushering us into a new era of autonomous drones.
We announced the acquisition last July. After a substantial amount of work, the deal closed in January. We expect this combination to be both a strategic and financial home run, strategically bringing the best of both systems together, as we will describe, strengthens our moat around autonomy, reliability, safety, functionality, and customer value. It's also quite clear that this transaction was financially astute. Airobotics has invested approximately $140 million in the business. Primarily in technology and important field activity with customers. The acquisition and transaction value was possible due to market disruption and the difficulty investors have in identifying value in the drone space.
As a strategic investor, Ondas was well-positioned to assess the value of Airobotics in the Optimus system and also able to reduce risk of execution given shared expertise and synergies between the two companies. You can call it a unique moment in time as the acquisition cost Ondas just 2.8 million shares. The price was particularly attractive as the deal was struck only a few months before the Optimus platform was to be validated by the purchase orders and commercial deployments with customers that we have recently announced. Since agreeing to the deal, we have only seen Airobotics' business strengthen. Customers have enthusiastically endorsed the acquisition by Ondas in the value of the strong global platform and the funding strength of the combined company. Customer interest in the Optimus system has actually accelerated, particularly in the Gulf and other international markets, as well as in the U.S.
As we build new inventory, we believe U.S. demand will also be significant and look to prove that in the coming quarters. After years of hard work at both AR and Airobotics, it's particularly gratifying to get to this moment and transition to commercial activity and revenue generation, and I want to congratulate the team for their amazing achievements. In a moment, I'm gonna turn the call to Reese Mozer and Yishay Curelaru who will provide an overview and details around the integration activities and business plan for 2023 and beyond. Before I do, I want to discuss the integration at a high level. As mentioned earlier and in our press release today, we are organizing our drone operations under the Ondas Autonomous Systems umbrella.
Meir Kliner will be our president of this business unit and have responsibility for executing the business plan we lay out today. We have tremendous confidence in Meir Kliner in the combined teams at both AR and Airobotics to deliver. The benefits of combining the drone operations, which will include Iron Drone when we close that acquisition in the coming weeks, are substantial. We are able to share technology to further increase the value of Optimus and open up global markets with customers from the Gulf to the United States. With our combined energy focused on the Optimus system, which has been commercially validated and is scaling with customers today, we are able to generate more revenue sooner with lower OpEx and much greater capital efficiency.
As we outline our plan, you will see that the early commercial success with Airobotics is driving the activity with customers in the near term.
Nonetheless, rest assured that American Robotics remains a critical piece of our outlook and value proposition. Put simply, American Robotics will thrive from here. AR's intellectual property, which ranges from the technology, talent, and regulatory expertise we have, in addition to the brand equity, is critically important to our long-term value. Similarly, the ability to access a large U.S. market in oil and gas sector is hugely important to our strategy. AR's IP will be a core piece of the Ondas Autonomous Systems business plan and roadmap. We expect substantial growth from here in the U.S. and to realize the AR vision, which is shared with Airobotics. I'll now hand the call to Reese and Yishay so they can outline the Ondas Autonomous Systems business plan. Reese?
Thank you, Eric. Good morning, everyone. I'm excited to share with you our vision, business plan, and financial outlook for Ondas Autonomous Systems. Let's first talk about the vision. Make no mistake, we are in the process of building the leading commercial drone services provider in what we believe will be a winner-take-most market. This is a generational opportunity to define and lead a category of technology that is critical to the advancement of multiple industries. We will accomplish this with diligent focus on profitability and cash management, scaling in a progressive land and expand pattern, starting first with the highest value markets. We will be capitalizing on the momentum of our engagements with early customers, duplicating this success with others at faster rates. Our business is ultimately about data, so in parallel, we will continue to progressively build out our data product portfolio in coordination with validated market demands.
