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Eltek Ltd. Reports Strong Second-Quarter 2025 Results

1. ELTK reported $12.5 million revenue, up 20% year-over-year. 2. Gross margin increased to 24.1%, up from 15.6% last year. 3. Operating income surged 259% to $1.5 million compared to last year. 4. Non-cash financial expenses were $1.0 million due to currency fluctuations. 5. Production capacity expansion is on schedule, despite supply delays.

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Why Bullish?

ELTK's substantial revenue and profit growth are likely to enhance investor confidence. Similar trends in previous quarters have resulted in positive stock performance.

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The article outlines significant financial improvements and growth strategies that are likely to affect stock valuation directly.

Why Short Term?

Improvements in financial metrics suggest immediate market responsiveness, historically causing short-term price upswings.

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20% Quarter-over-quarter revenue growth; gross margin expands to 24% , /PRNewswire/ -- Eltek Ltd. (NASDAQ: ELTK), a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), today announced its financial results for the quarter ended June 30, 2025. Second Quarter 2025 Highlights Q2 2025 Q2 2024 %      Revenues (*) $12.5 million $10.5 million +20 %      Gross margin 24.1 % 15.6 % +8.5 %      Operating income $1.5 million $0.4 million +259 %      Financial income (expense) $(1.0) million $0.5 million n/m (*) Revenues for the six months ended June 30, 2025 totaled $25.3 million, up 14% from $22.2 million in the 2024 period. Eli Yaffe, Chief Executive Officer, stated: "Strong momentum across our defense and medical segments drove significant year-over-year growth, highlighted by double-digit revenue increases. Continued operational improvements and a favorable product mix (compared to Q2 2024) contributed to a substantial increase in gross margin and operating profit, which reached $1.5 million - more than triple the amount recorded in the same period last year. We remain committed to expanding our production capacity. All the equipment that was delivered to date has been successfully installed and is performing in accordance with specifications. Construction to accommodate the core of our investment plan - the new 60-meter coating lines is progressing smoothly, on schedule, and without any material impact on ongoing production operations. Following a recent scheduling update from our coating lines supplier, we have been informed of an additional delay in the delivery of the first line. We now expect the first line to arrive at our facility toward the end of 2025. With staffing up approximately 10% since January, we continue our efforts to meet growing demand while maintaining best-in-class lead times. The sharp appreciation of the Israeli shekel during the quarter resulted in a non-cash financial expense of $1.0 million. Given that the majority of our revenues are denominated in U.S. dollars, we have proactively updated our pricing model to better align with our NIS-based expenses. The impact of the currency fluctuation will be reflected in future customer orders, helping to protect our margins moving forward." Second Quarter 2025 GAAP Financial Results Revenues for the second quarter of 2025 were $12.5 million compared to $10.5 million in the second quarter of 2024. Gross profit for the second quarter of 2025 was $3.0 million (24% of revenues) compared to $1.6 million (16% of revenues) in the second quarter of 2024. Operating profit for the second quarter of 2025 was $1.5 million compared to operating profit of $0.4 million in the second quarter of 2024. Financial expenses for the second quarter of 2025 were $1.0 million compared to financial income of $0.5 million in the second quarter of 2024. Financial expenses primarily resulted from the 9% erosion of the U.S. dollar against the NIS. Net income for the second quarter of 2025 was $0.4 million or $0.05 per fully diluted share compared to net income of $0.8 million or $0.11 per fully diluted share in the second quarter of 2024. Second Quarter 2025 Non-GAAP Financial Results EBITDA for the second quarter of 2025 was $2.0 million (15.6% of revenues) compared to EBITDA of $0.8 million (7.6% of revenues) in the second quarter of 2024. Six Months Ended June 30, 2025 GAAP Financial Results Revenues for the first six months of 2025 were $25.3 million compared to $22.2 million in the first