Caesarstone Reports Second Quarter 2025 Financial Results

- Revenue of $101.1 Million -

- Gross Margin of 19.6% -

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, 2025.

Yos Shiran, Caesarstone's Chief Executive Officer commented, "We are taking decisive action to align our cost structure to improve profitability at current revenue levels. During the quarter, we approved cost reduction measures expected to generate an additional $10 million of annualized savings, commencing in the second half of 2025. We also continued to benefit from an improved production footprint. In addition, we remain focused on investing in our strategic transformation initiatives. These measures are helping us to navigate the challenging global market landscape and position us well to scale efficiently as we move forward."

Second Quarter 2025 Results

Revenue in the second quarter of 2025 was $101.1 million compared to $119.4 million in the prior year quarter. On a constant currency basis, second quarter revenue was down 15.6% year-over-year mainly due to lower volumes. Volumes were impacted by global economic headwinds across the Company's main regions resulting in lower demand accompanied by greater competitive pressures.

Gross margin in the second quarter of 2025 was 19.6% compared to 22.9% in the prior year quarter. Adjusted gross margin in the second quarter was 19.7%, compared to 23.8% in the prior year quarter. The difference in gross margin was mainly due to lower volumes and production, which resulted in lower fixed costs absorption, and unfavorable product mix, partially offset by the benefits of an improved production footprint.

Operating expenses in the second quarter of 2025 were $32.5 million, or 32.1% of revenue, compared to $36.6 million, or 30.6% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies, and restructuring and impairment expenses, operating expenses were 30.1% of revenue compared to 28.2% in the prior year quarter, primarily due to lower revenues.

Operating loss in the second quarter of 2025 was $12.6 million compared to an operating loss of $9.3 million in the prior year quarter, primarily reflecting lower gross profit.

Adjusted EBITDA in the second quarter of 2025, which excludes expenses for non-cash share-based compensation, legal settlements and loss contingencies, restructuring charges and other non-recurring items, was a loss of $6.4 million compared to a loss of $0.1 million in the prior year quarter.

Finance (income) expense in the second quarter of 2025 was $5.7 million compared to finance income of $1.8 million in the prior year quarter. The difference primarily reflects foreign currency exchange rate fluctuations.

Net loss attributable to controlling interest for the second quarter of 2025 was $18.6 million compared to a net loss of $9.2 million in the prior year quarter. Net loss per share for the second quarter 2025 was $0.54 compared to a net loss per share of $0.27 in the prior year quarter. Adjusted diluted net loss per share for the second quarter was $0.33 on 34.7 million shares, compared to Adjusted diluted net loss per share of $0.14 in the prior year quarter on 35.0 million shares.

Balance Sheet & Liquidity

As of June 30, 2025, the Company's balance sheet included cash, cash equivalents and short-term bank deposits of $75.6 million and total debt to financial institutions of $3.2 million. The Company's net cash position was $72.4 million as of June 30, 2025.

Legal Proceedings Update

As of June 30, 2025, the Company was subject to lawsuits involving 423 individuals alleging injuries related to exposure to respirable crystalline silica dust. These included 49 claims in Israel, 141 in Australia, and 233 in the United States. As of the same date, the Company recorded a provision of $44.9 million, representing its best estimate of probable and reasonably estimable losses associated with pending claims. The Company's insurance receivables related to these provided for silicosis claims totaled $25.6 million.

During the quarter, a jury in California ruled in favor of the Company, assigning no liability to the Company in one trial, pending post-trial motions and potential appeals. To date in the United States, the Company has also received one adverse jury verdict in 2024, which remains under appeal, and has settled another claim during 2025. The remaining U.S. claims are either in early stages or are considered only reasonably possible losses, and therefore no additional provision has been recorded.

In July 2025, both the Company and certain U.S. insurance carriers initiated proceedings for declaratory relief to determine the proper interpretation and application of Company's U.S. product liability insurance policies and available limits. These proceedings are in an early stage.

If there is a change in the assessment for the outcome of the claims or the insurance coverage limits through the course of the trial processes, such changes could lead to a material and adverse impact on our business, financial position, results of operations or cash flows.

Nahum Trost, Caesarstone's Chief Financial Officer concluded, "We remain confident that the structural improvements made under our restructuring plan and recent cost reduction initiatives will help us navigate near-term headwinds and drive long-term value."

Webcast and Conference Call Details

The Company will host a webcast and conference call today, August 6, 2025, at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. 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 1 80 921 3284. Upon dialing in, please request to join the Caesarstone Second Quarter 2025 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 10201158. The replay will be available beginning at 12:30 p.m. ET on Wednesday, August 6, 2025 and will last through 11:59 p.m. ET on Wednesday, August 13, 2025.

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, 2024 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 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 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. custom 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 5, 2025, 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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Investor Relations:

ICR, Inc. - Rodny Nacier

[email protected]

+1 (646) 200-8870