As our sales grow, we will reinforce and expand our moats with additional R&D investment. We believe in doing all of this, we will drive adoption along a classic S-curve with which we are now currently at the early inflection point. In connection with the closing of the Airobotics acquisition, we made the decision to focus on a single platform with a single team, and in the process, reducing expenses and focusing on the highest value near-term revenue opportunities. That is the right decision, and it sets us up for success going forward. We will focus on the Airobotics Optimus platform as we go to market, and development efforts will be focused on lowering production costs and expanding functionality. This will broaden the use cases for the Optimus platform as we segment the market.
To that end, we have significantly cut OpEx at American Robotics to unify under the Optimus platform. Specifically, we executed a reduction in headcount at AR in January to slash overall cost to achieve roughly a 77% reduction in OpEx. Combined with Airobotics, the resulting headcount for OAS is now roughly 72 people. On the development side, we are transferring the best parts of the Scout technology to Optimus, which will better help us scale U.S. customer activity and autonomous operations. We will invest additional R&D dollars only when directly supported by customer contracts. As a result of the combined customer pipelines, we currently have $5.7 million in POs secured for 2023, which validates the scalability of the Optimus platform.
Customer activity will ramp as we pursue existing smart city and construction customer opportunities, as well as the highest value oil and gas opportunities. One of the primary reasons for the decision to unify under single platform in 2023 is the Optimus drone currently has a higher payload capacity than the Scout drone, which is necessary to convert our oil and gas customers to commercial growth. The particular brand used with customers will be dictated by the region and the market we are selling to. In line with our cash management directive, we'll be advancing our product roadmap based on success with customers. In the near term, that means immediate commercial growth in the smart city market and integrating certain parts of the Scout System stack into Optimus to support this growth.
In parallel to outfitting the Optimus system with the hardware and software features that our oil and gas customers have requested, we will be pursuing a multi-stage joint effort to cost down Optimus and thus progressively expand the size of our addressable market. I will dive deeper into this on a later slide. I'd like to take another moment to highlight the remarkable synergies that we have enabled as a result of this acquisition of Airobotics. The combined business accelerates revenue, capital efficiency, and technology leadership in extraordinary ways. We have bolstered our customer pipeline across multiple countries with POs in hand. We have a mature platform with customer acceptance and a multinational staff to support sales and operations activities. We have a significant expansion in our already large addressable market. I'll touch more on that a bit later.
In quantitative terms, we believe this combination saves over $30 million in spend over the next two years, eliminating tens of millions in redundant R&D investment and shortening our path to profitability. This combination also ensures consolidation of IP and talent from the industry's two leading drone-in-a-box developers, increasing our opportunities to expand competitive moats and accelerating regulatory progress in multiple jurisdictions around the globe. As hard technologies require real investment dollars, the combined investment in these products- to- date, over $200 million, is a material competitive advantage that will bear fruit for this company for years to come. I will now hand it over to Yishay, CFO of Airobotics, to provide a deeper intro into the Optimus system technology as well as the smart city markets it is now deployed in. Yishay?
Thank you, Reese. As Reese mentioned, I wanna share with you important details about the Optimus system, which we believe is the most powerful autonomous drone solution in the commercial drone marketplace. Before I proceed, I wanna take a brief moment and share how excited our team at Airobotics is to join forces with Ondas and American Robotics. We have worked extremely hard to get to where we are today. We think our future is incredibly bright. Together, we have the ability to achieve great things. The Airobotics system is completely automatic and does not require any human intervention at all. The drone take off and land automatically from the docking station. The robotic arm inside the docking station replaces batteries and a variety of different sensors, up to 12 batteries and nine different payloads.
This allows a 24/7 flight sequence and the ability to collect diverse types of information such as video, lidar, and others. One system covers an area of 80 sq km or 30 sq mi and is able to serve multiple customers 24/7 from one single system. Airobotics has extensive experience in a variety of end markets, ranging from mining, oil and gas in remote areas, to public safety and smart cities in urban environments. The payloads are mature and integrated, enable a wide variety of use cases for large number of end markets. Inside the docking station, there is a room for nine different payloads. Integration for a new payload can be performed very easily with almost any sensor available on market. You can see here example of the sensor that we have integrated and are already providing solution to our end customer.
