Eltek Ltd.

Second-quarter 2026 revenue was $11.5 million versus $12.5 million in Q2 2025. Gross loss was $1 million, compared with gross profit of $3 million a year ago; management also said gross loss improved from $1.8 million in Q1 2026. Operating loss was $2.5 million versus operating profit of $1.5 million in Q2 2025. Net loss was $2.7 million, or $0.41 per share, versus net income of $0.4 million, or $0.05 per share, and EBITDA loss was $1.9 million versus EBITDA of $1.9 million in the prior-year period. Operating activities generated $0.7 million of cash, and the company ended June 30, 2026 with $11.5 million in cash and cash equivalents and no debt. Management did not give formal forward guidance, but said they expect improvement to be gradual as volume, efficiency, capacity utilization, new line ramp-up, raw material availability, and pricing all improve; they also expect the second plating line to arrive and be installed before year-end.

Eli Yaffe framed the quarter as part of an “important transition period” focused on stabilizing manufacturing and building the infrastructure needed for the next phase of growth. He said demand remains strong and backlog is high, but the company is still working to convert that demand into production and revenue. He highlighted progress on the first plating line, ERP implementation, customer certifications in medical markets, and workforce expansion, while saying these steps should support a return toward historical profitability over time.

Ron Freund emphasized the financial impact of lower revenue volume, production inefficiencies, and the stronger U.S. dollar against the Israeli shekel. He said the company’s financial expense was $0.7 million, partly offset by interest income on cash, and reiterated that the balance sheet is solid with $11.5 million in cash and no outstanding debt. He also noted that operating activities produced $0.7 million of cash during the quarter and said the company expects to see continued benefit from improved average selling prices and a better mix, though he did not provide formal guidance.

Analysts pressed on why gross margin is still negative despite strong demand and significant investment in production lines. Management responded that the issue is operational, not demand-related, and that pricing cannot simply be raised because Eltek competes with local and foreign suppliers. On backlog, Eli Yaffe said about one-third is tied to historical exchange rates, one-third is around 3.2, and the most profitable last third is at current exchange rates near 3.0; Ron Freund declined to forecast next-quarter results but said the company saw some ASP improvement in Q2 and hopes for more.