TSG IT Advanced Systems (TSG) Q2 2025 earnings summary

Executive summary

• H1 2025 revenue rose to ₪205.6m from ₪152.3m, led by defense activity and acquired businesses; net income increased to ₪8.1m from ₪3.7m.

• Q2 revenue was ₪104.6m and net income ₪4.7m, both above the prior-year quarter; adjusted EBITDA reached ₪17.6m.

Financial highlights

• Q2 gross profit rose 46% to ₪26m, with a 25% gross margin.

• Q2 operating profit was ₪9.8m versus ₪5.6m; net income was ₪4.7m versus ₪1.4m.

• H1 gross profit was ₪49.5m versus ₪34.6m; operating profit was ₪18.5m versus ₪12.4m, reflecting organic growth and acquisitions, partly offset by higher operating expenses.

• H1 adjusted net income, excluding share-based compensation net of tax and acquisition/IPO expenses, was ₪11.5m versus ₪8.2m.

• H1 net cash from operating activities was ₪32.4m versus ₪19.0m.

Outlook and guidance

• Continued organic and inorganic growth expected in defense and civil sectors; growth potential identified in service center software and advanced testing equipment.

• A 10-year maritime defense project signed in July covers maintenance and integration of an advanced underwater system, for total consideration of €3m.

• The June 2025 conflict with Iran had no identified material operating impact as of the report date; management expected it could support Israeli defense-industry demand.