Q2 2026 Meitav Investment House Ltd Earnings Call

August 17, 2026

Speaker #2: Good day, everyone, and welcome to Meitav's second quarter 2026 earnings conference call. I would like to note that today's call is being recorded. With us today on the call are Ilon Raviv, Chief Executive Officer, and Einat Rahm, Chief Financial Officer.

Operator: Good day, everyone, and welcome to Meitav's Q2 2026 earnings conference call. I would like to note that today's call is being recorded. With us today on the call are Ilan Raviv, Chief Executive Officer, and Einat Rom, Chief Financial Officer. Please note that certain statements made on this call may be forward-looking and are subject to risks and uncertainties as described in our regulatory filings. All figures are in new Israeli shekels and US dollars. After the presentation, we will hold a question and answer session. You may ask a question using any of the following methods: submitting it via the Zoom Q&A feature, using the raise hand function on Zoom, or dialing into the conference call. We will do our best to address as many questions as possible. Ilan, please go ahead.

Speaker #2: Please note that certain statements made on this call may be forward-looking and are subject to risks and uncertainties, as described in our regulatory filings.

Speaker #2: All figures are in New Israeli Shekels and US dollars. After the presentation, we will hold a question-and-answer session. You may ask a question using any of the following methods: submitting it via the Zoom Q&A feature, using the raise hand function on Zoom, or dialing into the conference call.

Speaker #2: We will do our best to address as many questions as possible. Ilon, please go ahead.

Speaker #3: Thank you, and welcome, everyone. I will begin with a general overview of Meitav's excellent results for the second quarter of 2026. When we spoke in May, we discussed the strength of our first quarter results and the momentum we were carrying into the rest of the year.

Ilan Raviv: Thank you, and welcome everyone. I will begin with a general overview of Meitav's excellent results for Q2 2026. When we spoke in May, we discussed the strength of our Q1 results and the momentum we were carrying into the rest of the year. I am happy to report that Q2 built on that momentum with continued growth in AUM, in revenues, and in profitability, and it is another strong quarter of net inflows across our platform of more than 14 billion ILS, which is approximately $4.8 billion. The macro environment continues to be dynamic as it has been across global markets. Despite ongoing volatility and regional instability, our business continues to perform well throughout the period. The Israeli economy has again demonstrated the resilience that has come to define it.

Ilan Raviv: Thank you, and welcome everyone. I will begin with a general overview of Meitav's excellent results for Q2 2026. When we spoke in May, we discussed the strength of our Q1 results and the momentum we were carrying into the rest of the year. I am happy to report that Q2 built on that momentum with continued growth in AUM, in revenues, and in profitability, and it is another strong quarter of net inflows across our platform of more than ILS 14 billion, which is approximately $4.8 billion. The macro environment continues to be dynamic as it has been across global markets. Despite ongoing volatility and regional instability, our business continues to perform well throughout the period. The Israeli economy has again demonstrated the resilience that has come to define it.

Speaker #3: I am happy to report that Q2 built on that momentum with continued growth in AUM, in revenues, and in profitability, and it's another strong quarter of net inflows across our platform of more than 14 billion shekels, which is approximately $4.8 billion US dollars.

Speaker #3: The macro environment continues to be dynamic, as it has been across global markets. Despite ongoing volatility and regional instability, our business continues to perform well throughout the period.

Speaker #3: The Israeli economy has again demonstrated the resilience that has come to define it. It continues to see strong client demand, robust inflows, and broad-based growth across all three of our business pillars.

Ilan Raviv: We continue to see strong client demand, robust inflows, and broad-based growth across all three of our business pillars. This quarter's financial results are highlighted by our profitability. Adjusted EBITDA was up 33% year over year to 265 million ILS, which is approximately $89 million, reflecting a record high adjusted EBITDA margin of 43.2%, our strongest margin quarter to date. Net profit attributed to the shareholders was up 31% year over year and up 11% sequentially. This came alongside continued top-line growth, with revenues up 28% year over year and up 3% sequentially. Investment performance remains strong, particularly in our actively managed mutual funds, which continue to rank highly across all major bank rating systems. This has been, and continues to be, well translated into strong inflows into our highest margin actively managed mutual funds.

Ilan Raviv: We continue to see strong client demand, robust inflows, and broad-based growth across all three of our business pillars. This quarter's financial results are highlighted by our profitability. Adjusted EBITDA was up 33% year over year to ILS 265 million, which is approximately $89 million, reflecting a record high adjusted EBITDA margin of 43.2%, our strongest margin quarter to date. Net profit attributed to the shareholders was up 31% year over year and up 11% sequentially. This came alongside continued top-line growth, with revenues up 28% year over year and up 3% sequentially. Investment performance remains strong, particularly in our actively managed mutual funds, which continue to rank highly across all major bank rating systems. This has been, and continues to be, well translated into strong inflows into our highest margin actively managed mutual funds.

Speaker #3: This quarter's financial results are highlighted by our profitability. Adjusted EBITDA was up 33% year over year, to 265 million shekels (approximately $89 million), reflecting a record-high adjusted EBITDA margin of 43.2%.

Speaker #3: Our strongest margin quarter to date. Net profit attributed to the shareholders was up 31% year over year, and up 11% sequentially. This came alongside continued top-line growth, with revenues up 28% year over year, and up 3% sequentially.

Speaker #3: Investment performance remains strong, particularly in our actively managed mutual funds, which major bank rating systems. This has been, and continues to be, well translated into strong inflows into our highest-margin, actively managed mutual funds.

Speaker #3: I'd like to also note that during the quarter, we drew, which is an affiliate of Moody's, upgraded our issuer and our Series D bond ratings from Aa3 to Aa2, with a stable outlook.

Ilan Raviv: I'd like to also note that during the quarter, Midroog, which is an affiliate of Moody's, upgraded our issuer and our Series D bond ratings from Aa3 to Aa2 with a stable outlook. This is a meaningful vote of confidence in our financial strength, in our business quality, and our long-term growth strategy. As some of you who are familiar with Meitav may know, our business is built on three core pillars: Asset management, comprising long-term savings and short-term savings, non-bank credit, and the brokerage pillar. Each of these segments delivered significant growth in Q2, continuing the positive momentum we saw in Q1 of the year. Given our H1 performance, we are increasingly confident in our ability to meet, and likely exceed, our full-year target, supported by continued business momentum and our operational efficiency.

