Good morning, everyone, and thank you for joining our call today. Polly, can you jump to the next two slides? One more, please. We will start with the results. We are very delighted with those results, showing double digits growth, both in 2025 and in the first half of 2026, from revenue all the way down to the earning per share. I would like to emphasize the operational cash flow that we had in the first half of this year. If people heard me before, they know that we are planning to convert about 70%-80% of the EBIT into operational cash flow, and this was the case in the first half, so we are very happy with that. Can you move to the next slide, please? What pushes our business? First of all, of course, it is the defense market.
As everybody is well aware, the conflicts are continuing around the world, and nothing seems to be solved yet. In Europe, a lot of funds were directed into defense after many years that not enough funds were spent on defense. It is not only that. What we see today is that the war is becoming much more electronic warfare, and this means that everything is controlled and managed remotely. It is all about electronics, and this is where MTI is getting into the pictures with many solution regarding communication jamming, telemetry to control remote, and so on. As indicated below, you see that in the last couple of months, we received some very nice significant orders that we announced about, but many more small orders came in that are smaller to announce. Overall, the backlog and the order of pipeline of opportunities is very, very big.
Can you move to the next one, please? Looking at the commercial market, I think that after this summer, everybody in Europe understand what global warming is all about, and we start to see more interest coming from certain areas of the world regarding water management. We just recently had a visit from an Eastern European country, but David will talk about it later on. No doubt that preserving water is a big issue for all of us. In the other segment of the commercial business is the 5G backhaul market. We all consume much more data. The problem is the capacity in the network. We have some very nice solution for that, and we are very optimistic about where it is headed. If you go to the next slides, please. The growth driver, of course, is with the defense.
As I mentioned, lots of new orders. The pipeline is going, the backlog is big, and we look very optimistically on the second half and towards 2027 because some of the orders are already for 2027. In the 5G backhaul markets, I would like to remind about our antenna beam steering solution. The idea is that in the high end of the backhaul, you use higher frequencies, the beam is narrow, and then you need to make sure that you adjust the movements of the towers with the antenna, and we invented a solution that we rotate only the feed, which is the electronics in the dish and not the entire dish. It is a patented technology. It is being very well accepted, and I will elaborate about it later on. Of course, the star of the first half was Mottech, with excellent results.
David will elaborate about it, but part of it is the new hardware that we developed by ourselves. All of this together, all the new solution that we bring help to saving to increase margin and see that we are growing both on revenue and profitability. Polly, can you move to the next slide, and David will take it?
Good morning, everybody. Let me start with the foundation of Mottech business. We have been working in water and the irrigation control for more than 33 years, including our long relationship partnership with Motorola. Today, we are active in five continents with more than 150,000 control units in the field. This installation is a historic base, is very important for us, is create an opportunity for additional sales, system expansion and upgrade, and of course, growing our recurring revenue. When I speaking about recurring revenue, we're speaking about recurring service and management revenue. Being active in different countries, markets, and market segments give us a lot of flexibility. If one market is affected by economy or other change, we have other markets where we can continue to grow, and that's what happened always. Geographically separate, i t gives us a good level of stability and riskless.
About water saving, over the years, we have proven in many projects that saving reach up to 40% in some cases, of the amount of the water compared to the amount used in the past. When we're speaking about long product life, it's important advantages and is very important for our customer, whether municipalities, agriculture companies, or water utilities. They also want to know that the system can continue to grow and develop with their needs. We have demonstrated that we can support several generation of field unit. In some cases, it's more than four generation in one place. There are hundreds of customers around the world whose system contains several generation of products, up to four generation in some case. This give our customer confidence and protects the value, the investment over the long term.
On top of this strong foundation, over the last two years, we have significantly expanded our technology and product offering. Motorola of course, remain an important part of our offering and a strong asset for us. But at the same time, we have added our own Mottech products, including the Elite range, decoder, sensor, and software application. This give us much more flexibility in the market, of course. Customers do not all need the same solution. Some need a very advanced system, while others need a simple and more cost-effective solution. Our broader products range allow us to offer solution that is better suit to customer needs, fit the condition, and budget, of course. We're not replacing one technology with another. We are adding capability and giving our customer more choice. To the next slide, please. Market opportunity.