six months of 2024. Gross profit for the first six months of 2025 was $5.2 million (21% of revenues) compared to $4.9 million (22% of revenues) in the first six months of 2024. Operating profit for the first six months of 2025 was $2.2 million compared to operating profit of $2.1 million in the first six months of 2024. Financial expenses for the first six months of 2025 were $0.5 million compared to financial income of $0.8 million in the first six months of 2024. Financial expenses primarily resulted from the erosion of the U.S. dollar against the NIS. Net profit for the first six months of 2025 was $1.4 million or $0.20 per fully diluted share compared to net profit of $2.5 million or $0.38 per fully diluted share in the first six months of 2024. Six Months Ended June 30, 2025 Non-GAAP Financial Results EBITDA for the first six months of 2025 was a $3.1 million (12% of revenues) compared to EBITDA of $2.9 million (13% of revenues) in the first six months of 2024. About our Non-GAAP Financial Information The Company reports financial results in accordance with U.S. GAAP and herein provides EBITDA, a non-GAAP measure. This non-GAAP measure is not in accordance with, nor is it a substitute for, GAAP measures. This non-GAAP measure is intended to supplement the Company's presentation of its financial results that are prepared in accordance with GAAP. The Company uses the non-GAAP measure presented to evaluate and manage the Company's operations internally. The Company is also providing this information to assist investors in performing additional financial analysis. Reconciliation between the Company's results on a GAAP and non-GAAP basis is provided in a table below. Conference Call Today, Thursday, August 14, 2024, at 9:00am Eastern Time (16:00pm Israel Time, 6:00am Pacific Time), Eltek will conduct a conference call to discuss the results. The call will feature remarks by Eli Yaffe, Chief Executive Officer and Ron Freund, Chief Financial Officer. To participate, please call the following teleconference numbers. Please allow for additional time to connect prior to the call: United States:             1-866-860-9642Israel:                          03-918-0691International:               +972-3-918-0691 To Access a Replay of the Call A replay of the call will be available for 30 days on the Investor Info section on Eltek's corporate website at http://www.nisteceltek.com approximately 24 hours after the conference call is completed. About Eltek Eltek – "Innovation Across the Board", is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs) and is an Israeli leading company in this industry. PCBs are the core circuitry of most electronic devices. Eltek specializes in the manufacture and supply of complex and high-quality PCBs, HDI, multilayered and flex-rigid boards for the high-end market. Eltek is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading companies in the defense, aerospace and medical industries in Israel, the United States, Europe and Asia. Eltek was founded in 1970. The Company's headquarters, R&D, production and marketing center are located in Israel. Eltek also operates through its subsidiary in North America and by agents and distributors in Europe, India, South Africa and South America. For more information, visit Eltek's web site at www.nisteceltek.com Forward Looking Statement Some of the statements included in this press release may be forward-looking statements that involve a number of risks and uncertainties including, but not limited to expected results in future quarters, the impact of the Coronavirus on the economy and our operations, risks in product and technology development and rapid technological change, product demand, the impact of competitive products and pricing, market acceptance, the sales cycle, changing economic conditions and other risk factors detailed in the Company's Annual Report on Form 20-F and other filings with the United States Securities and Exchange Commission. Any forward-looking statements set forth in this press release speak only as of the date of this press release. The information found on our website is not incorporated by reference into this press release and is included for reference purposes only. Investor Contact Ron FreundChief Financial Officer[email protected]+972-3-939-5023 Eltek Ltd. Consolidated Statements of Income U.S dollars in thousands (except per share data) Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Revenues 12,529 10,466 25,285 22,249 Costs of revenues (9,510) (8,830) (20,054) (17,361) Gross