Speaker #3: This is a meaningful vote of confidence in our financial strength, in our business quality, and in our long-term growth strategy. As some of you who are familiar with Meitav may know, our business is built on three core pillars: asset management, comprising long-term savings and short-term savings; non-bank credit; and the brokerage pillar.

Speaker #3: Each of these segments delivered significant growth in the second quarter, continuing the positive momentum we saw in the first quarter of the year. Given our first-half performance, we are increasingly confident in our ability to meet and likely exceed our full-year target.

Speaker #3: Supported by continued business momentum and our operational efficiency, we now expect full-year 2026 profitability to increase by more than 25% compared to the previous year, 2025.

Ilan Raviv: We now expect full year 2026 profitability to increase by more than 25% compared to the previous year, 2025. This is above the at least 20% growth we guided to previously. This is, of course, subject to market conditions. Turning to assets under management. As we published the data of 31 July, total AUM reached a record 466 billion ILS, which is about 156 billion USD. This compares to 426 billion ILS at the end of Q1. Total alternative investment AUM reached approximately 1.6 billion ILS, up slightly from the end of the previous quarter. This growth continues to be driven by a combination of AUM appreciation and strong net inflows, particularly into our core savings products, provident and pension funds, and mutual funds. Our actively managed mutual funds, which is our highest margin product, led the market consistently throughout the H1 of the year.

Ilan Raviv: We now expect full year 2026 profitability to increase by more than 25% compared to the previous year, 2025. This is above the at least 20% growth we guided to previously. This is, of course, subject to market conditions. Turning to assets under management. As we published the data of 31 July, total AUM reached a record 466 billion ILS, which is about 156 billion. This compares to 426 billion ILS at the end of Q1. Total alternative investment AUM reached approximately 1.6 billion ILS, up slightly from the end of the previous quarter. This growth continues to be driven by a combination of AUM appreciation and strong net inflows, particularly into our core savings products, provident and pension funds, and mutual funds. Our actively managed mutual funds, which is our highest margin product, led the market consistently throughout the H1 of the year.

Speaker #3: This is above the at least 20% growth we guided to previously. This is, of course, subject to market conditions. Turning to assets under management, as we published the data as of July 31, total AUM reached a record 466 billion shekels, which is about $156 billion US dollars.

Speaker #3: This compares to ₪426 billion at the end of the first quarter. Total alternative investment AUM reached approximately ₪1.6 billion, up slightly from the end of the previous quarter.

Speaker #3: This growth continues to be driven by a combination of AUM appreciation and strong net inflows, particularly into our core savings products—provident and pension funds, and mutual funds.

Speaker #3: Our actively managed mutual funds, which are our highest-margin products, led the market consistently throughout the first half of the year. That leadership continued into July.

Ilan Raviv: That leadership continued into July. The latest published mutual fund inflow data shows our net inflows in July running more than double the second largest competitor. In our long-term savings segment, revenues reached 268 million ILS, which is approximately 90 million USD in Q2, which is up 42% year over year, and up 11% sequentially. This was driven by strong client deposit inflows of 6 billion ILS in the H1 of 2026, and market share gains of approximately 18 billion ILS at the same period. This is also leading the market by a wide margin. Long-term savings revenues for the H1 of 2026 reached 510 million ILS, approximately 171 million USD, up sharply versus the H1 of 2025.

Speaker #3: The latest published mutual fund inflow data show our net inflows in July running more than double the second largest competitor. In our long-term savings segment, revenues reached 268 million shekels, which is approximately $90 million.

Speaker #3: In Q2, which is up 42% year over year and up 11% sequentially, this was driven by strong client deposit inflows of ₪6 billion in the first half of 2026 and market share gains of approximately ₪18 billion during the same period.

Speaker #3: This is also leading the markets by a wide margin. Long-term savings revenues for the first half of '26 reached 510 million shekels, approximately $171 million, up sharply versus the first half of 2025.

Speaker #3: Turning to our short-term savings activities, mutual funds and ETF revenues reached 128 million shekels in Q2, which is about $43 million, and that's up 29% year over year.

Ilan Raviv: Turning to our short-term savings activities, mutual funds and ETF revenues reached 128 million ILS in Q2, which is about $43 million, and that's up 29% year over year. Though it's down slightly sequentially, this reflects the normal range of quarter-to-quarter variability. We continue to see strong demand for higher fee products, including mutual hedge funds and momentum-based strategies, and we remain pleased with the performance and rating of our actively managed funds. Our portfolio management revenues and the retail inflows continue to be historically strong due to both good investment performance and increasing cooperation with our distribution channels on this product. Moving to the brokerage platform, Meitav Trade revenues totaled 75 million ILS, approximately 25 million USD in this quarter, and that's up 17% year over year. Though it's down modestly sequentially on softer trading activity following a very strong Q1 and some seasonality effects.

Speaker #3: Though it's down slightly sequentially, this reflects a normal range of quarter-to-quarter variability. We continue to see strong demand for higher-fee products, including mutual hedge funds and momentum-based strategies, and we remain pleased with the performance and rating of our actively managed funds.

Speaker #3: Our portfolio management revenues and the retail inflows continue to be historically strong, due to both good investment performance and increasing cooperation with our distribution channels on this product.

Speaker #3: Moving to the brokerage platform, Meitav Trade revenues totaled 75 million shekels, approximately $25 million, in this quarter, and that's up 17% year over year.

Speaker #3: Though it is down modestly sequentially, on softer trading activity following a very strong first quarter and some seasonality effects, the total retail brokerage client base reached approximately 130,000 clients as of the end of June, up from approximately 123,500 at the end of the first quarter.