Water, of course, becoming a more limited and more valuable resource, and customers are under increasing pressure to use water more efficiently. This is driving the adaptation to smart irrigation and water management solutions. The market forecast shown here is very strong, but for Mottech, the more important point is that the need is a real need. We can touch it. We are identifying new opportunities with the actual transaction in a region where we have not previously operated in the past, such as in Eastern Europe, CIS, Czech Republic, Germany, and more places. Next slide. One very good example is our Elite product range. Elite has been well-received and gives us another strong solution in the market. It allows us to be more competitive, especially in markets where both price and performance is important.
It also opens an opportunity that was more difficult for us to address in the past. South Africa is a very good example. After several difficult years in this region, the business has returned to growth. The broader product portfolio, and especially Elite, has helped us become more competitive and grow profitably. We are also using the wider portfolio to enter areas where we had very limited presence before, such as a golf course, a landscape. This is regarding South Africa. Italy also is another important example. We saw Italy not simply as a new country, because we are active in Italy more than 25 years, but as a platform to develop with the Western European market, and of course, expand our share of the Italian market. At the same time, we want to build an installed base that can support recurring service revenue.
We already have a big experience with this model in markets such as Israel, Australia. For example, over 40% of the revenue in Israel coming from recurring revenue. We expect to sign the first two or even three service agreements in Italy during this year. Italy gives us two opportunities, products growth and recurring service revenue. When we look at Mottech today, several things are happening at the same time. We have a large installed base from the international diversification and long-term customer relationship. We have expanded our technology and product offering. The market for smart water irrigation is growing. We are entering new applications and strengthening our existing markets. We are building recurring revenue, like service and management revenue. Thank you.
Thank you, David. Polly, can we jump to the next one? Moving to the second division, the antenna division, and before jumping into 5G and military and telling you all about that, I am just reminding that we have two other commercial markets. One is fixed broadband wireless access, which is more or less flat, and we have the RFID, radio frequency identification, which just continues to grow for us. We do the antennas for assets management and toll road applications. Let us go to the next slide, discuss the growth that we see in military. No doubt that 2025 was a great year for the military antenna business, and we started 2026 quite slow. But we are catching up, and I have no doubt that the second half of the year is going to be much stronger than the first one.
We secured a lot of orders, but we continue to see a lot of tenders and a lot of opportunities. Some of it are based on new technologies that we are bringing into the market. I spoke in the past about the build to print process that we are doing with some of the defense company here in Israel. Just as a reminder, it is getting a production file from the customer and produce it to them, because they do not have the capacity. It turns out that it is a bit slower than we anticipated, but it has a lot of advantages because they want to change some of the product process and sometime the yields are not good enough, so we are doing changes, and it just make us more involved and more tied to the customer.
I have no doubt that this will be, for the long term, another growth engine for MTI In the international market, we are seeing a lot of demand at the moment, some new orders from some new customers, mostly coming from Europe. We are very excited about the prospects of the military antenna business. Let us move to the next slide, please. In the 5G vertical, the ABS is where we see a lot of traction at the moment. We are the only one today with an ABS solution in the western part of the world. I am happy to say that we are now working, we just closed an agreement with another Tier 1 vendor. It is the radio manufacturer. We are working with the vast majority of the radio manufacturer in the western part, and when I am talking western part, I exclude China.
You can see here in the picture our antenna with its logo on it. This is an ABS antenna solution already installed in field. I can say that we are moving very well, both in production and receiving, as I said, another customer. We were even ahead of our internal plan and started to manufacture those in India as well in our facility in India. So we now can manufacture them either in Israel or in India. We are looking for the growth that we started to see this year in this area. We are still very much tied to the Indian market. Unfortunately, it is still on hold. As you can see below here, the percent of penetration in the Indian market is very, very low. We expect it to build up, and we will be there when it is ready.