Still imaging for 3D modeling, lidar sensor for point cloud model, a high resolution day and night camera, and a special payload that enable the transfer of emergency equipment delivered automatically. We developed the Insightful, a secure web software which gather all drone collected data according to time and GPS location. The Insightful allows our customers the ability to follow execution of operational procedures, real-time mapping and measurement, 3D modeling, and other important insights based on our collected data. The system reliability and track record are one of the most powerful assets we have driven customer demand. The system has undergone a long series of tests to support the regulation certification and increase the reliability of the system, such as ongoing durability test, wind and rain resistance, and hold the ASTM standard for parachute deployment in case of emergency.
The system has accumulated over 50,000 flight hours and has exemplary safety record activity with more than 5,000 flights within a few months flying in the Dubai Expo. These validations are fundamental when marketing our system to new large-scale customers. Thanks to our ability to replace sensor and our proprietary Insightful software, we are providing a significant number of applications to end customer. As you can see below, starting with application from smart city, industrial, and large construction sites. In fact, I would like to highlight the value of the Optimus system for construction project management. The drone can be used for a variety of data and information collection, ranging from video and security and safety to image collection for mapping and surveying.
The data we collected is delivered via Insightful to a portal which can be accessed by hundreds of people from the customer and external vendor to track progress. Overlies of actual project progress via targeted plans construction is valuable tool to effectively manage large projects. We have a lot of experience here, including with Intel, at one of the biggest construction sites in Israel. Same as with American Robotics, from day one, we worked very closely with the regulator across the world. We started in Israel and moved to every territory where we operate. As you can see, we obtained countless specific approval around the world. We have been working closely with the FAA for the last three years to obtain type certificate for the Optimus system. This process includes strict experiment and extensive regulatory documentation.
The type certification will allow us to more easily provide the Optimus system in densely populated urban environments. We're in the final stage of FCC approval process and expect it in 2023, hopefully very soon. Once achieved, it will further support growth and broaden customer opportunities in the U.S. market. With the system capabilities and its reliability, we can create a network of aerial data collection, 24/7, on-demand, eye in the sky. The Optimus system operates as a smart drone infrastructure to provide numerous types of information in an automatic and integrative manner. It can be compared to a fiber optic infrastructure. Once the infrastructure is installed, it serves a large number of customers based on the same network. Here you can see the markets that are relevant to drone infrastructure. Basically, everything that is under the same area.
We believe that the added value in public safety is clear. Here, ROI is not the primary. It's about saving lives and reducing the response time. For public safety, we can reduce labor costs for police and fire operations, while also improving safety for local population. The enforcement application are extremely interesting, as we are able to increase our clients revenues in urban areas such as municipalities, while providing solutions for private and commercial facilities. Once the infrastructure is in place, it will be faster and cheaper for the end customer to receive those services. We already have good example of this today. We work in several business models. Data as a service recurring revenues, where the end customers receive data insights in return for monthly recurring fees. With an outright sale, the customer purchases the unit and an annual maintenance package.
This model will appeal to certain homeland security and public safety customers, similar to the commercial deployment we recently announced in the UAE. To enable rapid growth of the drone infrastructure, we also enable a joint venture model, partnering with a local distributor, where we are paid upfront for each Optimus system. The planned JV we announced with SkyGo in Abu Dhabi last week is an example of this. As Eric mentioned earlier, we are adding counter-UAS capability to our portfolio of drone solutions. We believe our customers will have significant interest in the Raider, which is pictured here. We expect the acquisition of Iron Drone assets to close this quarter, and we'll share more details then. I will now turn the call back to Reese, who will share some more details around our outlook. Thank you.
