Eltek Ltd. (ELTK): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of Eltek Ltd. (ELTK), and honestly, it's a fascinating map of high-stakes manufacturing: this company is deeply embedded in defense, pulling in $\mathbf{\$38.6}$ million in revenue over the first nine months of 2025 by building mission-critical, complex Printed Circuit Boards (PCBs). As your analyst, I see a business model balancing its $\mathbf{63\%}$ defense revenue concentration with a major capacity expansion, all while actively managing the financial sting of currency risk-they booked a $\mathbf{\$0.3}$ million hit in Q3 2025 just from the US dollar moving against the NIS. Dive below to see exactly how their Key Resources, like $\mathbf{\$11.6}$ million in cash, support their specialized Value Propositions and navigate these near-term operational realities.

Eltek Ltd. (ELTK) - Canvas Business Model: Key Partnerships

You're looking at the relationships that keep Eltek Ltd. running and growing, especially as they push through that strategic capacity expansion. These aren't just names on a list; they are concrete financial anchors and future delivery commitments.

Parent company: Nistec Golan Ltd.

Eltek Ltd. maintains a close operational relationship, as evidenced by the joint branding in some filings, but specific 2025 financial figures detailing the exact nature of the parent/subsidiary financial dependency aren't public in the latest reports.

Key defense customers (e.g., Israeli defense company with $2.4 million in orders)

The defense segment remains a core pillar. For instance, in August 2025, Eltek Ltd. announced receiving purchase orders totaling $2.4 million from a leading Israeli defense company. These critical PCB components are scheduled for delivery primarily across 2026 and 2027. To give you a sense of this segment's weight, in Q2 2024, the defense sector accounted for 60% of Eltek's revenue.

The company's overall financial health in late 2025 provides context for these partnerships. For the third quarter of 2025, Eltek Ltd. reported revenues of $13.3 million, with a gross profit of $1.6 million, representing a gross margin of 12% of revenues. As of September 30, 2025, the company held $11.6 million in cash, cash equivalents, and short-term deposits.

Here's a quick look at the scale of recent customer commitments and investment context:

Global network of agents, distributors, and sales representatives

Eltek Ltd. supports its global reach, serving customers across Israel, the United States, Europe, and Asia. This network includes:

• A subsidiary operating in North America.
• Agents and distributors located in Europe.
• Agents and distributors located in India.
• Agents and distributors located in South Africa.
• Agents and distributors located in South America.

Specialized equipment suppliers (e.g., new coating line supplier)

To meet demand, Eltek Ltd. is executing a major investment plan, which includes installing new production equipment, specifically new 60-meter coating lines. The company has a target of achieving annual production capacity in the range of $55 million to $65 million following this investment plan. The supplier for these core lines recently provided an update, pushing the expected arrival of the first line to toward the end of 2025. This capacity expansion is part of an accelerated $15 million investment plan initiated earlier.

PCB trading and manufacturing companies for supply chain diversification

While Eltek Ltd. specializes in complex, high-quality PCBs and holds certifications like ITAR compliance, AS-9100, and NADCAP electronics, specific financial details or named partners regarding PCB trading or diversification agreements for the 2025 period are not explicitly detailed in the latest financial disclosures.

Eltek Ltd. (ELTK) - Canvas Business Model: Key Activities

You're looking at the core things Eltek Ltd. does to make its business run, grounded in the numbers from late 2025. It's all about making those complex circuit boards and getting the new factory running right.

Manufacturing complex, high-reliability Printed Circuit Boards (PCBs)

Eltek Ltd. focuses on manufacturing technologically advanced solutions in the field of printed circuit boards (PCBs), specializing in complex and high-quality boards for high-end markets. The sales mix clearly shows where the current revenue engine is running.

• Defense sector sales represented approximately 63% of total quarterly revenues in Q3 2025.
• Rigid Flex Products Sales accounted for 66% of quarterly sales in Q3 2025.

Here's a quick look at the top-line performance reflecting these manufacturing activities through the third quarter of 2025.