But now what we see is that the ABS is pushing us forward. Let us move to the next slide, to our third division. It is the distribution and special consulting services. Here as a reminder, we first do represent about 30 companies, 40 companies outside of Israel, bringing their technology into the Israeli market, mostly to the defense companies in Israel. It is about 80% defense here. On top of it, we have PSK Wind Technologies, which is doing the integration and the build-up of shelter solution that it is purely military. Here is where we really feel the demand growing in the defense market in Israel. Can we flip to the next slide? I will give some examples. You can see on the picture to the right many different type of components and subsystem that we sell here into the market. The backlog here is very, very big.
We made a lot of design wins. Some of the backlog is not filled because we are waiting for the customer to finish the development and going into production, and some is filled. In PSK, we have the strongest backlog since we acquired it, and the pipeline of opportunities is very, very big. We are in a very good spot at the moment that we can do cherry-picking of project for PSK. We take some big project, I would say with less risk and probably lower margin. At the same time, we can take some other projects that are with more risk, more technology, more margin. We are building it up. The demand for shelter building and integration is huge. We are considering how to handle it and how to even expand more.
But we are very happy with where it position and where it should end this year. Let's go to the next slide. I think that overall, the big message here is that we are trying to build on innovation. Whether it's the new controllers for Mottech, the ABS antenna, or other type of antennas that we develop, we are trying not to fight on the cheapest solution and only in price, but we are investing a lot in order to bring a value-added solution to the market. You would see that our R&D is not big. We expense everything, but it's not big because some of the R&D is paid by others, especially in the military market, but we keep the IP for ourself.
Some is collaboration with the companies that we represent, and this is how we are bringing a value-added solution to the market and improve our margin. Let's continue to the next slide. Although we have a very strong growth internal engine, we are always looking to expand, either by acquiring other companies or by expanding, especially in Mottech worldwide. We've been quite active this year with acquiring 50% remaining in Mottech Australia to push it stronger. Now is the opening of the Italian office because we believe there is a lot what to do there. When it's under our management, we are more aggressive in marketing and chasing the recurrent revenue. As David mentioned, we expected to see contracts already in Italy this year. When we are looking at acquisition, I always say I have two criterias. One is better safe than sorry.
We learn very thoroughly before we do the investment. Secondly is that we are looking for profit enhancing from day one. We are not looking for turnarounds, we are not looking for science rocket technology that we don't understand yet. We are trying to expand with what we want, and I hope that before this year end, we will have another news for you on that, but when time comes, we will of course announce. Let's continue to the next slide, please. A little bit more color on the revenues and the profits this year. As I said, military started a little bit slow, so it went down a little to 47% of our revenue. But I have no doubt that we will end this year with above 50%. It's not because I expect Mottech or the commercial market to go slower.
We just know what we have in the pipeline in the military side. I love the diversity. As I mentioned, Mottech was the star of the first half. So having three good legs in different markets, different geographies is always benefiting in my eyes. As you can see, Europe or EMEA grew quite dramatically this year over Asia and the Americas. It is both in the antennas and in Mottech business. I remind you that in Israel, what we do about one sale is ending as indirect export. We have a loyal customer base. They remain loyal because we give the value-added and the services. And of course, we are always focused on the earning per share. I am happy to show that we continue with the double digit growth in that. Moving to the next slide. This is one of the best slide I can show.
I think every CEO would love to show this slide. Everything double digit growth, both last year and in the first half, margin expanding. But for me, it is important to remind our business model going forward. I always claim that on the additional dollar of revenue that we will generate, we should make 20% operational profit. So if you look at last year, we grew by $6 million more or less in revenue, and operational profit grew by $1.3 million. Same goes in the first half of this year, $2.5 million growth in revenue, about $500,000 growth in operational profit. So the business model is working very well for us, and this means that as long as we can drive the growth in revenue, the profit will grow much faster. Let us move to the next slide, please. We have a very solid shareholder base.
My family owns about 1/3 of the company, so full alignment with all the shareholders of the company. This is, of course, one of the reason that we pay dividend. And the real fact is that the first U.K. Non-Exec Director that we had told me that the real business pay dividends, and since then we do pay dividend. We paid once in April, and as long as we can generate and continue to make profits, we will pay the dividends. Let us continue to the next slide, please. We are very much focused on increasing the trading in the share of the company. I think it is important to everyone, and I think that part of what we are doing here in connecting with InvestorHub is to get more closer to the shareholder base.
