Q2 FY2026
Filed Aug 18, 2026Eltek reported a second-quarter GAAP net loss of $2.7 million as revenue declined and gross profit turned into a gross loss during a manufacturing and systems transition.
Second-quarter revenue was $11.5 million versus $12.5 million in the second quarter of 2025, while gross profit of $3.0 million became a gross loss of $1.0 million, operating profit of $1.5 million became an operating loss of $2.5 million, and net income of $0.4 million became a net loss of $2.7 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $11.5 million | – | – |
| Costs of revenuesGAAP | (12,498) U.S dollars in thousands | – | – |
| Gross profit (loss)GAAP | ($1.0 million) | – | – |
| Research and development expenses, netGAAP | - | – | – |
| Selling, general and administrative expensesGAAP | (1,582) U.S dollars in thousands | – | – |
| Operating income (loss)GAAP | ($2.5 million) | – | – |
| Financial expense, netGAAP | $0.7 million | – | – |
| Income (loss) before income taxGAAP | (3,244) U.S dollars in thousands | – | – |
| Income tax expenses (tax benefit)GAAP | (500) U.S dollars in thousands | – | – |
| Net income (loss)GAAP | ($2.7 million) | – | – |
| Diluted net income (loss) per ordinary shareGAAP | ($0.41) per ordinary share | – | – |
| Basic net income (loss) per ordinary shareGAAP | ($0.41) per ordinary share | – | – |
| Weighted average number of ordinary shares used to compute diluted net income (loss) per ordinary shareGAAP | 6,785 (in thousands) | – | – |
| Non-GAAP EBITDAnon-GAAP | ($1.9 million) | – | – |
| First six months revenueGAAP | $22.0 million | – | – |
| First six months gross profit (loss)GAAP | ($2.8 million) | – | – |
| First six months operating income (loss)GAAP | ($5.8 million) | – | – |
| First six months financial expense, netGAAP | $0.8 million | – | – |
| First six months net income (loss)GAAP | ($5.6 million) | – | – |
| First six months diluted net income (loss) per ordinary shareGAAP | ($0.83) per ordinary share | – | – |
| First six months Non-GAAP EBITDAnon-GAAP | ($4.6 million) | – | – |
Capital returns
- Dividend distribution: - for the three months ended June 30, 2026, compared to (1,276) U.S dollars in thousands for the three months ended June 30, 2025.
- Exercise of options: 5 U.S dollars in thousands for the three months ended June 30, 2026.
What drove it
- Management described the period as an important transition focused on stabilizing manufacturing operations and building human and operational infrastructure.
- The company said stabilization of its production system and integration of new production lines are progressing but are not complete.
- Management said it is well advanced in implementing a new ERP system.
- The company is completing installation and conducting acceptance testing of a newly arrived PCB plating line, and expects to begin qualification during the third quarter.
- Financial expenses primarily resulted from erosion of the U.S. dollar against the NIS.
Concerns
- Revenue was $11.5 million compared to $12.5 million in the second quarter of 2025.
- The company reported a gross loss of $1.0 million, compared to gross profit of $3.0 million in the second quarter of 2025.
- Operating loss was $2.5 million, compared to operating profit of $1.5 million in the second quarter of 2025.
- Net loss was $2.7 million, compared to net income of $0.4 million in the second quarter of 2025.
- Management said the manufacturing transition process is not yet complete.
- First-six-month operating loss was $5.8 million compared to operating profit of $2.2 million in the first six months of 2025.
What to watch
- Completion of manufacturing-system stabilization and integration of the new production lines.
- Qualification progress for the newly arrived PCB plating line during the third quarter.
- Implementation of the new ERP system and its stated role in managing and scaling operations.
- Progress in improving operational efficiency and restoring operational and financial performance.
- Currency movements between the U.S. dollar and the NIS.
Balance sheet and cash flow
- Net cash provided by operating activities: 674 U.S dollars in thousands for the three months ended June 30, 2026, compared to (2,935) U.S dollars in thousands for the three months ended June 30, 2025.
- Net cash provided by operating activities: 289 U.S dollars in thousands for the six months ended June 30, 2026, compared to (2,808) U.S dollars in thousands for the six months ended June 30, 2025.
- Purchase of fixed assets: (934) U.S dollars in thousands for the three months ended June 30, 2026; (1,673) U.S dollars in thousands for the six months ended June 30, 2026.