Executing the accelerated capacity investment program (new production hall)

The company is actively executing its plan to expand manufacturing infrastructure. This involves significant capital deployment to bring new capabilities online. You can see the near-term goal for the physical buildout.

• Construction to accommodate the core investment-the new 60-meter coating lines-is progressing smoothly.
• The first coating line is now expected to arrive at the facility toward the end of 2025.
• The overall accelerated investment program is targeted for completion by mid-2026.

Research and development (R&D) for advanced circuitry solutions

While specific 2025 R&D expenditure isn't detailed, the focus is on future process enhancement. There is a clear forward-looking R&D initiative planned.

• A new RRP project is being prepared for implementation in 2026, aimed at enhancing operational visibility and control.
• An earlier development program, starting in March 2021, involved an approximately $250,000 one-year development effort with the Israel Innovation Authority (IIA).

Improving manufacturing efficiency and stabilizing new production lines

The ramp-up of new equipment and increased staffing are direct activities aimed at efficiency, though they currently weigh on margins. You can see the immediate impact on profitability metrics.

• Staffing levels were up approximately 10% since January 2025 to meet demand.
• Q3 2025 Gross Margin was 12%, a sharp drop from 26% in Q3 2024.
• The nine-month Gross Margin for 2025 was 18%, compared to 23% for the same period in 2024.

Management stated they continue to invest significant effort in improving manufacturing efficiency. The lower margins in Q3 2025 were attributed to temporary efficiency losses during the ramp-up phase of new production equipment and increased labor costs.

Global sales, marketing, and distribution management

Managing global sales involves handling revenue streams across different periods and market segments. The nine-month revenue growth shows underlying momentum despite Q3 currency headwinds.

• Nine-month revenues for the period ended September 30, 2025, grew 8% year-over-year to $38.6 million, up from $35.8 million in the first nine months of 2024.
• Q3 2025 revenues of $13.3 million reflected a 6% increase compared to the second quarter of 2025.

The balance sheet supports these activities, showing a cash position as of September 30, 2025.

Cash, cash equivalents, and short-term deposits amounted to $11.6 million as of September 30, 2025. Finance: draft 13-week cash view by Friday.

Eltek Ltd. (ELTK) - Canvas Business Model: Key Resources

You're looking at the core assets Eltek Ltd. relies on to deliver its high-reliability printed circuit boards (PCBs). These aren't just items on a balance sheet; they are the engines of their specialized manufacturing capability, especially given their focus on defense and medical sectors.

The physical and financial foundation is quite specific. You see the tangible assets like the specialized manufacturing facility in Petach Tikva, Israel, which is currently undergoing expansion, with the company preparing for the installation and commissioning of new coating lines to support long-term growth objectives. Tangible financial resources are also key, providing operational flexibility.

The real moat, though, is in the intellectual property and compliance framework. Eltek Ltd. is recognized as a world leader in specific, complex PCB technologies. This know-how allows them to service demanding, high-reliability markets.

This technological edge is supported by a strict adherence to international standards, which is non-negotiable for their primary defense and aerospace customers. You can see this commitment in their required compliance list:

• ITAR compliance
• NADCAP Electronics compliance
• AS-9100 compliance

The proprietary technological know-how centers on creating boards that push performance limits. They specialize in manufacturing complex structures like Flex-Rigid boards, complex Rigids, and boards utilizing Sequential Lamination and HDI (High-Density Interconnect) techniques. For instance, their HDI capabilities include handling buried and blind via holes, with minimum dielectric thickness down to 2 MIL, and micro via copper fill.

Regarding personnel, the company has been actively bringing on new talent. The integration of newly recruited engineers and production staff is noted as a current operational focus as they absorb new capacity and technology upgrades. This investment in human capital is directly tied to their ability to utilize the new production hall capacity effectively.

Finance: draft 13-week cash view by Friday.

Eltek Ltd. (ELTK) - Canvas Business Model: Value Propositions

The core value proposition of Eltek Ltd. centers on delivering technologically advanced printed circuit boards (PCBs) where failure is not an option. You are providing solutions that underpin critical systems.

