Eltek (ELTK) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenues reached $12.5 million, a 20% increase year-over-year, with first half 2025 revenues at $25.3 million, up from $22.2 million in H1 2024, driven by strong defense and medical segment demand.

• Gross margin expanded to 24.1% from 15.6% year-over-year, reflecting operational improvements and favorable product mix.

• Operating income rose to $1.5–$1.6 million, up from $0.4 million in Q2 2024.

• Net profit was $0.4 million ($0.05 per share), down from $0.8–$1.4 million ($0.11 per share) in Q2 2024, impacted by currency-related financial expenses.

• Early signs of production capacity stabilization and improved run rate observed.

Financial highlights

• Q2 2025 gross profit was $3 million (24–24.1% margin), nearly double Q2 2024, with gross margin expanding from 15.6–16%.

• EBITDA reached $2 million (15.6% of revenue), up from $0.8 million in Q2 2024 but lower than Q1 2025.

• Cash flow from operating activities was negative $2.8–$2.9 million, mainly due to increased receivables and inventory.

• Cash and equivalents plus short-term deposits totaled $11.2 million as of June 30, 2025, with no outstanding debt.

• Inventories increased to $12.9 million from $9.5 million at year-end 2024.

Outlook and guidance

• Revenue capacity expected to reach $55–$60 million annually once the new 40 m coating line is operational by end of 2025; delivery delayed to end of 2025.

• Incremental revenue above current levels expected to contribute $0.50 per dollar to gross margin due to fixed cost absorption.

• Strong defense demand anticipated to continue into 2026, with growing opportunities in Israel, the US, and Europe.

• Staffing increased by 10% since January to meet rising demand and maintain lead times.

• Pricing model updated to offset currency fluctuations, aiming to protect future margins.