- Revenue of $96.6 Million and Gross Margin of 24.0% -
- Recently Announced U.S. Quartz Tariff-Rate Quota on Imports, Effective August 15, 2026 -
- Evaluating the Impact of New U.S. Tariffs on the Timing of Positive Adjusted EBITDA -

Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its second quarter ended June 30, 2026.

Yos Shiran, Caesarstone’s Chief Executive Officer commented, “Our second quarter performance marks another step forward in our efforts to restore profitability. Gross margin improved both year-over-year and sequentially, and our Adjusted EBITDA loss narrowed significantly, primarily reflecting the growing benefits of our optimized production network and disciplined execution of our restructuring plan. While revenue continues to be impacted by competitive dynamics and soft market conditions, most notably in North America, the structural changes we have implemented have created a leaner, more flexible operating model to improve our offering to customers. Despite recent tariff developments, we remain confident that our operating model positions us well to deliver long term value.”

Nahum Trost, Caesarstone’s Chief Financial Officer added, “I am pleased with the momentum of our financial and operating performance. The improvements in our operating model have created a structural step change in our ability to deliver more favorable results. Based on these efforts, we entered the quarter on track to achieve our previously stated goal of positive Adjusted EBITDA. Following the new U.S. Tariffs on quartz surface products, we are reassessing the timing of achieving positive Adjusted EBITDA while evaluating the appropriate actions to mitigate the impact of these new tariffs.”

Second Quarter 2026 Results

Revenue in the second quarter of 2026 was $96.6 million compared to $101.1 million in the prior year quarter. On a constant currency basis, second quarter revenue was down approximately 7.7% year-over-year, reflecting continued softness in global demand and competitive pressures, particularly in North America, partially offset by strength in Australia.

Gross margin in the second quarter of 2026 was 24.0% compared to 19.6% in the prior year quarter. Adjusted gross margin in the second quarter was 26.5%, compared to 19.7% in the prior year quarter. The improvement in gross margin mainly reflects the realization of cost savings associated with the Company's transition to its global network of production partners following the closure of its Bar-Lev facility. The second quarter also benefited from a refund received on account of previously paid U.S. IEEPA tariffs.

Operating expenses in the second quarter of 2026 were $33.4 million, or 34.6% of revenue, compared to $32.5 million, or 32.1% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies and impairment and restructuring expenses, operating expenses were 29.6% of revenue compared to 30.1% in the prior year quarter. The year-over-year difference primarily reflects higher legal settlements and loss contingencies.

Operating loss in the second quarter of 2026 was $10.2 million compared to an operating loss of $12.6 million in the prior year quarter. The improvement was primarily driven by higher gross margin, partially offset by higher legal settlements and loss contingencies.

Adjusted EBITDA in the second quarter of 2026, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies, impairment and restructuring charges and other non-recurring items, was a loss of $1.0 million compared to a loss of $6.4 million in the prior year quarter. The improvement primarily reflects higher gross margin and the benefits of the Company’s cost savings initiatives.

Finance expenses in the second quarter of 2026 were $5.0 million compared to $5.7 million in the prior year quarter. Finance expenses result mainly from foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the second quarter of 2026 was $15.6 million, compared to $18.6 million in the prior year quarter. Net loss per share for the second quarter of 2026 was $0.45 compared to a net loss per share of $0.54 in the prior year quarter. Adjusted diluted net loss per share for the second quarter was $0.10 on 34.6 million shares, compared to an Adjusted diluted net loss per share of $0.33 in the prior year quarter on 34.7 million shares.

Balance Sheet & Liquidity

As of June 30, 2026, the Company’s balance sheet included cash, cash equivalents and short-term bank deposits of $51.8 million and no debt to financial institutions compared to a net cash position of $50.4 million as of March 31, 2026.

U.S. Tariffs Update

The Company continues to monitor the impact of existing and proposed U.S. tariffs affecting various countries and product categories, that are currently in a wide range on the majority of products imported into the U.S. Approximately 44% of the Company's revenues during the three months ended June 30, 2026 were generated in the U.S. market, served by the Company's global production network.

In addition to other tariffs, on July 31, 2026, the U.S. Administration issued its final determination imposing a four-year tariff-rate quota on imports of quartz surface products, effective August 15, 2026. During the first year, the industry’s covered imports within an annual quota of approximately 13.0 million square meters, assessed quarterly, will be subject to an additional 25% tariff, while imports exceeding the quota will be subject to an additional 50% tariff. During the subsequent three years, the tariff rates will gradually decline, while the annual quota will gradually increase.

The Company is evaluating the expected impact of the measure on its global production and supply network and intends to implement appropriate supply-chain, sourcing and pricing actions to mitigate its effects.