High-reliability, complex PCBs for mission-critical applications define the offering. This is evidenced by the revenue concentration in sectors demanding the highest quality and reliability.

The specialization in advanced board types is a key differentiator. Specifically, flex-rigid boards accounted for 66% of Eltek Ltd.'s sales in the third quarter of 2025, and represented 65% of sales for the first nine months of 2025. This focus on complex, integrated solutions is where the company positions its technological leadership.

Eltek Ltd. targets custom-made circuitry solutions for high-end, low-volume markets. The market dynamics support this, as in low volume, high complexity production, competition remains limited, allowing for greater pricing flexibility.

The approach to the market is built on a long-term, close partnership approach with customers. This is supported by the company's history of supplying products to a leading Israeli defense company that relate to systems for which Eltek Ltd. has previously supplied components.

Compliance with stringent defense and medical industry standards is non-negotiable for serving the primary customer base. Eltek Ltd. maintains specific certifications to validate this capability.

Here is a look at the key market segments driving the value proposition in Q3 2025:

The commitment to quality assurance is formalized through adherence to several critical industry standards:

• ITAR compliant
• AS-9100 certification
• NADCAP Electronics certifications

The total revenue for the third quarter of 2025 was $13.3 million, with sales for the first nine months totaling $38.6 million. Finance: review the impact of the $800,000 currency erosion on Q3 2025 gross profits compared to Q3 2024.

Eltek Ltd. (ELTK) - Canvas Business Model: Customer Relationships

You're looking at Eltek Ltd. (ELTK) right now and seeing a company whose customer relationships are deeply embedded in high-reliability, complex technology sectors. This isn't a commodity play; it's about being the trusted supplier for mission-critical components, which naturally demands a dedicated, high-touch approach.

The nature of the business-manufacturing technologically advanced printed circuit boards (PCBs), including HDI, multilayered, and flex-rigid boards for the high-end market-forces a consultative relationship. You don't just order these parts off a shelf; you work with Eltek Ltd. engineers to get the design right.

Longstanding, close partnerships with key defense and medical clients are the bedrock of Eltek Ltd.'s revenue stability, especially when facing external shocks like currency volatility. The defense sector, in particular, is the primary engine driving the company's current performance.

Here's the quick math on where the revenue was coming from in the third quarter of 2025:

For the first nine months of 2025, Eltek Ltd. reported total revenues of $38.6 million. This concentration means those relationships are not just important; they are the main determinant of the top line.

The requirement for dedicated direct sales and technical support for complex projects flows directly from this segment mix. When a defense or medical client needs a complex PCB, they require engineering support from the start. This consultative process is what secures the order and builds the long-term dependency that keeps the revenue flowing.

The company's specialization in complex, high-quality PCBs necessitates a high-touch, consultative relationship for custom PCB design. This is where Eltek Ltd. differentiates itself from competitors who might focus on lower-end, higher-volume segments. The relationship is built on technical capability, not just price.

You also need to track how Eltek Ltd. manages the financial friction inherent in its global customer base. The company has taken clear action regarding pricing adjustments to mitigate currency risk, reflected in new quotations.

The financial impact of the currency movements has been material:

• The sharp devaluation of the U.S. dollar against the Israeli shekel led to financial expenses of $1.0 million in the second quarter of 2025.
• The total impact of currency erosion on operating profit in the third quarter of 2025 was approximately $800,000 compared to the third quarter of 2024.
• For the first nine months of 2025, financial expenses totaled $0.8 million, a significant shift from the financial income of $1.0 million in the first nine months of 2024.

Management updated its pricing model at the end of Q2 2025 to account for these currency trends, expecting the positive impact of the revised quotations to begin showing in the coming quarters. Finance: draft the expected margin recovery percentage from the new pricing model for Q4 2025 by next Tuesday.

Eltek Ltd. (ELTK) - Canvas Business Model: Channels

You're looking at how Eltek Ltd. gets its high-end printed circuit boards (PCBs) into the hands of defense, aerospace, and medical customers globally. The channel strategy is a mix of direct engagement and third-party reach, which is typical for specialized, high-reliability manufacturing.

