Eltek Ltd. reported third‑quarter 2025 results that showed revenue of $13.3 million, a 6 % sequential increase from $12.5 million in Q2 but a 1.5 % year‑over‑year decline from $13.5 million in Q3 2024. Defense customers accounted for roughly 63 % of the quarterly revenue, underscoring the company’s concentration in that sector. Gross profit fell to $1.6 million, translating to a 12 % gross margin, a sharp drop from the 26 % margin recorded in Q3 2024, largely due to the sharp depreciation of the U.S. dollar against the Israeli shekel during the period. Net loss for the quarter was $0.2 million, or $0.03 per diluted share, compared with a net income of $1.7 million, or $0.25 per diluted share, in Q3 2024. Over the nine‑month period ending September 30, revenue totaled $38.6 million and net profit was $1.1 million, down from $4.2 million in the same period a year earlier.
The sequential revenue growth was driven by continued demand from defense customers, but the company’s profitability was eroded by currency headwinds. The depreciation of the U.S. dollar increased the dollar value of NIS‑denominated operating expenses, compressing gross margin. Management also noted higher raw‑material consumption and energy costs, which added to the margin pressure. The combination of these factors explains why the company moved from a net income in Q3 2024 to a net loss in Q3 2025.
CEO Eli Yaffe highlighted that defense demand remained strong, citing a 63 % share of quarterly revenue, but emphasized that the currency impact had a “significant” effect on profitability. He also noted that the company is in the final stages of preparing a new production hall for coating lines, a key milestone in its accelerated investment program aimed at expanding capacity and supporting future revenue growth.
Investors reacted negatively to the results, citing the net loss and margin compression as key concerns. Analysts pointed out that the company’s exposure to currency fluctuations remains a risk and suggested that hedging strategies could mitigate future headwinds. The market’s reaction underscores the importance of the company’s ability to manage currency risk while maintaining its defense‑sector focus.
Eltek has not issued new guidance for the remainder of the year, but the company’s focus on expanding manufacturing capacity signals a long‑term confidence in growth. The near‑term outlook remains challenged by currency volatility, raw‑material and energy cost pressures, and the need to complete the new production hall before the company can expect margin recovery.
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