Summary of Eltek Ltd. Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $11.5 million for Q2 2026, down from $12.5 million in Q2 2025.

Gross Loss: $1 million, an improvement from a $1.8 million loss in Q1 2026 but down from a $3 million profit in Q2 2025.

Operating Loss: $2.5 million, compared to an operating profit of $1.5 million in the same quarter last year.

Net Loss: $2.7 million or $0.41 per share, compared to a net income of $0.4 million or $0.05 per share in Q2 2025.

EBITDA: Loss of $1.9 million, unchanged from the previous year.

Cash Position: $11.5 million in cash and cash equivalents, with no outstanding debt.

2Strategic Updates and Business Highlights

Eltek is in a transition period focused on stabilizing manufacturing operations and building infrastructure for growth.

The company has a strong backlog and ongoing demand for its products, particularly in the medical and high-end industrial markets.

Progress on operational improvements includes the implementation of a new ERP system and installation of a new PCB plating line, with initial trial production underway.

The company has integrated 15 foreign employees to enhance production capacity and operational efficiency.

3Forward Guidance and Outlook

Eltek anticipates gradual improvement in gross margins as production volume and efficiency increase, alongside the ramp-up of new production lines.

The company expects to convert its strong backlog into higher revenue levels, with a focus on stabilizing operations to leverage fixed costs more effectively.

Although no specific revenue forecasts were provided, management expressed optimism about future performance as operational stability improves.

4Bad News, Challenges, or Points of Concern

The company continues to face operational challenges, including production inefficiencies and raw material supply limitations, particularly for fiberglass-based materials.

The competitive environment restricts the ability to raise prices despite strong demand, impacting gross margins.

Approximately one-third of the backlog is tied to historical exchange rates, which may weigh on profitability until those orders are fulfilled.

5Notable Q&A Insights

Management acknowledged that improvements in gross margin will be gradual and dependent on several operational factors.

The first plating line is installed and undergoing acceptance testing, while the second line is expected to arrive by year-end.

There is a strong demand environment, but operational execution remains the primary challenge in converting backlog into sales.

Management clarified that while they hope to see improvements in average selling prices, they do not provide specific revenue forecasts. Overall, Eltek is navigating a challenging transition period but remains optimistic about future growth driven by strong demand and strategic operational improvements.