Direct sales personnel in Israel and internationally.

Eltek Ltd.'s headquarters, R&D, production, and marketing center are all based in Petah-Tikva, Israel. This location serves as the hub for direct sales efforts, particularly within the strong Israeli defense sector, which accounted for approximately 63% of quarterly sales in Q3 2025. While the search results confirm a strong Israeli base, the extent of international direct personnel beyond the North American subsidiary isn't explicitly quantified, but it supports the direct sales to major clients across the US, Europe, and Asia mentioned in their profile.

North American subsidiary for US market access.

Access to the critical United States market is managed through a dedicated local presence. Eltek Ltd. operates through its subsidiary in North America, specifically mentioning Eltek USA Inc. This structure is key for serving US-based defense and aerospace customers, a segment that drives significant revenue for Eltek Ltd. The US market is also noted as a potential area for competitive advantage due to existing high tariffs on competing products.

Agents and distributors across Europe, India, South Africa, and South America.

To cover the rest of the global footprint, Eltek Ltd. relies on an established network of external partners. This channel strategy allows the company to service customers in key international territories without needing a full direct sales force in every country. The specific regions covered by this network include:

• Europe
• India
• South Africa
• South America

This network supports sales to customers in Europe and Asia, complementing the direct and subsidiary sales efforts.

Corporate website for investor relations and product information.

The corporate website, http://www.nisteceltek.com, acts as a crucial non-transactional channel for stakeholders and potential customers. This digital presence is the primary conduit for official company disclosures, as financial results for Q3 2025 were posted there, along with conference call replays. For investors, this is where you find SEC filings, press releases, and other key corporate information.

Here's a quick look at the geographic structure supporting these channels, based on where Eltek Ltd. serves its customers and where it has operations as of late 2025:

The overall revenue picture for the first nine months of 2025 reached $38.6 million, showing a year-over-year growth of about 7.82%. While the channels are geographically diverse, the revenue concentration in the defense segment suggests that the direct sales and North American subsidiary channels, which heavily service this sector, are the most financially impactful today. Finance: review the Q4 2025 channel performance against the Q3 2025 segment concentration by Friday.

Eltek Ltd. (ELTK) - Canvas Business Model: Customer Segments

You're looking at Eltek Ltd. (ELTK) right now and seeing a business heavily weighted toward high-reliability, complex Printed Circuit Board (PCB) manufacturing, which means your customer base is highly specialized. The concentration risk is real, but so is the current demand driving that concentration.

The primary customer segment is clearly the Defense and Security sector. For the third quarter of 2025, this single market accounted for approximately 63% of the total quarterly revenue, which was $13.3 million. That translates to about $8.379 million in sales from defense customers in Q3 2025 alone. This reliance is the most important number to watch, as it dictates much of the near-term financial stability, even with the gross profit for the quarter dipping to $1.6 million.

The nature of the work for these top segments is evident in the product mix; for Q3 2025, the company noted that Rigid Flex Products made up 66% of quarterly sales, which makes sense given the demanding specifications of defense and aerospace applications.

Here's a breakdown of the key customer groups Eltek Ltd. serves with its advanced PCB solutions:

You should know that Eltek Ltd. is actively investing to support this demand, with management noting they are in the final stages of preparing a new production hall for coating lines, a strategic move to expand infrastructure.

The other customer groups, while smaller contributors to the Q3 2025 top line compared to defense, are critical for diversification and long-term stability. You see this in the Q2 2025 results where growth in the medical segment helped push the gross margin to 24% before the Q3 currency headwinds hit.

The customer base relies on Eltek Ltd. for specific, high-value capabilities. These include:

• Manufacturing of Rigid Flex Products, which were 66% of Q3 2025 sales.
• Complex, high-quality PCBs for mission-critical systems.
• Solutions requiring High Density Interconnect (HDI) technology.
• Products built to stringent quality standards for regulated industries.