Thank you, Yishay. Let's recap what this all looks like from a total market opportunity. For those who have been following us previously, you know we've been targeting a $100 billion+ set of markets, which can be grouped at a high level into industrial, agriculture, and defense. Within industrial, the largest estimated opportunity is oil and gas, with the top use cases being methane detection and oil spill detection. With the addition of Airobotics and soon Iron Drone, we've added smart cities and counter-drone markets, adding a combined estimate of roughly $25 billion to the total addressable market size for Ondas Autonomous Systems. We've estimated the size potential of the smart cities market by incorporating cities with a population of at least 100,000, and then assuming a ratio of one Optimus system per 100,000 inhabitants.
This ratio is derived from our planned deployments in Dubai and Abu Dhabi. Now, we can't attack every one of those sub-markets simultaneously, so let's talk about how we will be connecting our product roadmap to these addressable markets. With our unification under Optimus, we are making the analogy to how Tesla approached their various car models. They began with the Roadster, the highest priced product targeted at high-end buyers. This is analogous to the current state of the Optimus system, which is superior to all other drone products in terms of functionality, but also sits at the high end of the cost spectrum. This cost and functionality range is appropriate for a subset of the potential markets, including smart cities, high-end construction, high-end oil and gas, defense, and public safety.
To move beyond those markets to what we believe are even larger multi-billion dollar revenue opportunities and expand penetration, we must reduce the cost to produce our product. To that end, we believe over the next year, our two teams can work together to achieve a significant cost reduction, with our target being 50%. This reduction in cost will unlock profitable business opportunities in a broader segment of oil and gas, rail, and other aspects of urban infrastructure. We can call this Optimus X for now, and this would be analogous to the Model S. To reach an even lower price, which we can compare to the Model 3, we anticipate an overall architecture change being necessary, which is close to what we see in the current Scout System. Thus, we foresee a Scout Optimus hybrid being developed to reach an 85% reduction in manufacturing costs.
This reduction will unlock yet another level of mass market applicability, including mining, aggregates, and agriculture. All right, to wrap things up, let's talk about the specific customer opportunities we are servicing this year. As mentioned, the focus for 2023 will be around smart cities, public safety, construction, and oil and gas. Our largest opportunities from a near-term revenue perspective are the smart city customers in Dubai and Abu Dhabi of the UAE. Between those accounts, we are projecting $7 million or more in revenue this year, with much of that already under contract. The achievement of this should not be understated, as these two deployments represent the first real-world operation of autonomous drones in an urban environment. We can mark this down in the history books as events that will forever change the skies in our cities.
We also have a foothold in the construction market via our customer relationship with Intel in Israel, where they are managing the largest construction project in the country. We believe the co-construction project management use case is a valuable one. We believe we can bring those applications to the United States, where construction activity, including mega projects related to infrastructure development and onshoring of manufacturing facilities, is growing. Through American Robotics activities over the past two years, we've generated an impressive pipeline of some of the largest oil and gas customers in the world. A portion of those already have POs or have requested units for 2023, and each of these accounts represents potentially hundreds of millions in future revenue for us.
We remain committed to serving the oil and gas market, particularly in the United States, where recent EPA regulations on methane further increase the need for our technology. To fill this existing and projected demand, we are ramping production of the Optimus system. Current inventory is effectively sold out, and we have an additional 15 units on order from our manufacturer, with deliveries projected to begin mid-year. As we approach 2024 with more POs in hand, we will place additional orders for more units. On a final note, we've entered a new stage for our company, where the focus has shifted to fleet expansion as opposed to purely proof of concept engagements. We expect customer traction to steadily increase this year as we build a wait list for the highest value customer opportunities.
I'll now, hand it back to Eric to summarize the financial outlook for Ondas Autonomous Systems and Ondas Holdings. Eric?
All right. Thank you, Reese, and to you, Yishay, as well. Let's wrap up the OAS outlook by summarizing the key financial targets. As mentioned, we expect to generate around $8 million in revenue during 2023 in the drone segment. That outlook is supported by existing backlog as well as insight into expected customer demand. We are inventory constrained at the moment, but expect to alleviate that as we move through the year. Demand looks strong, and as we expand conversations to new markets and new customers, I suspect demand will continue to remain robust, which would support 100% growth in 2024. To that point, you have heard me say on a number of occasions that pent-up demand for autonomous drone solutions is substantial. This remains the case in a big way. There's a difference for Ondas now.
