This stock has lost 23% since the IPO: but the numbers tell a different story

Those who bought Frudelim shares at the IPO last February have not enjoyed the experience: since then, the stock has lost about 23% of its value. However, the second-quarter 2026 reports paint a picture that does not quite align with this decline.

Let's start with the central factor in the story. Frudelim is an Israeli company that has become a global leader in natural solutions and ingredients for the food and beverage industry — from complete juice solutions for manufacturers, through natural flavors and food colorings, to technology for removing alcohol from wines and spirits. The company was founded in 1987, employs about 570 people, and supplies more than 1,200 products to 700 customers in 60 countries.

The headline in the reports is a growth engine called SIS — Specialized Ingredient Solutions. This activity jumped by 131% in the quarter compared to last year, reaching about $22 million. Even excluding acquisitions (in LFL terms), the growth stood at about 36% — meaning it is not just about expansion through purchases, but about real demand.

The operating profitability (adjusted EBITDA) in this field more than tripled, to about $4.2 million. The result: SIS already accounts for 24% of sales but almost 40% of operating profit — meaning the most profitable part of the business is growing the fastest.

Bottom line, total revenue for the quarter rose by about 16% to about $92.5 million, and adjusted net profit rose by about 4% to about $5.3 million. Profit did not jump as much as revenue for a understandable reason: the company continues to invest aggressively in sales and marketing to fuel growth. Cash flow from operating activities, perhaps the most reassuring number, climbed to about $15.5 million.

Behind the growth is a chain of acquisitions. Among other things, the company completed this year the acquisition of the Brazilian extracts company Sylvestre for about $31 million, and has already begun cross-selling its products. At the same time, it is opening factories and laboratories in California, Spain, Slovenia, and Florida, and expanding the alcohol removal activity (Solos) — a small field today but with potential in the growing market for reduced-alcohol beverages.

One must also remember the other side. The stock has lost height since the IPO, the core activity (juice solutions) stagnated and even recorded a decline in profitability compared to an especially strong quarter last year, and the heavy investments in growth are pressuring profit in the short term.

Tsahi Barak, Chairman of the Board and CEO of the company, stated:

"We are happy to summarize another quarter of growth and especially the growing contribution of the Specialized Ingredient Solutions activity. We clearly see the fruits of the transformation we have been leading in the last year, as the activity in the Specialized Ingredient Solutions field has grown by more than 2 times compared to the corresponding period last year, and the profitability of the activity already accounts for about 40% of the total adjusted EBITDA. We estimate that this trend will only strengthen, while maintaining stability in the juice solutions field.

We continue to invest the fruits of growth in our operational infrastructure, in recruiting key personnel, and in developing innovative products that are in the commercialization stages. We see this as a basis for significant operational leverage that we have not yet utilized, and we believe it will be reflected in our results in the near future and will lead to continued growth in revenue and profit."

The company concluded the first half of the year with a positive cash flow from operating activities of about $30 million, reflecting its financial strength and its ability to continue supporting accelerated internal growth and mergers and acquisitions.