TSG Reports Second Quarter 2026 Results
August 24, 2026
Press Release / Investor Update
TSG Reports Second Quarter 2026 Results
Q2 revenue increased 22% to NIS 127.6 million, while operating profit rose 23% to NIS 12 million
Q2 net profit surged approximately 60% to NIS 7.5 million
H1 2026 revenue increased 21% to NIS 248.3 million, operating profit rose 35% to NIS 25 million, and net profit doubled to NIS 16.4 million
The Company has cash reserves of approximately NIS 0.5 billion
TSG, a developer of advanced software systems and products, manufacturing and engineering solutions for the defense and municipal sectors, today announced its financial results for the second quarter and first half of 2026, reporting continued business growth alongside a significant improvement in profitability.
Revenue for the second quarter totaled NIS 127.6 million, an increase of 22% compared with NIS 104.6 million in the corresponding quarter last year, with growth recorded across both of the Company’s operating segments.
During the period, TSG continued to expand its involvement in defense export projects led by Israel’s defense industries. The Company’s data-fusion solutions and command-and-control systems are being integrated into major export programs, further expanding TSG’s presence in international markets.
At the same time, TSG continues to broaden its portfolio of defense capabilities, including through the establishment of an advanced engineering and manufacturing arm and the acquisition of companies with complementary capabilities. In the counter-drone and counter-UAS field, the Company continues to expand the DroneWeaver System ecosystem by integrating a wide range of sensors and effectors. This enables TSG to provide an AI-driven response to aerial threats, encompassing detection and identification, data processing, situational awareness and selection of the most appropriate response.
Arik Kilman, CEO of TSG:
“We conclude the second quarter and first half of 2026 with continued significant growth in our operations and increased profitability. This growth reflects the expansion of the Company’s activities and our growing portfolio of capabilities in command-and-control systems, AI and drones.
“The launch of the DroneWeaver System, together with growing demand for counter-drone and counter-UAS capabilities in Israel and international markets, represents a significant growth driver for TSG, and we are actively working to realize the potential of this market.
“During the reporting period, we also launched an advanced engineering and manufacturing arm as part of our strategy to build a comprehensive portfolio of solutions for the defense sector. We continue to see growing demand for the Company’s products and services.
“We also recently completed a bond issuance totaling NIS 222 million, strengthening our financial flexibility and enabling us to continue investing in the expansion of our operations and pursue additional growth opportunities.”
Second Quarter 2026 Financial Highlights
Revenue increased by 22% in the second quarter to NIS 127.6 million, compared with NIS 104.6 million in the second quarter of 2025. Revenue growth was recorded across both of the Company’s operating segments.
Gross profit increased by 5.5% to NIS 27.2 million, compared with NIS 25.7 million in the corresponding quarter last year.
Operating profit increased by 22.7% to NIS 12 million, compared with NIS 9.8 million in the second quarter of 2025. The increase was driven by higher revenue and lower share-based compensation expenses.
EBITDA increased by approximately 34% to NIS 20.1 million, compared with NIS 15.6 million in the corresponding quarter last year, representing approximately 16.4% of revenue.
Net profit increased by 59% to approximately NIS 7.5 million, compared with NIS 4.7 million in the corresponding quarter of 2025. The increase was primarily driven by higher operating profit and lower tax expenses, despite a negative impact of more than NIS 1.5 million resulting from the depreciation of the U.S. dollar at the Company’s subsidiaries.
Adjusted EBITDA (Non-GAAP) increased by 23.6% to NIS 19.1 million, compared with NIS 15.5 million in the second quarter of 2025, representing approximately 15% of revenue.
Adjusted net profit (Non-GAAP) increased by 45.2% to NIS 12.4 million, compared with NIS 8.5 million in the corresponding quarter last year.
Adjusted EBITDA is calculated as net profit for the period before depreciation and amortization, net finance expenses or income, and income taxes, and excluding share-based compensation expenses and acquisition-related expenses. Adjusted EBITDA includes depreciation expenses relating to right-of-use assets arising from leases.
Adjusted net profit is calculated as net profit for the period excluding share-based compensation expenses, net of tax; acquisition-related expenses; and amortization expenses relating to intangible assets arising from business combinations, net of tax.
First Half 2026 Financial Highlights
Revenue increased by 20.7% in the first half of 2026 to NIS 248.3 million, compared with NIS 205.6 million in the first half of 2025.
Gross profit increased by 17.4% to NIS 57.9 million, compared with NIS 49.3 million in the corresponding period last year.
Operating profit increased by 35.1% to NIS 25 million, compared with NIS 18.5 million in the first six months of 2025.
EBITDA increased by approximately 37% to NIS 41.2 million, compared with approximately NIS 20.1 million in the corresponding period of 2025, representing approximately 17% of revenue.
Net profit increased by 101% to NIS 16.4 million, compared with NIS 8.1 million in the first half of 2025. The increase was primarily attributable to revenue growth, acquisitions of subsidiaries and lower share-based compensation expenses, despite a negative impact of more than NIS 2.2 million resulting from the depreciation of the U.S. dollar at the Company’s subsidiaries.
Adjusted EBITDA (Non-GAAP) increased by 28% to NIS 38.2 million, compared with NIS 29.8 million in the first half of 2025.
Adjusted net profit (Non-GAAP) increased by 58% to NIS 24.9 million, compared with NIS 15.8 million in the corresponding period last year.
Bond Issuance
In July 2026, the Company completed its first issuance of Series A bonds together with Series 1 warrants, raising gross proceeds of NIS 223 million, with the potential for an additional NIS 126 million in future proceeds, assuming full exercise of the warrants.
Launch of the DroneWeaver System
In June 2026, TSG launched the DroneWeaver System (DWS), a groundbreaking automated counter-drone and counter-UAS solution designed to enable defense forces and security organizations to detect, analyze, prioritize and neutralize drone threats within seconds, while significantly reducing operator workload.
The new system is built on TSG’s operational aerial command-and-control platform, which has been deployed by customers in Israel and worldwide for many years, extending its capabilities with a dedicated solution for countering drone and UAS threats.
About TSG
TSG is a leading global technology company specializing in the development of advanced solutions, manufacturing and engineering for defense and municipal applications where high availability, maximum precision and rapid response are critical.
The Company operates across the defense, homeland security and civilian sectors, providing end-to-end systems together with support and maintenance services designed to ensure long-term reliability and performance.
TSG also develops dedicated solutions for government agencies, public-sector organizations and local authorities, helping improve emergency preparedness, enhance services to residents and accelerate digital transformation.
The Company’s customers include the Israeli Ministry of Defense, leading defense companies worldwide, 160 local authorities and government ministries throughout Israel. TSG employs approximately 900 people and is headquartered in Or Yehuda, Israel.
For further information:
Visit our Investor Realations page (Hebrew)
Hillel Koren
052-2468841
Eisenberg Eliash – Public Relations & Investor Relations
Disclaimer
This document summarizes the key elements of the Company’s report in order to provide an accessible overview of the relevant information, as approved by the Company. It does not replace a review of the full report as officially published on the websites of the Israel Securities Authority, the Tel Aviv Stock Exchange and/or the Company, which contains additional information, including legal disclaimers.
Nothing in this document should be construed as a recommendation or advice regarding the purchase of securities, the making of investments or the execution of any transaction involving securities.
One point I would verify before publishing the English version: I kept the financial data exactly as stated in the Hebrew document, but there appear to be several internal inconsistencies in the source: the EBITDA percentages versus the comparison figures in both Q2 and H1 do not appear to align, and the CEO quote refers to a NIS 222 million bond issuance while the later detailed section states NIS 223 million.