Eltek (NASDAQ:ELTK) reported a wider loss for the second quarter of 2026 as production inefficiencies, lower revenue volume and currency pressures weighed on profitability, even as management said demand and backlog remained strong. Revenue totaled $11.5 million for the quarter, down from $12.5 million in the second quarter of 2025. First-half revenue was approximately $22 million.
Chief Executive Officer Eli Yaffe said the company's central challenge was not market demand, but its ability to convert backlog into production and shipments at targeted levels. → Applied Materials Beat Everything but Wall Street's Expectations for Margins "The market environment remains strong, with continued high demand for our products and strong backlog," Yaffe said. "The challenge we are facing is not demand, but our ability to consistently convert this demand and our backlog into production and shipments at the level we would like." Eltek posted a gross loss of $1 million in the second quarter, compared with gross profit of $3 million a year earlier. However, the gross loss improved from a $1.8 million loss in the first quarter of 2026, which management attributed to higher sequential revenue and an improvement in average selling prices for printed circuit boards. → AMG's Alternatives Boom Powers Record Growth The company said its pricing adjustments are intended to address a higher-cost environment that includes a weaker U.S. dollar, raw-material costs, production overhead and depreciation.
Yaffe said the impact of revised pricing should become more visible as newer orders booked under the updated structure account for a larger share of sales. Operating loss was $2.5 million, compared with operating income of $1.5 million in the prior-year quarter. Net loss was $2.7 million, or $0.41 per share, versus net income of $400,000, or $0.05 per share, in the second quarter of 2025.
EBITDA loss was $1.9 million, compared with EBITDA of $1.9 million a year earlier. → Microsoft's Maia 300 Chip Targets NVIDIA's AI Dominance Chief Financial Officer Ron Freund said the year-over-year deterioration in gross profitability reflected "lower revenue volume, production inefficiencies, and depreciation of the U.S. dollar against the Israeli shekel." Financial expenses totaled $700,000, down from $1 million in the prior-year period, primarily reflecting the dollar's depreciation against the shekel, partly offset by interest income on cash balances. During the question-and-answer session, management emphasized that Eltek operates in a competitive market and cannot substantially raise prices without regard to competitors. Freund said the company's near-term mission is to convert its backlog into sales and lift revenue above the levels recorded during the first half of the year.
Yaffe said approximately one-third of the company's backlog is tied to long-term purchase orders using historical exchange rates, and that this portion would remain a drag on profitability until completed. Another third of backlog is associated with exchange rates around 3.2, while the final third is priced closer to the current exchange rate of about 3.0. Yaffe characterized that final portion as the most profitable backlog.
Management did not provide a financial forecast. Freund said the company had seen an increase in average selling prices during the second quarter and hoped to see additional improvement. Eltek is working to increase manufacturing capacity through new plating lines, workforce additions and the implementation of a new enterprise resource planning system.
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