Ilan Raviv: The total retail brokerage client base reached approximately 130,000 clients as of the end of June, up from approximately 123,500 at the end of Q1. During H1 2026, our retail brokerage recruited approximately 19,000 new customers. Moving to our non-bank credit segment, revenues reached ILS 105 million, which is about $35 million in Q2. That is up 7% year over year and 6% sequentially. The credit portfolio topped ILS 4 billion, which is about $1.35 billion as of the end of June, up from ILS 3.67 billion at the end of Q1. We continue to monitor the price pressures on Israeli companies operating in the credit markets and are managing the portfolio with a disciplined approach to risk and to our underwriting standards.

Speaker #3: During the first half of 2026, our retail brokerage recruited approximately 19,000 new customers. Moving to our non-bank credit segment, revenues reached 105 million shekels, which is about $35 million in Q2.

Speaker #3: That's up 7% year over year and 6% sequentially. The credit portfolio topped 4 billion shekels, which is about $1.35 billion US dollars as of the end of June.

Speaker #3: Up from $3.67 billion at the end of the first quarter. We continue to monitor the price pressures on Israeli companies operating in the credit markets, and are managing the portfolio with a disciplined approach to risk and to our underwriting standards.

Speaker #3: Just after the quarter end, we also completed a full exchange tender offer for Peninsula, which is our non-bank SME credit business. Now, it is a wholly owned subsidiary.

Ilan Raviv: Just after the quarter end, we also completed a full exchange tender offer for Peninsula, which is our non-bank SME credit business. Now it is a wholly owned subsidiary. This full ownership allows us to leverage our capabilities in this segment to expand our operations and to optimize capital utilization, as well as reducing costs. Before I turn over to Einat, I want to spend a moment on AI, since we know this is a topic of real interest, and we want to expand the use of AI tools to leverage and improve our results and our efficiency. As we previously discussed, we have been investing in AI-driven systems across two main areas, client service and back office automation.

Speaker #3: This full ownership allows us to leverage our capabilities in this segment to expand our operations, optimize capital utilization, and reduce costs.

Speaker #3: Before I turn it over to Einat, I want to spend a moment on AI, since we know this is a topic of real interest, and we want to expand the use of AI tools to leverage and improve our results and our efficiency.

Speaker #3: As we previously discussed, we've been investing in AI-driven systems across two main areas: client service and back office automation. In the provident fund and pension companies, currently 55% of all written communications with clients are handled by AI tools.

Ilan Raviv: In the provident fund and pension companies, currently 55% of all written communications with clients are handled by AI tools, and the information provided to these clients is personalized rather than general information. The responses are precise, and the service is available around the clock, 24/7. In the operations department, the AI-based platform is already functioning, and several processes are carried out without human intervention, thanks to AI agents, of course. AI tools have also been implemented for most of our company employees. While at the end of the previous quarter, 25% of our employees used AI tools as part of their daily routine, today, this figure has jumped to 53% of employees who utilize these tools to streamline their work and achieve more accurate results. With that, I will now turn it over to Einat to review the financials in more details.

Speaker #3: And the information provided to these clients is personalized rather than general information. The responses are precise, and the service is available around the clock, 24/7.

Speaker #3: And the operations departments: the AI-based platform is already functioning, and several processes are carried out without human intervention—thanks to AI agents, of course.

Speaker #3: AI tools have also been implemented for most of our company employees. While at the end of the previous quarter, 25% of our employees used AI tools as part of their daily routine, today the figure has jumped to 53% of employees who utilize these tools to streamline their work and achieve more accurate results.

Speaker #3: With that, I will now turn it over to Einat to review the financials in more detail. Einat, please.

Speaker #2: Thank you, Einat. Thank you. Now, let's review the key financial results for the second quarter of 2026 in more detail. All figures are presented in shekels, with U.S. dollar conversions at an exchange rate of $1 equal to ₪2.978 as of the end of the quarter.

Einat Rom: Thank you, Ilan.

Ilan Raviv: Einat, please.

Einat Rom: Thank you. Now let's review the key financial results for Q2 2026 in more detail. All figures are presented in shekels with US dollar conversions at an exchange rate of one US dollar equal to 2.978 shekels as of the end of the quarter. For comparability, I will present figures excluding legal claims. As Ilan noted, Q2 2026 represents a continuation of strong trends we reported in May, with broad-based revenue growth, improving operating leverage, and continued margin expansion. I'll lead with profitability since that's really the headline this quarter. Adjusted EBITDA reached 265 million shekels, which is approximately $89 million, up 33% year-over-year and up 5% sequentially, for a margin of 43.2%. What stands out to me is the consistency of that expansion, 43.2% this quarter, 42.3% last quarter, and low forties a year ago.

Speaker #2: And for comparability, I will present figures excluding legal claims. As Einat noted, Q2 2026 represents a continuation of the strong trends we reported in May, with broad-based revenue growth, improving operating leverage, and continued margin expansion.

Speaker #2: I will lead with profitability, since that's really the headline this quarter. Adjusted EBITDA reached 265 million shekels, which is approximately $89 million—up 33% year over year, and up 5% sequentially—for a margin of 43.2%.

Speaker #2: What stands out to me is the consistency of that expansion: 43.2% this quarter, 42.3% last quarter, and low 40s a year ago. This tells us the margin gains are coming from structural operating leverage rather than one-off events.

Einat Rom: This tells us the margin gains are coming from structural operating leverage rather than one-off events. For H1 2026, adjusted EBITDA reached 518 million shekels, which is approximately $174 million, with a margin of 42.7%, up from 40.1% in H1 2025. Net profit reached 151 million shekels, which is about $51 million, up 25% year-over-year and up 8% sequentially. Net profit attributed to shareholders reached 142 million shekels, which is approximately $48 million, up 31% year-over-year and up 11% sequentially. Basic earnings per share was 1.7 shekels, up 25% year-over-year and up 8% sequentially. For H1 2026, net profit reached 291 million shekels, which is approximately $98 million, up 28% year-over-year, and net profit attributed to shareholders reached 270 million shekels, which is about $91 million, up 32% year-over-year.

Speaker #2: For the first half of 2026, adjusted EBITDA reached 518 million shekels, which is approximately $174 million, with a margin of 42.7%, up from 40.1% in the first half of 2025.