As we brought American Robotics Scout System to market, we had to limit our activities because customers needed to spend six-12 months to validate our system, given its newness. Once validated, we found that new payload and analytics needed to be tailored for specific end markets. It's a whole new game now, as the Optimus system has been validated, and that system also has mature payloads and solutions integrated. The Optimus system is scalable in the field today. Responding to pent-up demand with a mature platform like Optimus is a great position to be in and positions us for adoption along the S-curve we see with comparable technology platforms. I will now begin to wrap up the presentation before we take Q&A. As we said earlier, we expect revenue to fall in the $26 million-$30 million range on a consolidated level.
The target is supported by $13 million of total backlog. We expect growth in both businesses to remain robust in the coming years. We believe we could see 100% growth or better in 2024. Ondas Networks will make the largest contribution to revenue as the 900 MHz deployments begin. We have taken great efforts to budget our OpEx dollars efficiently. We believe a combination of revenue growth and operating leverage will rapidly improve our cash utilization, initially reducing the cash burn as we move forward, but ultimately allowing Ondas to generate positive adjusted EBITDA. We expect Ondas Networks to lead the way with improving margins and are targeting positive EBITDA there by Q4 2023.
We believe Ondas Networks could be strongly EBITDA profitable by 2024. The drone platforms will see rapid growth with Airobotics generating revenue from placing Optimus systems in international markets. Cash burn will decline here sooner than with American Robotics. We believe Airobotics will move to EBITDA breakeven in the second half of 2024. American Robotics profitability will be heavily dictated by our success in marketing in the U.S. and with oil and gas customers in particular. We are optimistic that AR will help grow the drone segment, though we will be conservative until we prove that as we engage customers and move through 2023. Stay tuned. Of course, Ondas Holdings is a cost center that weighs on overall profitability of the company. Public company costs are high. We're gonna look to control those as best we can.
Based on our current expectations, we believe that on a consolidated level, Ondas Holdings could be profitable on an EBITDA basis in 2024. Let's wrap this up with a couple of closing remarks before we shift to questions. I wanna reiterate that management is committed to delivering for investors. We believe we are on the right track to build a large, successful company that defines the large high value end markets we are addressing. As you are well aware, we have made significant investments in our valuable proprietary platform technologies. Business development, alongside the technical effort, have long cycles. We have put in the time and done the hard work. We are now transitioning to delivering for customers who need our technical solutions, and we're doing this for the benefit of our shareholders, who deserve to be rewarded for backing our company.
We believe we are creating company with significant value. Frankly, we need to have that reflected in the share price. We will work our tails off to deliver, and we will also be working to broaden and deepen our investor base. I think there's a lot of opportunity to do just that. Again, I think it's gonna be a great year for Ondas. With that, let's see if there are questions. Operator?
Thank you. We will now begin our question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Again, pressing star then one will allow you to ask a question. At this time, we will pause momentarily to assemble our roster. The first question today will be from Mike Latimore with Northland Capital Markets. Please go ahead.
Yeah, great. Thanks for the comprehensive presentation here. In terms of the opportunity in, I think it was Dubai and Abu Dhabi, I think it's roughly 50 units possible. You know, what are the catalysts to getting those incremental orders? Is it, you know, a government funding topic? Is it technology that you guys need to add? Or what gets you to those incremental units over time?
Well, I think it's, Mike, it's. Yeah. Let me take that. Mike, I think it's a function of first delivering and deploying the systems and then really working with them on their planned deployment. To be frank, they've given us a lot of thought. That's why we have visibility into the total capacity that they intend to deploy.
Yeah. I'd say part of this is just the ability to install units and just trying to do it in a, in a thoughtful way. Both of these customers have engaged with the intent to deploy across the city and the locations for those sites have already been chosen.
