Rafael Advanced Defense Systems reports 20% growth (45% in dollar terms) in second quarter revenue to NIS 5.6 billion ($1.91 billion) and a 39% (68% in dollar terms) jump in new orders to NIS 6.9 billion ($2.3 billion). Talking to "Globes", Rafael CEO Yoav Tourgeman called on Minister of Finance Bezalel Smotrich and Governor of the Bank of Israel Amir Yaron to intervene in the foreign exchange market.
"In the first half year, more than 60% of the orders were for export, a much higher proportion than in the corresponding period," Tourgeman explains. "When we receive orders in dollars and the shekel-dollar rate falls, or in euros and the euro rate falls, there’s a great deal less in shekels, and the profitability of the deals diminishes. Moreover, it does something else: it makes our bids more expensive in dollar terms, because in the forthcoming ones I will have to take into account a high conversion rate. That harms our competitiveness. It weighs on our industrialists, and that’s very bad news for the Israeli market. I hope that the finance minister and the governor will take it on themselves to deal with this matter in a more significant way than they have so far. Anyone who wants a soundly based industrial economy must ensure that the exchange rate fluctuates within a reasonable range and doesn’t get out of control."
Tourgeman points out that within a year the shekel-dollar exchange rate has fallen from 3.67/$ to under $3/$, and says that Israeli industry cannot sustain this. "State intervention is required. It was required in the past, and now even more so," he says.
In the second quarter of 2026, the war with Iran meant that Israel accounted for 56% of Rafael’s sales, followed by Europe (22%), Asia (16%), and America (5%).
Sales in the first half of 2026 totaled NIS 10.6 billion ($3.57 billion), representing growth of 13.6% in shekel terms and 35% in dollar terms in comparison with the first half of 2025. Year-on-year, the orders backlog grew by 33% to NIS 75.8 billion ($25.47 billion).
Rafael’s net profit for the first half of 2026 was NIS 663 million ($222.8 million), 8% higher than in the first half of 2025 (28% higher in dollar terms). This took place during a period in which the state’s debt to the defense companies grew to unprecedented proportions. "Rafael is a very strong company with the highest credit rating in the country, so the banks are happy to lend," Tourgeman says. "Nevertheless, credit costs money, and that shows up in the profit line. Does it harm performance? Yes."
What do customers look for in Rafael?
"The aerial defense market with all its layers is a main concern around the world. As the entity responsible for almost 100% of Israel air defenses, Rafael is a prominent player. The Spyder deal with Romania is the biggest in Rafael’s history, and I presume that there will be more like it, and not just in Europe, but all over. Europe is subject to the greatest tensions, and has the widest gap between needs and capabilities. I therefore estimate that together with the ability to pay will come large demand and many deals. We are also seeing substantial growth in ground, maritime, air, and intelligence systems, a lively market with high regard for our products."
Tourgeman says that the growing respect for Rafael’s products is bolstered by their impressive performance in the campaign against Iran, which demonstrated their high quality. "We are a supplier that supplies on time, and in order to meet schedules we increased output by 55% in comparison with the corresponding period. That’s more than startups manage. We did it through improvement along the whole value chain: mechanization, automation, the supply chain, production floors. When you look at the problems in the world, there’s difficulty in meeting demand, and certain companies say ‘it will take years more’. So customers come to us to choose high-quality equipment, less expensive, and on a short timetable."
Rafael chairperson Yuval Steinitz repeated his call for the company to be floated on the stock exchange, especially in the light of its performance. "The achievements of our business are doubly impressive in a period in which the company is operating in a complex security environment and in a competitive and dynamic global market," he said.
"Looking ahead," he continued, "the further strengthening of Rafael as a leading defense company necessitates the adaptation of its growth infrastructures to the challenges of the coming years, including a change in its status through an offering of shares that will enable it to expand investment in breakthrough technologies, deepen its international activity, retain the best brains and maintain its scientific and operational advantage, while safeguarding the security interests of the State of Israel," Steinitz said.
Published by Globes, Israel business news - en.globes.co.il - on August 31, 2026.
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