Speaker #2: Net profit reached 151 million shekels, which is about $51 million, up 25% year over year and up 8% sequentially. Net profit attributed to shareholders reached 142 million shekels, which is approximately $48 million, up 31% year over year and up 11% sequentially.

Speaker #2: Basic earnings per share was 1.7 shekels, up 25% year over year and up 8% sequentially. For the first half of 2026, net profit reached 291 million shekels, which is approximately $98 million, up 28% year over year. Net profit attributed to shareholders reached 270 million shekels, or about $91 million, up 32% year over year.

Speaker #2: Total revenue for the second quarter was 614 million shekels, which is about $206 million, up 28% year over year and up 3% sequentially.

Einat Rom: Total revenue for the second quarter were 614 million shekels, which is about $206 million, up 28% year-over-year and up 3% sequentially. Total revenue for the first half reached 1.2 billion shekels, which is approximately $407 million, up 30% year-over-year. Operating profit reached 447 million shekels, which is about $150 million, up 45% year-over-year. Operating profits reached 224 million shekels, which is about $75 million, up 37% year-over-year and roughly flat sequentially, following an exceptionally strong first quarter. Our marketing G&A expenses were 168 million shekels, which is around $56 million in Q2 2026, down slightly from 169 million shekels in Q1 2026, and up 8% year-over-year from 156 million shekels in Q2 2025. We continue to feel that our G&A expenses are well under control.

Speaker #2: Total revenue for the first half reached 1.2 billion shekels, which is approximately $407 million, up 30% year over year. Operating profit reached 447 million shekels, or about $150 million, up 45% year over year.

Speaker #2: Operating profit reached 224 million shekels, which is about $75 million, up 37% year over year, and roughly flat sequentially, following an exceptionally strong first quarter.

Speaker #2: Our marketing expenses were 168 million shekels, which is around $56 million, in the second quarter of 2026. This is down slightly from 169 million shekels in the first quarter of 2026, and up 8% year over year from 156 million shekels.

Speaker #2: In the second quarter of 2025, we continue to feel that our G&A expenses are well under control. Financing expenses for the second quarter totaled 8 million shekels, which is approximately $2.7 million, and representative pays for 2026.

Einat Rom: Financing expenses for Q2 totaled ILS 8 million, which is approximately $2.7 million, at a representative pace for 2026, consistent with the improvement we have flagged following our December 2025 equity raise. The effective tax rate for Q2 was approximately 33%, consistent with what we guided in our last call and should remain at this level. Turning to the balance sheet, as of 30 June 2026, we maintain an equity ratio of 31%, similar with the level we reported last quarter, reflecting a well-capitalized foundation for continued growth. The ILS 500 million equity raise we completed in December 2025 continues to provide flexibility to support both organic growth and strategic initiatives.

Speaker #2: Consistent with the improvement we have flagged following our December 2025 equity raise, the effective tax rate for the second quarter was approximately 33%, consistent with what we guided in our last call, and should remain at this level.

Speaker #2: Turning to the balance sheet, as of June 30, 2026, we maintain an average ratio of 31%, similar to the level we reported last quarter, reflecting a well-capitalized foundation for continued growth.

Speaker #2: The 500 million shekel equity raise we completed in December 2025 continues to provide flexibility to support both organic growth and strategic initiatives. With first-half results tracking ahead of plan, we are confident in our ability to meet, and likely exceed, our full-year guidance for more than 25% profitability growth compared to 2025—subject, of course, to market conditions.

Einat Rom: With H1 results tracking ahead of plan, we are confident in our ability to meet and likely exceed our full-year guidance for more than 25% profitability growth compared to 2025, subject, of course, to market conditions. With that, we are ready to take the questions.

Speaker #2: With that, we are ready to take the questions.

Operator: Thank you. We will now begin the question and answer session. Questions may be asked via Q&A text on your Zoom screen, by raising your hand within the Zoom platform, or if you are joining by telephone, by dialing the following numbers. If you are calling from Israel, please dial 97233741008. Otherwise, please dial 14129020131. When prompted by the operator, please ask to be joined into the Meitav Investment House call. Once you have joined the telephone audio, please press star 1 on your touch-tone phone to ask a question. If at any time your question has been addressed and you would like to withdraw it, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Today's first question over audio comes from Dan Fannon with Jefferies. Please proceed.

Speaker #1: Thank you. We will now begin the question-and-answer session. Questions may be asked via the Q&A text on your Zoom screen, by raising your hand within the Zoom platform, or, if you are joining by telephone, by dialing the following numbers. If you are calling from Israel, please dial +972-3-374-1008.

Speaker #1: Otherwise, please dial 1-412-902-0131. When prompted by the operator, please ask to be joined into the Meitav Investment House call. Once you have joined the telephone audio, please press star 1 on your touchtone phone to ask a question.

Speaker #1: If at any time your question has been addressed and you would like to withdraw it, please press star, then 2. At this time, we will pause momentarily to assemble our roster.

Speaker #1: And today's first question over audio comes from Dan Fannon with Jefferies. Please proceed.

Speaker #3: Thanks. Good morning or good evening your time. Wanted to talk about flows in more detail, looking at the long-term savings and other really strong first half, second quarter.

Dan Fannon: Thanks. Good morning or good evening, your time. Wanted to talk about flows in more detail, looking at the long-term savings. Another really strong H1, Q2. I was hoping you could unpack the 23% that's on, I guess this is slide 11, and talk about the components. I believe in your prepared remarks you mentioned mutual funds being a driver, which is I think one of your highest fee areas. But was hoping you could break down the split of kind of the products, either by percentage or dollar amount in terms of where the underlying flows are going.

Speaker #3: I was hoping you could unpack the 23% that's on—I guess this is slide 11—and talk about the components, I believe, in your prepared remarks.

Speaker #3: You mentioned mutual funds being a driver, which is, I think, one of your highest-fee areas, but I was hoping you could break down the split of the products, either by percentage or dollar amount, in terms of where the underlying flows are going.

Speaker #4: Hi, Dan. Thanks for your question. Yes, this was a very strong quarter and a very strong first half of the year. In terms of inflows, a lot of these inflows included market share gains and movement from our competitors to our firm. Of course, we're very happy and we're very proud about that.