- Net cash used in investing activities: (3,026) U.S dollars in thousands for the three months ended June 30, 2026; net cash provided by investing activities: 5,947 U.S dollars in thousands for the six months ended June 30, 2026.
- Cash and cash equivalents: 9,390 U.S dollars in thousands at June 30, 2026, compared to 2,481 U.S dollars in thousands at December 31, 2025.
- Short-term bank deposits: 2,117 U.S dollars in thousands at June 30, 2026, compared to 9,643 U.S dollars in thousands at December 31, 2025.
- Trade receivables: 11,656 U.S dollars in thousands at June 30, 2026, compared to 14,789 U.S dollars in thousands at December 31, 2025.
- Inventories: 10,295 U.S dollars in thousands at June 30, 2026, compared to 11,154 U.S dollars in thousands at December 31, 2025.
- Property and equipment, net: 24,664 U.S dollars in thousands at June 30, 2026, compared to 20,862 U.S dollars in thousands at December 31, 2025.
- Short-term operating lease liabilities: 718 U.S dollars in thousands at June 30, 2026, compared to 1,100 U.S dollars in thousands at December 31, 2025.
- Long-term operating lease liabilities: 12,199 U.S dollars in thousands at June 30, 2026, compared to 5,296 U.S dollars in thousands at December 31, 2025.
- Total shareholders' equity: 44,364 U.S dollars in thousands at June 30, 2026, compared to 46,737 U.S dollars in thousands at December 31, 2025.
Analysis
Eltek's second-quarter results weakened materially from the comparable 2025 period. Revenue was $11.5 million compared to $12.5 million, while gross profit of $3.0 million became a gross loss of $1.0 million. The resulting operating loss was $2.5 million, compared with operating profit of $1.5 million, and the company recorded a GAAP net loss of $2.7 million, or $0.41 per fully diluted share, compared with net income of $0.4 million, or $0.05 per fully diluted share.
The six-month results show the same deterioration. First-half revenue was $22.0 million versus $25.3 million in the first six months of 2025. Gross loss was $2.8 million versus gross profit of $5.2 million, operating loss was $5.8 million versus operating profit of $2.2 million, and net loss was $5.6 million versus net profit of $1.4 million. Non-GAAP EBITDA was a loss of $1.9 million in the quarter and a loss of $4.6 million in the first six months, compared with EBITDA of $2.0 million and $3.1 million, respectively, in the prior-year periods.
Management attributed the period to an ongoing operational transition. It said production-system stabilization and new-line integration are progressing but incomplete, while the company is implementing a new ERP system and installing and testing a new PCB plating line. The stated focus is completing manufacturing stabilization, strengthening the organization and infrastructure, and improving operating efficiency. Financial expenses primarily resulted from erosion of the U.S. dollar against the NIS.
Cash flow was positive from operations in the quarter, with net cash provided by operating activities of 674 U.S dollars in thousands, compared to net cash used in operating activities of (2,935) U.S dollars in thousands in the prior-year quarter. Cash and cash equivalents were 9,390 U.S dollars in thousands at June 30, 2026, compared to 2,481 U.S dollars in thousands at December 31, 2025, while short-term bank deposits were 2,117 U.S dollars in thousands compared to 9,643 U.S dollars in thousands. The company did not provide financial guidance, so the near-term operating milestones are the third-quarter plating-line qualification, ERP implementation, and completion of manufacturing stabilization.
Management, verbatim
Our second-quarter 2026 results reflected a loss as we remain in an important transition period focused on stabilizing our manufacturing operations and building the human and operational infrastructure required to support our next phase of growth. The stabilization of our production system and the integration of our new production lines are progressing, although the process is not yet complete.
Eli Yaffe, Chief Executive Officer
We are well advanced in the implementation of our new ERP system, which we believe will provide a stronger foundation for managing and scaling our operations. We are also completing the installation of our newly arrived PCB plating line, while conducting acceptance testing in parallel, and expect to begin the qualification process during the third quarter.
Eli Yaffe, Chief Executive Officer
Not in the filing
stated, not guessed- Financial guidance for a future reporting period.
- Previous-release outlook and prior-guidance comparison.
- Reportable segment revenue, segment comparisons, and segment drivers.
- Current-quarter gross margin percentage.
- Current-quarter and first-six-month operating margin percentages.
- Non-GAAP net income and non-GAAP earnings per share.
- Free cash flow.
- Share repurchases or repurchase authorization.
- Debt or borrowings, other than operating lease liabilities.
- Quarter-over-quarter comparisons for reported income-statement metrics.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.