Defense software company TSG reports 101% jump in net profit

TSG, a company engaged in the development of software systems and products, manufacturing, and advanced engineering for the defense and municipal sectors, has published its financial results for the second quarter and the first half of 2026.

Revenues for the second quarter of 2026 rose by 22% to 127.6 million shekels, compared to 104.6 million shekels in the second quarter of 2025. This growth was recorded across both business segments. Gross profit for the second quarter increased by 5.5% to 27.2 million shekels, while operating profit rose by 22.7% to 12 million shekels, driven by higher revenues and lower share-based payment expenses.

EBITDA for the second quarter grew by approximately 34% to 20.1 million shekels, representing about 16.4% of revenues. Net profit for the second quarter of 2026 rose by 59% to approximately 7.5 million shekels, compared to 4.7 million shekels in the same period last year. This growth was achieved despite a negative impact of over 1.5 million shekels resulting from the erosion of the dollar exchange rate in the company's subsidiaries. Adjusted net profit (Non-GAAP) for the quarter rose by 45.2% to 12.4 million shekels.

For the first half of 2026, revenues increased by 20.7% to 248.3 million shekels. Operating profit for the six-month period rose by 35.1% to 25 million shekels. Net profit for the first half of 2026 surged by 101% to 16.4 million shekels, compared to 8.1 million shekels in the first half of 2025. This performance was driven by revenue growth, the acquisition of subsidiaries, and reduced share-based payment costs, despite a negative impact of over 2.2 million shekels due to dollar exchange rate fluctuations in subsidiaries.

In July 2026, the company issued bonds (Series A) for the first time along with warrants (Series 1), raising 223 million shekels gross, with an additional potential consideration of 126 million shekels upon full exercise of the warrants.