Ilan Raviv: Hi, Dan. Thanks for your question. Yes, this was a very strong quarter and a very strong H1 of the year in terms of inflows. A lot of these inflows included market share gains, movement from our competitors to our firm. Of course, we are very happy, and we are very proud about that. The inflows covered actually all areas of our asset management. The main two areas where there is public data and where there is constant continuous data are in the long-term savings activities and in the mutual funds. I should say on a side note, there is also very nice inflows into our portfolio management company, but those are less reported, less visible.

Speaker #4: The inflows covered actually all areas of our asset management. The main two areas where there is public data and where there is constant, continuous data are in the long-term savings activities and in the mutual funds.

Speaker #4: I should say, on a side note, there are also very nice inflows into our portfolio management company, but those are less reported and less visible.

Speaker #2: No, we publish it in the MD&A.

Einat Rom: No, we publish it in the MD&A.

Speaker #4: In the MD&A, on an annual basis.

Ilan Raviv: In the MD&A on an annual.

Speaker #2: Yeah, each quarter, yes.

Einat Rom: Yeah. In the quarter. Yes.

Speaker #4: In terms of the long-term savings, we've seen inflows mainly coming from our distribution channels. So a large portion—over 90%—of our inflows are coming from the distribution channel.

Ilan Raviv: In terms of the long-term savings, we have seen inflows mainly coming from our distribution channels. A large portion, over 90% of our inflows are coming from the distribution channel. The numbers, I do not have them offhand, but the numbers are clear and public data. They include both funds coming into our provident funds and funds coming into our pension funds. The reasons for the strong inflows, as I think we have mentioned before, are the good relative performance. They are the strong brand, which we continue to monitor very closely and survey all the time, and we remain the strongest brand in our category, in our vertical here in Israel. Of course, the good work we are doing with the distribution channels, as you can see from the results. The other segment, which is bringing in large inflows, are the mutual funds.

Speaker #4: The numbers—I don't have them offhand—but the numbers are clear and public data. They include both funds coming into our provident funds and funds coming into our pension funds.

Speaker #4: The reasons for the strong inflows, as I think we've mentioned before, are the good relative performance, the strong brand—which we continue to monitor very, very closely—and survey all the time.

Speaker #4: And we remain the strongest brand in our category, in our vertical here in Israel. And of course, the good work we're doing with the distribution channels, as you can see from the results.

Speaker #4: The other segment, which is bringing in large inflows, is the mutual funds. Also, very good work with the distribution channels, but they're different distributors.

Ilan Raviv: Also very good work with the distribution channels, but they are different distributors. Mutual funds are distributed by the banks here in Israel, and the distribution is based on ratings of these funds in the bank systems. Each system is a bit different. Of the different types of mutual funds, the active funds, the passive funds, money market, and the fixed income and equity, our main strength in the H1 of this year and in the last quarter definitely was in what we call the traditional funds or the fixed income and the equity funds. These are the funds with the higher margin, the higher management fees on them. If I am not mistaken, the average management fee is about 97 basis points or not?

Speaker #4: Mutual funds are distributed by the banks here in Israel, and the distribution is based on ratings of these funds in the bank systems. Each system is a bit different.

Speaker #4: Of the different types of mutual funds, the active funds, the passive funds, money market, and the fixed income and equity, our main strength in the last half, in the first half of this year and in the last quarter, definitely, was in what we call the traditional funds or the fixed income and the equity funds.

Speaker #4: These are the funds with a higher margin, and the higher management fees on them. If I'm not mistaken, the average management fee is about 97 basis points.

Einat Rom: Yeah. For the actively managed.

Speaker #2: Yeah, for the active management.

Speaker #4: On the actively managed funds, we've seen very nice inflows—almost 4 billion shekels in the first half of the year. As I said, based on the bank rating systems, we're rated very, very well.

Ilan Raviv: On the actively managed funds. There, we have seen very nice inflows, almost 4 billion ILS in the H1 of the year. As I said, based on the bank rating systems. We are rated very well in the different systems. We continue to be rated well, so I foresee this strength continuing in visibility of several months, I would say, forward. I cannot say more than that because these things do change occasionally. At the moment, according to our ratings, we should continue to see strong inflows. This is we always advise subject to market conditions.

Speaker #4: On the in the different systems, we continue to be rated well. So I foresee this trend, this strength, continuing in visibility for several months, I would say, forward.

Speaker #4: I can't say more than that because these things do change occasionally, but at the moment, according to our ratings, we should continue to see strong inflows.

Speaker #4: This is why we always advise, subject to market conditions.

Einat Rom: Mm-hmm. We have seen it also in July, after the quarter.

Speaker #2: We have seen it also in July, after the quarter.

Speaker #4: And yes, we reported it in July as well. Continued strength in terms of the inflows.

Ilan Raviv: Yes, we reported it in July as well.

Einat Rom: Yes.

Ilan Raviv: Continued strength in terms of the inflows.

Speaker #3: Great, that's very helpful. And just on the bank ratings, can you provide some context in terms of how often they're updated? I assume performance is the biggest factor, but is it also fees?

Dan Fannon: Great. That is very helpful. Just on the bank ratings, can you provide some context in terms of how often they are updated? I assume performance is the biggest factor, but is it also fees? Just curious about the other things that you score well on, then also, as I said, how often these ratings change.

Speaker #3: Is it just curiosity about the other things that you score well on? And then also, yes, as I said, how often do these ratings change?

Speaker #4: There are five major banks in Israel, so five major distributors of our funds here in Israel. Each bank has its own rating system, so it's different.

Ilan Raviv: There are five major banks in Israel, so five major distributors of our funds here in Israel. Each bank has its own rating system, so it is different. They look at different parameters. They look at different time periods. Probably the closest proxy to what they look at is Sharpe ratios of the funds, so performance and the standard deviation or volatility of the returns, so Sharpe ratios. The usual period varies between 12 months to 24 months, with different weights on the different time periods. So it varies between the banks. It changes, again, differently between the different distributors. But usually, it is on a monthly to quarter either monthly or on a quarterly basis. But these trends evolve over time. The rating does not drop usually very abruptly. You will see the ratings starting to deteriorate, and you will be able to see these.