For the first nine months of 2025, total revenue reached $38.6 million, showing that despite the slight dip in Q3 year-over-year revenue ($13.3 million vs. $13.5 million in Q3 2024), the overall year-to-date performance was up compared to the prior year's nine-month total of $35.8 million.

Finance: draft 13-week cash view by Friday.

Eltek Ltd. (ELTK) - Canvas Business Model: Cost Structure

You're looking at the cost side of Eltek Ltd. (ELTK) as of late 2025, which is heavily influenced by ongoing capacity expansion and currency volatility. The cost structure is clearly under pressure from both operational investments and external financial factors.

Cost of Goods Sold (COGS) for raw materials and manufacturing is the largest component of the cost base. Based on the third quarter of 2025 results, with revenues at $13.3 million and a gross profit of only $1.6 million (or 12% of revenue), the implied COGS was approximately $11.7 million.

We see evidence of high labor costs and increased depreciation from new equipment impacting gross margins earlier in the year. For instance, in the first quarter of 2025, the gross margin shrank to 17%, down from 28% year-over-year, which management directly attributed to increased labor expenses and temporary efficiency losses during the ramp-up of new production equipment.

Financial expenses present a significant, non-operational cost headwind. For the third quarter of 2025, Eltek Ltd. reported $0.3 million in financial expenses, a shift from the financial income of $0.1 million seen in the third quarter of 2024. This expense was primarily driven by the sharp erosion of the U.S. dollar against the Israeli Shekel (NIS) during the quarter.

Operating expenses, which include Research & Development (R&D) and Selling, General, and Administrative (SG&A), are substantial when compared to the slim operating income. For Q3 2025, operating income was only $0.05 million (or $50,000) on a gross profit of $1.6 million. This implies that the combined R&D and SG&A spend for the quarter was around $1.55 million.

Finally, the cost structure includes the ongoing commitment to capital expenditures for the accelerated investment program. As of the Q2 2025 update, management confirmed there was a remaining balance of approximately $6 million under this accelerated expansion plan, which is focused on installing the new 40-meter coating line expected toward the end of 2025.

Here's a quick look at the key cost drivers and metrics from the Q3 2025 period:

The pressure points are clear:

• Gross Margin was only 12% in Q3 2025.
• Labor costs were a noted driver of margin compression in Q1 2025.
• The company absorbed a one-time $1 million foreign exchange expense in Q2 2025.
• The investment program requires continued capital outlay, with about $6 million remaining.

Eltek Ltd. (ELTK) - Canvas Business Model: Revenue Streams

You're looking at the core money-making engine for Eltek Ltd. (ELTK) right now, and it's heavily weighted toward specialized, high-reliability manufacturing. The primary revenue stream is the Sales of advanced Printed Circuit Boards (PCBs), which is the company's bread and butter, serving high-end markets like defense, aerospace, and medical industries across Israel, the United States, Europe, and Asia.

The most significant driver of current top-line performance is the Revenue from the defense sector (primary source). For the third quarter of 2025, sales to the defense market represented approximately 63% of total quarterly revenues. This concentration shows where the immediate demand strength lies, even as the company navigates operational challenges.

To give you a clear snapshot of the recent financial performance feeding these streams, here are the key top-line numbers:

The company's focus on complex, high-end PCBs is evident in the product mix. Specifically, RigidFlex products accounted for 66% of the quarterly sales in Q3 2025 and 65% of the sales for the first nine months of 2025. This suggests that the higher-complexity, higher-value PCB offerings are what is keeping the revenue base relatively stable despite margin pressures.

While the financial reports focus heavily on product sales, the business model canvas also accounts for service-based income, though concrete figures aren't immediately apparent in the latest filings. The structure includes:

• Sales of advanced Printed Circuit Boards (PCBs).
• Revenue from the defense sector (primary source).
• Potential revenue from training and consulting services.

The company is actively working to expand its commercial sales scope, which might encompass service offerings as they stabilize production efficiency following infrastructure upgrades. Finance: draft 13-week cash view by Friday.