I would like to invite you to join our InvestorHub, if you haven't done so. It will allow you to communicate with us directly, very easily. This is one part of the increased trading that we are looking for in the share. If we jump to the next slide, please, I will summarize. I think we are in a great position in growing markets. We have a proven track record of managing this growth and penetrating in this market and seeing the growth converting to cash. We are paying dividend. We have a nice cash balance to continue and look for the M&A on a better safe than sorry mode, as I mentioned. And we are very excited on the prospects going forward. I hope you all do, and with this, we will be happy to take any question you may have.
Great. Thank you, Moni, and for David for your presentation today. We will now share some of the investor questions that have been submitted. Please do continue to ask questions via the chat box in the right-hand corner. The first question that has come through is, "What scope is there for Mottech to create a solution to address wildfires?
One thing. It is a different segment, so we are not active in this segment, but control system is control system. Therefore, there is a possibility that our control system will be also integrated into this kind of solution in the future. There is one place, only one place in Greece, in Delta, where our control system has already been integrated into this kind of solution. Mostly, the idea is to ensure the irrigation system are closed, so all of the water pressure is directly for the fire system.
Great. Thank you, David. The nature of warfare has changed with far greater emphasis on technology. How valuable is this shift for MTI? Can you quantify?
It is very difficult to quantify. The size of the market is, of course, enormous. I can say that the technologies that we have developed in the last few years, we see them more and more getting into the markets. One very good example is that we developed an anti-jamming GPS type of a solution for an airborne application. It was for a North European government at the time, and we suddenly see it coming from many other European countries, that everybody is looking for this exact same solution. I have no doubt that our capabilities are really aligning into what the market is looking for. Of course, here in the local market, we are very strong in everything that relates to missile identification and then the interception rockets. We are in all of these markets.
Great. Thank you, Moni. Outside of Israel, which markets represent the greatest opportunity for Mottech? I think you've briefly kind of touched on this, but just to maybe mention again, and what is your strategy for growing your share of these markets?
So I will answer this with your permission. We are active everywhere with Mottech. Where we thought that there is a real need, we opened our own business or our own subsidiary, because as I mentioned, I think we are more aggressive. I think that our key target is to go in the U.S. U.S. is a huge market. We have some very good value-added resellers there. But I believe that if we would have boots on the ground, we would be even more aggressive, and again, it creates the opportunity for the recurring revenue that we all so love in Mottech and increase this.
Great. Thank you. And the last question that's come in so far, do you have plans to buy the remaining equity in PSK?
Yes, the option in PSK is coming to life really at the end of this year, once we announce the results for 2026. I think that we will acquire, I'm not sure if the full entire 40% or we leave some incentive to the management. But for sure we'll increase our stake in PSK. Everyone who followed us for a few years know that the start was not that smooth. And it took us time to take control over it and make sure it operates the way we think it should. I'm happy to say that now it looks much better. We also brought another external manager to help us with this, so he's here for the last six months, and we're seeing more and more organized type of work like we used to work in MTI that is happening there.
I am quite confident that we will exercise the option. You are on mute, Polly.
Sorry about that. Thanks for the flag. Another question we have just had come through is, "Being a U.K. company but run from Israel is a negative factor. What are you doing to address this problem for investors and the share price?
I am not sure why it is negative if you are talking on the geopolitical part of it. We are from where we are, this cannot be changed. Part of what we are doing is these conferences and talking to as many investors as we can, and people who know us and know what we feel and what we think. I would only add that you need to distinguish between the government of Israel, or current government, and the people of Israel, and that is about politics. I want to say, we are all about business.
Great. Thank you, Moni. I think that is all of the questions for today. Thank you, MTI Group, for updating investors today. On behalf of the management team at MTI, thank you for attending today's webinar. The recording will be available via the MTI Investor website just shortly after this presentation. If you have any more questions, please just do submit those there and we will get back to you. But thank you again, and have a great day to everyone. Thank you.
Thank you.
Thank you.