Speaker #4: They look at different parameters. They look at different time periods. Probably the closest proxy to what they look at is the Sharpe ratios of the funds.

Speaker #4: So, performance and the standard deviation or volatility of the returns. So, Sharpe ratios and the usual period varies between 12 months to 24 months, with different weights on the different time periods.

Speaker #4: So it varies between the banks. It changes again, differently between the different distributors. But usually, it's on a monthly to quarter, either monthly or on a quarterly basis.

Speaker #4: But these trends evolve over time. The rating doesn't usually drop very abruptly. You will see the ratings start to deteriorate, and you will be able to see— we are able to see funds that are going up in their ratings and funds that are going down in their ratings.

Ilan Raviv: We are able to see funds who are going up in their rating and funds who are going down in their ratings. We have quite good visibility from that point of view.

Speaker #4: We have quite good visibility from that point of view.

Speaker #3: Okay, thank you. And then, just on the short-term savings, I think you mentioned in your prepared remarks similar dynamics. In terms of mutual funds, you’re seeing strong inflows, but could you contextualize that a little bit more and provide some context?

Dan Fannon: Okay. Thank you. Just on the short-term savings, I think you mentioned in your prepared remarks, similar dynamics, in terms of mutual funds just seeing strong inflows. Could you contextualize that a little bit more and provide some context? I do not believe we got a July update for short-term savings, but if there is also just an update around how those trends are looking, that would be helpful, so.

Speaker #3: And I believe—I don't believe we got a July update for short-term savings, but if there is, also just an update around how those trends are looking, that would be helpful also.

Speaker #4: July is a continuation of the strong momentum in both the long-term and the short-term savings, in terms of the growth in the AUM and the inflows element of that, of course.

Ilan Raviv: July is a continuation of the strong momentum in both the long-term and in the short-term savings in terms of the growth in the AUM and the inflows element of that, of course. The main inflows, as I mentioned, are in equity and fixed income funds. We have nice inflows, in terms of the market share of our inflows, of a total market share of about just over 14%, 1-4%, in mutual funds. In terms of the fixed income and equity funds, we are running at a rate of between 25% and 30% of the market inflows, which is very strong. I do not recall that in the past for long periods. We have been doing it, as I said, for the first seven months of the year at least. We see above our market share inflows also in money market funds.

Speaker #4: The main inflows, as I mentioned, are in equity and fixed income funds. We have strong inflows in terms of the market share of our inflows.

Speaker #4: Of total market share of just over 14%, 1.4% is in mutual funds. In terms of fixed income and equity funds, we are running at a rate of between 25% and 30% of the market inflows, which is very strong.

Speaker #4: I don't recall that in the past for long periods. We've been doing it, as I said, for at least the first seven months of the year.

Speaker #4: We see above our market share inflows, also in the money market funds. And in terms of the passive investments, there are two types of funds here in Israel: ETFs.

Ilan Raviv: In terms of the passive investments, there are two types of funds here in Israel, ETFs and what we call tracking funds. On the tracking funds, we are also bringing in inflows above our market share. In the ETFs, we are below our market share in terms of inflows. It is mainly an institutionally driven product here in Israel, the ETF. They are the ETFs, as you know them in the US, so they trade continuously throughout the day. It is not much of a retail instrument. It is more of an institutional instrument here in Israel. There, we have seen some outflows, some for technical reasons, some for fee-related reasons. We monitor it, but I would not be too concerned from a financial point of view on the ETF side of the business at the moment.

Speaker #4: And what we call tracking funds. And in the tracking funds, we're also bringing in inflows above our market share. In the ETFs, we are below our market share in terms of inflows.

Speaker #4: It is mainly an institutionally driven product here in Israel, the ETFs. They're the ETFs, as you know, like in the US, so they trade continuously throughout the day.

Speaker #4: It's not much of a retail instrument. It's more of an institutional instrument here in Israel. And there, we've seen some outflows—some for technical reasons, some for fee-related reasons.

Speaker #4: We monitor it, but I wouldn't be too concerned from a financial point of view on the ETF side of the business at the moment.

Speaker #4: Much, much more important are the fixed income and equity funds, with almost 100 basis points of management fees, and they've been doing very nicely and continue to do so even after the first half.

Ilan Raviv: Much, much more important are the fixed income and equity funds with almost 100 basis points of management fees, and they have been doing very nicely and continue to do so even after the H1. By the way, Dan, I think

Speaker #4: And by the way, Dan, I think we can give our short-term numbers a look. We did give our short-term as well as the long-term, all the—.

Dan Fannon: Okay, great.

Ilan Raviv: we did give our short-term

Einat Rom: Yeah, we gave

Ilan Raviv: numbers. Have a look.

Einat Rom: Yeah.

Ilan Raviv: We did give our short-term as well as the long-term, all the-

Speaker #2: We gave the total AUM. We didn't give inflows and yields. We gave just the total number of the AUM per segment.

Einat Rom: We gave total AUM. We didn't give inflows and yields. We gave just the total number of the AUM per segment.

Ilan Raviv: Per product. Per long-term, per short-term.

Speaker #4: short-term. And portfolio management.

Einat Rom: Long-term, yes. Portfolio management.

Ilan Raviv: Portfolio management.

Einat Rom: Yes.

Speaker #2: Yes.

Speaker #3: No, no, I got that. The flow number is what I was asking.

Dan Fannon: No, no, I got that. The flow number is what I was asking about.

Speaker #2: And of course, we will publish the KPIs, the amount of KPIs, and you can see it also there.

Einat Rom: And of course, at the end of the month, we will publish the monthly KPIs, and you can see it also there.

Speaker #3: Okay, great. And then on the credit side, if you could talk more broadly about credit quality across the portfolio, and then expand upon your comments around the strategic rationale for buying in the remaining stake of Peninsula—why now, and what is going to be different post-acquisition.

Dan Fannon: Okay, great. On the credit side, if you could talk more broadly about credit quality across the portfolio, then expand upon your comments around the strategic rationale for buying in the remaining stake of Peninsula. Why now, and what is going to be different post?