Legal Proceedings Update

The Company is subject to approximately 800 individuals alleging injuries related to exposure to respirable crystalline silica dust including approximately 600 in the U.S. As of June 30, 2026, the Company recorded a provision of $51.2 million, representing its best estimate of probable and reasonably estimable loss. The vast majority of U.S. claims are either at an early stage or considered only reasonably possible losses, and therefore no provision was recorded in connection therewith. As of June 30, 2026 the Company recorded $12.0 million of insurance receivables globally, as coverage disputes are ongoing. The Company will continue to vigorously defend these claims.

During the second quarter of 2026, the Company resolved four claims in California and received a favorable defense jury verdict in a Colorado claim, that assigned no liability to the Company. Additionally, the Company was dismissed of several cases in various states. Prior verdicts remain under appeal.

A negative change in the assessment of the outcome of such claims or of the available insurance coverage would have a material and adverse impact on our business, financial position, results of operations and cash flows. Additional information related to legal proceedings can be found in the Company's Annual Report on Form 20-F for the year ended December 31, 2025.

Webcast and Conference Call Details

The Company will host a webcast and conference call today at 8:30 a.m. ET to discuss the results. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-833-816-1463 and 1-412-542-4167, respectively. The toll-free Israeli number is +972 3-374-1008. Upon dialing in, please request to join the Caesarstone Second Quarter 2026 Earnings Conference Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671 (international) and enter pass code 10210513. The replay will be available beginning at 12:30 p.m. ET on Wednesday, August 5, 2026 and will last through 11:59 p.m. ET on Wednesday, August 12, 2026.

About Caesarstone

Caesarstone is a global leader of premium surfaces, specializing in countertops that create dynamic spaces of inspiration in the heart of the home. Established in 1987, its multi-material portfolio of over 100 colors combines the company’s innovative technology with its powerful design passion. Spearheading high-quality, sustainable surfaces, Caesarstone delivers functional resilience with timeless beauty, for a vast range of applications, including kitchen countertops, bathroom vanities, and more, for indoor and outdoor spaces.

Since it pioneered quartz countertops over thirty years ago, the brand has expanded into porcelain and natural stone and is on the ground in more than 50 countries worldwide while enhancing customer experience through the expansion of groundbreaking digital platforms & services. More information on Caesarstone: caesarstoneus.com, Facebook, LinkedIn and Instagram

The Company has filed its annual report on Form 20-F for the year ended December 31, 2025 with the U.S. securities and exchange commission (“SEC”) and can be accessed on its website.

Non-GAAP Financial Measures

The non-GAAP measures presented by the Company should be considered in addition to, and not as a substitute for, comparable GAAP measures. Reconciliations of GAAP gross profit to Adjusted gross profit, GAAP net income (loss) to Adjusted net income (loss) and net income (loss) to Adjusted EBITDA are provided in the schedules to this release. To calculate revenues growth rates that exclude the impact of changes in foreign currency exchange rates, the Company converts actual reported results from local currency to U.S. dollars using constant foreign currency exchange rates in the current and comparable period. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company's core business and management uses the non-GAAP measures internally to evaluate the Company's ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company's operating performance.

Forward-Looking Statements

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “goals," “intend,” “seek,” “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “may,” “plan,” “outlook,” “future” and “project” and other similar expressions that predict, project or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements regarding the Company’s goals and plans, intentions, expectations, assumptions, goals and beliefs regarding the Company’s business. Actual results may differ materially from those projections and estimates due to various risks and uncertainties, both known or unknown. These factors include, but are not limited to: the effects of the global and regional economy and geo-politics on the Company’s business and operations including the length, duration and impact of the war in Israel, the Houthi’s disruption to the movement of goods in the Red Sea and trade disruptions such as Turkey’s decision not to trade with Israel; the outcome of silicosis and other bodily injury claims, and the availability of relevant insurance; regulatory changes and requirements relating to the manufacturing and fabrication of our products; the outcome of our restructuring efforts, of the closure of the Sdot Yam and Richmond Hill Facilities, the estimated closure costs and the estimated potential savings relating to said closures, the ability to sell or sublease all or part of these facilities; our ability to effectively collaborate with production business partners; our R&D and product introduction efforts, managing constraints in the global supply chain and effectively procuring raw materials and goods as well as fluctuations in their price; our ability to mitigate the recently imposed U.S. customs tariffs; our ability to protect our brand, technology and intellectual property, as well as our freedom to operate; competitive pressures; disruptions to our information technology systems, fluctuations in currency exchange rates against the U.S. dollar; our ability to successfully integrate our acquisitions; our ability to meet ESG goals and targets; and other risks and uncertainties discussed under the sections "Risk Factors" and “Special Note Regarding Forward-Looking Statements and Risk Factor Summary” in our most recent annual report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2026, and in other documents filed by Caesarstone with the SEC, which are available free of charge at www.sec.gov. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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