Next Vision Stabilized Systems (TASE: NXSN), which produces stabilized cameras for UAVs, released another set of financials yesterday presenting substantial growth in both its top and bottom lines. The company, managed by co-founder and Chief Development Officer Chen Golan and co-owner and CEO Michael Grosman, raised its annual revenue target for the second time this year. Local investors were nevertheless unimpressed and sent the company's share tumbling by 7% yesterday. This morning, the share price is up by 1.75%.
Next Vision's second quarter revenue totaled $88.2 million, 138% more than in the corresponding quarter last year, reflecting growth in both sale volumes and the number of customers. Next Vision says that the growth in its revenue shows its ability "to continue expanding its activity simultaneously in a number of markets, while bolstering its production capacity and augmenting its activity with its global customer base."
In view of the continual increase in its revenue, Next Vision's management raised its annual revenue target for the second time this year. The company now expects to finish 2026 with $355 million revenue, 111% more than in 2025, given the continued demand for its systems. On its bottom line, Next Vision's net profit rose 130% to $53.6 million in the second quarter.
Why did the investors in Tel Aviv abandon the stock?
Despite its strong results, Next Vision’s share price fell sharply. Market sources attributed this to, among other things, a decline in the company's gross profit margin to 65%, compared with almost 72% in the corresponding period last year. The decline in the orders backlog by over $20 million to $265.2 million was also cited as a cause.
"There are ostensibly weak points in the financials, especially the slump in the gross profit margin and orders backlog in comparison with the preceding quarter," explains Achord Investment Management co-founder and managing partner Kobi Segev. He goes on to say, however, "The backlog goes down in the second quarter every year, compared with the first quarter, and the gross profit margin dipped because the company's volumes rose substantially."
In its call with investors after its results were published, Next Vision’s management explained that its priority was increasing market share and sales, even at the expense of some decline in gross margin (because of the fall in the average sales price), while predicting that some of this effect would be offset by means of operational leverage.
An analyst following the company nevertheless notes, "While the company previously stated that it expected no change in the profit margin profile in the 65%-72% range, this time it failed to clearly address the question of its future profit margin."
He also points our that the company's management stated in the call with investors that it had observed an increase in the number of companies operating in the sector. The management stressed, however, that owing to Next Vision's competitive advantages, no significant risk was anticipated from this increase, which it attributed to the development and growth in the market. "It nonetheless appears that investors are afraid that growing competition is liable to generate additional pressure on profit margins," the analyst says.
Despite the anxieties and weakness in specific items in the financial reports, Segev from Achord says, "The report is a good one. Next Vision's stock is not cheap, but it is an excellent company operating in a very positive business environment. Evidence of the increase in the volume of sales to each customer can been seen in the number of customers reported by the company, which grew very moderately relative to the surge in the volume of the contracts, indicating that the quantity of products ordered by each customer is constantly increasing."
On the market's response, Segev states, "It’s difficult to explain the market's caprices. The share price was twice as high in March, making it very expensive, which did not appear odd to this market at the time. The company reports superb growth rates and profit margins. The current price is in the vicinity of the company's financial equilibrium, given its substantial projected growth."
Despite the fall in price on Monday, Next Vision is one of the Tel Aviv Stock Exchanges' biggest success stories of recent years. The share price has skyrocketed by over 1,000% in the past three years, bringing the company's market cap to a peak of almost NIS 36 billion in March. On the other hand, profit-taking by shareholders has pushed the share price down by 45% in the past three months and the company's market cap has lost almost NIS 15 billion as a result of the defense sector's poor performance following the relative calm in the Iranian theater. Next Vision's current market cap is NIS 20 billion. The company's shareholders have enjoyed an incredible return of 4,000% on their investment in the past five years following the dramatic and almost constant improvement in its business.
Published by Globes, Israel business news - en.globes.co.il - on August 11, 2026.
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