Okay, great. It sounds like this will be on the kinda individual purchases as opposed to an as a service model for those units.
cities have two different models. In Dubai, it is a purchase of the system with a service and maintenance contract. In Abu Dhabi, it is more of the data as a service model. Eric, you want to add anything to that?
No, that's exactly right. We're doing this with the joint venture with the group in Abu Dhabi called SkyGo, which we announced last week.
Yeah. Okay, great. Just from a technical aspect, as these drones collect data in a city here, how do you generate kind of the insights? Is it an automated function that you guys offer yourself? Is it, you know, third-party software that ingests the data and then raises an insight? I guess, how much more advanced can that functionality get over time?
Yeah, I can take that. The near-term use cases in the smart city market are a bit different than the ones that we talked about for oil and gas. Oil and gas is more, you know, utilizing analytics to do automated data analysis. The use cases, at least at the moment, in Dubai and Abu Dhabi, are more about emergency response, some small package delivery. It's actually centered around live video feeds from public safety officials, you know, responding to a fire, responding to a car accident, or some sort of safety issue. Less, much less emphasis on analytics for the smart city applications, at least at the moment.
Got it. On the network side of thing, I think you were originally targeting $20 million of orders in 2022. For the amount that you didn't get in 2022, is that part of the plan for this year, or are there other sources of orders in the pipeline?
We're working with Siemens on identified opportunities. We do expect the order book to grow.
Is some of that from the ones that didn't close last year?
Yes. It's really a matter, Mike, of when the deployments start. Once they start, you should see sequential growth for, you know, quite a period of time. As individual railroads begin to deploy, they deepen or broaden their own deployment, and more railroads come on board to do the same thing.
Mm-hmm. Okay. All right. Thanks.
Sure.
The next question is from Timothy Horan from Oppenheimer. Please go ahead.
Thanks, guys. On the 900 MHz opportunity, the $462 million, do you think the entire revenue, will you get that entire revenue, $462 million? Maybe you can describe what portion you'll get. Can you give us, you know, over what timeframe that is? Is this over, like, a five-year period, the $462 million, you know, or does it have to be done by the end of 2025? You know, any more color there. Secondly, how much more capital do you think you need to raise in total to get to free cash flow breakeven? Thanks.
Okay. Tim, I'll start. I'm sorry, the TAM is a function of our pricing based on what we understand for both, the required base station infrastructure, the number of base stations that need to be deployed, for network coverage, and then all the edge remotes at various locations, whether it's wayside crossings on locomotives, et cetera. It reflects our pricing, and of course, if Siemens is also involved, they're taking our pricing and they add their own margin for the customer.
Just to be clear.
The net special. Yeah.
Of the $462 million, you know, how much of that would you receive? Half of that? You know, 25%, 75%?
We look at that as our addressable market.
Okay. The $462 million is what you think you'll get total.
Right.
Over, you know, what timeframe, like, you know, are we talking about now?
We segmented the rollout into two categories in the presentation. It was the upgrade and the expansion. The upgrade is the initial rollout where the railroads create coverage, so it's very base station intensive. Then they deploy certain locations, particularly wayside and crossings, and we expect. That's the upgrade. That's the upgrade where they're replacing a legacy network. We expect to generate the bulk of that by the deadline of 2025.
Sorry, and is that, middle of 25? End of 25? The beginning?
It's The formal deadlines, as we understand them, are the third quarter of 2025.
Okay. The entire $462 million should be spent by third quarter of 2025, basically.
No, I'm saying the upgrade cycle. Then when they have the the network built, just like, you know, other wireless networks, when you have more data capacity, you expand to new applications. We've identified based on AR roadmaps, you know, what those new applications will be, and we expect, you know, them to continue to utilize the data capacity by expanding the utilization of the network beyond
Okay.
the current legacy network.
The 233 by middle of 2025 and then the rest over, is it, like, for a 10-year period, do you think? five-year period?
you know, It's hard to say right now. We're focused on getting these upgrades going. you know, to be frank, I think this, you know, because our network is greenfield, we can always add capacity if they have spectrum. I believe this network will be built and maintained for 20 years.