profit 3,019 1,636 5,231 4,888 Research and development expenses, net - (47) (50) (62) Selling, general and administrative expenses (1,563) (1,184) (3,000) (2,700) Operating profit 1,456 405 2,181 2,126 Financial income (expense), net (1,012) 489 (508) 839 Income before income tax  444 894 1,673 2,965 Income tax expenses 79 143 306 475 Net income  365 751 1,367 2,490 Earnings per share: Basic net income per ordinary share 0.05 0.11 0.20 0.38 Diluted net income per ordinary share 0.05 0.11 0.20 0.38 Weighted average number of ordinary shares used to compute basic net income per ordinary share (in thousands) 6,715 6,706 6,715 6,541 Weighted average number of ordinary shares used to compute diluted net income per ordinary share (in thousands) 6,784 6,764 6,785 6,628 Eltek Ltd. Consolidated Balance Sheets U.S dollars in thousands  June 30, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents 1,770 7,575 Short-term bank deposits 9,385 9,663 Trade receivables (net of allowance for credit losses) 14,480 11,786 Inventories  12,874 9,488 Other accounts receivable and prepaid expenses 404 602 Total current assets 38,913 39,114 Long term assets: Severance pay fund 61 56 Deferred tax assets, net 334 496 Operating lease right of use assets 6,409 5,911 Total long term assets 6,804 6,463 Property and equipment, net 18,703 14,578 Total Assets 64,420 60,155 Liabilities and Shareholder's equity Current liabilities: Trade payables 7,197 7,367 Other accounts payable and accrued expenses 5,527 5,136 Short-term operating lease liabilities 1,047 827 Total current liabilities 13,771 13,330 Long-term liabilities: Accrued severance pay 525 443 Long-term operating lease liabilities 5,477 5,190 Total long-term liabilities 6,002 5,633 Shareholders' equity: Ordinary shares of NIS 3.0 par value – Authorized: 10,000,000 shares at June30, 2025 and December 31, 2024; Issued and outstanding: 6,715,624 sharesat June 30, 2025 and 6,714,040 shares at December 31, 2024 6,012 6,011 Additional paid-in capital 32,634 32,627 Foreign currency translation adjustments 3,750 664 Capital reserve 2,777 2,507 Accumulated deficit (526) (617) Total shareholders' equity 44,647 41,192 Total liabilities and shareholders' equity 64,420 60,155 Eltek Ltd. Unaudited Non-GAAP EBITDA Reconciliations U.S dollars in thousands  Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 GAAP net income  365 751 1,367 2,490 Add back items: Financial income, net  1,012 (489) 508 (839) Income tax expenses  79 143 306 475 Depreciation and amortization 500 388 966 753 Non-GAAP EBITDA 1,956 793 3,147 2,879 Eltek Ltd. Consolidated Statement of  Cash flow U.S dollars in thousands  Three months ended Six months ended June 30, June 30, 2025 2024 2025 2024 Cash flows from operating activities: Net Income 365 751 1,367 2,490 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation 500 388 967 753 Unrealized financing expenses (income), net 595 (98) 466 (186) Share-based compensation 132 154 270 286 Decrease in deferred tax assets  120 (100) 202 91 1,347 344 1,905 944 Decrease (increase) in operating lease right-of-use assets (1) 2 - 3 Decrease (increase) in trade receivables (1,378) (219) (1,733) 517 Decrease (increase) in other receivables and prepaid expenses 314 234 247 309 Decrease (increase) in inventories (2,282) (169) (2,612) (565) Increase (decrease) in trade payables (1,138) 955 (2,000) (536) Increase (decrease) in other liabilities and accrued expenses (201) (48) (28) (249) Increase (decrease)  in employee severance benefits, net 39 (48) 46 (30) (4,647) 707 (6,080) (551) Net cash provided by (used in) operating activities (2,935) 1,802 (2,808) 2,883 Cash flows from investing activities: Purchase of fixed assets (1,743) (3,215) (2,880) (5,947) Withdrawal of (investment in) short-term bank deposits, net - (132) 534 (6,534) Net cash used in investing activities (1,743) (3,347) (2,346) (12,481) Cash flows from financing activities: Exercise of options 8 16 8 261 Dividend distribution (1,276) - (1,276) - Issuance of shares, net - - - 9,312 Net cash provided by (used in) financing activities (1,268) 16 (1,268) 9,573 Effect of translation adjustments 1,250 (204) 617 (376) Net increase (decrease) in cash and cash equivalents (4,696) (1,733) (5,805) (401) Cash and cash equivalents at the beginning of the period 6,466 10,610 7,575 9,278 Cash and cash equivalents at the end of the period 1,770 8,877 1,770 8,877 Logo - https://mma.prnewswire.com/media/881148/5208248/Eltek_Logo.jpg SOURCE Eltek Ltd. 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