Speaker #4: Sure. The credit portfolio—we don't, at the moment, see any worrying signals, besides the fact that the overall market here in Israel, especially the real estate market, has softened quite a lot in the last 6 to 12 months.

Ilan Raviv: Sure. The credit portfolio, we do not at the moment see any worrying signals, besides the fact that the overall market here in Israel, especially the real estate market here in Israel, has softened quite a lot in the last 6 to 12 months. Since that is a lot of the collateral for the credit, then we are very careful, as I mentioned in my comments before, and we monitor ourselves and our underwriting very carefully. So, in terms of the actual quality of the existing credit portfolio, I do not see any change or any major change from the previous quarters. Your question regarding the take private of Peninsula. First of all, I remind you that even before this step, we owned 80%, and then we did take private in two steps. We went up to 88%, and then up to 100%.

Speaker #4: And since that's a lot of the collateral for the credit, we are very careful, as I mentioned in my comments before, and we monitor ourselves and our underwriting very, very carefully.

Speaker #4: So, in terms of the actual quality of the existing credit portfolio, I don't see any change or any major change from the previous quarters.

Speaker #4: Your question regarding the take private of Peninsula, first of all, I remind you that we own the even before this step, we owned 80% and then we did take private in two steps.

Speaker #4: We went up to 88%, and then up to 100%. For those of you who haven't been with us for a long time, I think it was about two years ago, we tried to merge two of our credit companies, and we did not succeed in that merge.

Ilan Raviv: For those of you who have not been with us for a long time, I think it was about two years ago, we tried to merge two of our credit companies, and we did not succeed in that merge. If we want to pursue any reorganization of our credit segments, if we want to make any major changes, and we can talk about that in detail, but in terms of the lean banking licenses, which are being offered here by the new legislation here in Israel, all of these things will be much easier to do if the companies are private. We did not get a lot of value add from the fact that it was a public company. It does have bonds and issuance, and it can issue bonds, but for that, in Israel, you do not have to be a public company.

Speaker #4: If we want to pursue any reorganization of our credit segment, if we want to make any major changes—and we can talk about that in detail—but in terms of the lean banking licenses which are being offered here by the new legislation in Israel, all of these things will be much easier to do if the companies are private.

Speaker #4: We did not get a lot of value add from the fact that it was a public company. It does have bonds and it can issue bonds, but for that, in Israel, you don't have to be a public company.

Speaker #4: You can be what we call a reporting entity, which is what Peninsula is now. So it's a reporting company. We report its financials every quarter, and it has bonds and issuances, and it can issue new bonds and commercial paper and other instruments.

Ilan Raviv: You can be what we call a reporting entity, which is what Peninsula is now. So it is a reporting company. We report its financials every quarter, and it has bonds in issuance, and it can issue new bonds and commercial paper, and other instruments. For that, it does not have to have its shares floated. It does not have to be public. So we did not get any upside from the fact that it was a public company. We did get some downside in terms of our flexibility and our ability to shape the credit segment, and that was the reasoning behind it. About the timing, as I said, this was something that has gone on for quite a few months. It was easy to buy the bigger holders of the shares, and we did that, institutional holders of the shares in the past.

Speaker #4: It doesn't have to do that, it doesn't have to have its shares floated. It doesn't have to be public. So we didn't get any upside from the fact that it was a public company.

Speaker #4: We did get some downside in terms of our flexibility and our ability to shape the credit segment, and that was the reasoning behind it.

Speaker #4: And about the timing, as I said, this was something that has gone on for quite a few months. It was easy to buy from the bigger holders of the shares, and we did that with institutional holders of the shares in the past.

Speaker #4: At the end of the day, you have to collect the retail holdings—small holdings, well-diversified, dispersed among small holders. That takes time, and that's what we did.

Ilan Raviv: At the end of the day, you have to collect the retail holdings, small holdings, well-diversified, dispersed among small holders. That takes time, and that is what we did, and I am very glad that we successfully did it in July.

Speaker #4: And I'm very glad that we successfully did it in July.

Speaker #3: Okay, thank you. And just lastly for me, you've managed expenses well through the first half. You've talked about some of the AI momentum, and just as we think about the second half of the year or into next year, is there anything, as you think about the rate of change and/or growth of expenses, that we should be aware of? Whether it's new initiatives, investment spend that could change, or other areas around the trajectory of the expense outlook that could be different either in the second half or even as we start to think about 2027?

Dan Fannon: Okay. Thank you. Then just lastly for me, you have managed expenses well through the H1. You have talked about some of the AI momentum. Just as we think about the H2 of the year or into next year, anything as you think about the rate of change or growth of expenses that we should be aware of, whether it is new initiatives, investment spend that could change or other areas around the trajectory of the expense outlook that could be different, either in the H2 or even as we start to think about 2027?

Ilan Raviv: I will let Einat talk about the expenses side.

Speaker #4: I'll let it not talk about the expensive side.

Speaker #2: I think we talked about it also in our previous calls, that our model is to increase revenue significantly but to control our G&A expenses.

Einat Rom: I think we talked about it also in our previous calls that our model is to increase revenue significantly, but to control our G&A expenses. As you can see, Q1 versus Q2, expenses are almost the same. I would like to remind that Q4, traditionally, the G&A expenses are a bit higher than the previous quarters because of the year-end, especially in salaries, in IT, in marketing.

Speaker #2: So, as you can see, Q1 versus Q2, expenses are almost the same. But I would like to remind you that Q4, traditionally, the G&A expenses are a bit higher than the previous quarters because of the year-end, especially in salaries, in IT, and in marketing. So, we have G&A expenses that are a bit higher than other quarters. But besides that, and if we really will have the AI influence that Ilan mentioned before, I think that G&A expenses will be well controlled, and I don't anticipate any significant higher G&A expenses in the second half of 2026.

Ilan Raviv: Marketing

Einat Rom: We have G&A expenses that are a bit higher than other quarters. Besides that, and if we really will have the AI influence that Ilan mentioned before, I think that G&A expenses will be well controlled, and I don't anticipate any significant higher G&A expenses in the H2 of 2026. I just remind you that direct expenses are linked to the revenue, of course. If revenue increased significantly, AUM increased significantly, trade activity and so on, of course, direct expenses will be higher as well.

