Shares of new defense company Smart Shooter plunge 15%: The reasons
Smart Shooter's operating profit dropped by approximately 70% in the second quarter to $238,000. The company attributed the rise in expenses partly to the strengthening of the shekel.
Shares of Smart Shooter are plunging by a double-digit percentage in Tel Aviv trading today (Tuesday) following the release of the company's second-quarter financial reports. Despite the drop, the share price remains about 17% higher than its March IPO price, valuing the Kibbutz Yagur-based company at one billion shekels.
Smart Shooter’s flagship product is the "Paggion" smart sight, designed for light weapons to significantly increase the probability of hitting ground and aerial targets. The company concluded the second quarter with a 28.8% revenue growth to $9.7 million, bringing the half-year revenue to $16.3 million, a 27.4% increase. However, quarterly operating profit fell by 69.5% compared to the same period last year, totaling $238,000, while the company recorded an operating loss of $836,000 for the first half of the year.
The company attributed the increase in R&D, marketing, sales, and administrative expenses partly to the strengthening of the shekel. While the company recorded a net profit of $1.7 million for the second quarter, it posted a net loss of $4.9 million for the first half. EBITDA remained positive, totaling $620,000 for the quarter and $658,000 for the half-year. The order backlog at the end of the half-year stood at $51.6 million, with at least $34 million expected to be recognized as revenue in the second half of 2026.
During a post-earnings conference call, CEO and Chairwoman Michal Mor highlighted the company's focus on geographical diversification:
"The USA is a key client, Europe is a super-interesting client, and we are seeing growth in the Asia-Pacific region and Israel."
Nearly half of the quarterly revenue came from Europe, with 43% from the USA. Mor also addressed the challenge of countering drones, noting that their low cost creates an unprecedented asymmetry on the battlefield.
"We feel that we are cracking the equation of the interception cost of this growing threat against our capabilities," she stated.
The company’s unique algorithms identify targets, predict movement, and synchronize bullet release with microsecond precision. According to Mor, the anti-drone market is currently growing at a rate of 26.5% and is expected to reach $14.5 billion in the coming years.