Okay. Got it.
This is what we've identified today.
Got it. How much more cash to get to free cash flow breakeven?
Well, the short answer is we may need some capital. We do think it's modest. If I could provide some context, as we outlined, the businesses are selecting, and cash burn should decline sharply. You know, that's particularly as we move through the year. Incremental capital needs should be modest. I think they're gonna be modest, mostly due to working capital as we build inventory, relative to the strong revenue growth we expect. I'm not gonna put a number on it, but I do think it's a modest number relative to our opportunity.
Thank you.
Sure.
The next question is from Carter Mansbach from Forte Capital Group. Please go ahead.
Morning, gentlemen. Thanks for the comprehensive outline of the company. It's a lot to unpack. I just think I heard this correctly, but are you expecting the full company to be EBITDA breakeven in 2024?
That's what, that's our expectations and that's driven by, the, you know, Ondas Networks really, in that operating leverage we described, as more rails get involved in broadening, their network deployments.
Got it. Okay. Great. Thanks again.
Sure.
Once again, if you have a question, please press star one. The next question is from Craig Slater from Morgan Stanley. Please go ahead.
Yeah. Hello. I don't know if I'm online. People can hear me?
You are.
I had.
Hi, Craig. We can hear you.
Okay, great. Thank you.
Great.
I had a question about your IP portfolio, how you're protecting yourselves, and then even expanding that enterprise wide around, maybe cyberattacks, cyber hacks. Finally, the competitive landscape. I'm not sure you really provide a ton of color on that, but love some additional commentary, if you could, on what really sets you head and shoulders above the rest. Thank you.
Sure. Stewart, I'll ask you and Reese to take the IP question separately.
Sure.
Stewart, why don't you start from the network side?
Yeah. On the IP for networks, we do what, you know, most technology companies do. We have patent attorneys that represent us all over the world, and we do take our core technology and with Siemens as a partner, we've decided that we protect our patents in most of the key major industrial countries around the world. For the network side, we have our core patents. One of the things that we didn't hit on heavily, and this goes back to the total addressable market, is today, we see we don't see competition for our technology. We dominate in terms of what we've developed over the last number of years.
What we're doing is putting that in a standardization group, and that gives us also the ability to take it all over the world with support for royalties, whoever uses our technology. I'll, I can now let Reese discuss on the American Robotics side.
Sure. Yeah. The IP for our systems between American Robotics and Airobotics is quite extensive. You know, this is technology that's been developed over seven years, between two companies that have spent over $200 million so far. The IP is grouped in a number of different categories. We have patents just like any other company. As Stewart said, we have patent attorneys that continue to service those and update them and protect them around the world. Really beyond that, we, you know, it's a tremendous amount of software that goes into all these products, back-end, front-end, data analysis, et cetera. There's a tremendous amount of trade secret in what we do. Another important category is our regulatory approvals.
The not just the approvals themselves, but the know-how about how to receive those approvals, is currently non-public information, and is one of our important differentiating factors. You know, we look at our IP modes being incredibly numerous that are only gonna actually grow as we get our systems out with more customers. You asked about cyber attacks. That historically hasn't been a big focus for us since we've largely been in an R&D and POC mode. As we're deploying with customers, that is now becoming more of a focus, actually at the request of our customers. Again, we're dealing with very large companies, Sydney Oil and Gas and Smart City Place.
In addition to our internal efforts, our customers are putting that those demands on us as well.
Okay.
Craig, are you finished with your line of questions?
All set. Thank you.
All right. Thank you so much. Also, ladies and gentlemen, this now concludes our question- and- answer session. I'd like to turn the conference back over to Eric Brock for any closing remarks.
Okay. Thank you, operator. I'm gonna close the call by thanking you again for attending. We have a lot of work ahead. We will get right back at it. I look forward to keeping you informed on our progress. We'll talk soon. Have a great day.
Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.