Speaker #2: Just to remind you that direct expenses are linked to the revenue, of course. So, if revenue increased significantly, AUM increased significantly, trade activity, and so on. Of course, direct expenses will be higher as well.

Speaker #3: Great. Thank you for taking all my questions.

Dan Fannon: Great. Thank you for taking all my questions.

Speaker #2: Thank you, Dan.

Einat Rom: Thank you, Dan.

Speaker #4: Thanks for asking, Dan.

Ilan Raviv: Thanks for asking, Dan.

Speaker #1: And as a reminder, if you do have a question, questions asked via Q&A text on your Zoom screen may be typed in. You may also raise your hand within the Zoom platform to ask a question verbally over Zoom.

Ilan Raviv: As a reminder, if you do have a question, questions asked via Q&A text on your Zoom screen may be typed in. You may also raise your hand within the Zoom platform to ask a question verbally over Zoom. If you are on the telephone, please dial 97233741008 from inside Israel. Otherwise, please dial 4129020131 and press star one to join the questioning queue. It looks like we do have a question that has come over the Zoom Q&A chat, and it reads, "2026 guidance of more than 25% profit growth implies declaration compared to the H1. Is there any specific cost-raising this year driving the growth declaration in the H2?

Operator: As a reminder, if you do have a question, questions asked via Q&A text on your Zoom screen may be typed in. You may also raise your hand within the Zoom platform to ask a question verbally over Zoom. If you are on the telephone, please dial 97233741008 from inside Israel. Otherwise, please dial 4129020131 and press star one to join the questioning queue. It looks like we do have a question that has come over the Zoom Q&A chat, and it reads, "2026 guidance of more than 25% profit growth implies declaration compared to the H1. Is there any specific cost-raising this year driving the growth declaration in the H2?

Speaker #1: And if you are on the telephone, please dial 972-3-374-1008 from inside Israel. Otherwise, please dial 412-902-0131 and press star 1 to join the question queue.

Speaker #1: And it looks like we do have a question that has come over the Zoom Q&A chat. It reads: "2026 guidance of more than 25% profit growth implies a deceleration compared to the first half."

Speaker #1: Is there any specific cost phrasing this year driving the growth declaration in the second half?

Speaker #4: I think that it's deceleration they're referring to—slower growth than in the first. Yeah, in the second half versus the first half.

Ilan Raviv: I think that it's deceleration is what they're referring to. Slower growth than in the-

Einat Rom: Second

Ilan Raviv: Yeah, in the H2 versus the H1. First of all, we're upping our guidance. We're increasing our guidance. It was a growth of over 20%, and now we're saying it's over 25%, so it's not less than the H1, it's over 25%. It can be slightly more, it can be significantly more. But we feel confident enough to say that it's going to be more than upping the bar more than 25%. More substantially, some of the inputs of our growth are something which is hard to model at the same rate going forward in terms of a management conservative approach. For instance, the inflows we've seen in the H1 of the year are inflows which almost have never been seen in the Israeli market.

Speaker #4: First of all, we're upping our guidance. We're increasing our guidance. It was a growth of over 20%, and now we're saying it's over 25%.

Speaker #4: So it's not less than the first half. It's over 25%. It can be slightly more. It can be significantly more. But we feel confident enough to say that it's going to be more than, upping the bar, more than 25%.

Speaker #4: But more substantially, some of the inputs of our growth are something which is hard to model at the same rate going forward, in terms of a management conservative approach.

Speaker #4: I mean, for instance, the inflows we've seen in the first half of the year are inflows which have almost never been seen in the Israeli market.

Speaker #4: So, I'm very glad and very proud of them, and I hope they do continue. But I wouldn't model them at this rate, at this growth rate, going forward.

Ilan Raviv: I am very glad and very proud of them, and I hope they do continue, but I would not model them at this growth rate forward. There are other things which we are very happy modeling forward at the same rate or even higher. For instance, growth in clients in our brokerage business, the growth of our credit portfolios. I mentioned before in the mutual funds that we were bringing in between 25% and 30% market share of the inflows in the fixed income and equity funds, whereas we are only 14% of the market share in mutual funds. We cannot continuously bring in twice our market share. It is not realistic, I would say, to forecast or to guide towards that.

Speaker #4: There are other things which we are very happy modeling forward at the same rate or even higher—for instance, growth in clients in our brokerage business and the growth of our credit portfolios.

Speaker #4: As I mentioned before, in mutual funds we were bringing in between 25% and 30% market share of the inflows in the fixed income and equity funds.

Speaker #4: Whereas we're only 14% of the market share in mutual funds. So we cannot continuously bring in twice our market share. It's not realistic, I would say, to forecast or to guide towards that.

Speaker #2: We hope to achieve it, but we are not sure that it's going to happen.

Einat Rom: We hope to achieve it, but we are not sure that it is going to happen.

Speaker #4: Above 25% is something we feel confident in guiding forward. Do we have any other questions? Because?

Ilan Raviv: Above 25% is something we feel confident in guiding forward. Do we have any other questions?

Speaker #1: There are currently no further questions in the queue.

Ilan Raviv: There are currently no further questions in the queue.

Operator: There are currently no further questions in the queue.

Speaker #4: Okay, so thank you very much.

Ilan Raviv: Okay.

Einat Rom: Okay.

Ilan Raviv: Thank you very much.

Speaker #2: Thank you. Thank you very much.

Einat Rom: Thank you. Thank you, everyone.

Ilan Raviv: We appreciate your time, your attention, and your confidence in the company. Thank you very much.

Speaker #4: We appreciate your time, your attention, and your confidence in our company. Thank you very much.

Speaker #2: Thank you for participating.

Einat Rom: Thank you for participating.

Speaker #1: And the Meetov Investment House call has now concluded. Thank you for attending today's presentation. And you may now disconnect your lines.

Einat Rom: The Meitav Investment House call has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.

Operator: The Meitav Investment House call has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.

Operator: Goodbye

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Q2 2026 Meitav Investment House Ltd Earnings Call

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